Whether the issuing corporation of this case constitutes a small or medium enterprise

The transfer date of the instant shares is January 23, 2013; however, in order to determine whether a small and medium enterprise is a small and medium enterprise as of the transfer date of the instant shares, it shall be determined as whether a corporation issuing the instant shares is a small and medium enterprise

Article 104 (1) 11 of the Income Tax Act, Article 2 of the Heavy Techniques, etc.

Cheongju District Court 2017Guhap3316

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ㅁㅁ세무서장

National Rotations

2018.05.31

1. The plaintiff's claim is dismissed.

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

Defendant’s transfer income tax amounting to KRW 93,926,560 for the Plaintiff on February 1, 2016 (additional Tax) of the year 2013.

b) revoke the disposition of imposition.

1. Details of the disposition;

A. On January 23, 2013, the Plaintiff entered into a contract with AA Co., Ltd. (hereinafter referred to as “AA”), an unlisted corporation, to transfer 20,000 common shares (hereinafter referred to as “instant shares”) issued by AA to KRW 824,00,000 per share price (hereinafter referred to as “instant shares transfer”).

B. On May 27, 2013, the Plaintiff reported the transfer income tax on the instant stock transfer, and reported and paid KRW 71,738,000 of both income tax by applying 10% of the transfer income tax rate for the transfer of stocks of a small or medium enterprise pursuant to Article 104(1)11(b) of the former Income Tax Act (wholly amended by Act No. 12169, Jan. 1, 2014; hereinafter “former Income Tax Act”).

C. However, on February 1, 2016, the Defendant determined that AA as of the date of the instant stock transfer does not constitute a small or medium enterprise, and issued a corrective disposition on February 1, 2016 that added the transfer income tax of KRW 93,926,560 (including additional tax) to the Plaintiff by applying 20% of the transfer income tax rate for the transfer of stocks of a general enterprise pursuant to Article 104(1)11(c) of the former Income Tax Act (hereinafter “instant disposition”).

D. On April 20, 2016, the Plaintiff dissatisfied with the instant disposition and filed a request for review with the Board of Audit and Inspection on April 20, 2016, but the Board of Audit and Inspection decided to dismiss the Plaintiff’s request on September 28, 2017. The Plaintiff received it on October 10, 2017.

[Ground of recognition] Facts without dispute, entry of Gap evidence 1 to 4, purport of the whole pleadings

2. Determination on the legitimacy of the instant disposition

A. The parties' assertion

1) The plaintiff's assertion

Article 104 (1) 11 of the former Income Tax Act and Article 167-8 of the former Enforcement Decree of the Income Tax Act (wholly amended by Presidential Decree No. 24356, Feb. 15, 2013; hereinafter referred to as the "former Enforcement Decree of the Income Tax Act") stipulate only the criteria for judgment of small and medium enterprises to the Framework Act on Small and Medium Enterprises and its Enforcement Decree, and the time of judgment as of the date of transfer of stocks, etc. under the former Enforcement Decree of the Income Tax Act. Therefore, in calculating the transfer income tax, whether a small or medium enterprise is a small or medium enterprise as of the date of transfer shall be determined as of the

However, as of the end of 2012, AA, an issuer of the instant shares, falls under a small or medium enterprise, and according to such standards, the transfer income tax rate applicable to the transfer of the instant shares is 10% pursuant to Article 104(1)11(b) of the former Income Tax Act, and on the premise that it does not fall under AA’s small or medium enterprise, the instant disposition that calculated the transfer income tax rate of 20% is unlawful

2) The defendant's assertion

Article 104 (1) 11 of the former Income Tax Act delegates to Article 167-8 of the former Enforcement Decree of the Income Tax Act, and Article 167-8 of the former Enforcement Decree of the Income Tax Act delegates to Article 2 of the former Framework Act on Small and Medium Enterprises (wholly amended by Act No. 12240, Jan. 14, 2014; hereinafter referred to as the "former Framework Act on Small and Medium Enterprises").

Furthermore, Article 2 of the former Framework Act on Small and Medium Enterprises provides detailed criteria for determining whether a small or medium enterprise is small or medium enterprises

The Enforcement Decree of the Framework Act on Small Enterprises (wholly amended by Presidential Decree No. 25302, Apr. 14, 2014; hereinafter referred to as "former Enforcement Decree of the Framework Act on Small and Medium Enterprises") is delegated to Articles 3 through 3-3, among them.

In addition, the latter part of Article 3-3(1) of the former Enforcement Decree of the Framework Act on Small and Medium Enterprises provides that the application period of whether a small or medium enterprise is a small or medium enterprise shall be one year from the end of the immediately preceding business year until one year after the end of the immediately preceding business year. In other words, if a small or medium enterprise satisfies the application requirements as of the end of 2011, it constitutes a small or medium enterprise and if a small or medium enterprise satisfies the application requirements as of the end of 2012, it constitutes a small or medium enterprise from April 1, 2013 to March 31, 2014. Accordingly, whether a small or medium enterprise is a small or medium enterprise as of January 23, 2013, which is a stock transfer date of this case, shall be determined as of the end of 2011.

On the other hand, AA, an enterprise subject to the transfer of stocks of this case, is not a small or medium enterprise under the former Framework Act on Small and Medium Enterprises because it failed to meet the independence standard as of the last day of 2011, and thus, the disposition of this case applying 20% capital gains tax rate to the transfer of stocks

B. Relevant statutes

It is as shown in the attached Form.

