The meaning of "money and valuables donated free of charge to the State or a local government" under Article 18 (2) 1 of the Corporate Tax Act

The term “money and valuables donated free of charge to the State or a local government” under Article 18(2)1 of the Corporate Tax Act means money and valuables donated free of charge to the State or a local government by the State or the local government after the fact that the other party to the donation is the State or the local government is the State or the local government, and the nature of the money and valuables is not different. Thus, even if the State or the local government voluntarily transferred the money and valuables to other related organizations for the purpose of donation and provided them for the purpose of donation, it does not constitute money and valuables donated free of charge

Article 18(2)1 of the Corporate Tax Act

Gyeonggi Development Corporation (Attorney Lee Ba-ho, Counsel for defendant-appellant)

Head of Suwon Tax Office

Seoul High Court Decision 84Gu1066 Decided April 9, 1985

The appeal is dismissed.

The costs of appeal shall be borne by the defendant.

The grounds of appeal are examined.

In addition, Article 18(1) of the Corporate Tax Act recognizes the nature of deductible expenses only within the scope of a certain amount of the donation in light of the size and financial capacity of the juristic person in question as a general principle (so designated donation). Article 18(2) of the same Act exceptionally provides that the value of the donation free of charge to the State or a local government (Article 18(1) of the same Act, national defense cash and relief aid and relief aid funds (Article 1(2)), the value of the donation free of charge for the victims of natural disasters (Article 2(3) of the same Act) shall be treated as deductible expenses in the purport that the State secures it as a result of securing tax revenues. Of the above, the "money and valuables gratuitously donated to the State or a local government" refers to the money and valuables donated to the State or a local government where the other party to the donation is the State or a local government, and it does not constitute the purpose of transferring the donation money and valuables to the State or a local government without compensation.

According to the court below's decision, the court below found that the plaintiff corporation donated the sports promotion fund of the amount as stated in its decision free of charge to Gyeonggi-do on each date of original adjudication, and Gyeonggi-do has paid the money to the 10th juvenile body and the expense subsidy for the national physical transfer to the 62,63th national body, and the Gyeonggi-do Sports Association has received the money and consumed the money for the above juvenile body and the national body, and the Gyeonggi-do has recognized the fact that the money was managed and executed in accordance with the budget of revenue and expenditure in accordance with the "Guidelines Guidelines for the Management of Various Gender Payments" and the "Financial Accounting Rules of Gyeonggi-do," and found the fact that the above money was managed and executed in accordance with the budget of revenue and expenditure, the above amount of the sports promotion fund that the plaintiff corporation donated without compensation to Gyeonggi-do can be treated as the total amount of losses pursuant to Article 18 (2) 1 of the Corporate Tax Act, so the actual donee is the Gyeonggi-do Sports Association's sports promotion fund and the designated donation falling under Article 42 subparagraph 7 of the Enforcement Decree.

Therefore, the appeal is dismissed, and the costs of the appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices.

Justices Yellow-ray (Presiding Justice)