[Plaintiff-Appellant] Jin Jin Jin J. (Law Firm Barun, Attorneys Park Jong-sik et al., Counsel for plaintiff

Head of Ansan Tax Office

November 25, 2010

Suwon District Court Decision 2008Guhap8599 Decided April 28, 2010

1. The plaintiff's appeal is dismissed.

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

The judgment of the first instance is revoked, and the defendant revoked the disposition of imposition of corporate tax of KRW 929,98,442 for the plaintiff on August 1, 2007.

1. Details of the disposition;

The following facts are not disputed between the parties, or may be recognized by considering the whole purport of the pleadings in each entry in Gap evidence 1, 2, and Eul evidence 1 to 17 (including each number):

A. Original Telecom Co., Ltd., a non-listed corporation, entered into a merger contract (hereinafter “the merger of this case”) with an unlisted fixed company (hereinafter “the non-listed corporation”) under Article 87 of the Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 18706, Feb. 19, 2005; hereinafter “Enforcement Decree of the Corporate Tax Act”) on Nov. 27, 2001, regardless of the amendment, and where the Enforcement Decree of the Corporate Tax Act is invoked, the non-listed corporation, a related party under Article 87 of the Enforcement Decree of the Corporate Tax Act (hereinafter “the merger of this case”). The main contents are as follows.

The main contents of the table merger contract included in the main contents of Article 1 (Methods of Merger) of ○○ (Method of Merger) Original Telecom shall be merged and continued to exist, and the permanent transmission shall be dissolved. The original telecom under Article 2 (Increase of Capital and Reserve) shall be granted 364,000 shares of original telecom (13 percent shares of original telecom per share of the permanent transmission period) in compensation for the merger. The original telecom under Article 3 (Issuance of New Shares) shall be issued 364,00 shares of original telecom and issued 364,00 shares for new shares after the merger. The original telecom under Article 4 (Date of Date of General Meeting of Shareholders Approval for Merger) and the permanent transmission period shall be convened on December 27, 2001 to make a resolution on matters necessary for the approval and merger of this contract (201.31.201.31.201.)

B. Original Telecom: (a) completed the merger registration on February 1, 2002 after undergoing a temporary general meeting of shareholders on December 27, 2001; (b) issued new shares 364,000 (28,000 x 13) shares; and (c) granted each share to the Nonparty, the shareholder at the time of the merger of this case, and the non-party, the shareholder at the time of the merger of this case, 321,100 (24,70 x 13 x 13 x 13) and 42,900 (3,300 x 13) shares, respectively. The current status of shareholders of the original telecom and the permanent transmission of alcoholic beverages following the merger of this case is as stated in Table 1>

The current status of shareholders before and after the merger of Table 1>

The number and holding ratio of original telecom after the merger of the number of shares in the name of the voting shareholders included in the main sentence of this paragraph shall be 00 24,700 024,700 8.2321,100 (34.75 %) Korea 110,009.63,300 152,90 (16.55 %) 186,000 (16.5 %) 186,003.20 186,003.203.20 186,000 (20.13%) Plaintiff 264,000 (20.13%) 204,007.20 (20.57%) 10,000,500,500,5010,000 (16.555 %)

C. At the time of the merger of this case, the Nonparty, as a representative director of the Plaintiff and a director of the original telecom, held 138,268 shares of the Seocho City Stock Company (35.57%) among the total shares of the 388,880 shares, and the Nonparty, the shareholder of the Plaintiff, the non-party, and the Han Seo-gu Ltd. were specially related persons pursuant to Article 87 of the Enforcement Decree of the Corporate Tax Act.

