Gwangju District Court-2014-Gu Partnership-1267 ( October 18, 2015)

The meaning of duplicate support under Article 127 (3) of the Restriction of Special Taxation Act

Article 127 (3) of the Restriction of Special Taxation Act does not purport to provide only one benefit on the ground that it is a national or resident with the same intent of not providing duplicate support for tax reduction or exemption and tax credit for one investment.

Article 127 of the Restriction of Special Taxation Act (Elimination of Overlapping Assistance)

2015Nu6001 Revocation of revocation of revocation of corporate tax rectification

4.The fifth expansion investment is an extension investment in an existing project, not a separate facility, and production capacity.

In general, it does not constitute separate accounting if the tax base is divided on the basis of power.

applying the method of calculating the abated or exempted corporate tax for the year 2008 and 2009 to the Plaintiff

AB made it.

On December 28, 2010, the Plaintiff, who was dissatisfied with the above disposition, filed a petition with the Tax Tribunal for an inquiry, and Article.

On May 28, 2013, the Tax Tribunal does not keep separate accounts in proportion to the production capacity.

As such, calculating the tax amount to be reduced or exempted due to foreign investment according to the calculation method of the reduced or exempted tax amount.

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The plaintiff accepted the above claim and revoked all the defendant's above disposition.

4) Plaintiff’s declaration of corporate tax for the business year 2011 and 2012

Before the decision of tax appeal as referred to in paragraph (3) above is made, the plaintiff shall not be liable for damages to the defendant

In filing a report on the corporate tax base and tax amount, the general public with respect to the investment in the fourth and fifth expansion of this case

In accordance with the method of calculating the amount of tax reduced or exempted, the tax amount to be reduced or exempted by foreign investment shall be calculated.

Special Taxation Act (Law No. 10406, Dec. 27, 2010) (Law No. 10406, Dec. 27, 2010)

Article 14(1) and (2) of the Addenda to the Special Taxation Act (amended by Act No. 1035, Dec. 27, 2010)

Article 26 of the former Restriction of Special Taxation Act (amended by Act No. 10406, hereinafter referred to as "the former Restriction of Special Taxation Act").

amount to be deducted pursuant to paragraph (1) shall be calculated, and the investment amount in 2012 shall be

Before the amendment by Act No. 11614, Jan. 1, 2013;

Employment establishments subject to each deduction under Article 26 of the former Restriction of Special Taxation Act after amendment (hereinafter referred to as "the former Restriction of Special Taxation Act").

The tax credit amount for investment was calculated, and each amount for the business year of 2011 and 2012 calculated as above.

section 127(3)2 of the Restriction of Special Taxation Act multiplied by a national investment ratio in accordance with the exclusion provision of duplicate support

The amount was calculated as the final tax credit amount.

D. Plaintiff’s request for correction and Defendant’s rejection disposition

C. (3) On October 28, 2013, after the decision of tax appeal under paragraph (3) above, the Plaintiff: (1) on October 28, 2013, the Defendant

Foreign investment in an amount calculated in accordance with the calculation method of a reduced or exempted amount of capital increase;

(2) with respect to the investment in the sixth extension of this case, the old tax prior to the amendment.

Tax calculated pursuant to Article 26 of the Special Restriction Act and Article 26 of the former Restriction of Special Taxation Act after its amendment;

by multiplying the ratio of national investment in accordance with the exclusion provisions of Article 127(3) of the Special Restriction Act;

2) After being amended by Act No. 10068 on March 12, 2010, the amendment has not been enforced until now.

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Not the amount (2011 business year: 455,864,193, 2012 business year: 1,334,248,778), as above,

The total amount of tax calculated by this Act (62,067,392 won for the business year: 662,067,392 won for the business year 2012: 1,769,317,805

b) Since the amount to be deducted is the difference of each such amount (=206,203,199 won for the business year: 201)

62,067,392 - 45,864,193 - 2012 - 435,069,027 won (=1,769,317,805 won) -

1,334,248,778) The corporate tax for the business year 201 and 2012 on the ground that such tax should be deducted.

A request for reduction and correction was made.

On December 23, 2013, the defendant is exempted from foreign investment among the plaintiff's request for correction on December 23, 2013.

cite the case, and for the amount of tax to be deducted from temporary investment or job creation investment, the plaintiff

Article 127(3) of the Restriction of Special Taxation Act is applicable to foreign investment reduction in the same taxable year.

under the provision of the exclusion of overlapping support that a tax credit may be granted to the percentage of the national

Each disposition (hereinafter referred to as the "disposition of rejection") was made.

