Whether the excessive portion of the acquisition tax of a corporation for non-business use is included in the acquisition value when calculating the transfer margin for the calculation of the special surtax on the transfer of the land (affirmative)

In full view of the provisions of Article 59-2(3) of the former Corporate Tax Act (amended by Act No. 4804 of Dec. 22, 1994), Articles 48(2) and 124-2(2) of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 14468 of Dec. 31, 1994), and the fact that the special surtax, in essence, has the same nature as the capital gains tax under the Income Tax Act, it is difficult to exclude the excess of the acquisition tax from the acquisition value deducted in calculating the gains on transfer of the special surtax.

Article 59-2(3) of the former Corporate Tax Act (amended by Act No. 4804 of Dec. 22, 1994); Article 124-2(2) and Article 48(2) of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 14468 of Dec. 31, 1994); Article 112(2) of the former Local Tax Act (amended by Act No. 4794 of Dec. 22, 1994)

Supreme Court Decision 86Nu787 delivered on November 14, 1989 (Gong1990, 47) Supreme Court Decision 90Nu3607 Delivered on November 27, 1990 (Gong1991, 258) Supreme Court Decision 90Nu3614 Delivered on January 29, 1991 (Gong191, 890)

New Bank of Korea (Attorney Kim Jong-soo, Counsel for defendant-appellee)

The director of the tax office

Seoul High Court Decision 95Gu16532 delivered on December 13, 1995

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

The Plaintiff’s attorney’s ground of appeal is examined.

According to the reasoning of the judgment below, since the plaintiff acquired the land of this case from 4,510,00,00 won on June 1, 1989, and transferred the land of this case to 6,321,875,000 won on September 16, 1992, and when reporting tax base for the taxable year 192 on March 25, 1993, the court below rejected the above disposition from 112 (2) of the former Local Tax Act (amended by Act No. 4794 of Dec. 22, 1994) which did not include acquisition tax and special surtax for non-business purposes, including acquisition tax and special surtax for non-business purposes in the acquisition tax rate prescribed in Article 112 (1) of the same Act (20/1,000) which did not include acquisition tax and special surtax for non-business purposes, but did not include acquisition tax and special surtax for non-business purposes in the acquisition tax rate of 589,5397,947.9

However, Article 59-2(3) of the former Corporate Tax Act (amended by Act No. 4804, Dec. 2, 1994); Article 124-2(2) of the Enforcement Decree of the same Act (amended by Presidential Decree No. 14468, Dec. 31, 1994; hereinafter the same) provides that the acquisition value to be deducted from the transfer value means the sum of the acquisition value calculated by applying mutatis mutandis the provisions of Article 48(2) of the Enforcement Decree of the same Act, the construction fund and the interest and the capital expenditure of the corporation in calculating transfer margin, and Article 48(2)1 of the same Act provides that the acquisition value of the purchased fixed assets shall be the price at the time of purchase (including registration tax, acquisition tax, and other incidental expenses), and that the acquisition value of the special surtax shall not be excluded from the acquisition value of the corporation's land for non-business purposes, and it shall not be applied to the calculation of transfer margin of the acquisition tax and the special surtax, which shall not be applied separately from the acquisition value of the corporate tax (see 197. 19.7.

Therefore, the judgment of the court below that the disposition of this case is legitimate on the premise that the excess of the acquisition tax is not included in the acquisition value in calculating gains on transfer of special surtax, is erroneous in the misapprehension of legal principles as to the calculation of the tax base of special surtax, which affected the conclusion of the judgment.

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

Justices Chocheon-sung (Presiding Justice)