라. 한편 피고는 이 사건 합병 등기일인 2002. 2. 1.을 평가기준일로 하여 당시 오리엔트텔레콤과 영송정기의 합병 전후의 순자산가액·발행주식총수·1주당 순자산가액·1주당 최근 3년간의 순손익액의 가중평균액을 아래 〈표2〉의 기재와 같이 산정한 후, 오리엔트텔레콤과 영송정기의 합병 전 주식가액 8,291,397,663원(≒ 오리엔트텔레콤의 1주당 가액 0원 × 560,000주 + 영송정기의 1주당 가액 296,121원 × 28,000주, 계산하면 8,291,388,000원이나 단수처리상 8,291,397,663원으로 산정된 것으로 보이는바, 그 차액은 9,663원으로서 근소하므로 적정하게 계산된 것으로 본다)을 합병 후 오리엔트텔레콤의 주식 924,000주로 나눈 후 합병 후 오리엔트텔레콤의 1주당 가액을 8,973원(8,291,397,663원 ÷ 924,000주)으로 각 평가하였고 그에 따라 원고가 법인세법 시행령 제87조 제1항 에 따른 특수관계자인 영송정기의 주주 소외인과 한서시계 주식회사로부터 이 사건 합병으로 인하여 그 보유 주식수에 해당하는 이익 2,369,736,630원(≒ 264,000주 × 1주당 8,973원, 계산하면 2,368,872,000원이나 단수처리상 2,369,736,630원으로 산정된 것으로 보이는바, 그 차액은 864,630원으로서 근소하므로 적정하게 계산된 것으로 본다)을 분여받은 것으로 보고 이를 법인세법 시행령 제11조 제9호 에 따라 익금에 산입하여 2007. 8. 1. 원고에게 2002년 귀속 법인세 953,168,770원을 경정·고지하였다(이후 피고는 2007. 8. 27. 이월결손금 조정액을 반영하여 22,897,816원을 감액경정하고 2007. 10. 8. 가산세 중복반영분을 조정하여 272,512원을 감액경정하는 등, 2007. 8. 1.자 법인세 부과처분 중 이 사건 소제기 전까지 남아 있는 금액은 929,998,442원이다. 이하 위와 같이 감액되어 남은 법인세 부과처분 부분을 ‘이 사건 처분’이라 한다).

Table 2> Calculation of Value per Share

The net asset value of the merged corporation, a surviving corporation, after the merger of the head of the Dong, included in the main sentence of this Note after the merger, shall be the weighted average amount of net profit and loss of the last three years of △△△△,338,67,613 Won 8,291,397,613 Won 8,297,663 Won 8,291,397,663 Won 297,663 KRW 560,000,000 KRW 28,000 KRW 28,000,000 KRW 924,000,000 KRW 296,121 won KRW 8,973 KRW 8,00 KRW 8,00 KRW 1,789 KRW △△,555 KRW △△,00 KRW 1,789 KRW KRW 296,121 KRW 8,973 won per share.

E. On October 30, 2007, the Plaintiff, who was dissatisfied with the instant disposition, filed an appeal with the Tax Tribunal on October 30, 2007, but was dismissed on June 18, 2008, and filed the instant lawsuit on September 12, 2009.

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The plaintiff asserts that the disposition of this case is unlawful on the following grounds.

① The Defendant: (a) deemed that the Plaintiff received profit by distribution from a person with a special relationship through the instant merger, and thus, included the instant disposition in gross income pursuant to Article 11 Subparag. 9 and Article 88(1)8(a) of the Enforcement Decree of the Corporate Tax Act; and (b) the Enforcement Decree of the Corporate Tax Act does not provide for how to calculate the profit received by distribution from a person with a special relationship; and (c) thus, the instant disposition that did not disclose it in the absence of disclosure, even

