Seoul High Court 2011Nu31859 (2012.03.07)

National High Court Decision 2007west1844 (2010.02.04)

payments made under a specific purchase transaction shall be subject to tax credit to improve the corporation’s bill system.

The price paid by the Supplier to the Supplier under the "specified Purchase Transactions" purchased from the Supplier at the time of sale of the goods to the customer by the Supplier shall be subject to a tax credit to improve the corporation's bill system.

Article 7-2 of the Restriction of Special Taxation Act

2012du7844 and revocation of disposition of imposing corporate tax and value-added tax.

XX Co., Ltd

Head of Mapo Tax Office

Seoul High Court Decision 2011Nu31859 Decided March 7, 2012

July 26, 2012

The appeal is dismissed.

The costs of appeal are assessed against the defendant.

The grounds of appeal are examined.

Article 7-2 (1) (main sentence) of the former Restriction of Special Taxation Act (amended by Act No. 7322 of Dec. 31, 2004; hereinafter "the Act") provides that where a national operating a business pays a purchase price by settling a bill of exchange or a written request for collection of sale proceeds, or where payment is made by using an exclusive-use card for business purchase purchase, the amount equivalent to 3/1,000 of the amount calculated by subtracting the amount under subparagraph 2 from the amount under subparagraph 1 shall be deducted from the income tax (limited to the income tax on business income) or the corporate tax, while subparagraph 1 provides that the amount equivalent to 3/1,00 of the amount calculated by subtracting the amount under subparagraph 2 from the amount under subparagraph 1

"The amount of bills of exchange settled to pay purchase prices, the amount of a written request for collection of sale proceeds, the amount of a company's exclusive purchase card, and the amount paid by using the loan system for loan against loan against credit sales claims," respectively, and Article 3 (3) 1 of the same Act provides that "the amount of a promissory note settled to pay purchase prices" means the amount of "purchase prices" used in paragraph (1) of the same Article.

After finding the facts as stated in its holding, the court below held that the tax credit system for improving the corporate bill system provided in Article 7-2 of the Act was intended to provide tax support to a purchasing enterprise in cases where a purchasing enterprise makes a settlement in a way that makes it easy to equitable due to the default of a promissory note, and that it is necessary to induce the Plaintiff to make a settlement in a way that makes it easy to equitable because the Plaintiff can use a promissory note as a settlement means even for a transaction price that is settled by the supplier pursuant to the specific purchase transaction of this case.Third, the court below determined that the Plaintiff’s disposal of the purchase price of the goods supplied by the supplier in the specific purchase transaction of this case constitutes a "person who supplies the supplier", the Plaintiff’s "person who receives the delivery", the Plaintiff’s "person who receives the purchase price from the supplier", the Plaintiff’s "person who receives the purchase price", the Plaintiff’s sales price of the goods in the specific purchase transaction of this case can be deemed as the purchase price of the Plaintiff under the Corporate Tax Act.

In light of the contents of the above legal provisions, their legislative intent, and records, the judgment of the court below is just, and there is no error in the misapprehension of legal principles as to Article 7-2 of the Act, as otherwise alleged in the

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.