Supreme Court: Corporate Tax Exemption Possible Without Agricultural Management Registration Certificate

Court: "If Requirements Are Met, Corporate Tax Exemption Cannot Be Denied"

The Supreme Court has ruled that even if an agricultural cooperative corporation does not submit a registration confirmation certificate for agricultural and fishery business entities, the competent tax office cannot refuse corporate tax exemption.

The Supreme Court's Second Division (Presiding Justice Min Yusuk) announced on the 17th that it overturned the second-instance ruling, which dismissed the lawsuit filed by Agricultural Cooperative Corporation A against the Icheon Tax Office Chief seeking cancellation of the corporate tax imposition, and remanded the case to the Suwon High Court.

Corporation A applied for corporate tax exemption on income from food crop cultivation for the 2015 and 2016 fiscal years based on the Restriction of Special Taxation Act. Corporations registered as agricultural and fishery business entities can be exempted from corporate tax imposed on income from food crop cultivation. However, tax benefits can only be received if the registration confirmation certificate for agricultural business entities is submitted to the competent tax office.

The Icheon Tax Office confirmed that Corporation A did not submit the agricultural business entity registration confirmation certificate and imposed approximately 360 million KRW in corporate tax, including additional tax, in March 2018. Corporation A filed a tax appeal, but after it was dismissed, they filed a lawsuit.

The first and second trials ruled against the plaintiff, stating, "An agricultural cooperative corporation under the Agricultural and Fishery Business Entities Act must submit the agricultural business entity registration confirmation certificate to be exempted from corporate tax on income from food crop cultivation."

However, the Supreme Court viewed the regulation requiring submission of the registration confirmation certificate as merely an obligation of cooperation. The court stated, "If the conditions for corporate tax exemption are met, refusal of corporate tax exemption cannot be justified solely because the agricultural business entity registration confirmation certificate stipulated by the regulation was not submitted."

This content was produced with the assistance of AI translation services.