C. Lawful of the instant disposition

1) Relevant legal principles

The principle of strict interpretation derived from the principle of no taxation without law is applicable not only to the cases that meet the taxation requirements, but also to the cases that meet the requirements for non-taxation and tax reduction and exemption. As such, extensively interpreting or analogical interpretation of the requirements for non-taxation or tax exemption and exemption as favorable to taxpayers without any justifiable reason would result in a violation of the tax equity doctrine, which is the basic ideology of the tax law (see Supreme Court Decision 2005Da19163, May 25, 2006). 2) In light of the following circumstances revealed by comprehensively taking into account the above legal principles at the time of determining whether a person is a small and medium enterprise or the facts recognized earlier at the time of determining whether the person is a small and medium enterprise and the purport of all pleadings, as alleged by the Defendant, it is reasonable to determine whether AA, as of January 23, 2013, is a small and medium enterprise as of January 23, 2013, as alleged by the Defendant.

A) Article 104 (1) 11 of the former Income Tax Act and Article 167-8 of the former Enforcement Decree of the Income Tax Act provide that "small and medium enterprises subject to the application of 10% of transfer income tax rate means enterprises falling under small and medium enterprises under Article 2 of the Framework Act on Small and Medium Enterprises as of the date of transfer of stocks, etc., thereby delegating the criteria for determining

B) However, Article 2 of the former Framework Act on Small and Medium Enterprises is largely divided into the requirements of small and medium enterprises: ① the size of the number of full-time workers, ② the independence of ownership and management; and again, it is delegated to the former Enforcement Decree of the Framework Act on Small and Medium Enterprises; accordingly, Article 3(1)1 of the former Enforcement Decree of the Framework Act on Small and Medium Enterprises provides the specific size criteria; and Article 3(2) of the former Enforcement Decree of the Framework Act on Small and Medium Enterprises provides the specific independence criteria; furthermore, Article 3-3 of the same Enforcement Decree provides the timing of determining the independence criteria; and Article 3-

C) In full view of the delegation system and content of the above provisions, the requirements for small and medium enterprises under the former Framework Act on Small and Medium Enterprises shall be satisfied in order to constitute a small and medium enterprise under the former Framework Act on Small and Medium Enterprises, and it is reasonable to deem that each of the relevant requirements should be satisfied to the proviso to Article 3-3(1) of the Enforcement Decree of the former Framework Act on Small and Medium

D) In relation to this, Article 167-8 of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 23588, Feb. 2, 2012) provides that "small and medium enterprises prescribed by Presidential Decree" means small and medium enterprises under Article 2 of the Framework Act on Small and Medium Enterprises as of the end of the business year immediately preceding the business year in which the transfer date of stocks, etc. belongs, but as of February 2, 2012, "as of the end of the business year immediately preceding the business year in which the transfer date of stocks, etc. belongs" was changed to "as of the transfer date of stocks, etc.", it can be confirmed that Article 167-8 of

On the other hand, the reason why the former Enforcement Decree of the Income Tax Act was amended as above is that there is a aspect that makes it difficult to accurately understand the substance of the enterprise at the time of the transfer date under the former Enforcement Decree of the Income Tax Act, and that the point of time to be applied under the Framework Act on Small and Medium Enterprises is changed by revising the expressions of the Enforcement Decree of the former Income Tax Act to solve such problem. Therefore, it is difficult to view that the Enforcement Decree

E) Therefore, in order to determine whether a “small and medium enterprise” is a “small and medium enterprise as of the date of transfer” under Article 167-8 of the former Enforcement Decree of the Income Tax Act, whether the relevant transfer date is a “date three months from the last day of the immediately preceding business year” shall be determined on the last day of the immediately preceding business year only in the latter case, and on the last day of the preceding business year not the last day of the immediately preceding business year in the case of the former. This shall be determined on the last day of the immediately preceding business year, not on the last day of the immediately preceding business year. For example, for example, 2013 and 2014 as of the date of transfer, the following table shall be applied as it is in this case, which is the date of

3) Whether A constitutes a small and medium enterprise as of the end of 2011

In accordance with Article 2(3) of the former Enforcement Decree of the Framework Act on Small and Medium Enterprises, AA does not constitute a small and medium enterprise because it fails to meet independence standards under Article 3(1)2(c) of the former Enforcement Decree of the Framework Act on Small and Medium Enterprises as of the end of the business year 2011, and as of the end of the business year 201 (the end of December 31, 201).

3. Conclusion

Therefore, the instant disposition applying 20% of the transfer income tax rate is legitimate on the premise that AA is not a small or medium enterprise as of the date of transfer of this case. Thus, the Plaintiff’s claim is dismissed on a different premise. It is so decided as per Disposition. (1) The Plaintiff’s reference materials for example, asserting that the application of the proviso of Article 3-3(1) of the former Enforcement Decree of the Framework Act on Small and Medium Enterprises should be excluded. However, in consideration of tax policy factors, the Restriction of Special Taxation Act and its Enforcement Decree provide different provisions concerning the requirements and scope of small or medium enterprises, such as restricting the application of special taxation to a small or medium enterprise, and the scope of the application of special taxation is excluded from the Framework Act on Small and Medium Enterprises. In other words, the Enforcement Decree of the Restriction of Special Taxation Act provides that if a small or medium enterprise is no longer a small or medium enterprise due to the expansion of its size or revision of statutes, it shall be issued differently from the Framework Act on Small and Medium Enterprises (see, e.g., Supreme Court Decision 2012Du1315.).