Seoul Administrative Court 2005Guhap15083 ( November 24, 2005)

The legitimacy of the assertion that the disposition imposed is not reported as reorganization claims by deeming the assets revaluation marginal profits as discretionary evaluation marginal profits.

In the event that the amount should be paid by including the assets revaluation spread due to a failure to list within the listing period, the date on which the listing period ends. Therefore, a taxation disposition has been made after the commencement of a company reorganization procedure.

The contents of the decision shall be the same as attached.

Article 9 (Income for Each Business Year of Corporate Tax Act)

Article 15 (Non-Inclusion in Gross Income)

1. The plaintiff's appeal is dismissed.

2. The costs of appeal shall be borne by the Plaintiff.

The decision of the court of first instance shall be revoked. The defendant's disposition of imposition of corporate tax of KRW 9,076,951,760 against the plaintiff on January 16, 2004 in excess of KRW 970,958,020, and the defense tax of KRW 2,478,610,640, in excess of KRW 413,101,770, and the disposition of imposition of KRW 164,52,60, in excess of KRW 970, and the defense tax of KRW 2,478,610,640 shall be revoked.

1. Details of the disposition;

The following facts are not disputed between the parties, or may be acknowledged by considering the whole purport of the pleadings as a whole in the entries in Gap evidence 1-1, 2, 3, 2-1, 2-2, 3, 4 and 1-6.

A. The plaintiff company (the original company's trade name was ○○○ KMM, which was 'the first ○○○ 2.1 January 1, 2007, changed to 'the duty-free shop stock company' on March 25, 2008, hereinafter "the plaintiff company") was ordered to commence corporate reorganization on December 12, 200 from the Seoul District Court, and the company was decided to authorize reorganization of the company on July 3, 2001. The company was manufacturing and selling magnetic tapes (the audio, video, computer, etc.) for which corporate reorganization was completed on January 26, 2006. The company did not report the revaluation of its assets to 9.19 on December 31, 199, under the premise that the company did not finally list its stocks to the Korea Stock Exchange under Article 56-2 (3) of the former Enforcement Decree of the Assets Revaluation Act or 9.2 (the same shall apply to the previous Article 56-2) of the Corporate Tax Act, and did not report the revaluation of its assets for 19.37.194.2

D. Accordingly, on January 16, 2004, on the ground that the Plaintiff Company did not list its stocks within the listing period, the Defendant, under Article 23 (1) of the Addenda of the former Regulation of Tax Reduction and Exemption Act (Act No. 4285, Dec. 31, 1990) 21,617,370 corporate tax for 190 and 11,92,967,967,967, and 160, 205, 30, 196, 206, 205, 30, 160, 206, 30, 50, 206, 206, 30, 196, 206, 30, 160, 196, 30, 196, 30, 196, 30, 196, 196, 30, 196.

A. The plaintiff's assertion

(1) The applicable law applied by the defendant in the disposition of this case shall be the provisions of the former Enforcement Decree of the Regulation of Tax Reduction and Exemption Act (referring to each of the provisions of the former Enforcement Decree of the Regulation of Tax Reduction and Exemption Act (amended by the relevant Acts and subordinate statutes; hereinafter the same shall apply) or the Enforcement Decree of the Restriction of Special Taxation Act (amended by the Presidential Decree No. 16693 and 17458 of the Enforcement Decree of the Restriction of Special Taxation Act, and all of the provisions of the current Enforcement Decree of the Restriction of Special Taxation Act among the Enforcement Decree of the Restriction of Special Taxation Act as stated in the relevant Acts and subordinate statutes; hereinafter the same shall apply) which provides the period of listing after January 1, 1994 according to the supplementary provisions of this case and the delegation thereof. Since the supplementary provisions of this case as the mother corporation loses its effect by the enforcement of the former Regulation of Tax Reduction and Exemption Act as amended by Act No. 4666 of Dec. 31, 193, the above provision of this case shall also be null and void.

(2) Article 12-3(2)2 and 3 of the Enforcement Decree of the Framework Act on National Taxes (amended by Presidential Decree No. 13192, Dec. 31, 1990; hereinafter “Enforcement Decree of the Framework Act on National Taxes”) provides that the period of listing under the former Enforcement Decree of the Act on the Regulation of Tax Reduction and Exemption and the Restriction of Special Taxation (amended by Presidential Decree No. 13192, Dec. 31, 1990; hereinafter “the period of exclusion from the imposition of corporate tax and defense tax”) shall not be considered as the revaluation under the Assets Revaluation Act if the stocks are not listed within the said period, and the excessive depreciation costs and the profits accruing from the transfer of underpaid assets based on the revaluated results shall not be considered as the revaluation under the Assets Revaluation Act, but shall not be deemed as the period of listing the stocks of the corporation which conducted the revaluation regardless of the exclusion period, and the period of exclusion from the imposition of the revaluation tax has elapsed since the expiration of the period of 29.31.

