The scope of foreign-capital invested companies under Article 101 subparagraph 3 of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 12028 of Dec. 31, 1986) to which the application of heavy registration tax is excluded.

Article 101 subparagraph 3 of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 12028, Dec. 31, 1986) to which the heavy registration tax rate is excluded, includes not only companies registered in the finance division pursuant to Article 12 of the same Act, but also companies which have obtained authorization of investment from the Minister of Finance and Economy pursuant to Article 7 (1) of the same Act, in light of the fact that the purport of Article 101 subparagraph 3 of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 12028, Dec. 31, 1986) was to attract foreign capital by providing tax benefits to foreign-invested enterprises, and that the reduction and exemption of income tax, corporate tax, acquisition tax, property tax, customs, special consumption tax, value added tax, etc. under the Foreign Capital Inducement Act and the heavy registration tax exemption of the heavy

Article 138(1) proviso of the former Local Tax Act (amended by Act No. 3878 of Jan. 31, 1986), Article 101 subparag. 3 of the Enforcement Decree of the same Act (amended by Presidential Decree No. 12028 of Dec. 31, 1986)

Supreme Court Decision 88Nu9015,942,88Nu961 Decided April 25, 1989

[Defendant-Appellant] Korea Squib Co., Ltd., Counsel for defendant-appellant-appellant

The head of Jongno-gu Seoul Metropolitan Government

Seoul High Court Decision 88Gu2160 delivered on May 13, 198

The appeal is dismissed.

The costs of appeal are assessed against the defendant.

We examine the grounds of appeal.

Article 101 subparagraph 3 of the former Local Tax Act (amended by Presidential Decree No. 12028 of Dec. 31, 1986) which received the proviso of Article 138 (1) of the same Act (amended by Presidential Decree No. 12028 of Dec. 31, 1986) provides that a foreign-invested enterprise under the provisions of the Foreign Capital Inducement Act is one of the enterprises to which the heavy tax rate of registration tax is excluded. The term "foreign-invested enterprise" includes not only the enterprise whose registration is completed in its finance division pursuant to Article 12 subparagraph 5 of the Foreign Capital Inducement Act, but also the enterprise whose investment is authorized by the Minister of Finance and Economy pursuant to Article 7 (1) of the same Act, notwithstanding the concept of Article 2 subparagraph 5 of the same Act.

This is because Article 101 subparagraph 3 of the Enforcement Decree of the Local Tax Act ("the Enforcement Decree of the Local Tax Act") has been set up at the same time because it was necessary to attract foreign capital in light of the economic conditions of our country. For this purpose, as part of the policy to provide various benefits in the tax system for foreign-invested enterprises, even if the registration of incorporation, etc. in large cities is made pursuant to Article 12 of the Foreign Capital Inducement Act, it would not apply the heavy taxation rate of registration tax. However, if foreign-invested enterprises excluded from the subject of the heavy taxation are registered pursuant to Article 12 of the Foreign Capital Inducement Act, it is limited to companies that meet the requirements prescribed in Article 7 of the Foreign Capital Inducement Act and completed the registration of incorporation or capital increase with the approval of investment from the Minister of Finance and Economy and have not been registered for foreign-invested enterprises which are already engaged in business activities, and it seems that it is extremely inconsistent with the purport of the above provision

In addition, it can not be said that it is fair in legal interpretation because it differs from the purpose of taxation, the reason for taxation, and the system of laws and regulations that exclude the heavy tax rate of the registration tax under the Local Tax Act and the reduction of income tax, corporate tax, acquisition tax, property tax, customs, special consumption tax, value added tax, etc. under the Foreign Capital Inducement Act.

In the same purport, the judgment of the court below that the disposition of this case was unlawful on the premise that the heavy tax rate of registration tax is applied, on the ground that the plaintiff was a foreign-capital invested company which obtained authorization for investment from the Minister of Foreign Affairs pursuant to Article 7 of the Foreign Capital Inducement Act but did not complete the registration pursuant to Article 12 of the above Act, is just and there is no error in the misapprehension of legal principles as to the interpretation of foreign-capital invested company to which the heavy tax rate of registration tax is excluded, and the calculation of the principle of no taxation without law

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 Ansan-man (Presiding Justice)