Cases concerning the interpretation of transitional provisions where the scope of reduction and exemption of special surtax has been reduced or abolished on several occasions.

The case reversing the judgment of the court below that applied the provisions of Article 19 (3) of the former Addenda to the Regulation of Tax Reduction and Exemption Act (amended by Presidential Decree No. 1991, Dec. 27, 1991) to extended the scope of special surtax reduction and exemption on the ground that it does not arbitrarily extend the scope of special surtax reduction and exemption on the grounds that the former tax reduction and exemption on the transfer of public waters in principle should be strictly interpreted, and that the former tax reduction and exemption on the transfer of public waters did not meet the expected profit of the purchaser after obtaining a license for reclamation of public waters at the time of the enforcement of the amended Act, unless there is clear provision that the previous provision is retroactively applied in the Addenda to the amended Act.

Article 14 of the Public Waters Reclamation Act; Article 59-3 (1) 19 of the former Corporate Tax Act (amended by Act No. 4020 of Dec. 26, 198); Article 59-3 (2) 6 of the former Corporate Tax Act (amended by Act No. 4165 of Dec. 30, 198); Article 12 of the Addenda (amended by Act No. 4451 of Dec. 27, 1991); Article 59 subparagraph 10 of the former Regulation of Tax Reduction and Exemption Act; Articles 5 (1) and 5 (3) of the Addenda of the former Regulation of Tax Reduction and Exemption Act; Article 19 (3) of the Addenda of the former Regulation of Tax Reduction and Exemption Act (amended by Act No. 4165 of Dec. 27, 1991)

Supreme Court en banc Decision 93Nu5666 Decided May 24, 1994 (Gong1994Ha, 1860) Decided 89Nu468 delivered on April 10, 1990 (Gong1995Ha, 2648) (Gong195Ha, 2648) delivered on June 30, 1995

Attorney Han-hee, Counsel for the plaintiff-appellant

The director of the North Incheon National Tax Office

Seoul High Court Decision 94Gu1816 delivered on December 13, 1994

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

We examine the grounds of appeal.

1. The following studies are conducted on the modification process of the relevant Acts and subordinate statutes concerning the reduction and exemption of special surtax in a case where a person who acquired the ownership of reclaimed land under the Public Waters Reclamation Act transfers reclaimed

(1) 100% reduction and exemption regulations under the Corporate Tax Act (the initial provision on the basis of convenience)

Article 59-3 (1) 19 of the former Corporate Tax Act (amended by Act No. 4020 of Dec. 26, 1988) provides that the special surtax shall not be imposed on the income accrued from the transfer of reclaimed land acquired by a person who acquired ownership pursuant to Article 14 of the Public Waters Reclamation Act.

(2) 50% reduction and exemption regulations and transitional regulations by amendment of the Corporate Tax Act (the first amendment on convenience)

Article 59-3(2)6 of the Corporate Tax Act was deleted and instead Article 59-3(2)6 was newly established under the Act on December 26, 198 (Enforcement from January 1, 1989). In such a case, the amended Act provides that only 50% of the special surtax shall be exempted, and Article 12 of the Addenda provides that the said new provision shall apply from the transfer of the land acquired by a reclamation licensee under the Public Waters Reclamation Act for the first time after the enforcement of the said amended Act (the first amended Act).

(3) Amendment to the provisions of 50% reduction and exemption under the Corporate Tax Act to the provisions of the Regulation of Tax Reduction and Exemption Act (the second amendment on convenience)

Article 59(10) of the Regulation of Tax Reduction and Exemption Act (amended by Act No. 4165 of Dec. 30, 1989) was deleted, and instead, there was no change in the content that the amount of the special surtax is exempted by 50%. However, Article 5(1) of the Addenda of the Regulation of Tax Reduction and Exemption Act (amended by Act No. 4165 of Dec. 30, 1989) provides that the provisions of the above amended Regulation of Tax Reduction and Exemption Act (amended by Act No. 4165) shall apply from the first transfer after its enforcement (amended by Act No. 411 of Jan. 1, 1990), and Article 5(3) provides that the transfer income tax or special surtax imposed or to be imposed pursuant to the previous Regulation of Tax Reduction and Exemption Act (amended by the second Amendment) shall apply to the transfer income tax or special surtax.

(4) Elimination and transitional provisions under the Regulation of Tax Reduction and Exemption Act (the third amendment on convenience)

Article 59 subparag. 10 of the Regulation of Tax Reduction and Exemption Act (amended by Act No. 4451 of Dec. 27, 1991) was deleted (Article 19(3) of the Addenda provides that “Where a person who buried public waters before December 31, 191 acquires reclaimed land pursuant to the Public Waters Reclamation Act, and transfers reclaimed land before December 31, 1994, the former provisions of Article 59 subparag. 10 shall apply).”

2. According to the reasoning of the judgment below, since the plaintiff obtained a reclamation license for public waters with a total of 1,346,596 square meters of 504 square meters in Dong-gu Incheon Metropolitan City over three times between 1982 and 1983 under the Public Waters Reclamation Act, and then disposed of the land of this case on June 30, 1989 and November 3, 1992 after obtaining authorization for the completion of the reclamation license, the court below determined that Article 19 (3) of the Addenda of the Act on the Regulation of Tax Reduction and Exemption of 3rd Amendment (hereinafter referred to as the "Act") which was enforced on May 1, 1993 and Article 19 (3) of the Addenda of the Act on the Regulation of Tax Reduction and Exemption of 193 and Article 50 (2) of the Addenda of the Act on the Regulation of Tax Reduction and Exemption of 50% of the above Act on the transfer of the above reclaimed land was applied to the above 90% of the previous Act on the enforcement date of the Act (amended 19730%).

3. However, we cannot accept the above judgment of the court below.

In principle, tax laws and regulations should be strictly interpreted whether they are taxable requirements or tax exemption requirements. As seen in the case of the transfer of the reclaimed land of this case, as seen in the transfer of the reclaimed land of this case, as long as there is a certain provision that applies retroactively to the previous provisions in the Addenda of the amended Act, unless there is a clear provision that the previous provisions are applied retroactively to the purchaser's expectation interest at the time of the enforcement of the previous Acts and subordinate statutes (generally, in the case of the amendment of the tax law, in accordance with the previous provisions at the time of the enforcement of this Act, the scope of the previous provisions should not be expanded and interpreted without permission in the interpretation of the Addenda of the amended Act.

Article 19 (3) of the Addenda of the Act (the third amendment) to be applied to the transfer of the reclaimed land of this case (the third amendment) provides that "in case where the reclaimed land acquired by the person who buried the public waters before December 31, 191 pursuant to the Public Waters Reclamation Act and the reclaimed land is transferred until December 31, 194, it shall be governed by the provisions of Article 59 (10) of the previous Act." However, in case where the above conditions are met, it shall be interpreted that 50% reduction or exemption shall be made as provided in Article 59 (10) of the previous Act. It shall not be deemed that the supplementary provisions at the time of the establishment of the new provision are also applied.

Therefore, the court below's decision that Article 59 subparagraph 10 of the Act as well as the supplementary provision at the time of its establishment also applies pursuant to the above supplementary provision is erroneous in the misapprehension of legal principles as to the interpretation of the above provision, which affected the conclusion of the judgment. There is a reason to point this out.

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

Justices Lee Jae-soo (Presiding Justice)