A. Whether Article 59-2(1) of the former Corporate Tax Act and Article 124-3(5) and (6) of the Enforcement Decree of the former Enforcement Decree of the Corporate Tax Act can be viewed to the effect that only buildings for other purposes deemed housing are excluded from taxation independently

(b) The case reversing the judgment of the court below holding that the sale of newly constructed commercial buildings incidental to the new construction or lease of a rental apartment is excluded from the special surtax;

A. Tax laws and regulations shall be strictly interpreted as a non-taxation requirement, and they shall not be extensively interpreted or analogical interpretation. Under Article 59-2(1) of the former Corporate Tax Act (amended by Act No. 4282 of Dec. 31, 1990), Article 124-3(5) and (6) of the Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 14080 of Dec. 31, 1993), where a corporation newly constructs and sells a house, the corporation shall be excluded from the special surtax on the house and its appurtenant land, and where a part of a building is constructed for other purposes such as a store, if the size of the house is equal to or larger than that of the building for other purposes, the provision shall be applied in light of the purport of Article 19-2(1) of the former Corporate Tax Act and Article 124-3(5) and (6) of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 14080 of Dec. 31, 297).

(b) The case reversing the judgment of the court below that where a new apartment complex was sold in addition to the new construction and lease of a rental house, it was excluded from special surtax;

Article 59-2(1) of the former Corporate Tax Act (amended by Act No. 4282 of Dec. 31, 1990); Article 124-3(5) and Article 124-3(6) of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 14080 of Dec. 31, 1993)

Non-permanent Co., Ltd. and one other plaintiffs et al., Counsel for the defendant-appellant-appellee

Head of Yeongdeungpo Tax Office

Seoul High Court Decision 94Gu5269 delivered on June 14, 1994

The judgment below is reversed and the case is remanded to Seoul High Court.

The grounds of appeal by the defendant litigant are examined.

According to the reasoning of the judgment below, the court below acknowledged that the plaintiffs, a corporation operating new construction and sale of houses under the Rental Housing Construction Promotion Act, as stated in its reasoning in each business year in 1987, sold apartment facilities (the sale of new construction of the judgment of the court below seems to be a clerical error in the construction), and that the size of the above welfare facilities is smaller than the size of each rental apartment. Since the new construction of rental housing is regulated under the Rental Housing Construction Promotion Act to promote the people's residential stability, and it should be the same as the new construction of the general housing in the aspect of supplying the people's housing. Thus, the court below determined that it is reasonable to exclude the special surtax from the imposition of the special surtax in the case of new construction of new rental housing as stated in Article 59-2 (1) of the Corporate Tax Act (amended by Presidential Decree No. 4282, Dec. 31, 1990; hereinafter the same shall apply) and Article 124-3 (5) and (6) of the Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 14080, Dec. 31, 319, ).

However, tax laws and regulations shall be strictly interpreted as a case of non-taxation, and they shall not be extensively interpreted or analogical interpretation. Under Article 59-2(1) of the Act and Article 124-3(5) and (6) of the Decree, in a case where a corporation newly constructs and sells a house, Article 124-3(5) and (6) of the Decree provides for the exclusion of special surtax on the house and its appurtenant land from taxation, and where a part of a building is constructed for other purposes such as a store, if the area of the house is equal to or larger than that of the building for other purposes, the entire house is deemed a house. However, in a case where a new house is built and sold for other purposes, the scope of deeming the house as a house as a house can not be deemed to be excluded from the independent taxable object on the sale of a building for other purposes even if the purpose of the above provision is not sold, and Article 10 of the former Rental Housing Act (wholly amended by Act No. 4629, Dec. 27, 1993) has limited the above scope of special surtax.

Therefore, the court below erred by misapprehending the legal principles on the exclusion of the special surtax in the case of newly constructing and selling a house under the Corporate Tax Act, and there is a reason to point this out.

Therefore, the judgment of the court below is reversed and the case is remanded to the court below. It is so decided as per Disposition by the assent of all participating Justices.

Justices Chocheon-sung (Presiding Justice)