(a) Whether the land acquired for the purpose of exchange with the land to be used for business is "land directly used for the business";

(b) The case holding that "the use of the relevant real estate shall not be prohibited or restricted by the provisions of Acts and subordinate statutes after its acquisition" under Article 18 (4) 1 of the former Enforcement Rule of the Corporate Tax Act (amended by the Ordinance of the Ministry of Finance and Economy No. 1835 of Oct. 22, 1990)

A. Article 59-3 (2) 2 of the former Corporate Tax Act (amended by Act No. 4165 of Dec. 30, 1989), Article 124-6 (1) of the Enforcement Decree of the same Act (amended by Presidential Decree No. 12878 of Dec. 31, 1989), Article 59-6 (4) 1 of the Enforcement Rule of the same Act (amended by Ordinance of the Ministry of Finance and Economy No. 1818 of Apr. 4, 1990), Article 57 (1) 1 of the former Regulation of Tax Reduction and Exemption Act (amended by Act No. 4165 of Dec. 30, 1989), Article 6 of the Regulation of Tax Reduction and Exemption Act, Article 54 of the former Enforcement Decree of the same Act (amended by Presidential Decree No. 13202 of Dec. 31, 190), Article 59-6 (4) 1 of the same Act (amended by Ordinance of the Ministry of Finance and Economy), which directly provides that land is used for business purposes.

B. The case holding that Article 18 (4) 1 of the former Enforcement Rule of the Corporate Tax Act (amended by the Ordinance of the Ministry of Finance and Economy No. 1835 of Oct. 22, 1990) cannot be seen as "the use of the relevant real estate is prohibited or restricted by the provisions of Acts and subordinate statutes after its acquisition."

A. Article 59-3 (2) 2 of the former Corporate Tax Act (amended by Act No. 4165 of Dec. 30, 1989), Article 124-6 (1) of the Enforcement Decree of the same Act (amended by Presidential Decree No. 12878 of Dec. 31, 1989), Article 59-6 (4) 1 of the Enforcement Rule of the same Act (amended by Ordinance of the Ministry of Finance and Economy No. 1818 of Apr. 4, 1990), Article 57 (1) 1 of the former Regulation of Tax Reduction and Exemption Act (amended by Act No. 4165 of Dec. 30, 1989), Article 6 of the Regulation of Tax Reduction and Exemption Act, Article 54 of the former Enforcement Decree of the same Act (amended by Presidential Decree No. 13202 of Dec. 31, 190), Article 59-6 (2) 1 of the same Act (amended by Ordinance of the Ministry of Finance and Economy)

[Plaintiff-Appellant] Plaintiff 1 and 1 other (Law Firm Gyeong, Attorneys Park Jong-soo et al., Counsel for plaintiff-appellant)

[Defendant-Appellant] Korea Telecommunication Corporation et al., Counsel for defendant-appellant-appellant and three others

The Head of the Maternization Tax Office

Seoul High Court Decision 92Gu14207 delivered on December 10, 1992

The appeal is dismissed.

The costs of appeal are assessed against the plaintiff.

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).

1. Details of the judgment below

(a) recognised facts

(1) The Plaintiff, a corporation established for the purpose of the rational management of public telecommunications business and the promotion of telecommunications technology by obtaining permission for establishment under the former Korea Telecommunications Corporation Act (repealed on June 5, 1981), was subject to transfer of the site and ancillary facilities of the telegraph or telephone station under the management of the Ministry of Communications, which was under the management of the Ministry of Information and Communication. Of telegraph or telephone stations, a independent telegraph or telephone station, which was operated independently from a post office, acquired the site and ancillary facilities from the State in the form of receiving investment in kind. The integrated telegraph or telephone station (integrated station) that was installed and operated with a post office, which had been installed and operated with a post office on December 28, 1984 between the Plaintiff and the Minister of Information and Communications, decided to exchange the site and buildings of the substitute office building required by the Ministry of Information and Communication in cash, but if the exchange price does not coincide with the relevant integrated office office building, the difference between the two consolidated offices will be settled in cash.

(2) Pursuant to the above Convention, the Plaintiff and the Minister of Communications concluded an exchange contract with the Plaintiff on July 15, 1989 with respect to real estate, such as 16 to 9,314.7 square meters, which the Plaintiff acquired from the Seoul Metropolitan Government for the exchange with the Integrated Bureau (hereinafter “the instant site”), and with respect to the members apartment site and several integrated bureau stations located in Seongdong-gu Seoul Metropolitan Government, Seongdong-gu, Seoul, under the management of the Minister of Communications, and completed the registration of the transfer of ownership to the other party by concluding an exchange contract with respect to the Alternative Office owned by the Plaintiff and the Integrated Bureau managed by the Administrator of the New Bureau.

(3) At the time of May 1985, the Minister of Information and Communication understood that the instant site was used as the Seoul International Postal Office site by the Seoul Special Metropolitan City, which had been implementing a land readjustment project in the first place of the instant site as of May 1985. At that time, the Plaintiff acquired the instant site from the Seoul Special Metropolitan City, and agreed to exchange the instant site with employees, apartments, and training institutes located in Seongdong-gu Seoul Metropolitan City, where the Minister of Information and Communication manages the instant site by acquiring it from the Seoul Special Metropolitan City (the method of exchange is in accordance with the above consolidated State Organization Convention, and the property subject to exchange

(4) The instant land was made available for the construction of a new building in around June 27, 1985 when its lot number and land were not determined due to the implementation of the said land readjustment project, and accordingly, the new building construction was completed on August 19, 1989 by entering into a contract with the Han River Construction General Co., Ltd. and entering into a new construction contract with the said Seoul International Post Office building.