(3) The time of establishment of the corporate tax and defense tax in this case is December 31, 1990 when the taxable period ends, and the time of establishment of the revaluation tax in this case is December 31, 1990 when the taxable period ends, and the time of establishment of revaluation tax in this case is July 1, 1998 when the revaluation tax in this case was established. Meanwhile, the reorganization claim in the Company Reorganization Act is reported to the court within the reporting period, and if the reorganization claim is not reported within the reporting period, the claim is forfeited by the decision of approval of reorganization plan. The defendant did not report the disposition in this case within the reporting period under the Company Reorganization Act, and as long as the reorganization plan in the Plaintiff Company was already authorized, the right to impose the disposition in this case was entirely forfeited and extinguished.

B. Relevant statutes

Article 56-2 (Special Cases of Re-evaluation in Case of Disclosure of Company)

Article 66 (Special Cases concerning Asset Revaluation in Public Disclosure)

Article 109 (Special Cases concerning Asset Revaluation in Public Disclosure)

Article 9 (Income for Each Business Year of Corporate Tax Act)

Article 15 (Non-Inclusion in Gross Income)

C. Determination

(1) As to the assertion that it violates the principle of no taxation without law

(A) The amendment history of the special provisions on revaluation in the event of the disclosure of the company

Under the provisions of Article 88 (1) of the Securities and Exchange Act, a corporation which intends to list stocks for the first time at the Korea Stock Exchange under the provisions of Article 56-2 (1) of the same Act may conduct revaluation under the Assets Revaluation Act by treating the first day of each month as the revaluation date, notwithstanding the provisions of Articles 4 and 38 of the Assets Revaluation Act: Provided, That where a corporation which has conducted revaluation fails to list stocks on the Korea Stock Exchange within 2 years from the revaluation date, the revaluated already conducted shall not be deemed revaluation under the Assets Revaluation Act.

Article 13 of the former Enforcement Decree of the Restriction of Special Taxation Act (amended by Act No. 4285, Dec. 31, 1990) provides that "the former Enforcement Decree of the Restriction of Tax Reduction and Exemption Act (amended by Presidential Decree No. 135, Dec. 31, 1990) shall be deleted; Article 13 of the former Enforcement Decree of the Restriction of Tax Reduction and Exemption Act (amended by Presidential Decree No. 1358, Dec. 31, 1990) shall not be deemed revaluation under the Assets Revaluation Act, unless shares are listed within the period prescribed by Presidential Decree No. 56-2; Article 19 of the former Enforcement Decree of the Restriction of Tax Reduction and Exemption Act (amended by Presidential Decree No. 1381, Dec. 31, 1990); Article 19 of the former Enforcement Decree of the Restriction of Tax Reduction and Exemption Act (amended by Presidential Decree No. 1368, Dec. 14, 199) shall be amended by Presidential Decree No. 1656 of the former Enforcement Decree No. 201.

In a partial amendment of a law, the transitional provisions of the Addenda to the previous law do not automatically become null and void, unless there is a separate provision that the amendment or deletion of the transitional provisions is made. However, in the case of the whole amendment of a law, the main provisions of the previous law as well as the main provisions of the Addenda and their transitional provisions are repealed. However, even in such a case, if there are special circumstances to deem the amendment or the same as the former provisions exist, it shall not become null and void (see, e.g., Supreme Court Decision 2001Du1168, Jul. 26, 2002). Therefore, where there are circumstances to deem that the former transitional provisions are continuously applicable, the transitional provisions of the entire amendment shall not become null and void (see, e.g., Supreme Court Decision 2001Du1168, Jul. 26, 2002). Determination of whether there are such circumstances ought to be made by taking into account various circumstances such as the legislative process and purport of the previous transitional provisions, the legislative intent and overall amendment and overall system, whether there is void.