(2) According to Articles 15(1) and 18(1) of the Corporate Tax Act, profits shall be excluded from the profits from the evaluation marginal profits of assets, which are the amount of profits generated from transactions that increase the net assets of the relevant corporation, except as otherwise provided for in this Act, with the exception of the payment of capital or financing and financing. Therefore, even though Article 11 subparag. 9 of the Enforcement Decree of the Corporate Tax Act, which is a subordinate statute, includes profits distributed by a person with a special relationship upon delegation under Article 15(1) of the Corporate Tax Act in the scope of profits, such profits shall not be included in the profits by deeming the profits as profits. Ultimately, the Plaintiff shall not be included in the profits from the merger of this case, rather than the acquisition of new stocks due to the merger of this case, merely because the financial condition of the original telecom, which is better before and after the merger, increases the value of the stocks of the original telecom, and as long as the Plaintiff does not dispose thereof,

③ Even though it is reasonable to include profits equivalent to marginal profit from asset evaluation as profits distributed by a person with a special relationship, as long as Article 89(6) of the Enforcement Decree of the Corporate Tax Act applies mutatis mutandis to the calculation method, the Defendant’s application of Article 89(6) of the Enforcement Decree of the Corporate Tax Act in calculating that profit is unlawful by analogical application of tax-related Acts and subordinate statutes. Furthermore, Article 89(6) of the Enforcement Decree of the Corporate Tax Act provides for the calculation method of the amount to be included in gross income in cases where a corporate shareholder distributes profits to another shareholder who is a person with a special relationship pursuant to Article 88(1)8 of the Enforcement Decree of the Corporate Tax Act, if the corporate shareholder distributes profits to the other shareholder who is a person with a special relationship. Thus, the above provision cannot be

④ The Plaintiff’s profit derived from the merger of this case shall be calculated by applying the net asset increase theory, which is the larger principle under the Corporate Tax Act. Ultimately, the difference between the Plaintiff’s stock value prior to the merger and the Plaintiff’s stock value after the merger shall be calculated by including the difference between the Plaintiff’s stock value and the Plaintiff’s stock value. The net asset value per week of the original telecom prior to the merger shall be deemed 7,747 won (the Defendant deemed 0) and the net asset value per 4,277 won [3,952,720,050 won per original telecom after the merger (the net asset value of the original telecom prior to the merger 4,38,67,613 won prior to the merger 20 won per share 8,291,397,63 won per stock prior to the merger 200 won per such merger 4,200 won per telecom, 17,400 won per Share after the merger 1,400 won per such combined net asset value per 1,200 won after the merger.

⑤ Under Article 28(3) through (7) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act (hereinafter “the Inheritance Tax and Gift Tax Act”) pursuant to Article 89(6) of the Enforcement Decree of the Corporate Tax Act, even if the provisions of Article 28(5) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act apply, if a corporation which continues to exist after the merger is an unlisted corporation, the base date of appraisal of the value of the stocks immediately before the merger of the merged corporation shall be deemed the date of publication of the balance sheet under Article 522-2 of the Commercial Act. The original corporation of the merged party, the original telecom and the Youngcom shall be deemed the date of publication of the balance sheet under Article 522-2 of the Commercial Act. On December 13, 201, the date of publication of the balance sheet from December 27, 2001, which is two weeks before the date of the general meeting of shareholders for the merger of this case. Nevertheless, the defendant was unlawful as of February 13, 2002.

(b) Related statutes;

The entries in the attached Table shall be as follows.

C. Determination

(1) Determination as to the argument

If the tax authority imposed and notified the total amount of corporate tax imposed by taxable period and the tax base, tax rate, deductible tax amount, etc., which is the basis for the calculation thereof, by the statutory tax payment notice, when imposing corporate tax, etc. by taxable period, the details of calculation basis or the amount of tax pursuant to Article 9(1) of the National Tax Collection Act, Article 70 of the Corporate Tax Act, and Article 109(1) of the Enforcement Decree of the Corporate Tax Act are sufficient to the extent stated above, and even if the tax authority did not state the substantial basis or route of calculation of the amount of tax, such as gross income and deductible expenses, and the underlying law, it is not unlawful (see Supreme Court Decision 2001Du1014, Jan. 27, 2004). According to the above evidence, the defendant is recognized to state the taxable year, tax base, tax rate, additional tax, etc. in the instant tax payment notice. Thus, even if the defendant did not state the basis for calculating the amount of tax or interest of a related party, this cannot be deemed unlawful.

