Whether a venture business is exempted from acquisition tax and registration tax under Articles 119(3)1 and 120(3) of the former Restriction of Special Taxation Act in case where a venture business is confirmed by the former Act on Special Measures for the Promotion of Venture Businesses after acquiring business property and completing registration thereof (affirmative)

Article 19 (3) 1 of the former Restriction of Special Taxation Act (amended by Act No. 8138 of Dec. 30, 2006; hereinafter “former Restriction of Special Taxation”) provides for the requirements and procedures for confirmation of venture businesses, and provides for the methods of confirmation of venture businesses, and provides for the methods of confirmation of venture businesses and the methods of confirmation of new businesses to be considered as the date of establishment of venture businesses under Article 25 of the former Act on Special Measures for the Promotion of Venture Businesses (amended by Act No. 7868 of Mar. 3, 2006; hereinafter “ Venture Business Act”), and Article 25 of the former Restriction of Special Taxation Act (amended by Act No. 8138 of Dec. 30, 2006), the “date of confirmation as a venture business” means the date of confirmation as a venture business under Article 25 of the former Act on Special Measures for the Promotion of Venture Businesses (amended by Act No. 7868 of Mar. 3, 2006). 1).

Articles 6(2), 119(3)1 (see current Article 119(2)1), and 120(3) of the former Restriction of Special Taxation Act (Amended by Act No. 8138, Dec. 30, 2006); Article 2-2 (see current Article 18-3); Article 18-3 subparag. 2 (see current Article 18-4); Article 120(3) of the former Enforcement Decree of the Special Measures for the Promotion of Venture Businesses (Amended by Act No. 7868, Mar. 3, 2006); Article 2-2 (see current Article 18-3); Article 18-3 subparag. 2 (see current Article 18-4); Article 8 of the former Enforcement Decree of the Special Measures for the Promotion of Venture Businesses (Amended by Presidential Decree No. 19498, Jun. 2, 2006)

Ship Engineering Co., Ltd. (Law Firm Maw Co., Ltd., Counsel for the plaintiff-appellant-appellant)

Head of Bupyeong-gu Incheon Metropolitan City (Attorney Fixed-ro, Counsel for defendant-appellant)

Seoul High Court Decision 2008Nu21524 decided July 15, 2009

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

1. Article 6(2) of the former Restriction of Special Taxation Act (amended by Act No. 8138, Dec. 30, 2006; hereinafter the same) defines “a venture business under Article 2(1) of the Act on Special Measures for the Promotion of Venture Businesses, which is prescribed by the Presidential Decree, as a venture business and verified as a venture business under Article 25 of the same Act within two years after its establishment, as a small and medium venture business.” Article 119(3)1 of the same Act provides that “registration of business property acquired by a small and medium venture business start-up enterprise to conduct the relevant business (referring to the date verified as a venture business) within two years from the date of its establishment (referring to the date verified as a venture business),” and Article 120(3) of the same Act provides that the acquisition tax shall be exempted for the acquisition of business property under Article 119(3)1.

Meanwhile, Article 25(1) and (2) of the former Act on Special Measures for the Promotion of Venture Businesses (amended by Act No. 7868, Mar. 3, 2006; hereinafter “ Venture Business Act”), Articles 2-2 and 18-3 subparag. 2 of the Enforcement Decree of the same Act (amended by Presidential Decree No. 19498, Jun. 2, 2006); and Article 8 of the Enforcement Rule of the same Act (amended by Ordinance of the Ministry of Commerce, Industry and Energy No. 342, Jun. 5, 2006; hereinafter “Enforcement Rule of the Venture Business Act”) provides that a venture business which intends to be supported shall be issued a confirmation of whether it falls under a venture business, for which two years have passed since the date of confirmation; Article 8(4) of the Enforcement Rule of the Venture Business Act provides that a new venture business shall be issued by the Administrator of the Small and Medium Business Administration; Article 203-12 of the Presidential Decree of the Small and Medium Business Administration shall be confirmed as a preliminary one-month.

2. Article 119(3)1 of the former Restriction of Special Taxation Act provides that “The date of obtaining a confirmation as a venture business” shall mean the date of obtaining a confirmation as a venture business under Article 25 of the said Act. Articles 2-2(1)3(c) and 25 of the said Act do not distinguish a preliminary venture business from a venture business under Article 2-2(1)3(c) of the said Act. The method of confirming a venture business does not indicate that the preliminary confirmation as to a venture business under Article 25 of the said Act is the same as the confirmation of a venture business. According to the guidelines of confirming a venture business, a confirmation of a venture business may be issued only if six months have passed since the issuance of the preliminary confirmation as to a venture business after its establishment. Considering the fact that the period of validity of the preliminary venture business is the same as the period of validity of the confirmation of a venture business, an enterprise obtaining a confirmation as to a venture business under Article 119(3)1 and 25 of the said Act, as a matter of course, may be converted into a venture business after its establishment.

3. In full view of the evidence of its employment, the lower court determined that: (a) the Plaintiff acquired a preliminary venture business confirmation certificate from August 3, 2005 to August 2, 2007 with respect to a new venture business with respect to the development technology of automobile parts from Incheon Regional Small and Medium Business Administration on July 4, 2005; (b) the Plaintiff issued a preliminary venture business confirmation certificate from August 3, 2005 to August 2, 2007 with respect to a new venture business with respect to a new venture business with respect to the development technology of automobile parts; and (c) the Plaintiff obtained a confirmation with respect to a new venture business with respect to a new venture business with respect to a land located in Bupyeong-gu Incheon Metropolitan City 420-4 square meters and building 7,01.4 square meters (hereinafter collectively referred to as “the real estate of this case”) and completed the registration of the new venture business from the date of receiving the confirmation from the Plaintiff to the date of receiving the confirmation from the Administrator of the Small and Medium Business Administration to the date of Incheon Special Metropolitan City 20.3.

The judgment of the court below is just in accordance with the above provisions and legal principles, and there is no error in the misapprehension of legal principles as to the above provision as otherwise alleged in the ground of appeal.

4. 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 on the bench.

Justices Ahn Dai-hee (Presiding Justice)