If a small or medium start-up enterprise engages in the same type of business after acquiring an existing place of business, it does not constitute reduction or exemption

If a small or medium start-up enterprise is engaged in the same type of business after acquiring an existing place of business, it does not constitute reduction or exemption of small or medium start-up enterprises, and it does not constitute a violation of the penalty tax imposition

Article 6 of the former Restriction of Special Taxation Act (Tax Reduction or Exemption for Small or Medium Enterprise Enterprises)

2014Guhap1109 Revocation of Disposition of Imposing Corporate Tax

AA Heavy Industries Co., Ltd.

○ Head of tax office

2015.03.26

2015.04.09

1. The plaintiff's claim is dismissed.

2. The costs of lawsuit shall be borne by the Plaintiff.

On November 1, 200, the disposition of imposition of ○○○○○ (including additional tax), a corporate tax of 200○○ (including additional tax ○○○○) against the Plaintiff on November 1, 200, 200, 200○○○ (including additional tax ○○○), and 200,000, corporate tax of 200, is revoked.

1. Details of the disposition;

A. The plaintiff's status

The Plaintiff is a company established on June 20, 2000. 6. 200. BB Industries Co., Ltd. (hereinafter referred to as “B Heavy Industries”) and CCC (hereinafter referred to as “CCC”) by investing KRW 100 million in the amount of KRW 00,000,000,000, with the purpose of painting and other disposal business.

On July 27, 200, the Plaintiff purchased the land of ○○○○○○○○○○○, ○○○○○○, ○○○○○○○, and its ground, (hereinafter collectively referred to as the “instant real estate, including the instant land and buildings,”) from the DD industry Co., Ltd. (hereinafter referred to as the “DD industry”), and the machinery and equipment, parts, tools and instruments, office fixtures, office fixtures and equipment, and assets located in the business place as of the contract date (hereinafter referred to as the “instant real estate, etc.”) from the Defendant on November 2, 2000, by completing business registration by making the business registration to the Defendant on April 10, 200, and by making the type of the business, reporting, and assembling metal structures.

B. In applying Articles 64 and 6 of the former Restriction of Special Taxation Act (amended by Act No. 921, Jan. 1, 2010; hereinafter referred to as the “former Restriction of Special Taxation Act”), the Defendant filed each declaration of KRW 00,00 as corporate tax for 200, KRW 200 as corporate tax for 200, and KRW 00 as corporate tax for 200.

The defendant issued a disposition to the plaintiff on November 1, 2000 by applying Article 7 of the former Restriction of Special Taxation Act to impose corporate tax for 2000 square meters (including additional tax), ○○○○ (including additional tax), 2000, 000, 2000, 000, 000, 000, 000, 000, 000, 00,000, 00,000, 00,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,00,000,000,000,00

(c) Procedures of the previous trial;

On January 6, 200, the Plaintiff filed an appeal with the Tax Tribunal on the instant disposition, but was dismissed on April 16, 200.

[Ground of recognition] Facts without dispute, entry of Gap evidence 1 to 3, and 6 evidence (including branch numbers), the purport of the whole pleadings

2. The plaintiff's assertion and relevant Acts and subordinate statutes;

A. The plaintiff's assertion

1) Non-existence of the grounds for disposition

A) The Plaintiff and DD industry should be determined on the basis of subdivisions in the Korea Standard Industrial Classification pursuant to Article 2(2) of the Enforcement Decree of the Support for Small and Medium Enterprise Establishment Act as to whether the Plaintiff and DD industry engaged in different types of business and the same type of business shall be determined. However, the Plaintiff constitutes painting and other types of business (25923) and metal assembly fixtures (2513) on the Korean Standard Industrial Classification, while DD industry constitutes vessel components manufacturing business (3114). Accordingly, the Defendant’s disposition of this case on a different premise is unlawful.

