[1] The meaning of "real estate, the use of which is limited by the provisions of Article 18 subparagraph 1 of the former Enforcement Rule of the Corporate Tax Act"

[2] The detailed method to determine whether the measures to restrict construction under the former Building Act fall under the restrictions on use under Article 18 (4) 1 of the former Enforcement Rule of the Corporate Tax Act

[3] The case holding that "real estate, the use of which is restricted by the laws and regulations" under Article 18 (4) 1 of the former Enforcement Rule of the Corporate Tax Act during a certain taxable period

[1] In determining whether the interest paid on borrowings under the Corporate Tax Act constitutes non-taxable real estate for non-business purposes, the "real estate, the use of which is restricted or prohibited under the provisions of laws and subordinate statutes" under Article 18 (4) 1 of the former Enforcement Rule of Corporate Tax Act (amended by Ordinance of the Ministry of Finance and Economy No. 1818 of Apr. 4, 190), which is defined as one of the cases excluded from non-business real estate in determining whether the interest paid on borrowings falls under non-business real estate, includes a case where the administrative agency does not jointly grant authorization and permission on land use, such as building permission, as part of the administrative action, and practically restrict or prohibit the use of land.

[2] In order to determine whether a restriction on construction under Article 44(2) of the former Building Act (amended by Act No. 4381 of May 31, 1991) constitutes a restriction on use under Article 18(4)1 of the former Enforcement Rule of the Corporate Tax Act (amended by Ordinance of the Ministry of Finance and Economy No. 1871 of February 29, 1992), the non-deductible of interest paid under the Corporate Tax Act shall be carried out for each taxable period. Thus, barring any special circumstance, the non-deductible of interest paid under the Corporate Tax Act shall comprehensively consider various circumstances, such as the size, use, size, etc. of the building to be newly constructed as a result of the Plaintiff’s construction-related act conducted before and after the taxable period, and the contents of the above restriction on construction.

[3] The case affirming the judgment of the court below which recognized the "real estate, the use of which is restricted by the laws and regulations" under Article 18 (4) 1 of the former Enforcement Rule of Corporate Tax Act during a certain

[1] Article 18-3 of the former Corporate Tax Act (amended by Act No. 4282 of Dec. 31, 1990), Article 43-2 (5) of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 1295 of May 1, 1990), Article 18 (4) 1 of the former Enforcement Rule of the Corporate Tax Act (amended by Ordinance of the Ministry of Finance and Economy No. 1818 of Apr. 4, 1990) / [2] Article 44 (2) of the former Building Act (amended by Act No. 4381 of May 31, 1991), Article 18-3 of the former Corporate Tax Act (amended by Act No. 4561 of Jun. 11, 1993), Article 18-19 of the former Enforcement Rule of the Corporate Tax Act (amended by Presidential Decree No. 13814 of Dec. 13, 1992) 198

[1] Supreme Court Decision 93Nu2995 delivered on January 25, 1994 (Gong1994Sang, 848), Supreme Court Decision 93Nu17591 delivered on March 25, 1994 (Gong1994Sang, 1367), Supreme Court Decision 94Nu2503 delivered on November 22, 1994 (Gong1995Sang, 127), Supreme Court Decision 95Nu1026 delivered on June 13, 195 (Gong195Ha, 2426)

Sam Chang Industrial Development Co., Ltd. (Attorney Kim Young-chul, Counsel for the defendant-appellant)

Head of Mapo Tax Office

Seoul High Court Decision 93Gu31100 delivered on May 12, 1995

The appeal is dismissed. The costs of appeal are assessed against the defendant.

We examine the grounds of appeal.