(e) Procedures of the previous trial;

On March 24, 2014, the Plaintiff is dissatisfied with the instant refusal disposition issued by the Tax Tribunal and filed a petition for tax trial.

However, the Tax Tribunal dismissed the plaintiff's above claim on May 20, 2014.

[Ground of recognition] Facts without dispute, entry of Gap evidence 1 to 3, purport of the whole pleadings

2. Claims of the parties and relevant statutes;

A. The parties' assertion

1) Summary of the Plaintiff’s assertion

A) A company with facilities added by the investment in the sixth extension of the instant case (hereinafter “the instant facilities”).

The ratio of sales of business due to facilities (hereinafter referred to as "previous facilities") before investment in the business and its expansion shall be the total amount;

Since the ratio of each facility to the production capacity is the same as the ratio of each facility, the business for each facility is the sales amount.

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It is possible to keep separate accounting by dividing common deductible expenses and common gross income in proportion to common deductible expenses.

B) If it is possible to keep separate accounting as above, the foreign investment tax reduction for the previous facilities

Myeon, for the facilities in this case, a temporary tax credit or tax credit for employment-generating investment may be received.

In addition, even if so, tax benefits are not provided in duplicate to one investment, and tax characteristics are not provided.

It does not violate the provision of Article 127 (3) of the Act on the Restrictions on Cases.

2) The defendant's argument

A) Separate accounting means the calculation of each tax base for the instant facilities and the previous facilities.

It means that the sales cost is deducted from the sales cost of each facility for this purpose, and each facility shall be installed.

must be calculated by subtracting the cost of the instant facilities, but the previous facilities are not distinguished.

Since it is impossible to compute the above sales and costs as a single continuous process facility, this company

It is impossible to keep separate accounting of the business with the facility and the previous facility.

B) The Restriction of Special Taxation Act excludes overlapping assistance on the basis of ‘national or resident’

The plaintiff is a national, and the plaintiff is a national, in the year 2011 and 2012, MPI project.

Since foreign investment has been granted tax reduction and exemption, further tax credits are overlapping support.

applicable.

(b) Related statutes;

It is as shown in the attached Form.

3. Whether the disposition is lawful;

A. Whether it is possible to keep separate accounting

1) Relevant provisions

(1) Article 121-4 of the former Restriction of Special Taxation Act and the Enforcement Decree of the same Act (amended by Presidential Decree No. 2358, Dec. 28, 2012)

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Article 116-6(2) of the Decree (amended by Ordinance No. 24271) provides that a foreign-invested enterprise shall increase its capital.

Article 121-2 of the same Act shall apply to increased investments for a business subject to tax reduction or exemption.

It is regulated that the capital increase can be subject to tax reduction or exemption.

(2) Article 143 (1) of the Restriction of Special Taxation Act and Article 136 (1) of the Enforcement Decree of the Restriction of Special Taxation Act

Article 113 of the Corporate Tax Act shall apply mutatis mutandis where a business subject to tax reduction or exemption or any other business is operated.

The Act provides that separate accounting shall be made.

(3) Article 113(1) of the Corporate Tax Act, Article 156(1) of the Enforcement Decree of the Corporate Tax Act, corporate tax enforcement regulations

Article 75 (2) of the Regulations shall apply to a corporation which operates a business subject to corporate tax reduction and exemption and other businesses.

Article 76 (6) of the Enforcement Rule of the Act provides that separate accounting shall apply mutatis mutandis.

The main sentence of Article 76 (6) of the Corporate Tax Act is the number of nonprofit corporations under Article 113 (1) of the Act.

In the case of separate accounting of profits and losses from the following businesses and other businesses, common profits shall include profit-making businesses and other private businesses.

shall be calculated in proportion to the revenue or sales of the business, and the profit-making business and other business types

The common deductible expenses in this case shall be proportional to the revenue or sales of profit-making businesses and other businesses.

shall be calculated in accordance with the applicable law.

(ii) the facts of recognition

and evidence Nos. 3, 5, and 1-1, 2, and 2-3 of the above facts and evidence No. 3, 5, and No. 1-2

(1) In full view of the purport of the entire pleadings, MID shall use major raw materials through pipes.