In light of the above legal principles, the provisions of the Addenda 1 to this case were deleted by the former Article 56-2, which is the special provision on asset revaluation, and the effect of the existing asset revaluation (paragraph 1) at the time of listing and the time of cancellation of the asset revaluation (paragraph 2) of the corporation under the above provision. Since the former Article 56-2, which is the special provision on asset revaluation, has been delegated to the Presidential Decree for the time of listing, it seems that the former Act on the Regulation of Tax Reduction and Exemption, even if the provisions of the Addenda to this case are not applied continuously under the revised Regulation of Tax Reduction and Exemption Act, may sufficiently regulate the matters concerning the special provision on asset revaluation which has already been repealed, it seems that there is no separate transitional provision on this matter. Furthermore, if the effectiveness of the provisions of the Addenda to this case becomes null and void as of January 1, 1994 due to the implementation of the wholly amended Regulation of Tax Reduction and Exemption Act, it is difficult to view the new provision on asset revaluation to be applied to the corporation whose asset revaluation had already been implemented within 16 years without the previous Article 2.

"If so, there is a special circumstance that the supplementary provision of this case is not effective even if the wholly amended Regulation of Tax Reduction and Exemption Act was enforced." (C).

Therefore, since the supplementary provisions of this case, which are the basis for the imposition of corporate tax and defense tax, and the enforcement decree of the former Enforcement Decree of the Regulation of Tax Reduction and Exemption Act or the Enforcement Decree of the Restriction of Tax Reduction and Exemption Act, which are the basis for the imposition of corporate tax and defense tax, have not been invalidated even after the enforcement of the wholly amended Regulation of Tax Reduction and Exemption Act, the imposition of corporate tax and defense tax in this case is legitimate. In addition, as long as the revaluation of assets conducted on October 1, 1990 does not be regarded as revaluation under the Assets Revaluation Act, the revaluation of assets on July 1, 1998 shall be deemed as the exception of Article 13 (1) 1 of the Assets Revaluation Act, which is the land acquired before December 31, 1983, which is acquired before December 31, 1983, it shall not be applied to the first revaluation of land not conducted after January 1, 1984, and therefore, the plaintiff's assertion that the tax rate of revaluation tax in this case is legitimate.

(2) As to the assertion that the exclusion period has expired

Article 26 subparag. 2 of the Framework Act on National Taxes provides that the obligation to pay national taxes shall expire without imposing national taxes within the exclusion period under the provisions of Article 26-2 of the same Act. Article 26-2 of the Framework Act on National Taxes provides that the exclusion period of national taxes, excluding inheritance tax and gift tax, shall be five years from the date when national taxes can be imposed in principle. Article 9(2) of the former Corporate Tax Act and Article 12(1)5 of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 1468 of Dec. 31, 1994) provides that the exclusion period of 10/10 of the revaluation tax shall not be counted in gross income until the date when the revaluation rate of 20/10 of the previous revaluation tax shall not be counted in gross income, but the exclusion period of 20/10 of the previous revaluation tax shall not be counted in gross income until the date when the revaluation rate of the company is calculated under the provisions of Article 15(1)5 of the Corporate Tax Act.

Therefore, it is apparent that the disposition of this case imposed on January 16, 2004 within the exclusion period is within the exclusion period. Thus, the plaintiff's above assertion is without merit.

(3) As to the assertion that forfeiture was forfeited

Where a taxation claim against a reorganization company satisfies the taxation requirements under the Act before the commencement of reorganization proceedings, such taxation claim shall be a reorganization claim even after the commencement of reorganization proceedings, and a taxation claim against the reorganization company shall be forfeited or extinguished unless it is reported without delay at the latest prior to the second meeting of interested parties, which is the date of the commencement of reorganization programs, under Article 157 of the Company Reorganization Act (see, e.g., Supreme Court Decisions 2001Du7268, Sept. 4, 2002; 93Nu1417, Mar. 25, 1994).

On the other hand, according to Paragraph (1) of the Addenda of this case and the former Enforcement Decree of the Restriction of Tax Reduction and Exemption Act and the Enforcement Decree of the Restriction of Special Taxation Act, where the company first listed stocks should include assets revaluation in its gross income and pay the corresponding amount in its gross income due to not listed stocks within the listing period, the date satisfying the taxation requirements should be deemed the date of the closing of the listing period, and in light of such legal principles, the taxation requirements of this case cannot be seen as the expiration of the listing period, even if the company did not file a report within the reporting period after the commencement of the company reorganization procedure as of January 31, 2004, as of January 16, 2004.

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and the judgment of the court of first instance is justified as it is so decided as per Disposition.