(5) On February 28, 1987, when the construction of the above new building was in progress, the Plaintiff entered into a sales contract with Seoul Special Metropolitan City on the instant site (However, on April 25, 1989 and May 16 of the same year, the number was determined or the buyer’s indication was partly corrected) and completed the registration of ownership transfer in the future of the Plaintiff on May 18, 198, and as seen earlier, the Plaintiff entered into an exchange contract with the Minister of Communications and completed the registration of ownership transfer in the future of the country on September 29 of the same year.

B. The judgment of the court below

(1) As long as the Plaintiff acquired the instant land for the purpose of exchanging with the substitute, and the building of the Seoul International Postal Office was constructed on that ground, the instant land cannot be deemed as being directly used for the Plaintiff’s business. Therefore, the transfer of the said land does not constitute the subject of exemption of special surtax provided for in Article 59-3(2)2 of the former Corporate Tax Act (amended by Act No. 4165 of Dec. 30, 1989), Article 124-6(1) of the Enforcement Decree of the same Act (amended by Presidential Decree No. 12878 of Dec. 30, 1989), Article 59-6(4)1 of the Enforcement Rule of the same Act (amended by Ordinance of the Ministry of Finance and Economy No. 1818 of Apr. 4, 1990).

(2) In addition, the land in this case was offered as a site for Seoul International Postal Office under the New Postal Affairs Act and transferred to a country, and the land in this case falls under the object of special surtax exemption under Article 57 (1) 1 of the former Regulation of Tax Reduction and Exemption Act (amended by Act No. 4165 of Dec. 30, 1989), but as long as the land in this case was not used directly for the plaintiff's business, the land in this case can not be seen as being subject to tax reduction and exemption under Article 6 of the above Regulation of Tax Reduction and Exemption Act, Article 54 of the Enforcement Decree of the same Act (amended by Presidential Decree No. 13202 of Dec. 31, 190), Article 20-2 (1) of the same Act (amended by Ordinance of Ministry of Finance and Economy No. 1822 of Apr. 10, 1990), and the land in this case was not subject to tax reduction and exemption under Article 28 (1) 48 of the former Enforcement Rule of the Corporate Tax Act.

2. Judgment on the grounds of appeal

A. As to the first ground for appeal

Article 59-2 (1) and Article 124-3 of the Enforcement Decree of the Corporate Tax Act concerning the tax base of special surtax and each provision concerning the reduction or exemption thereof shall be imposed on gains accruing from the transfer of land, etc. by a corporation, in principle, special surtax shall be imposed on gains accruing from the transfer of land, etc., and the corporation requires the use of the relevant land, etc. for business purposes for a certain period under the premise of the reduction or exemption. Thus, in light of the contents and form of the provision, the above provisions concerning the reduction or exemption shall be interpreted as being listed in the Act by limiting the reasons. Thus, the reasons not listed in the above cannot be deemed as falling under the above reduction or exemption, even if the relevant real estate transaction was not made for the purpose of speculation, and even if there were justifiable reasons for the corporation to not use the relevant real estate

The judgment below to the same purport is just, and there is no error in the misapprehension of legal principles as to the interpretation of the above provisions as pointed out.

B. Regarding ground of appeal No. 2

The meaning of directly using a corporation's business as a requirement for reduction or exemption under the above Regulation of Tax Reduction and Exemption Act or each provision of the Corporate Tax Act means that the land is directly provided for the corporation's own business. Thus, if the corporation acquired the land for the purpose of exchanging and acquiring another land to be used for the corporation's own business, as in this case, but the land was not directly provided for the corporation's unique business, it shall not be deemed that it is directly used for the corporation's business (in addition, each subparagraph of Article 20-2 (1) of the Enforcement Rule of the Regulation of Tax Reduction and Exemption Act provides for the scope of real estate which is not related to the corporation's business concurrently, for example, if the corporation leases real estate at the time of lease, it constitutes real estate which is not related to the corporation's business under the above provision pursuant to subparagraph 1 of Article 18 (3) of the Enforcement Rule of the Corporate Tax Act, and in this case, whether the real estate falls under Article 18 (3) 11 of the Corporate Tax Act

The judgment of the court below to the same purport is just, and there is no error in the misapprehension of legal principles as pointed out.

C. Regarding ground of appeal No. 3

According to the decision of the court below, the plaintiff acquired the land of this case from the body body and transferred it to the body body by means of acquiring other real estate for business purpose from the body body body in accordance with the exchange agreement with the Minister of Communications. Thus, even if the plaintiff had already established an international post office on the ground at the time of acquiring the land of this case and it was not possible to use it directly for the plaintiff's business, such obstacle is merely based on the above exchange agreement between the plaintiff and the body body, and it cannot be deemed that it constitutes "the prohibition or restriction of use by the provisions of the law after acquiring the real estate of this case" under Article 18 (4) 1 of the Enforcement Rule of the Corporate Tax Act.

The judgment of the court below to the same purport is just, and there is no error in the misapprehension of legal principles as pointed out.

D. Regarding ground of appeal No. 4

Article 18 (4) 5 of the Enforcement Rule of the Corporate Tax Act provides that "the date on which a project can be constructed as a unit of subdivision is completed in fact as a unit of subdivision, and it refers to the date on which construction can be completed as a unit of subdivision, even before a disposition of replotting is publicly announced, and this does not relate to whether the relevant land can be disposed of or not. Thus, the court below made it possible to construct a new building on the site of this case before June 27, 1985, and in fact completed the construction after the new construction of the Seoul International Postal Office building on the site of this case on or around August 1986, as long as the new construction of the new construction of the new building on the site of this case was completed on or around August 1986, the land of this case cannot be deemed as falling under the land excluded from non-business property under the above provision of this case.

3. Conclusion

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 Jong-soo (Presiding Justice)