The continuous process that is made in the inside of the facilities, such as a drum, response instrument, and drums continuously put in;

The facts produced in the form, 2. The plaintiff installs a separate production facility by investing in each expansion.

production capacity in a way that part of the existing facilities is replaced with a large capacity;

(3) On the other hand, attached Form 8 of the Enforcement Rule of the Corporate Tax Act amended by the Plaintiff

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foreign investors with respect to the investment in this case 4 and 5 additional increase due to the method of calculating the reduced or exempted tax amount of capital increase.

The defendant, after calculating the amount of tax to be reduced or exempted due to investment, defects in filing a claim for rectification on corporate tax in 2008

The Plaintiff’s claim for correction was accepted and refunded corporate tax to the Plaintiff.

With respect to the Plaintiff’s corporate tax for the business year 2009, “the instant 4 and 5 increased investments” are separate facilities.

Investment in expansion of existing projects that are not subject to the production capacity, and proportional distribution of tax base based on the production capacity.

corporation that does not fall under separate accounting shall apply the general method of calculating the reduced or exempted tax amount.

The plaintiff appealed against the disposition of tax imposition, and the plaintiff filed an appeal with the Tax Tribunal, and the tax appeal is assessed.

on May 28, 2013, the Board may apply the provision on the reduction and exemption of corporate tax for existing projects;

The continuous MID process shall be divided according to the production capacity in proportion to production and sales.

It is also possible to keep separate accounts in accordance with the method of calculating the reduced or exempted amount of capital increase.

the defendant's revocation of the above disposition on the ground that it is reasonable to calculate the tax amount to be reduced.

(5) Accordingly, on October 28, 2013, the Plaintiff’s corporate tax amount for the business year 2011 and 2012 to the Defendant.

The business year 201 shall be the reduced or exempted business (the portion of the investment in this case 4 and 5) when filing a request for correction with respect to the Commission;

De-Reduction and exemption projects shall be divided into 90,000 tons and 100,000 tons according to annual production capacity:

Since July 2012, 2012, from around July 2012, the instant 6th extension began production.

Tax base of reduction and exemption projects (the portion of investment in the fourth and fifth expansions of this case) and non-reduction and exemption projects shall be the annual production capacity.

by dividing 90,00 tons and 130,000 tons and 130,00 tons) in proportion to sales, common deductible expenses, and common gross income.

income classification statement attached and calculated according to the calculation method of the reduced or exempted tax amount for capital increase.

(6) On December 23, 2013, the part concerning investment in the fourth and fifth expansion of the instant case

foreign investment as claimed by the Plaintiff on the ground that it constitutes a tax amount to be reduced or exempted by foreign investment.

3) Before the instant 6th expansion investment is completed.

4) Although the annual production capacity of the instant 6th expansion investment is 60,000 tons, production was commenced from July 2012, 30,000 tons.

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It can be recognized that 'the reduction or exemption of foreign investment tax in the region' is cited.

2) Determination

As can be known by the relevant regulations and facts of recognition, the relevant regulations

The reason why separate accounting is required for the reduction business is limited to the reduction business.

The purpose of application is to apply, and the defendant also distributes the sales according to the annual production capacity.

10. 28. Presumption that separate accounting has been made pursuant to the relevant provisions prior to the request for correction

as above, citing a foreign investment tax reduction or exemption in accordance with the calculation method of the reduced or exempted tax amount for capital increase.

MID output produced through the continuous process is the subject of reduction and exemption.

4. Production capacity (90,000 tons) increased due to the 5th expansion investment and expansion investment corresponding to a non-reduction or exemption project.

The ratio of increased production capacity can be divided according to the ratio of increased production capacity, except in extenuating circumstances.

Sales can be in proportion to MDI’s production, and individual profits and losses due to the characteristics of the facility.

Comprehensively taking account of the fact that it is impossible to calculate the Plaintiff’s investment in the existing reduction business

any expansion investment that constitutes a reduced or exempted business in order to obtain a reduction or exemption of foreign investment, and out of such business;

The separate accounting is made by calculating the tax base according to the ratio of the production capacity of the expansion investment.

It is reasonable to view that the case constitutes separate accounting under Article 143 (1) of the Special Cases Restriction Act.

Therefore, this part of the plaintiff's assertion is justified.

(b) Whether the application constitutes duplicate support prescribed by the Restriction of Special Taxation Act;

1) In full view of the factual relations as seen earlier and the purport of the entire arguments in the relevant laws and regulations, the following:

The circumstances may be recognized.