B) The former Restriction of Special Taxation Act provides that even if the ratio of the instant real estate, etc. to the Plaintiff’s assets for business constituted a business of the same kind, if the ratio of the acquired assets to the total value of the assets used for business, such as land, buildings, and machinery, to the total value of the assets used for business, is less than 50/100 at the time of the commencement of the business, the tax amount shall be reduced or exempted. Since the accumulated assets newly invested by the Plaintiff as of the year 2000, which the Plaintiff began to operate the business, are ○○, and the value of the instant real estate, etc. is ○○, the ratio of the instant real estate, etc. to the total value of the assets used for business to be transferred to the Plaintiff is less than 5

2) Illegality of imposing additional tax

In light of the fact that the Plaintiff cannot be deemed to have filed a false report in violation of its duty under tax-related Acts, and that the Defendant did not raise any objection while reducing or exempting corporate tax by applying Article 6 of the former Restriction of Special Taxation Act for more than three years, this case does not constitute the subject of penalty tax.

Therefore, since the Plaintiff’s report of tax reduction and exemption has justifiable grounds, the portion of penalty tax in the instant disposition is unlawful.

(b) Related statutes;

It is as shown in the attached Form.

3. Determination

(a) Facts of recognition;

The following facts may be acknowledged if there is no dispute, Gap evidence Nos. 4, 6 through 9, 12 (including branch numbers for those with branch numbers), Eul evidence Nos. 5, 6, 8, 10, and 11 added to the purport of the whole pleadings:

1) The transfer process DD industry of the instant real estate, etc. purchased the instant real estate from the FF industry, which operated the manufacturing business of vessel components on the first half of 2000, and operated the vessel equipment manufacturing business. FF corporation purchased the instant real estate, etc. from the Plaintiff in the second half of 2000 and operated the vessel components manufacturing business.

2) Details of issuance of sales tax invoices from around 2000 to 2000.

A) The Plaintiff’s supply value for each sales office from the second half of the year 200 to 2000 is as follows.

B) The sales of the Plaintiff’s 2000 and 2000 WD Industries are as follows.

3) On April 1, 200, the Plaintiff newly built the Plaintiff’s painting, with the permission to newly build the instant real estate painting, and commenced on April 15, 200 and obtained the approval of the use on September 30, 200.

4) Industrial classification in the Korea Standard Industrial Classification is classified as follows: characteristics of products (physical composition and subdivision of products) per unit; manufacture of engines for vessels (2911); manufacture of navigational and other vessel measuring instruments (272); manufacture of vessel components (excluding vessel assembly components) shall be excluded from the shipbuilding business (311); manufacture of vessel components (referring to the manufacturing of vessel components; 3114; 251; 3. Manufacturing of metal assembly components or floating parts; 2511; 3. Manufacturing of metal assembly components (251); manufacture of metal assembly components; 3. Manufacturing of metal-processing structures (25.1); manufacture of metal-processing machinery/processing equipment/processing equipment/processing equipment/processing equipment/processing equipment/processing equipment/processing equipment/processing equipment/processing equipment/processing equipment/processing equipment/manufacturing equipment/processing equipment/processing equipment/processing equipment/processing equipment/processing equipment/processing equipment/processing equipment/processing equipment/processing equipment/processing equipment/processing equipment/processing equipment/processing equipment/processing equipment/processing equipment/processing equipment/processing equipment/processing equipment/processing equipment/processing/processing equipment/processing equipment/processing equipment/processing/processing equipment/processing/processing equipment/processing equipment/processing equipment/processing equipment/processing equipment/ treatment/construction/ treatment/ treatment/M/M/M/M/raw equipment/raw equipment/raw equipment/raw.

