Seoul Administrative Court 2007Guhap4735 (Law No. 13, 2007)

National High Court Decision 2005No1667 ( November 02, 2006)

The aggregate value of each share of the stocks acquired by transfer shall be the actual transaction value;

The transaction value agreed on the basis of the price per share of the stocks to be acquired in connection with the transfer of stocks may be recognized, and the transaction value per share of the stocks to be acquired in exchange shall be determined by objective monetary value and the settlement amount based on such value shall be deemed to have been received together. As such, the sum of the settlement amount

2011Nu26499 Revocation of Disposition of Imposing corporate tax, etc.

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Seoul Administrative Court Decision 2007Guhap4735 decided July 13, 2007

Seoul High Court Decision 2007Nu21046 Decided March 18, 2008

Supreme Court Decision 2008Du5650 Decided July 28, 2011

April 4, 2012

June 13, 2012

1. The plaintiff's appeal is dismissed.

2. The plaintiff shall bear 5% of the total costs of the lawsuit after filing the appeal, and the remainder, respectively, by the defendant.

The judgment of the court of first instance shall be revoked. The defendant's decision of the court of first instance shall be revoked. The part exceeding KRW 000 of the disposition of imposition of securities transaction tax of KRW 000 on November 10, 200 for the business year 200 (which seems to have been erroneous as to KRW 000, KRW 000) and the part exceeding KRW 000 of the disposition of imposition of corporate tax of KRW 000 for the business year 2006 on February 13, 200 (in the case of the disposition of imposition of corporate tax, KRW 00) shall be revoked (the disposition of imposition of corporate tax shall be excluded from the disposition of imposition as of November 10, 204 after the disposition of imposition as of February 1, 206 and February 13, 2006 after the decision of increase in corporate tax was made on December 14, 206, and thus, the decision of revocation of the disposition of imposition was excluded from the scope of the following judgment.

1. Scope of adjudication of this court;

The first instance court dismissed all the Plaintiff’s claim. The Plaintiff appealed, and the first instance court accepted the Plaintiff’s claim and accepted all the Plaintiff’s claim. The Defendant appealed, and the Supreme Court reversed and remanded the part on the imposition of securities transaction tax among the Plaintiff’s claim, and dismissed the remainder of the appeal. Accordingly, the scope to be tried by the first instance court after remand is limited to the securities transaction tax amount that was reversed, and the remainder of the judgment before remand is separated and finalized.

2. Details of the disposition;

A. On July 26, 200, the Plaintiff received 000 won in cash in return for transfer of shares 1,330,759 shares issued by XX.com (hereinafter “the shares of this case”) to OO (hereinafter “O”), and received 811,334 shares issued by YY Telecom Co., Ltd. (hereinafter “YY Telecom”).

B. When the Plaintiff reported the corporate tax for the 2000 business year and the securities transaction tax for the instant shares, the Plaintiff was 403,44,389,332 won [cash 00 won + KRW 000 per share x 811,334 shares] of the transfer value of the instant shares.

C. In the course of the tax investigation against the Plaintiff, the director of the Seoul Regional Tax Office deemed that the transaction price per share of Yel Telecom was KRW 000,000, and notified the Defendant of the assessment data of the corporate tax and securities transaction tax base and tax amount by calculating the transfer price of the instant shares as KRW 00 (cash 00 + KRW 000 + KRW 81,34 per share).

D. On November 10, 2004, the Defendant, upon the notice of taxation data of the director of Seoul Regional Tax Office, considered the value per share of the instant shares as approximately KRW 000 ($11,330,759 (the number of the instant shares) from 00 won to 11,330,759 (the number of the instant shares) and decided and notified KRW 000 of the corporate tax for the business year 2000 (tlim less than KRW 10; hereinafter the same shall apply) and securities transaction tax for July 200 (hereinafter referred to as “the initial disposition” by referring to the determination and notice of the said corporate tax and securities transaction tax).

E. On January 31, 2005, the Plaintiff was dissatisfied with the initial disposition and filed an appeal with the National Tax Tribunal. On November 2, 2006, the National Tax Tribunal rendered a decision to rectify the tax base and tax amount with KRW 409,123,727,332 [The transfer value of the instant shares + KRW 000 + KRW 000 per share of Yel Telecom ( KRW 81,34 per share of July 25, 2000)].

F. On February 1, 2006, the Defendant rendered a decision to correct the corporate tax amount of the Plaintiff as KRW 000 on February 1, 2006, and made a decision to correct it again as KRW 000 on February 13, 2006 (see the following correction details).

