A. Whether land within the scope that must be secured to obtain permission from an administrative agency with respect to the purpose business of a corporation is real estate for business purposes notwithstanding Article 18(3)2 of the Enforcement Rule of the same Act (amended by Ordinance of the Ministry of Finance and Economy No. 1818 of Apr. 4, 190) (affirmative)

B. Whether the remainder of the land exceeding the scope of the above paragraph (a) among the land owned by a corporation constitutes non-business real estate (affirmative with qualification)

A. In order for a corporation to obtain permission from an administrative agency with respect to the purpose business, the land within the scope that the corporation must not be mandatorily secured if it is equipped with the facilities prescribed by the law or the permission-granting agency to carry out the purpose business. Thus, the land owned by the corporation cannot be deemed as holding the "real estate not directly related to the business of the corporation concerned (real estate for non-business use)" under Article 18-3 (1) 3 of the former Corporate Tax Act (amended by Act No. 4282 of Dec. 31, 190) and Article 43-2 (5) of the Enforcement Decree of the same Act (amended by Presidential Decree No. 13195 of Dec. 31, 190) and Article 18 (3) 2 of the same Act, notwithstanding the provisions of Article 18 (3) 2 of the Enforcement Rule of the same Act (amended by Ordinance of the Ministry of Finance and Economy No. 1818 of Apr. 4, 1990).

B. Of the land owned by a corporation, the remainder exceeding the scope of the land within the scope of paragraph (a) above cannot be applied to Article 18 (3) 2 (b) of the Enforcement Rule of the same Act. Thus, barring any special circumstance, it shall be deemed that it constitutes non-business real estate.

Article 18-3 (1) 3 of the former Corporate Tax Act (amended by Act No. 4282 of Dec. 31, 1990), Article 43-2 (5) of the Enforcement Decree of the same Act (amended by Presidential Decree No. 13195 of Dec. 31, 1990), Article 18 (3) 2 of the Enforcement Rule of the same Act (amended by Ordinance of the Ministry of Finance and Economy No. 1818 of Apr. 4, 1990)

Dongyang Fuel Co., Ltd., Counsel for the defendant-appellant and three others

Director of the tax office

Seoul High Court Decision 91Gu19595 delivered on February 18, 1992

The judgment of the court below is reversed.

The case is remanded to Seoul High Court.

We examine the grounds of appeal by the Plaintiff’s attorney.

1. The lower court determined that the Plaintiff’s provision of Article 13 subparag. 2 of the Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 12878, Nov. 12, 1980; Presidential Decree No. 1935, Nov. 12, 1980; Ordinance No. 2065, Nov. 2, 198; Ordinance No. 2065, Nov. 3, 198; Ordinance No. 2013; Ordinance No. 2065, Nov. 3, 198; Ordinance No. 2065; Ordinance No. 200, Nov. 2, 2008; Ordinance No. 2013; Ordinance No. 2065, Nov. 29, 2006; Ordinance No. 2014; Ordinance No. 2010, Mar. 19, 201) applied the Plaintiff’s tax base and tax amount for non-business income for each of this case.

2. Article 18-3 (1) of the Act provides, “The amount prescribed by the Presidential Decree within the limit of the total amount of assets falling under any of the following subparagraphs from among interest on loans paid by a domestic corporation holding assets for each business year shall not be included in deductible expenses in calculating the income amount for each business year.” Article 43-2 (5) of the Decree provides, “Real estate not directly related to the business of the corporation concerned” in Article 18-3 (1) 3 of the Act provides, “Real estate not directly related to the business of the corporation concerned” means real estate prescribed by the Ordinance of the Ministry of Finance and Economy (hereinafter referred to as “real estate for non-business use”) in consideration of the period after the acquisition of the real estate concerned, the amount of income generated from the real estate concerned, the area of the building, etc., and the degree related to the business of the corporation concerned.” Article 18 (3) of the Rule provides, “Real estate for non-business use” in Article 43-2 (5) of the Decree refers to the real estate falling under each of the following subparagraphs:

However, according to the provisions of Article 3(1) and (4), Article 5(1) and (2) of the Safety Control and Business Regulation of Liquefied Petroleum Gas Act, Article 3(1)10 and 11 of the Enforcement Decree of the same Act, Article 2(1) and Article 7 of the Enforcement Decree of the same Act, the standards for business permission to maintain a certain safety distance from protection facilities where the Enforcement Rule of the same Act provides for the storage facilities and charging facilities of liquefied petroleum gas supply business shall be determined as the basis for business permission. Thus, the land within the scope of not securing the facilities prescribed by the laws and regulations or permission authorities to obtain permission of the business for the purpose of the corporation shall not be deemed as “land pursuant to the provisions of the laws and regulations of 10 times or 100, and shall not be deemed as “land for non-business purposes” under Article 3(1) and (2) of the same Act, and shall not be deemed as “land for non-business purposes” under Article 18(3) and (4) of the same Act.

However, according to the records, the plaintiff did not claim that Article 18 (4) 13 of the Enforcement Rule of the Corporate Tax Act should be applied retroactively to the taxation disposition of this case, through the correction of the purport of the claim and the supplement of the cause of the claim stated on the complaint stated on the date of the first pleading in the court below, and on the third day of pleading, the plaintiff did not claim that Article 18 (4) 13 of the Enforcement Rule of the Corporate Tax Act should be applied retroactively to the taxation disposition of this case, as seen above, among the land of this case, land meeting the facility standards under the relevant provisions of the Safety Control and Business Regulation of Liquefied Petroleum Gas Act, which is not deemed non-business real estate, notwithstanding Article 18 (3) 2 of the Regulations, and the remaining land exceeding the above part cannot be deemed as non-business real estate, and therefore, it cannot be deemed as non-business real estate.

Therefore, the court below should have deliberated and decided on the scope of the above "land pursuant to the provisions of the law" among the land in this case, and on whether it would be 368.59 as alleged by the plaintiff, and based on the result, it should have judged whether the tax disposition in this case, which reported 155.49 square meters of the land in this case as non-business real estate, is legitimate. However, the court below did not have a deliberation and determination as to the plaintiff's argument at all. Thus, the court below erred in the misapprehension of the judgment as to the plaintiff's argument that affected the judgment. Thus, there is a ground to point this out.

3. However, the reason why the above "land pursuant to the provisions of the laws and regulations" shall not be deemed as real estate for non-business use. Since there is no relation as to whether the land constitutes land annexed to a building under Article 18 (3) 2 of the "Rules", the remaining part of the land in this case exceeding the scope of "land pursuant to the provisions of the laws and regulations" shall not be applied to Article 18 (3) 2 (b) of the "Rules". (In the case where the area of "land pursuant to the provisions of the Acts and subordinate statutes" does not exceed the basic area of land annexed to the land under Article 18 (3) 2 (b) of the "Rules" as alleged by the plaintiff, it shall be deemed that the remaining part of the land exceeding the scope of "land pursuant to the provisions of the Acts and subordinate statutes" constitutes land for non-business use, barring special circumstances.

Therefore, even though the court below did not make a decision on the plaintiff's above assertion on this point, it is nothing more than that of criticism since the omission of judgment did not affect the conclusion of the judgment.

4. In addition, under the premise that Article 16 subparag. 7 of the Corporate Tax Act was applied to the portion of 1986 business year when the Defendant rendered the instant tax disposition, the Plaintiff asserted that the instant land was not an asset unrelated to the business under Article 16 subparag. 7 of the Corporate Tax Act. However, according to the relevant evidence and the record, when the Defendant initially rendered the instant tax disposition, Article 16 subparag. 7 of the Corporate Tax Act and Article 30 subparag. 3 of the Enforcement Decree of the Income Tax Act was applied to the portion of 1986 business year before the amendment by Presidential Decree No. 12878 of Dec. 30, 1989. However, according to the decision of the Director of the National Tax Tribunal, Article 18-3(1) subparag. 3 of the Act and Article 43-2(1), (2), (5) of the Enforcement Decree of the Corporate Tax Act and Article 18(3) of the Regulations (Ordinance No. 1671, Mar. 31, 1986).

5. Therefore, the judgment of the court below shall be reversed, and the case shall be remanded to the court below for a new trial and determination as to the area of "land pursuant to the provisions of Acts and subordinate statutes" among the land of this case and the scope of non-business real estate incidental thereto. It is so decided as per Disposition