A) Article 127 of the Restriction of Special Taxation Act provides for the exclusion of overlapping support, and Article 2 of the Restriction of Special Taxation Act

5) The production capacity of the facility was almost two times due to the instant 4 and 5 expansion investments.

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(1) If the tax credit for the investment assets of the same taxable year is simultaneously applicable, one of them;

section 3 provides that a national may choose only the same taxable year for the national.

In applying foreign investment, where taxes are reduced or exempted, the total stocks of the company concerned shall be deducted; or

the amount calculated by multiplying the total shares of a national investor by the ratio of the shares or shares of the national investor;

subsection (5) shall be subject to the same taxation for the same place of business by a national

Where two or more provisions of the tax reduction or exemption are applicable in the year, only one of them shall be selected.

acquisition tax for the same business place of a national in paragraph (6) for the same taxable year;

any of the provisions on the reduction or exemption of property tax, only one of them shall be selected if any.

shall be subject to the reduction of at least two capital gains tax by transferring land, etc. under paragraph (7).

the resident shall select only one of the reduction and exemption provisions, if such provision is applied simultaneously;

Where a specific reduction or exemption provision applies to part of land, etc., it shall apply to the remaining part.

The Act is applicable to the reduction and exemption regulations.

As such, each section of Article 127 of the Restriction of Special Taxation Act shall apply to the case of duplicate support of tax benefits.

investment assets, foreign investment assets, not to determine whether to provide duplicate support for a national or resident unit;

tax benefits based on investment shares, places of business, real estate in a place of business, eligible real estate, etc.

In other words, a single investment act or acquisition of real property is judged as a number of taxes.

provision that only one benefit may be provided if the requirements for benefits are satisfied at the same time.

tax reduction and tax credit requirements separate from several investment activities or real estate acquisition activities, respectively.

only one benefit on the ground of being the same national or resident, even if meeting the requirements.

The purport is not that provision (see Supreme Court Decision 2014Du47662 decided May 14, 2015).

B) Article 127(3) of the Restriction of Special Taxation Act provides tax credit for a national and foreign investment.

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If tax reduction or exemption overlap, the amount to be deducted by multiplying the deductible tax amount by the percentage of local investors’ equity shares;

However, as seen earlier, the business year 2008 provides that amounts shall be deducted.

In case of calculating the reduced or exempted foreign investment by means of general calculation of the reduced or exempted tax

The ratio of foreign investment and the ratio of reduction and exemption calculated by a specified method in the total tax base;

by applying subparagraph (b) to the tax base due to a national investment shall be subject to reduction or exemption of foreign investment

Therefore, if the amount of tax is deducted from a national investment, tax credit for the ratio of foreign investment shall be granted.

to the maximum extent that tax reduction and tax credit are simultaneously applied to the same investment

I seem to be a legislative device to exclude.

Therefore, in this respect, the above provision is subject to tax reduction or exemption and tax credit for one investment.

The reason that it is the same national or resident that no benefit is provided in duplicate is provided.

The purport of supporting only one benefit is not to do so.

C) The amount eligible for tax credit with the investment in the sixth extension of this case is the amount of the relevant investment.

The amount calculated by the consolidation rate, and the tax reduction due to foreign investment shall result in the calculation method of the capital increase.

foreign investment scheme, not on the basis of the total income of the taxpayer when calculating the amount.

Any income accruing from the increase of the capital of the business (i.e., the income accruing from the investment in the fourth and fifth expansion of the business in this case)

(2) In such cases, whether the reduction or exemption and the deduction are provided repeatedly shall also be granted to a national.

investment in the instant 4 and 5 extension and investment in the instant 6 extension as defined in each of the above regulations;

The basis of each income generated must be determined.

However, the corporate tax for the business year 201 and 2012 by the Plaintiff using the Act on Calculation of Reduction and Exemption of Capital Increase.

upon filing a claim for correction and admitting it by the Defendant, income arising from the investment in the sixth extension of this case

If foreign investment has not been reduced or exempted, the law shall apply to income arising from the investment in the sixth extension of this case.

