A. Purport of Article 18-3(1)3 of the former Corporate Tax Act (amended by Act No. 4282 of Dec. 31, 1990)

B. The meaning of "land without any building on rent" as provided in Article 18 (3) 11 of the Enforcement Rule of the same Act (amended by Ordinance of the Ministry of Finance and Economy No. 1844 of Feb. 28, 1991)

A. The purport of Article 18-3 (1) 3 of the former Corporate Tax Act (amended by Act No. 4283 of Dec. 31, 190) is to reduce unreasonable dependence on other capital of a company and induce management by equity capital, and at the same time, to indirectly limit the use of corporate funds created by a company with productive capital in order to promote speculative profits from real estate transactions, and to indirectly limit the use of corporate funds created by a company with productive capital in order to improve the financial structure of a company, thereby prescribing the inclusion of tax interest in deductible expenses.

B. The phrase “land which has no building used in the lease” under the latter part of Article 18(3)11 of the Enforcement Rule of the same Act (amended by Ordinance of the Ministry of Finance and Economy No. 1844 of Feb. 28, 191) refers to the land which is used in the lease of the relevant corporation and has no building on the ground. The term “land which has no building on the lease” refers to the land which is used in the lease of the relevant corporation, and the term “building on the lease” refers to the land which

A.B. Article 18-3(1)3(b) of the former Corporate Tax Act (amended by Act No. 4282, Dec. 31, 1990); Article 43-2(5) of the Enforcement Decree of the Corporate Tax Act (amended by Ordinance of the Ministry of Finance and Economy No. 1844, Feb. 28, 1991); Article 18(3)11 of the former Enforcement Rule of the Corporate Tax Act (amended by Ordinance of the Ministry of Finance and Economy No. 1844, Feb. 28, 1991)

Choyang Co., Ltd., Counsel for the plaintiff-appellant and one other

Head of Central Tax Office

Seoul High Court Decision 90Gu11204 delivered on January 18, 1991

The appeal is dismissed.

The costs of appeal are assessed against the defendant.

The grounds of appeal are examined (to the extent of supplement in case of the supplemental appellate brief being filed after the deadline for submitting the appellate brief).

The purpose of the provision of Article 18-3 (1) 3 of the former Corporate Tax Act (amended by Act No. 4282 of Dec. 31, 1990) is to indirectly limit the use of corporate funds created by corporate capital with productive capital to promote speculative profits through real estate transactions in order to improve corporate financial structure by reducing unreasonable dependence on corporate capital and inducing management by equity capital, and at the same time, to indirectly limit the use of corporate funds created by corporate capital with productive capital in order to promote speculative profits, and to regulate the inclusion of tax interest paid in deductible expenses in order to improve corporate financial structure. The above provision and Article 43-2 (5) of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 13195 of Dec. 31, 190), which provide for non-business real estate upon delegation by Article 18 (3) 11 of the former Enforcement Rule of the Corporate Tax Act (amended by Ordinance of the Ministry of Finance and Economy No. 1844 of Feb. 28, 1991).

In the same purport, the judgment of the court below is just, and there is no error in the misapprehension of the legal principles as to the above provision in the judgment below.

Therefore, the appeal is dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices.

Justices Kim Yong-ju (Presiding Justice) Choi Jae-ho et al.