[1] Whether a housing improvement redevelopment cooperative under the former Urban Redevelopment Act constitutes a non-profit corporation under the Corporate Tax Act (affirmative)

[2] The case affirming the judgment of the court below which held that the income from the general sale of apartment houses designated as withholding facilities by the management and disposal plan under the former Urban Redevelopment Act after the dissolution date of the association constitutes a liquidation income of a non-profit domestic corporation and is not subject to corporate

[1] A housing improvement redevelopment cooperative under the former Urban Redevelopment Act (amended by Act No. 5116 of Dec. 29, 1995) constitutes a non-profit corporation established under a special Act under Article 1(1) of the Corporate Tax Act, which has the purpose of establishment under Article 32 of the Civil Act and its similar purpose of establishment

[2] The case affirming the judgment of the court below which held that the sales revenue amount from the above withholding facilities constitutes liquidation income of a non-profit domestic corporation and thus the corporate tax is not subject to taxation, since the disposal and disposal plan of the housing improvement redevelopment cooperative under the former Urban Redevelopment Act (wholly amended by Act No. 5116 of Dec. 29, 195) generally sold the apartment designated as withholding facilities after the dissolution date of the cooperative, since the above withholding facilities, which are residual property, are realized and distributed to the

[1] Article 1(1) of the former Corporate Tax Act (amended by Act No. 5581 of Dec. 28, 1998) Article 2(see current Article 3) of the former Urban Redevelopment Act (amended by Act No. 5116 of Dec. 29, 1995); Articles 43, 49, and 53 of the former Urban Redevelopment Act (amended by Act No. 6852 of Dec. 30, 2002) / [2] Article 1(1) (see current Article 1 subparag. 2) of the former Corporate Tax Act (amended by Act No. 5581 of Dec. 28, 1998); Article 2(2) (see current Article 3(1)2 of the former Urban Redevelopment Act (amended by Act No. 5581 of Dec. 29, 195); Article 3(2) of the former Urban Redevelopment Act (amended by Act No. 51530, Dec. 36, 2005)

Private Housing Improvement Development Cooperatives (Law Firm Gwangju, Attorneys Kim Tae-ho et al., Counsel for the plaintiff-appellant)

[Defendant-Appellee] The Head of Dongjak Tax Office (Attorney Kim Yong-sik)

Seoul High Court Decision 2003Nu9079 delivered on June 9, 2004

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

We examine the grounds of appeal.

1. Whether it is a nonprofit corporation under the Corporate Tax Act;

According to the reasoning of the judgment below, the court below acknowledged the facts as stated in its holding. Since an urban redevelopment cooperative established under the former Urban Redevelopment Act (wholly amended by Act No. 5116, Dec. 29, 1995; hereinafter referred to as the "former Urban Redevelopment Act") provides that the members of the association shall own their own shares, transfer their residual assets at the time of liquidation, and it cannot be viewed as non-profit domestic corporations under the Corporate Tax Act because the association's ownership can be distributed at the time of liquidation, and therefore, the plaintiff association established under the former Urban Redevelopment Act does not constitute a non-profit corporation under the Corporate Tax Act (wholly amended by Act No. 5581, Dec. 28, 1998; hereinafter referred to as "non-profit domestic corporations" under Article 32 of the Civil Act or Article 10 of the Private School Act shall be a corporation established under the former Urban Redevelopment Act, which is a non-profit corporation established under the same Act for the purpose of its establishment and other similar purposes. The plaintiff association established under the former Urban Redevelopment Act, its members, as the land redevelopment project or its ownership.

In light of the relevant laws and records, the above recognition and judgment of the court below is just, and there is no error of law that affected the conclusion of the judgment due to misunderstanding of legal principles as to nonprofit corporations under the Corporate Tax Act and misunderstanding of facts, as otherwise alleged in the ground of appeal.

2. Whether it falls under liquidation income;

According to the reasoning of the judgment below, the court below acknowledged the facts as stated in its reasoning. The plaintiff's assertion that the revenue from the sale of this case's withholding facilities constitutes a non-profit domestic corporation, not a liquidation income, but a property acquired as a result of the redevelopment project, which is the plaintiff's profit-making business, and is subject to corporate tax, since it constitutes income during each business year during the period of liquidation. The withheld facilities of this case are not for the purpose of general sale with profit-making business of the plaintiff union, but for the purpose of solving additional demand for sale to the members in the future due to the modification of the management disposition plan due to omission, error, etc. of the object of sale in the process of the redevelopment project, and for the reason that additional demand for sale to the members in the process of the redevelopment project has not occurred until the dissolution of the plaintiff association, the remaining remaining property after the completion of the liquidation shall be distributed to the members in proportion to the value of the previous land, and since it constitutes a non-profit domestic corporation's facility subject to redevelopment after the dissolution of the remaining property after the completion of the liquidation.

In light of relevant laws and records, we affirm the above recognition and judgment of the court below as just, and there is no error of law by misunderstanding legal principles as to liquidation income under the Corporate Tax Act, as otherwise alleged in the ground of appeal.

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 Yang Sung-tae (Presiding Justice)