2. Judgment on the argument

Article 11 subparag. 9 of the Enforcement Decree of the Corporate Tax Act provides that profits distributed by a specially related person due to capital transactions under each item of Article 88(1)8 of the Enforcement Decree of the Corporate Tax Act shall be profits under Article 15(1) of the Corporate Tax Act according to delegation by Article 15(3) of the Corporate Tax Act. In addition, Article 52(1) of the Corporate Tax Act and Article 88(1)8(a) of the Enforcement Decree of the Corporate Tax Act should be deemed as profits under Article 15(1) of the Corporate Tax Act. In such a case, Article 11 subparag. 9 of the Enforcement Decree of the Corporate Tax Act is deemed as gratuitously a corporation

On the other hand, even though Article 18 subparag. 1 of the Corporate Tax Act does not include profits, as a matter of principle, which are only marginal profits from the evaluation of assets, in order to prevent tax avoidance, this purport is that it does not recognize voluntary evaluation marginal profits. The profit received by distribution from a person with a special relationship according to an unfair ratio is inevitable to exist as the difference in the value of stocks before and after the merger. If it is not included in gross income pursuant to Article 18 subparag. 1 of the Corporate Tax Act on the ground that it is merely an evaluation marginal profit, it cannot be interpreted that even in such a case, it would result in an ambiguous outcome of Article 11 subparag. 9 and Article 88(1)8(a) of the Enforcement Decree of the Corporate Tax Act, in accordance with Article 18(1) of the Corporate Tax Act. Accordingly, this part of the

Article 12(3) of the Civil Code

㈎ 조세법률주의의 원칙상 과세요건사실이거나 비과세요건사실이거나를 막론하고 조세법규는 문언에 따라서 엄격하게 해석하여야 하고 함부로 확장해석이나 유추해석을 해서는 안된다고 할 것이나, 객관적이고 합리적인 근거와 이유가 있는 경우에는 조세법률주의가 지향하는 법적 안정성 및 예측가능성을 해치지 않는 범위 내에서 보충적으로 법률규정의 취지, 목적에 따르는 목적론적 해석이 허용된다고 보아야 할 것이다.

Article 11 subparag. 9 of the Enforcement Decree of the Corporate Tax Act, and Article 88(1)8(a) of the Enforcement Decree of the Corporate Tax Act, if a corporate shareholder distributes profits through a merger to another shareholder who is a person with a special relationship, the purport is to include the corresponding profits in the profit still to the corporate shareholder who received a distribution of profits despite being denied as it constitutes a wrongful calculation. Therefore, the benefits under Article 88(1) subparag. 8 of the Enforcement Decree of the Corporate Tax Act and the benefits under Article 11 subparag. 9 of the Enforcement Decree of the Corporate Tax Act are deemed to be identical to the actual object or contents. Thus, in light of the purport of Article 89(5) and (6) of the Corporate Tax Act, Article 63 of the Inheritance and Gift Act, and Articles 28, 54, and 56 of the Enforcement Decree of the Corporate Tax Act as to the calculation method of profits received without a reasonable calculation method, it is reasonable to conclude that the above profits are not applicable to the corporation’s calculation method of profits.