G. On December 14, 2006, according to the above decision of the National Tax Tribunal, the Defendant corrected the amount of corporate tax to KRW 00 in the case of corporate tax and securities transaction tax to KRW 196,342,828 in the case of securities transaction tax (hereinafter “instant disposition”).

[Reasons for Recognition] Facts without dispute, Gap 3, 4 evidence, Eul 1 and 2 evidence (including each number; hereinafter the same shall apply), the purport of the whole pleadings

3. Whether the instant disposition is lawful

A. The plaintiff's assertion

The instant disposition is unlawful for the following reasons.

1) 원고와 OO는 이 사건 주식의 양도 당시 사전에 합의된 교환비율에 따라 교환계약을 체결한 것일 뿐 QQOO텔레콤 주식의 1주당 가액을 000원으로 고정 시킨 합의를 한 사실이 없다. 설령 금전가치를 표준으로 한 가치적 교환합의를 하였다고 가정하더라도 이는 시가감정 등 객관적 금전가치 평가에 기초한 것이 아니라 교환 대상 주식의 상대적 가치비율을 고려한 협상결과에 불과하다. 결국 이 사건 주식의 양도는 그 실지 약정된 양도가액을 확인할 수 없는 경우에 해당하게 된다. 그렇다면 피고는 양도가액 평가방법에 따라 증권거래세 과세표준을 산정하여야 함에도 불구하고 실지 약정된 양도가액이 있음을 전제로 2000. 7. 25.자 YY텔레콤 주식의 시가를 기초로 증권거래세 과세표준을 산정한 잘못이 있다.

2) The National Tax Tribunal decided that no actual transaction price exists at the time of the transfer of the instant shares, and the Defendant issued a correction of reduction accordingly, so the reason for the disposition of the instant case should be deemed to have been changed on the premise that there is no actual transaction price. Nevertheless, the Defendant’s assertion that there exists another actual transaction price is contrary to the binding force of the ruling, and not only goes beyond the reason for the disposition subject to the instant lawsuit, but also cannot be permitted under the substantive law or under the Civil Procedure Act.

B. Relevant statutes

It is as shown in the attached Form.

(c) Fact of recognition;

1) Domestic and foreign 8 corporations, including the Plaintiff, and individual assistanceAA (hereinafter referred to as "transferor") held approximately 47.85% (74,93,052 shares; hereinafter referred to as "transferor's shares") out of the shares issued by the KOSDAQ-registered corporation (hereinafter referred to as "SP.com"), and exercised management rights for PP.com, and negotiations were concluded on March 6, 200 on the transfer of shares owned by the transferor to the OO. The negotiation was concluded on June 15, 200, and the subsidiary agreement was concluded on July 25, 200.

2) 양도인들과 OO 사이에 2000. 6. 6. 합의된 내용은, XX닷컴 주식의 양도 대가로 현금 30%와 YY텔레콤 주식 70%를 지급받는 조건을 선택한 매도자[원고, HH건설 주식회사, 조AA, 주식회사 KK(2001. 7. 30. HH개발 주식회사에 흡수합병 됨), AA그룹]는 XX닷컴 주식을 1주당 000원에 매도하고, YY텔레콤 주식의 가액을 000원으로 하여 주식교환비율을 1 : 9.75로 하며, XX닷컴 주식의 양도대가로 현금 20%와 약속어음 80%를 지급받는 조건을 선택한 매도자(BB 그룹)는 XX닷컴 주식을 1주당 000원에 매도하는 것이다. 양도인들을 대표한 조AA과 TT를 대표한 OO의 부사장 성CC가 합의서에 서명하였다. 그 후 2000. 6. 8. 조 AA과 원고를 포함한 HH그룹측이 AA 그룹과 BB 그룹으로부터 경영권에 대한 보상명목으로 300억 원에 해당하는 YY텔레콤 주식 76,923주를 넘겨받기로 하였다 (000원÷76,923주 ≒ 000원).

3) The contents of the share purchase contract concluded on June 15, 200 between the transferor and theO were to pay the transferor a total of 000 won in cash (25%) in the cost of the transferor’s acquisition of the shares, a total of 00 won in promissory notes (35%) and 3,024,379 shares in Yel Telecom Co., Ltd. (hereinafter “Yel Telecom”), and to take over the shares owned by the transferor. In the case of the Plaintiff, the Plaintiff transferred the shares in this case, and paid 00 won in cash and 856,608 shares in Yel Telecom.

