In cases where land is acquired for the construction of a separate hotel after the enforcement of Article 13(3) of the former Enforcement Decree of the Foreign Capital Inducement Act (amended by Presidential Decree No. 12185, Jun. 25, 1987; Presidential Decree No. 12475, Jul. 1, 1988; Presidential Decree No. 12475, Jun. 25, 198) that limited the business subject to exemption from income tax to manufacturing, whether foreign investment in the existing approved business is included in paid-in capital in which the foreign investment part

In full view of the relevant provisions of the former Foreign Capital Inducement Act (amended by Act No. 4128 of Jun. 16, 1989), in cases where a Korean national residing abroad under the Overseas Koreans Registration Act has obtained authorization of capital increase for the purpose of the establishment of a hotel hotel for the expansion of existing hotel business after January 1, 1988 and acquired real estate for the authorized business after the enforcement of the amended Enforcement Decree pursuant to the Addenda, it is identical to that of the existing authorized business and the approved business for capital increase, even if the business subject to acquisition tax exemption is limited to the manufacturing business, it can only be included in the ratio of foreign investment eligible for tax reduction or exemption only after the enforcement of the above provision, and it cannot be deemed that the portion of foreign investment in the existing authorized business can also be included in paid-in capital.

Article 14(4) of the former Foreign Capital Inducement Act (amended by Act No. 4128 of Jun. 16, 1989); Article 13(3) of the Enforcement Decree of the same Act (amended by Presidential Decree No. 12185 of Jun. 25, 1987); Article 13(3) of the same Act (amended by Presidential Decree No. 12475 of Jul. 1, 1988); Addenda (amended by Presidential Decree No. 12475 of Jun. 25,

Suwon Tourism Co., Ltd., Counsel for the defendant-appellant

Attorney Hong-soo et al., Counsel for the plaintiff-appellant

Gwangju High Court Decision 90Gu1952 delivered on August 30, 1991

The appeal is dismissed.

The costs of appeal are assessed against the defendant.

We examine the grounds of appeal.

1. According to Article 14(1) of the Foreign Capital Inducement Act (amended by Act No. 4128 of Jun. 16, 1989), the purport that acquisition tax shall be exempted in accordance with the provisions of paragraph (4) in cases where the investment projects of Korean nationals residing abroad under the Registration of Korean National Residing Abroad Act meet the standards prescribed by the Presidential Decree. Article 13 of the Enforcement Decree of the same Act is amended by Presidential Decree No. 12185 of Jun. 25, 1987, and Article 13(3) of the Enforcement Decree of the same Act provides that "investment projects of Korean nationals residing abroad under the Registration of Korean National Residing Abroad Act means manufacturing projects conducted by Korean nationals residing abroad," and Article 14(2) of the Addenda of the same Act provides that "the amended provisions of the above Enforcement Decree shall apply mutatis mutandis only to the portion of foreign investment, which is registered after the first application for authorization of foreign investment pursuant to the provisions of Article 7(1)3 of the same Act, to the effect that it shall apply mutatis mutandis to the pertinent business from the date of foreign investment."

In full view of the above provisions and other relevant provisions of the Foreign Capital Inducement Act, in cases where a Korean national residing abroad under the Act on the Registration of Korean National Abroad establishes a foreign-invested company with foreign investment approval and operates a tourist hotel business, and obtains an authorization of capital increase for the purpose of the construction of a hotel hotel for the expansion of the existing hotel business after January 1, 198 when the Enforcement Decree was amended in accordance with the Addenda, and acquired real estate for the authorized business, so long as the existing authorized business and the authorized business are related to the hotel business as the contents of the hotel business, it shall be identical, even if Article 13(3) of the Enforcement Decree of the above Act limits the business subject to acquisition tax exemption to the manufacturing business, it shall not be deemed that the foreign investment portion in the existing authorized business shall not be included in the foreign investment ratio, and it shall not be deemed that the foreign investment portion in the existing authorized business may also be subject to tax reduction or exemption.

2. Accordingly, the court below determined to the same purport that the plaintiff registered a foreign-capital invested company with respect to the existing authorized business on October 21, 1987 and acquired the land and buildings in this case for the purpose of using it as hotel rooms after January 1, 1988, the enforcement date of the above amended Enforcement Decree. In calculating the ratio of foreign investment, the ratio of acquisition tax exemption for the land and buildings in this case, the foreign investment portion in the approved business is not included in the increased business, and it is clear that only the existing authorized business falls under the reduction and exemption period, and therefore, it is just to regard the foreign investment portion in the approved business as the paid-in capital subject to the reduction

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.