'Real estate which has not been used directly for the business of the juristic person concerned for one year or longer until the date of transfer' shall not be excluded from the reduction and exemption of special surtax regardless of whether there are justifiable reasons for the purchase purpose or non-use (affirmative)

If a real estate acquired after January 1, 1981 pursuant to the main sentence of Article 54 of the former Enforcement Decree of the Regulation of Tax Reduction and Exemption Act (amended by Presidential Decree No. 13493 of Oct. 31, 1991), which was not used directly for the business of the juristic person concerned for not less than one year from the date of transfer stipulated in Article 20-2 (1) 1 of the Enforcement Decree of the same Act (amended by Ordinance of the Ministry of Finance and Economy No. 1878 of Mar. 3, 1992), is only a real estate which is not directly related to the business of the juristic person concerned, regardless of whether it was purchased through the original business of the juristic person, it shall not be subject to the provisions of the Regulation of Tax Reduction and Exemption and Exemption Act or special surtax of other Acts, regardless of whether it was purchased through the business of the juristic person, and if it was not used directly for the business of the juristic person

Article 66 (see current Article 77) of the former Regulation of Tax Reduction and Exemption Act (amended by Act No. 4451 of Dec. 27, 1991); Article 54 (see current Article 73) of the former Enforcement Decree of the Regulation of Tax Reduction and Exemption Act (amended by Presidential Decree No. 13493 of Oct. 31, 1991); Article 20-2 (1) 1 (see current Article 38 (1) 1) of the former Enforcement Decree of the Regulation of Tax Reduction and Exemption Act (amended by Ordinance of the Ministry of Finance and Economy No. 1878 of Mar. 3, 1992)

Hyundai Co., Ltd. (Attorney Jeon Jong-gu, Counsel for the defendant-appellant)

the director of the tax office

Seoul High Court Decision 95Gu18033 delivered on July 26, 1996

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

We examine the grounds of appeal.

Article 66 of the former Regulation of Tax Reduction and Exemption Act (amended by Act No. 4451 of Dec. 27, 1991; hereinafter referred to as the "Act") provides that "the provisions of this Act or other Acts concerning the non-taxation, reduction and exemption of special surtax shall not apply to real estate which is not directly related to the business of a corporation as prescribed by the Presidential Decree", and the main sentence of Article 54 of the Enforcement Decree of the Act (amended by Presidential Decree No. 13493 of Oct. 31, 1991) provides that "the real estate acquired after January 1, 1981 and has no relation to the business of a corporation as prescribed by the Ordinance of the Ministry of Finance and Economy shall be subject to the criteria for determining real estate which is not directly related to the business of a corporation, and Article 20-2 (1) of the Enforcement Rule of the Act (amended by Ordinance of the Ministry of Finance and Economy No. 1878 of Mar. 3, 1992) provides that "the Enforcement Decree of the Act shall continue to use real estate for the business.

However, from the perspective of the above provision form, the concept of "real estate not directly related to the corporation's business" takes a wider concept than the concept of "real estate prescribed by the Presidential Decree", and it is not likely that it is again prescribed by the Presidential Decree among the real estate not directly related to the corporation's business. However, the above provision should be interpreted as "real estate which is not directly related to the corporation's business and is prescribed by the Presidential Decree" as a whole. Thus, if the real estate is not used directly for the corporation's business for more than one year before the date stipulated in the main sentence of Article 54 of the Enforcement Decree of the Act and Article 20-2 (1) 1 of the Enforcement Decree of the Act, regardless of whether it was purchased for the original corporation's business purpose, it shall not be applied to the provisions of this Act or other Acts concerning the non-taxation, reduction or exemption of special surtax.

In addition, in light of the above provisions, as long as it was not used directly for the business of the corporation concerned for at least one year before the date of transfer, it shall be deemed that the application of the above provisions on non-taxation and reduction of special surtax is excluded without asking whether there is any justifiable reason for such use.

Therefore, the court below's decision that the plaintiff was excluded from the reduction or exemption of special surtax on the sole basis of the fact that the plaintiff did not directly use the plaintiff's business for at least one year from September 30, 198 to July 29, 191, which was the date of acquisition from September 30, 198 to July 29, 191, is justified in light of the above legal principles, and there is no error of misapprehending the legal principles under Articles 57 and 66 of the Act, Article 20-2 of the Enforcement Rule of the Act, Article 20-2 of the Enforcement Rule of the Act, or interpretation contrary to the standards or preparation of the tax law interpretation under Article 18 of the Framework Act on National Taxes, as

On the other hand, the argument that the transfer of land expropriated or acquired through consultation for a public project under Article 3 subparagraph 1 of the Land Expropriation Act (Article 2 subparagraph 2 of the Public Land Expropriation Act), without regard to whether it is real estate not directly related to the corporation's business, shall be exempted from Article 66 of the Act and the special surtax shall be abated or exempted by applying Article 57 of the Act without regard to whether it is real estate directly related to the corporation's

In addition, since Article 14 of the Addenda to the former Regulation of Tax Reduction and Exemption Act (Act No. 4285 of Dec. 31, 1990) does not exclude the application of Article 66 of the Act, even if the transfer of the land in this case is a case where the land, etc. necessary for large-scale development projects is transferred before December 31, 1991, the special surtax cannot be exempted unless it falls under a case provided for in Article 66 of the Act, and thus, the judgment below to the same purport cannot be said to be erroneous.

Therefore, the appeal is dismissed and all 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 Lee Don-hee (Presiding Justice)