㈏ 또한 구 법인세법 시행령(2000. 12. 29. 대통령령 제17033호로 개정되기 전의 것) 제11조 제9호 는 ‘ 제88조 제1항 제8호 의 규정에 의하여 특수관계자로부터 분여받은 이익’이라고 규정한 반면 개정된 법인세법 시행령 제11조 제9호 는 ‘ 제88조 제1항 제8호 각목 의 규정에 의한 자본거래로 인하여 특수관계자로부터 분여받은 이익’이라고 규정하고 있어 결국 위 규정은 자본거래의 유형만을 법인세법 시행령 제88조 로부터 준용하고 있다고 보이는 점, 법인세법 시행령 제89조 제6항 이 그 해석상 법인이 분여한 경우 그 이익의 산정방법을 규정하고 있으나 이는 그 규정이 법인에 관하여 규정하는 데서 비롯한 것에 불과한 점 등에 비추어 보면, 법인세법 시행령 제11조 제9호 는 법인이 특수관계자인 법인으로부터 뿐만 아니라 특수관계자인 개인으로부터 불공정비율 합병을 통하여 이익을 분여받은 경우에도 이를 무상으로 받은 자산으로 보아 익금에 산입하는 취지로 봄이 상당하다. 따라서 원고가 개인주주인 소외인으로부터 이익을 분여받은 경우도 이에 포함되고 결국 그 이익산정규정인 상증법 및 시행령의 관련규정이 그대로 적용된다고 할 것이다.

Applicant ④ Judgment on the argument

Article 89(6) of the Enforcement Decree of the Corporate Tax Act provides that the relevant provisions of the Inheritance Tax and Gift Tax Act shall apply mutatis mutandis to the calculation of the amount to be included in gross income where profits are distributed to a person with a special relationship. According to Articles 54 and 56 of the Enforcement Decree of the Inheritance Tax and Gift Tax Act, the value of non-listed stocks shall be the larger of the net value per share of profit and loss and the net asset value, and shall be zero won where the net asset value of the plaintiff's non-listed stocks is below zero won. Accordingly, the above part of the plaintiff's assertion on different premise is without merit [in the case of calculation of profits by the method alleged by the plaintiff, as seen earlier, the net asset value per share when the original telecom merger is registered with 7,747 won and the net asset value per share [3,952,720,050 won per share, 30,38,67,67,613, 397, 470, 360, 367, 96, 46, 7, 96, 10

(v) Determination on the assertion 5

Article 28(5) of the Enforcement Decree of the Inheritance and Gift Tax Act and Article 22 of the Enforcement Decree of the Income Tax Act provide that where a corporation surviving after the merger is a corporation other than a stock-listed corporation or an Association-registered corporation, the standard date of appraisal of the value of the stocks immediately before the merger shall be the “date of the balance sheet publication” under Article 522-2(1) of the Commercial Act. Meanwhile, Article 522-2(1) of the Commercial Act provides that the final balance sheet and profit and loss statement, etc. of the merged company shall be kept at the principal office from two weeks before the date of the general meeting of shareholders for the merger to six months after the date of the merger shall be the date of the merger. The written statements in subparagraph 3, subparagraph 4-1, and subparagraph 4-2 shall be sufficient to recognize that each company’s final balance sheet and profit and loss statement, etc. on December 13, 2001, which are two weeks prior to the date of the general meeting of shareholders for the merger, as alleged by the Plaintiff.

In light of the following circumstances: ① According to Article 522-2(1) of the Commercial Act, the period of publication of the balance sheet is 6 months from the date of the merger until 200 days before the date of the merger; ② The period of publication of the balance sheet is 3 months after the date of the first 20 days before the date of the merger; ② the period of publication of the balance sheet is 4 months after the date of the first 20 days after the date of the merger; ② the period of publication of the balance sheet is 9 days after the date of the first 20 days after the date of the merger; ② the period of publication of the balance sheet is 30 days after the date of the merger; ② the period of publication of the balance sheet is 16 days after the date of the merger; ② the period of publication of the balance sheet is 30 days before the date of the first 20 days after the date of the merger registration; ③ the period of publication of the balance sheet is 16 days after the date of the merger and 20 days before the date of the merger.

3. Conclusion

Therefore, the judgment of the first instance court is legitimate, and the plaintiff's appeal is dismissed. It is so decided as per Disposition.

[Attachment Form 5]

Judge Lee Ji-hun (Presiding Judge)