Whether the "expenses directly paid for the transfer of land, etc." under Article 59-2 (3) 2 of the Corporate Tax Act includes the expenses for newspaper advertisements for the invitation of a purchaser.

"Expenses directly paid for the transfer of land, etc." under Article 59-2 (3) 2 of the Corporate Tax Act refers to expenses for the transfer of land, etc. which are deemed reasonable by social norms. Among the above expenses, the expenses include not only the expenses for the preparation of a contract, notarial, stamp and introduction which are disbursed after the buyer's decision is made, but also the expenses for newspaper advertisement for the purpose of attracting many and unspecified purchasers before the buyer's decision is made, and it is deemed reasonable to the extent that such disbursement is inevitable.

Article 59-2 (3) 2 of the Corporate Tax Act

Supreme Court Decision 86Nu835 Decided August 18, 1987

National Bank of Korea (Attorney Kim In-con et al., Counsel for the defendant-appellant)

Head of Central Tax Office

Seoul High Court Decision 85Gu1239 delivered on December 29, 1986

All appeals are dismissed.

The costs of appeal shall be assessed against each appellant.

1. First, we examine the grounds of appeal by the defendant litigation performer.

(1) On the first ground for appeal

According to the provisions of Article 59-2 (3) 2 of the Corporate Tax Act, the tax base of special surtax shall be the amount obtained by deducting the expenses directly paid for the transfer of land, etc. from the transfer value of land, etc. in addition to the acquisition value. The "expenses directly paid for the transfer of land, etc." as mentioned above means the expenses for the transfer of land, etc., which are deemed reasonable by social norms. Therefore, among the above expenses, the expenses include not only the expenses for the contract preparation, notarial, stamp, and brokerage which are disbursed after the buyer's decision is made, but also the expenses for newspaper advertisement to attract many and unspecified persons to purchase before the buyer's decision is made, to the extent that such expenditure is deemed inevitable, and thus the above "expenses directly disbursed" shall be included (Supreme Court Decision 86Nu835 delivered on August 18, 1987)

According to the reasoning of the judgment of the court below, the court below acknowledged the fact that the plaintiff bank directly disposes of non-business properties, such as real estate, acquired at the auction procedure of the court for the collection of loans, or through the Korea Assets Management Corporation, in order to secure the profitability of the plaintiff bank, the sale method is, in principle, a public sale method in order to secure the profitability of the plaintiff bank, and therefore, instead of the necessity of the introduction fee, it is stipulated in the guidelines for disposal of assets for non-business use and the regulations for disposal of inflows, etc. of financial institutions so that it can be publicly announced in daily newspapers so that many people can purchase the above public auction in principle in order to sell the above public auction instead of the necessity of the introduction fee, and determined that the above newspaper advertising expenses constitute the expenses directly paid for the transfer of the inflows, and the above newspaper advertising expenses are determined to constitute the expenses directly paid for the transfer of the inputs.

(2) On the second ground for appeal:

The court below is justified in holding that the Plaintiff bank acquired fixed assets for business in its holding on December 19, 1983 and 3 years after transferring the land and buildings on 23-2 and 25-2 parcels in Busan, Jung-dong, Busan, which were used by the Plaintiff bank as Busan Western Branch, and confirmed the fact that it was submitted along with the documents provided in Article 124-6 (4) of the Enforcement Decree of the Corporate Tax Act, and that the transfer of the building at the Busan Busan Busan Western Branch constitutes a case that satisfies the exemption requirements of special surtax under Article 59-3 (2) 2 of the Corporate Tax Act and Article 124-6 (3)

If the time of acquisition of real estate at the valleydong branch of the Plaintiff bank, such as the head of the branch office, is considered to be December 24, 1982, not the date of settlement of the price, and the special surtax is exempted, the application for exemption of special surtax under the Enforcement Decree of the Corporate Tax Act can only be submitted, even if the court below decided that the Defendant’s disposition was unlawful for the same reason as the above stated in the reasoning, and therefore, the argument

2. The plaintiff's grounds of appeal are examined as follows.

Although the special surtax is stipulated in the Corporate Tax Act, it shall be independent, such as the corporate tax and its taxation requirements different from the corporate tax, and Article 5 of the Addenda of the Regulation of Tax Reduction and Exemption Act (amended by Act No. 3481, Dec. 31, 1981; Act No. 3609, Dec. 21, 1982; Act No. 3609) provides that the additional tax under Article 41 (1) 2 and 3 of the Corporate Tax Act shall not be imposed. Therefore, the court below has just determined that the additional tax should be imposed on the special surtax, and there is no error of law by misapprehending the legal nature of the special surtax and the legal principles under Article 5

3. Therefore, all appeals are dismissed, and the costs of appeal are assessed against each appellant. It is so decided as per Disposition by the assent of all participating judges.

Justices Kim Jong-sik (Presiding Justice)