(a) Purpose of Article 6 (2) 2 of the Income Tax Act;

(b) Requirements for abatement or exemption of the transfer income tax under the same provisions.

A. Article 6(2)2 of the Income Tax Act intends to support the relocation of factories in order to ensure the continued operation of factories even after relocation by giving benefits from income tax reduction and exemption to the transferor of the previous factory site and building in order to relocate the ownership and operation of the factory, and to prevent the benefits of reduction and exemption from abuse of the benefits of real estate speculation.

B. In full view of the legislative intent of the preceding paragraph and the provisions on tax reduction and exemption should be strictly interpreted in accordance with the principle of tax equity, where the owner of the old factory building and site at the time of transfer and the operator of the factory are identical, and the ownership period and the actual operation period shall be two or more years retroactively from the date of transfer, and the new factory building, the owner of the site and the operator of the factory shall be the same as the person prior to the transfer, and even if the new factory building, the owner of the site and the operator of the site are one company of the old factory building, the owner of the site and the operator of the site are different, and their personality shall not be subject to reduction

Article 6 (2) 2 of the Income Tax Act, Article 18 (1) of the Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 10977 of December 31, 1982)

(b) Supreme Court Decision 84Nu321 delivered on September 11, 1984, Supreme Court Decision 87Nu745 delivered on March 8, 1988

Plaintiff

Director of the tax office

Seoul High Court Decision 87Gu154 delivered on February 10, 1988

The appeal is dismissed.

The costs of appeal are assessed against the plaintiff.

The grounds of appeal are examined.

Article 6 (2) of the Income Tax Act provides that "if there is income falling under any of the following subparagraphs among transfer income, the income tax shall be exempted by applying mutatis mutandis the provisions of paragraph (1)." Article 6 (2) 2 of the same Act provides that "income accruing from the transfer of land and buildings within the extent prescribed by the Presidential Decree for the purpose of relocating the factory continually operated for two years or more as prescribed by the Presidential Decree." Article 18 (1) of the Enforcement Decree of the same Act (amended by the Presidential Decree No. 1097 of Dec. 31, 1982) provides that "the transfer income tax shall be imposed on the same owner of the building within the scope prescribed by the Presidential Decree." Article 6 (2) 2 of the same Act provides that "The transfer income tax shall be imposed on the same building site as that of the previous factory operator who is an individual, for the purpose of transferring the building site and new building site for the purpose of transferring it to the new factory operator within 18 years after the date of its construction." The above provision provides that the transfer of the previous building site and new building shall not be imposed on the owner.

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.

Justices Lee Chang-chul (Presiding Justice)