[2] Whether Article 5 (3) 3 of the Enforcement Rule of the Inheritance Tax Act is invalid

[2] Article 5 (3) 3 of the Enforcement Rule of the Inheritance Tax Act provides that, in calculating the net asset value of an unlisted corporation without any basis or delegation from the superior law, only 50/100 of the estimated amount of retirement pay shall be included in the liability, the scope of deduction has been reduced. This is a provision unfavorable to taxpayers, and thus has no effect.

Article 5 (5) 1 (b) of the Enforcement Decree of the Inheritance Tax Act (amended by Presidential Decree No. 12993, May 1, 1990; hereinafter the same) provides for the method of calculating the average of the net asset value of the corporation by combining the asset value of the corporation by the total number of issued and outstanding stocks in cases where it is difficult to calculate the market price with respect to non-listed stocks or equity shares. (b) proviso provides that the method of assessing the net asset value of the corporation shall be applied only to the corporation before the commencement of the business, the corporation less than three years after the commencement of the business, and the corporation during the suspension, closure, or liquidation of the business; and (c) item (c) provides that the net asset value of the corporation as of the date of commencement of the business shall be the amount calculated by deducting its liabilities from its appraised value as prescribed by this Decree.

Meanwhile, Article 5 (3) 3 of the Enforcement Rule of the Inheritance Tax Act (amended by the Ordinance of the Ministry of Finance and Economy No. 1522 of Apr. 19, 1982; hereinafter the same) provides that the liabilities under the above Enforcement Decree include the amount equivalent to 50/100 of the estimated amount of retirement pay to be paid to all employees of the employee of the non-listed corporation as of the commencement date of the commencement date of the inheritance.

However, in full view of the relevant provisions on the valuation methods of inherited property under Article 5 of the Enforcement Decree of the Inheritance Tax Act (in particular, with respect to a corporation during the suspension, closure, or liquidation of business, only the Net Asset Value Evaluation Act applies); unlike the factors of the supplementary valuation methods of unlisted stocks or equity shares under Article 5 (5) 1 (b) of the Enforcement Decree of the Inheritance Tax Act, the Net Asset Value Evaluation Act, which are different factors, is based on the so-called liquidation value, which assumes the liquidation of the corporation as the premise of the corporation’s continued value; and as long as the amount of net asset valuation is calculated based on the liquidation value of the corporation, the entire estimated amount of retirement benefits to be paid to all employees of the corporation at the time of such assessment, is subject to deduction (see Supreme Court Decisions 7Nu27, Nov. 22, 197; 207Nu1379, Dec. 13, 197; 208Nu1979, Dec. 17, 1979).

Therefore, Article 5 (3) 3 of the Enforcement Rule of the Inheritance Tax Act provides that only 50/100 of the estimated amount of retirement pay shall be included in the liability in calculating the net asset value of an unlisted corporation without any basis or delegation of superior laws and regulations, which reduces the scope of deduction. This is a disadvantageous provision to taxpayers, which has no effect due to its violation of the principle of no taxation without law.

Article 33(1) of the Income Tax Act (wholly amended by Act No. 4803 of Dec. 22, 1994); Article 65(2) of the Enforcement Decree of the same Act (wholly amended by Presidential Decree No. 1467 of Dec. 31, 1994); Article 13(1) of the Corporate Tax Act; Article 18(3) of the Enforcement Decree of the same Act (amended by Presidential Decree No. 1467 of Dec. 31, 1994); and Article 18(3) of the Enforcement Decree of the same Act allow the inclusion of necessary expenses and deductible expenses within the limits of 50/100 of the estimated amount of retirement allowance in the calculation of the net asset value of the corporation’s non-listed stocks, which are inherited property, in accordance with the relevant tax law, it is merely a method to recognize the estimated amount of retirement allowance as the total amount of

The court below is justified in holding that the above Enforcement Rule of the Inheritance Tax Act is null and void on the premise that the total estimated amount of retirement allowance is included in the items of fixed debts under corporate accounting standards, but the conclusion that the above Enforcement Rule of the Inheritance Tax Act is null and void on the premise that the total estimated amount of retirement allowance should be included in the above debts, and there is no error of law such as the theory of lawsuit

Therefore, the appeal is dismissed and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Chief Justice Yoon-young (Presiding Justice)