1. As to the third real estate

Article 18 (4) 1 of the former Enforcement Rule of the Corporate Tax Act (amended by Ordinance of the Ministry of Finance and Economy No. 1818 of Apr. 4, 1990) (amended by Ordinance of the Ministry of Finance and Economy No. 1818 of Apr. 4, 1990; Article 5 of the above amended Addenda provides that the former provisions of Article 18 (4) shall apply mutatis mutandis to the real estate, etc., the use of which is prohibited or restricted by the above Acts and subordinate statutes prior to the enforcement date of the above Enforcement Rule, which is prohibited or prohibited by the former Act and subordinate statutes of Dec. 31, 1991) shall apply mutatis mutandis to the "real estate, the use of which is prohibited or prohibited by the provisions of Acts and subordinate statutes" under Article 18 (4) 1 of the former Enforcement Rule of the Corporate Tax Act, which is defined as one of the cases where the administrative agencies do not directly prohibit or restrict the use of the land due to the establishment of urban planning as part of the administrative action (see, e.g.

On December 23, 1986, the court below recognized the fact that the plaintiff's construction plan was prepared while acquiring the real estate of this case No. 3 in the decision of the court below, but it was not possible to construct the above real estate as a non-business real estate in the business year of this case because the restriction was continued on October 4, 1991 in accordance with the National Land Use Plan (Urban Area) amended by Notice No. 570 of the Ministry of Construction and Transportation as of April 10, 1989 to establish an urban development plan for the above real estate, but the competent non-business real estate market controlled all development activities, such as construction, etc. from April 10, 1989 to the completion of all the procedures related thereto, and it was reasonable to view that the above real estate constitutes Article 18 (4) 1 of the Enforcement Rule and is excluded from non-business real estate, and there is no reason to exclude the plaintiff from non-business property as long as the use was not restricted by the above regulations.

2. As to the first and second real estate

According to the reasoning of the judgment of the court below, the plaintiff acquired the real estate of this case 1 for the purpose of construction of national housing on May 30, 1985, but changed the purpose of opening the market, and applied for the determination of urban planning facilities (road) on October 14, 198. The plaintiff was notified of the results of construction impact assessment on February 23, 198, and applied for construction permission of this case 1 to 198. The plaintiff was notified of the construction permit of the same 19. The construction permit of this case 1 to 2. The construction permit of this case was 1 to 9. The construction permit of this case 1 to 3. The construction permit of this case was 1 to 9. The construction permit of this case was 1 to 9. The construction permit of this case was 1 to 9. The construction permit of this case was 1 to 9. The construction permit of this case was 1 to 9. The construction permit of this case was 1 to 1 to 19.5.

In order to determine whether restrictions on construction under Article 44(2) of the former Building Act (amended by the Ordinance of the Ministry of Finance and Economy No. 1871 of Feb. 29, 1992) constitutes restrictions on use under Article 18(4)1 of the Enforcement Rule of the Corporate Tax Act (amended by the Ordinance of the Ministry of Finance and Economy No. 1871 of Feb. 29, 1992), the inclusion of paid interest in deductible expenses under the Corporate Tax Act shall be carried out for each taxable period. Thus, barring any special circumstance, various circumstances, such as the size, use and size of the building to be newly built as a result of the Plaintiff's construction-related act at the center of the taxable period, and the contents of the above restrictions on construction, shall be considered comprehensively, and the decision of the court below that the Plaintiff's new construction on each of the above real estate constitutes a regulation subject to the restriction on the construction of neighborhood facilities, general business facilities, and sales facilities, or the use of each of the above land from 30 years to 9.16 years to 9.3 years to 16.

In addition, as long as the grounds for restrictions on use under the above law can be recognized, it cannot be concluded that the Plaintiff corporation failed to use each of the above land due to other reasons, and even if there are different grounds for the failure to directly use the above land for the purpose of domestic business, this is merely a ground for restrictions on use under the law, concurrently or adding to it, barring any special circumstance. Therefore, it is difficult to accept the theory that the Plaintiff’s failure to construct a building on each of the above lands in the business year 191 is not due to the administrative agency’s restriction on construction. All arguments are without merit

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

Justices Lee Jae-soo (Presiding Justice)