The meaning of "one taxable period" under Article 11 (1) 1 of the Enforcement Decree of the former Business Tax Act.

Real estate business under Article 11 (1) 1 of the former Enforcement Decree of the Business Tax Act refers to a real estate sales business that acquires land, etc. at least once for profit-making purposes during each taxable period under Article 4 (1) 3 of the former Business Tax Act and sells real estate at least twice. Thus, if the acquisition and sales are extended over the first and second taxable periods, it shall not be deemed a business act during one taxable period even if it were conducted within six months.

Article 11 (1) 1 of the Enforcement Decree of the former Business Tax Act

Plaintiff

Head of the Southern Mine District Office

Gwangju High Court Decision 78Gu25-1 delivered on December 24, 1980

The judgment below is reversed, and the case is remanded to the Gwangju High Court.

We examine the Plaintiff’s ground of appeal.

(1) The principle of no taxation without law requires strict interpretation. According to Article 11(1)1 of the former Enforcement Decree of the Business Act, the business of acquiring land, etc. at least once during one taxable period for profit-making purposes and selling real estate at least twice shall be regarded as real estate business. According to Article 4(1)3 of the former Business Tax Act, the taxable period of business taxes shall be from January 1 to June 1, and from the end of July 1 to the end of December in the case of an individual, the taxable period of business taxes shall be from July 2 to the end of December in the case of acquiring land, etc. at least once for profit-making purposes and selling it more than twice during each of the above taxable periods. Thus, even if acquisition and sale are conducted within six months, it shall not be construed as business activities during the first and second taxable period of Article 11(1)1 of the former Enforcement Decree of the Business Tax Act.

(2) After recognizing the fact that the Plaintiff’s acquisition and expropriation of the instant real estate were conducted within 6 months in most cases, the lower court determined that the Plaintiff’s taxation disposition on the instant compensation for losses was lawful by interpreting the taxable period of 1-1 of Article 11(1)1 of the former Enforcement Decree of the Business Tax Act with the meaning of 6-months, on the ground that the Plaintiff’s acquisition and expropriation of each of the instant real estate for profit-making purposes is a business act on the instant real estate, and that the Plaintiff’s acquisition and expropriation of each of the instant real estate for profit-making purposes was conducted within 6-months. However, according to the lower judgment’s findings, it is apparent that there was no case where the Plaintiff’s acquisition and expropriation of each of the instant real estate were conducted within 6-months, and that the lower court’s determination that the Plaintiff engaged in real estate business was made by interpreting the meaning of 1-month period as the meaning of 6-months, which affected the conclusion of the judgment, without any need to decide on other grounds of appeal.

(3) Therefore, the instant case is remanded to the Gwangju High Court for further proceedings consistent with this Opinion. It is so decided as per Disposition by the assent of all participating judges.

Justices Lee Lee Sung-soo (Presiding Justice)