Cho Jae-2016-west-1273 ( December 30, 2016)

3. A saw which is a receiving device for digital broadcasting is difficult to recognize as falling under a transmission facility which is an asset subject to investment tax credit.

Since it is difficult to recognize that the three saws, which is the receiving device for digital broadcasting, are the transmission facility, it is difficult to obtain the deduction of investment tax amount under Article 24 (1) 2 of the Restriction of Special Taxation Act for the purchase cost of the three saws.

Tax credits for investment, etc. in facilities for improving productivity under Article 24 of the Restriction of Special Taxation Act

2017Guhap60154 Demanding revocation of a disposition rejecting rectification

주식회사 ●●●●

○ Head of tax office

May 11, 2018

June 29, 2018

1. Of the instant lawsuits, the part of the revocation claim against the rejection disposition of correction claim amounting to KRW 909,175,395 of the corporate tax for the business year 2011 is dismissed.

2. The plaintiff's claim is dismissed.

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

Cheong-gu Office

On February 12, 2016, the part of the defendant's rejection disposition against the plaintiff exceeds KRW 909,175,395, corporate tax of KRW 1,640,231,537 for the business year 201, corporate tax of KRW 1,640,231,537 for the business year 201, in excess of KRW 98,988,156 among the rejection disposition of correction claim of KRW 419,978,816 for the business year 2013, and in excess of KRW 30,429,468 for the business year 2014.

1. Details of the disposition;

가. 원고(2016. 3. 30. 주식회사 ■■■에서 현재와 같이 상호를 변경함)는 2000. 1. 25. 설립되어 종합유선방송업 등을 영위하는 중소기업 아닌 법인이다.

B. The Plaintiff acquired the three saws (Set-Top BOx; hereinafter “the three saws” in this case), which is a receiving device for digital broadcasting, from the business year of 2011 to the business year of 2014, and subsequently reported and paid corporate tax for each business year to the Defendant, and did not apply the investment tax deduction under Article 24(1) of the former Restriction of Special Taxation Act (amended by Act No. 12853, Dec. 23, 2014; hereinafter the same) with respect to the purchase cost of the three saws.

C. On October 7, 2015, the Plaintiff: (a) applied the investment tax credit to the Defendant on the ground that the instant hsaws constitute “transmission facilities” subject to the deduction of the investment tax amount under Article 24(1) of the former Restriction of Special Taxation Act; (b) applied the investment tax credit to KRW 909,175,395 to the corporate tax refund accrued in the business year 2011; (c) applied the minimum tax amount under Article 132 of the Restriction of Special Taxation Act to the business year 2012; and (d) applied the minimum tax amount under Article 132 of the Restriction of Special Taxation Act to deduct the amount from the corporate tax for the business year 2012; and (e) applied the corporate tax to KRW 1,640,231,537 to the corporate tax for the business year 2012 and KRW 731,056,142 to the Defendant; and (e) applied the corrected amount to reduce the amount of tax to KRW 1516,1715.

D. On February 12, 2016, the Defendant rejected the instant claim for correction on the ground that the instant three-saws do not constitute assets subject to deduction of the amount of investment tax under Article 24(1) of the former Restriction of Special Taxation Act.

E. On March 25, 2016, the Plaintiff filed an appeal with the Tax Tribunal on March 25, 2016, but was dismissed on December 30, 2016, and was served on January 3, 2017.

F. Meanwhile, while the lawsuit of this case is pending, the plaintiff excluded the corporate tax amount on the purchase cost of an article without the cable m from the above amount of the claim for refund, and modified the purport of the claim as stated in the purport of the claim (hereinafter "the "the claim of this case") by excluding the corporate tax amount on the purchase cost of the article without the cable m from the above amount of the claim for refund ("the claim of this case").

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1-3, Eul evidence Nos. 1-2 and the purport of the whole pleadings

2. Judgment on the defendant's main defense of safety

A. The defendant's main defense

Of the instant lawsuits, the purport of the revocation claim against the disposition rejecting a request for correction of KRW 909,175,395 of the corporate tax for the business year 201 is merely a request for the confirmation that the carried-over deduction amount of the corporate tax for the business year 2011 is KRW 909,175,395, and even if cited, it cannot be a ground for filing a request for correction because the tax base and tax amount of the corporate tax for the business year 2011 are not different. Furthermore, the Plaintiff’s request for correction of KRW 1,640,231,537 of the corporate tax for the business year 2012 includes both KRW 909,175,395, and there is no benefit in filing a lawsuit to seek a request for correction against the corporate