4) On July 25, 200, the contents of the subsidiary agreement as of July 25, 200 include the ratio of Yelcom stock to the transfer price of the shares owned by the transferor (40%) and the ratio of cash, etc. (60%) as is, however, the ratio of the amount to be paid with a promissory note out of cash, and the number of Yel telecom to be paid to the shareholders, domestic law, and the number of total Yel number of stocks so adjusted. Examining the details of partial adjustment, as a result of negotiations from OO on the claim for damages from O in accordance with the result of asset loss, such as the 018 PC number of subscribers, the total amount of damages shall be 00 won, and 00 won among them shall be deducted from the promissory note amount, 00 won shall be deducted from 80,770 (100 won per share, 200 won shall be calculated as 100 won, 15, 27185 Y4, 2815, 285 Y4).

5) The transferor received the transfer price of the shares owned by the transferor on July 26, 200 under the contract dated 25, 2000 (However, the payment date of the transfer price is October 5, 2000), the number of shares transferred by the transferor of the shares owned by the transferor, won, US dollars, promissory notes, and Yel Telecom number are listed in the table below.

6) The trading price per stock in the KOSDAQ market of the instant stocks was KRW 00 won on July 25, 200 and KRW 000 on July 26, 200, and the trading price per stock in the Yelcom Stock Exchange was KRW 00 on June 5, 200, KRW 00 on June 15, 200, KRW 00 on June 15, 200, KRW 000 on July 25, 200, and KRW 00 on July 26, 200.

7) On January 6, 2004, when the Seoul Regional Tax Office conducted an investigation with respect to the investigation of the tax offense against TPP with the Vice President at the time of the investigation, it stated that sexualCC did not have any separate agreement on June 15, 200, other than the stock purchase agreement, but it stated that the appropriateness of the purchase price may occur if the agreed price is known, and that it did not make an agreement on the agreed price determined that it might affect the market, and that it would not announce the agreed price. The actual transaction price for each transferee of the PPcom (No. 5-1), the actual transaction price for each trading partner [No. 5-2] prepared by the investigating public official, the negotiation on June 8, 200 (No. 5-2), and the transaction price of the shares at the same time as the transaction price at the same time as the transaction price at the same time, and no other agreement on June 15, 200 (No. 5-15-27, 200) was reached.

8) According to the door-to-door (Evidence 4-1) prepared by the Seoul Regional Tax Office in the course of investigating the ChoA in connection with the transfer of shares owned by the transferor, ChoA stated that on June 6, 2000, the transferor participated only once in the final negotiation at the hotel on June 8, 200, and that the transferor participated in the negotiations at the last stage of negotiations on the reasons directly participated in the final negotiation. At the negotiations on June 6, 200, the Seoul Regional Tax Office stated that at 00 won per share of 100 won per share, Yelcom shares were evaluated as 00 won per share, and that at the last stage of negotiations on May 6, 200, 200 agreed that the share exchange rate of 50 shares per share was 19.75 percent per share and 200 shares per share of 50 shares per share of 500 shares per share, 50 shares per share of 50 shares per 600 shares, 60.5 shares per share.6.6

[Reasons for Recognition] Facts without dispute, Gap 1 through 9 evidence, each entry of Eul 1 to 7, the purport of the whole pleadings

D. Determination

1) Determination on the assertion relating to the binding force of the ruling

A) The adjudication under Article 37 of the former Administrative Appeals Act (wholly amended by Act No. 968, Jan. 25, 2010) and Article 80 of the Framework Act on National Taxes is bound by the relevant administrative agency with respect to the recognition and judgment of facts constituting the order of adjudication and its premise regarding the relevant disposition, so it is not allowed to take the same disposition again on the ground that the relevant disposition is unlawful and that it is identical in basic facts in relation to the relevant disposition (see, e.g., Supreme Court Decision 2002Du3201, Apr. 25, 2003). In accordance with the binding force of the adjudication, the Defendant issued a reduction order on the initial disposition. The scope of the binding force of the adjudication is limited to the disposition agency and the relevant administrative agency, and the court or third party does not have a binding effect. In this case, the Defendant’s assertion that the actual transaction price exists was erroneous, and thus, it does not require the same disposition again, but is legitimate to seek a reduction or cancellation of the actual transaction price.

B) In addition, the purport of the decision of the National Tax Tribunal is that “the disposal authority calculates the value per share of Yelcom stocks at KRW 000 in determining the market price, the transfer price, payment method, payment rate, and the number of Yelcom stocks to be paid instead of cash, etc. in each stage in the process of concluding the instant stock purchase contract, and finally decided on July 25, 200, the transfer price should be calculated on the basis of the original Yelcom stocks’ market price at the time of July 25, 2000, rather than that there is no actual transaction price related to the transfer of the instant stocks (see evidence 4-1 and 2-1 of the evidence, and that the National Tax Tribunal does not clearly reject the Plaintiff’s actual transaction price related to the transfer of the instant stocks, and thus, it cannot be seen that there was no change in the actual transaction price from the time of the initial decision of the National Tax Tribunal (see, e.g., the first decision of the Tribunal).