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000 Stock Company

00. Head of tax office

Gwangju District Court Decision 2014Guhap1267 Decided June 18, 2015

November 19, 2015

December 17, 2015

1. The defendant's appeal is dismissed.

2. The costs of appeal shall be borne by the Defendant.

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increased investment vehicle year of investment (metric tons) total production capacity (metric tons) capacity;

Initial 1992 40,000 40,000 Foreign Investment eligible for corporate tax reduction or exemption

Primary 195 10,000 50,000

Second, 1997 30,000 Internal Capital Investment 80,000

Third, 2001 20,000 100,000

1. Purport of claim

Defendant 206,203,199 won and corporate tax for the business year 2011 against Plaintiff on December 23, 2013; and

The disposition of refusal to correct the corporate tax of KRW 435,069,027 shall be revoked for the business year 2012.

2. Purport of appeal

The judgment of the first instance is revoked. The plaintiff's claim is dismissed.

1. Basic facts

A. The plaintiff's status

The plaintiff, in Germany in 198, is a foreign-capital invested company with the purpose of manufacturing chemical products, pharmaceutical products, and other products by investing 100% of the share of 100%.

B. The Plaintiff’s MID1) The Plaintiff established and operated a MOI production plant with a production capacity of 40,000 tons at the time of credit in 192, while investing in the Plaintiff’s facilities, from 1995 to 2012, invested more than six times to increase MOI production capacity (hereinafter “each expansion investment”) as follows.

1) It is a chemical product used as a raw material to make luxane mainly to the weak in the Methylenedyphye diisocyate.

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Fourth, 2004 60,000 160,000 5- 2005 30,000 190,000 6 2011, 2012 60,000,000 250,000 250,000 internal capital investment capital (=total calculated tax amount x ② ② ② ②(iii)

(1) The income ratio of the business income subject to reduction or exemption shall be the total tax base incurred from the business of 003 403 003 4 003 4 003 003 003 003 003 408 403 403 403 003 4003 4003 4003 4003 4003 403 4003 4003 403 4003 4003 4003 4003 003 003 003 003 4 4004 404 404 404 404 404 404 403 404 404 404 404 4003 404 4004 4004 3004 3004 404 4 40004

1) Reporting corporate tax to the business year 2008

In filing a corporate tax with the Defendant by the business year 2008, the Plaintiff calculated the tax amount to be reduced or exempted for foreign investment in relation to the instant 4 and 5 expansion investments in accordance with Articles 121-4(1) and 121-2(1) of the former Restriction of Special Taxation Act (amended by Act No. 9276 of Dec. 29, 2008) by applying the weighted average rate of reduction and exemption and the weighted average rate of reduction and exemption as follows (hereinafter referred to as “general method of calculation of reduction and exemption”).

2) Where the Plaintiff filed a return of the corporate tax amount to be reduced or exempted by foreign investment in the business year 2008 upon filing a request for rectification of corporate tax, the corporate tax base for each extension shall be calculated by dividing the ratio of the amount of tax reduced or exempted by investment in each extension in accordance with attached Form 8 of the Enforcement Rule of the Corporate Tax Act (No. 10 of the Ministry of Strategy and Finance, March 31, 2008) to the Defendant, and the legal basis was prepared for calculating the amount of tax reduced or exempted by investment in each extension.

The method of calculating the reduced or exempted tax amount of capital increase 】 (total calculated tax amount 】 ② ② ②

(1) The amount of income of the business subject to reduction or exemption shall be 403 003 003 003 003 4 4 4 06 4 003 4 003 4 4 003 4 4 003 4 4 003 4 4 003 4 003 4 003 4 008

(2) The foreign investment principal money 008 foreign investment principal money 003 4 00 4 06 4 4 4 4 06 4 4 4 003 4 4 003 4 4 4 00

(3) The rate of reduction and exemption men men men 06 men men men 003 men 003 men men 003 men men men 003 men men men 008 men men men 004 men men x 042 men x 045 men men men men men men men men x 106 men men men men men x 1008 x x 2008 men men x 104 men x x x 042 men men x x x x 105 x x x men men men x x

3) The Plaintiff reported corporate tax for the business year 2009 and imposed corporate tax by the Defendant, etc., and reported corporate tax for the business year 2009 to the Defendant, and invested in the fourth and fifth extension.

As in the above 2, the tax amount to be reduced or exempted due to foreign investment was calculated according to the calculation method of the reduced or exempted capital increase.

On October 1, 2010, in order to calculate the reduced or exempted tax amount due to the calculation method of the reduced or exempted tax amount, the defendant should be able to calculate the tax base of the increased or exempted tax amount due to separate accounting.