B. Determination

According to Article 45-2(1) of the former Framework Act on National Taxes (amended by Act No. 12848, Dec. 23, 2014), an application for rectification shall be granted only when the tax base and tax amount entered in the tax base return are excessive, or the deficit amount or tax amount entered in the tax base return are deficient. Meanwhile, pursuant to Articles 144(1) and 132(1) of the former Restriction of Special Taxation Act, where the payable tax amount falls short of the minimum tax amount, the relevant business year shall not be eligible for the tax credit for such shortage, and instead, the amount which has not been deducted in the relevant business year may be carried over for five years

However, the Plaintiff’s tax amount to be paid for the business year 201 is below the minimum tax amount, and thus, even if the investment tax amount under Article 24(1) of the former Restriction of Special Taxation Act is not deducted in 2011, the Plaintiff can not be deducted in 2011, and it can be carried forward for five years, and even if a claim for correction can be filed in the sense that the carried forward deduction amount for the business year 2011 is recognized, in the case of the business year 2011, the tax base and tax amount are not entirely different depending on whether the deduction amount for the above investment tax is recognized or not in the case of the business year 2012, while the tax amount to be paid depending on whether the above 909,175,395 won is carried forward for the business year 2012, and thus, in the case of refusal of a claim for correction, there is no interest in dispute over the rejection of a claim for correction for the next

Therefore, the part of the claim for revocation against the rejection of the claim for correction of KRW 909,175,395 of the lawsuit of this case among the lawsuit of this case is inappropriate as there is no benefit of lawsuit. Thus, the defendant's main defense for safety is justified.

3. Whether the instant disposition is lawful

A. The plaintiff's assertion

Since the three saws of this case are directly used for the plaintiff's business as a transmission facility, the disposition of this case denying it is illegal even though it constitutes assets subject to the deduction of investment tax amount under Article 24 (1) of the former Restriction of Special Taxation Act.

B. Relevant statutes

It is as shown in the attached Form.

(c) Fact of recognition;

1) The Plaintiff, while running the cable broadcasting business, manufactures and purchases customized saws, which are operated only in the Plaintiff’s cable broadcasting service network, from the manufacture, installs them in TV, etc. of the subscribers, and collects the three saws rent from the subscribers separately from the broadcasting service fee.

2) According to the Korean Intellectual Property Office and the Korea Intellectual Property Protection Association published on December 2, 2011, the analysis of the current status of the activities of NPEs, III-C-Stop technical field, and the RFD technical characteristics of the three saws technical field are as follows:

Csaw-top means a signal transformation device that receives broadcasting signals transmitted in terrestrial, cable, or satellite and enables viewing through TV or other display devices. In other words, a device is a device that transmits a television to TV by converting a broadcast signal from a cryp to a dcop and using a dcop, image, voice, text, etc. after receiving it.

The cable TV receiver and satellite broadcasting receiver, etc. used to receive cable broadcasting or satellite broadcasting in addition to the terrestrial broadcasting from the general Arabic TV are set up in three saws.

In the early 1970s, the cable TV license hacks started from the Aday TV credit hacks (conversions). Since the 1980s, satellite broadcasting credit hacks led to alcoholic beverages. Since the late 1990s, rapid digitization has been developed, the substitution of digital hacks has been acceleratingd by using digital hacks.

Digital saws refer to digital media instruments that receive digital signals pressured in the form of PEG-2 as the recent digital broadcasting has been activated, and transmit them to DNA display, such as TV, through crowdfunding. The basic function of digital saws is to reproduce in a way that maintains the quality of the digital information compressed into PEG-2. Any signal transmitted through terrestrial, satellite, and cable according to each method shall be transmitted to tubes, and the signal transmitted through ducing function and transmission function shall be sent to ducers, and the FEC (inward Emeror Section) function shall be performed to correct bits arising from duc transmission function and transmission. The transmitted signal shall be rescinded in the form of MPEG-2, and shall be treated in image and voice processing division.

Smart saws refer to three saws that expand the function of Internet access to existing digital broadcasting services by carrying the improved hardware spaw and open-type operating platforms. Therefore, smart saws are characterized by providing both direction services (VOD, EPG) and Internet-based services, providing high-performance chips and mergs, providing support to the developers with high-performance chips and mergs, and disclosing platforms to the developers and building and operating TV app sets.

3) The instant three saws play a role in receiving signals sent by a cable broadcasting business entity by means of multiple-transmission of images, voice, data signals, etc., and then converting the modified signals received from the tubes into the original size, frequency, etc., by separating the compressed signals into each signal, such as images, voice, and data, and transmitting each signal to the DNA display system, and cable-typeing roles in receiving additional information necessary for digital broadcasting, and transmitting data and information necessary for transmission and reception of data, such as VOD Deman, etc.