B. Determination

1) Whether the Plaintiff was engaged in any other industry than DD industry

A) Relevant legal principles

The provision on tax reduction or exemption for a small or medium start-up enterprise under Article 6 of the former Restriction of Special Taxation Act is reasonable to deem that it grants benefits from tax reduction or exemption to small or medium enterprises on the premise of "small or medium start-up business establishment support and its Enforcement Decree", and it does not change even if Article 6 (4) of the Restriction of Special Taxation Act (amended by Act No. 6297, Dec. 29, 2000) amended by the former Act on Support for Small or Medium Enterprise Establishment and its Enforcement Decree provides that restrictions on the scope of business establishment like the former Act on Support for Small or Medium Enterprise Establishment and its Enforcement Decree (Supreme Court Decision 2007Du5240,

(1) Interpretation of classification of the Korean Standard Industry

(A) Determination as to whether a small or medium start-up enterprise constitutes a small or medium start-up enterprise shall not be based on the formal entry in the articles of incorporation or corporate register, but on the substantive content of the business that actually runs. In order to determine the substantial content of the business, the criteria for classification under the Korea Standard Industrial Classification should be considered in accordance

(B) Under the aforementioned classification criteria, the interpretation of the classification of the Korean Standard Industry related to the instant case is as follows.

① Since metal heat processing, painting and other metal processing business (2592) requires 'gold processing' to do gold-processed products under a fee or contract, it is reasonable to interpret that the manufacture of metal-processed products (25923) falls under the case of gold-processed products without any process such as partial gold-processing, etc., and it cannot be said that there is no heat processing, paint and other metal processing business falling under the unit classification criteria of metal-processed products in the process of manufacture of metal-processed products, and that there is no difference between vessel and vessel-processed products manufacturing business (2511).

Comprehensively taking account of the following circumstances revealed in the facts acknowledged above, the Plaintiff appears to have run the vessel structure parts manufacturing business (3114) among vessel shipbuilding business (311).

Therefore, the plaintiff's above assertion is without merit.

(A) In light of the Plaintiff’s sales from 200 to 200, most of the 1000 WD industry’s 200 and 200, the Plaintiff indicated the name of “goods” on sales tax invoices issued by WD Industries for 200 years, 20 years, and 30 years, it appears that the Plaintiff manufactured “FNEL” and “E/C” and supplied them to WD Industries. However, it is difficult to view that the Plaintiff’s “FNEL” as its main business is not the Plaintiff’s construction permit for vessel’s 20th vessel’s own manufacture or sale on board and on its own, it is difficult to view that the Plaintiff’s 20th vessel’s construction permit or sale on its own as its own, for the purpose of protecting the engineer’s office.

Therefore, even if the plaintiff's assertion is accepted, the ratio is 49.8% [=The value of the real estate, etc. of this case at the time of 2000,000,000, which is the year when the business was commenced as alleged by the plaintiff / (the above ○○,000,000 + ○○,498,579 won for new investment accumulated by the plaintiff). Thus, the plaintiff's above assertion is without merit without further review.

3) Whether the imposition of additional tax is illegal or not

A) Relevant legal principles

Under the tax law, penalty taxes are administrative sanctions imposed under the conditions as prescribed by the Act in order to facilitate the exercise of taxation rights and the realization of tax claims where a taxpayer violates a duty to report and pay taxes without justifiable grounds, and neither taxpayer’s intent nor negligence is considered as constituting justifiable grounds (see, e.g., Supreme Court Decision 2013Du1829, May 23, 2013). It is unreasonable for a taxpayer to be unaware of his/her duty due to conflicting views in the interpretation of the tax law beyond the scope of simple statutory sites or misunderstandings (see, e.g., Supreme Court Decision 201Du1829, May 23, 2013). However, it cannot be deemed that the tax authority’s duty to notify the taxpayer of the violation of the tax law, without justifiable grounds (see, e.g., Supreme Court Decision 200Du174, Aug. 23, 2002). 200.

B) Determination

In light of the above legal principles, the circumstances alleged by the Plaintiff are merely merely merely a lot or misunderstanding of laws and subordinate statutes, and it does not constitute justifiable grounds for not doing so. It cannot be said that there is justifiable grounds solely on the ground that the Defendant received reports in violation of the Plaintiff’s tax law.

Therefore, the plaintiff's above assertion is without merit.

4. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and it is so decided as per Disposition.