On a different premise, this part of the Plaintiff’s assertion cannot be accepted.

2) Determination on the assertion, such as whether the actual transfer value exists and whether a value exchange agreement is reached

A) Relevant legal principles

According to Article 7 subparag. 3 of the former Securities Transaction Tax Act (amended by Act No. 6302 of Dec. 29, 2000) and Article 4 subparag. 1 of the former Enforcement Decree of the Securities Transaction Tax Act (amended by Presidential Decree No. 17040 of Dec. 29, 2000), where stocks listed on the Stock Exchange are transferred without going through the Stock Exchange, the transfer value of relevant stocks shall be the tax base, and where the transfer value is unknown or the value is lower than the value assessed by multiplying the transaction quantity of the relevant stocks, etc., which are transferred by the method of calculating (hereinafter referred to as the "evaluation method of transfer") by the transaction quantity of the relevant stocks, etc., which are publicly announced by the Stock Exchange on the transaction date immediately before the transfer date, the transfer value shall be the tax base.

In addition, the actual transfer value, which is the basis for calculating capital gains tax or securities transaction tax, refers to the actual amount agreed upon at the time of transaction rather than the ordinary market price that reflects the objective exchange value. As such, if the transaction is a value exchange based on which the monetary value of the object of exchange is determined by objective monetary value, such as the appraisal value or market price, and entails the settlement procedure on the difference between different values, then the actual transfer value is confirmed, barring any other circumstances to deem that the transaction is not an exchange (see, e.g., Supreme Court Decisions 98Du19841, Nov. 26, 199; 2009Du19465, Feb. 10, 201). If the value of the object of exchange is determined by objective monetary value and received the settlement amount based on such value, the total amount of the actual transfer value will be the value of the settlement amount.

B) Whether there was an agreed transaction value

According to the above facts, the price of Yel stocks used in the first exchange ratio, 30 billion won which foreign shareholders shall pay to Korean shareholders, 76,923 shares, 4.95 shares of Yel Telecom, the price used in converting 4.9795 shares into Yel Telecom shares, and 000 won which shall be deducted from the transfer price of Yel Telecom shares, and the price used in converting 00 won to Yel Telecom shares, and 00 won which shall be deducted from the transfer price of O and the Plaintiff, etc., were agreed upon by the transferor, such as O and the Plaintiff, etc., on July 25, 200. In order to adjust the number of Yel shares to be paid to the Korean shareholders, the price agreed upon 00 won per share to be transferred from 0.0 per share to 60 billion won per share, based on the actual market price agreed upon by O and 10.00 per share transfer price per share.

Therefore, regarding the transfer of the instant shares, it can be seen that there was an agreement between the exchange parties on the basis of KRW 000 per share price of Yel Telecom stocks.

C) Whether the agreed transaction value is supported by objective monetary value

As seen earlier, in light of the fact that the trading price per stock at the Yel Telecom Stock Exchange is KRW 000 on June 5, 200, KRW 000 on June 15, 200, KRW 000 on July 25, 200, KRW 000 on July 26, 200, and KRW 000 on July 26, 200, and KRW 000 on the stock exchange if the market price is easy to understand as listed shares, concluding an exchange contract by reflecting the objective market price, such as the amount of stock exchange transaction, is consistent with the empirical rule and social norms, and KRW 00 on the trading price agreed with the Yel Telecom Stock Exchange at that time, it is reasonable to view that the agreed trading price as above is supported by the objective monetary value.

D) Sub-committee

The Plaintiff is deemed to have determined 000 won per share of Yel Telecom stocks acquired through exchange based on objective monetary value and received the settlement amount based thereon. The Plaintiff’s assertion otherwise cannot be accepted.

3) The amount of legitimate securities transaction tax;

As above, the total amount of settlement of agreed amounts is the actual transfer value. This is based on the value per share of Yel Telecom stocks of KRW 000,000, and is higher than the value [the value based on the amount calculated by subtracting 15% from the stock exchange closing price (00 won) of Yel Telecom stocks of July 25, 2000, the transfer date prior to the transfer date]. Therefore, the securities transaction tax base should be calculated according to the actual transfer value.

Of the initial disposition, the securities transaction tax portion is based on the value per share of Yel Telecom, and the disposition of this case remaining after reduction is within the reasonable tax amount. The disposition of this case is lawful.

4. Conclusion

The argument is not acceptable. The decision of the court of first instance is legitimate, and thus, the appeal is dismissed.