4) The definitions of the terms in accordance with the Telecommunications Technology Association (TA) published by the Telecommunications Technology Association (TA) established with authorization of the Minister of Science and ICT to efficiently carry out affairs concerning standardization of information and communications, including the establishment and dissemination of standards for information and communications and technical assistance for information and communications pursuant to Article 34 of the Framework Act on Broadcasting Communications Development,

Transmission Facilities: Facilities that transmit or receive broadcasting content received from the exchange facilities and terminal devices by a wired or wireless means, transmission devices, relays, multiplexation devices, distribution devices, and ancillary facilities of the transmission group, which convert, reproduce, or expand broadcasting content received from the exchange facilities and terminal devices.

단말기기(terminal equipment, 端末機器): ① 시스템 또는 통신망의 한 지점에서 데이터가 그 시스템 또는 통신망에 들어가거나 그것으로부터 나오는 장소, ② 통신로를 통하여 정보를 송신 또는 수신할 수 있는 장치, ③ 수행될 작업과 관련된 환경에서 데이터를 입출력할 수 있는 장치. 입력을 전송할 수도 있고 출력을 받을 수도 있다.

5) The Ministry of Science, ICT and Future Planning’s direction for the preparation of a business report of the 2014-year fiscal year that was prepared and distributed to CATV broadcasting business operators, including the Plaintiff, stated that “the service life of the assets changed to transmission facilities from among the existing terminal facilities, such as three saws, determined as a result of the Advisory Council of the 2012 fiscal year advisory group, shall be eight years and shall be treated by the former Act.” Accordingly, the Plaintiff has kept the accounts by classifying the instant three saws by classifying them as four-year terminal equipment, and the service life from the fiscal year 2014 as eight-year

6) As the Ministry of Science, ICT and Future Planning classified the tax Tribunal's classification of the three saws' accounting regulations on the nature of the three saws according to the main function performed by the said Tax Tribunal, it cannot be classified into the transmission facilities and the end facilities. If the main function of the three saws is the terminal function, it is classified as the end facilities, and if the main function is the transmission function, it is classified as the transmission facilities, and it is classified by each case. Since the classification of the three saws' facilities under the Telecommunications Business Act and the relevant accounting regulations is determined according to the purpose required under the Telecommunications Business Act, it is different from the definition of facilities subject to tax credit under the Restriction of Special Taxation Act.

[Reasons for Recognition] A without dispute, Gap evidence Nos. 5-9, 12-19, Eul evidence Nos. 3 and 4, the purport of the whole pleadings

D. Determination

1) The issues of the case

Article 24(1)2 of the former Restriction of Special Taxation Act provides that "where a national invests in facilities prescribed by Presidential Decree among high technology facilities in order to improve productivity, an amount equivalent to 3/100 of such investment amount shall be deducted from corporate tax." Article 21(2) of the former Enforcement Decree of the Restriction of Special Taxation Act (Amended by Presidential Decree No. 26070, Feb. 3, 2015; hereinafter the same shall apply) and Article 12(2) [Attachment 2] of the former Enforcement Rule of the Restriction of Special Taxation Act (Amended by Ordinance of the Ministry of Strategy and Finance No. 614, Mar. 17, 2017; hereinafter the same shall apply) refers to "facilities prescribed by Presidential Decree" among telecommunications facilities and equipment for exchange, transmission, telecommunications facilities and terminal equipment used directly for the relevant business.

However, Article 130 (2) of the former Restriction of Special Taxation Act provides that, if a person who is not a small or medium enterprise newly opens a place of business in the overconcentration control region of the Seoul Metropolitan area and starts a business in the overconcentration control region of the Seoul Metropolitan area after January 1, 1990, Article 24 (1) 2 of the former Restriction of Special Taxation Act does not apply to the fixed assets for business acquired to use in the place of business located in the overconcentration control region of the Seoul Metropolitan area except information and communication equipment prescribed by Presidential Decree, and Article 124 (4) of the former Enforcement Decree of the Restriction of Special Taxation Act provides that "information and communication equipment prescribed by Presidential Decree" means exchange equipment, transmission equipment, line equipment and data processing equipment among telecommunications equipment and facilities under Article 8 of the Regulations on Adjustment of and Report on Telecommunications Business Accounting, excluding

However, since January 1, 1990, a company that is not a small and medium enterprise by the Plaintiff, but newly established a place of business in Seoul, which is located within the overconcentration control zone of Seoul, and thereafter acquired the instant 3 3 1 2 3 3 3 3 3 3 3 33 33 33 33 4, 241 2 of the former Restriction of Special Taxation Act, is not a dispute between the parties.

2) Determination as to whether a transmission facility constitutes a transmission facility

In full view of the following circumstances revealed by the facts and the purport of the entire pleadings, it is difficult to recognize the three saws of this case as a transmission facility. Thus, the disposition of this case is lawful on the premise that the Plaintiff cannot obtain an investment tax deduction under Article 24(1)2 of the former Restriction of Special Taxation Act for the purchase cost of the three saws of this case.

A) According to Article 8 of the Regulations on Adjustment and Report of Accounting for Telecommunications Business, in addition to the technical form of the relevant facilities for the division of transmission facilities and terminal facilities, the term “conversion” in the technical form of transmission facilities is also considered. The term “conversion” in the technical form of transmission facilities is not the same as the technology for the conversion of the transmission facilities of the three-saws, which originally cancelled the compressed one as a signal, and it seems clear that the compressed one constitutes a terminal connected to the telecommunications network when considering the physical form of the three-saws in the instant case. In addition, according to Article 2 Subparag. 3 of the Telecommunications Business Act, the transmission facilities should be “facilities composed of communications between the places of transmission and reception,” while the three-saws in the instant case are located at the place under the control of individual subscribers and are merely the facilities that function together with TV, PC, Internet telephone.

B) If the Ministry of Science, ICT and Future Planning examines the main function performed by a specific three saws and performs its main function of transmission, it may constitute a transmission facility. However, it is judged only from a technical point of view, and it is insufficient to consider it as a standard for determining whether it is an asset subject to investment tax credit under the Restriction of Special Taxation Act.

C) The purpose of the tax credit system under Article 24(1)2 of the former Restriction of Special Taxation Act is to expand the growth potential of Korean economy and to support corporate productivity innovation by encouraging the expansion of investment in facilities of high-tech business operators. This is a tax policy to promote and support investment in facilities by the State level in preparation for a case where investment in facilities is reduced due to the likelihood that the recovery of investment is required as a large amount of investment, such as communication network, but the recovery of investment is anticipated to be unclear or indirect means, and the inducement of investment in facilities is anticipated to be recovered. Accordingly, the investment tax credit shall not be applied to a limited extent consistent with the above purpose, but shall not

The plaintiff purchased the three saws of this case for the purpose of leasing them to the subscriber for the purpose of leasing them to the subscriber, and collected rent for the three saws of this case from the subscriber separately from the broadcasting service fee. Since it is clear from the beginning that the expenses incurred by the plaintiff for the purchase of the three saws of this case would be compensated directly by receiving the rent from the subscriber, applying the investment tax deduction system to such expenses does not comply with the purpose of the above-mentioned system.

D) Article 10 subparag. 2 and 3 of the Guidelines on the Accounting and Report of Broadcasting Business Entities, which regulates cable broadcasting business operators, are similar to the purpose of the Regulations on the Adjustment and Report of Telecommunications Business, which is delegated by Article 124(4) of the former Enforcement Decree of the Restriction of Special Taxation Act. Article 10 subparag. 2 and 3 of the Guidelines on the Accounting and Report of Broadcasting Business Entities, which regulates cable broadcasting business operators, defines the transmission equipment as the transmission equipment, transmission equipment, relay equipment, multiplexation equipment, distribution equipment, etc., which transmits or receives by wire or wireless transmission or wireless transmission by converting, reproducing, reproducing, or enlarging the codes, words, sound, and images received by an exchange equipment, terminal device, etc., and defines the transmission equipment as the transmission equipment of the above Regulations on the Accounting Adjustment and Report of Telecommunications Business. For terminal equipment, the terminal equipment is defined as the “contain and three-saws” as the terminal equipment to be leased to subscribers by pay broadcast business operators.

On this issue, the plaintiff asserts that the three saws referred to in the Guidelines for Accounting and Report of Broadcasting Business Entities refer to three saws with only reception function when considering the expression "person providing credit service". Thus, it is different from the three saws of this case in which cable-based service or Internet-based service can be provided by the cable-based service because the cable-based type is loaded. However, the above guidelines are currently applicable at the present time, such as the three saws, and even if the three saws of this case have both directions and Internet-based service function, it is unclear whether the service provider or Internet-based service provider performs the function of transmission after conversion of contents, reproduction, expansion, and transmission, even if the two saws of this case have both directions and Internet-based service function, and it is difficult to accept the above argument because the removal of compressed signals cannot be deemed as conversion of transmission equipment, and therefore, it is difficult to accept it as above with additional function as above.

4. Conclusion

Therefore, the part of the lawsuit in this case against the rejection disposition of correction claim of KRW 909,175,395 of the corporate tax of 2011 is unlawful, and thus, it is dismissed. The remaining claims of the plaintiff are dismissed as it is without merit. It is so decided as per Disposition.