A. The meaning of where the transfer value and acquisition value under Article 59-2(3) of the Corporate Tax Act are unclear;

B. The meaning where the acquisition value under Article 59-2(3) of the Corporate Tax Act is unclear in the calculation of the transfer value where the assets acquired before or after December 31, 1974 are transferred.

A. “Where the transfer value and acquisition value are unclear” in Article 59-2(3) of the Corporate Tax Act includes not only where the transfer value and acquisition value are unclear, but also where either of the two values in equity is unclear.

B. According to Article 7 of the Addenda of the Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 7464 of Dec. 31, 1974), even if the transfer value can be known in cases where the assets acquired before and after December 31, 1974 are transferred, the value assessed on the basis of the current market price on January 1, 1975 should be confirmed in order to calculate transfer margin. Thus, Article 59-2(3) of the Corporate Tax Act provides that the acquisition value is unclear, and ultimately, the above market price cannot be known as of January 1, 1975.

A.B. Article 59-2(3)(b) of the Corporate Tax Act. Article 7 of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 7464 of Dec. 31, 1974)

A. Supreme Court Decision 81Nu200 decided Dec. 13, 1983; 86Nu671 decided Oct. 26, 1987; 87Nu662 decided Dec. 22, 1987

Attorney Kim Jong-young, Counsel for the plaintiff-appellant of social welfare foundation

Head of tax office

Gwangju High Court Decision 85Gu55 delivered on February 6, 1986

The appeal is dismissed.

The costs of appeal are assessed against the defendant.

We examine the grounds of appeal.

According to the facts established by the court below, the plaintiff acquired the land owned before December 31, 1974 and transferred it to 1983. Thus, as to the land transferred after January 1, 1982 pursuant to Article 13 of the Addenda of the former Corporate Tax Act (Act No. 2686 of Dec. 21, 1974) and Article 7 of Addenda of the same Act (Act No. 3473 of Dec. 31, 1981), the acquisition date shall be deemed to be January 1, 1975.

In addition, according to Article 59-2 (3) of the Corporate Tax Act, where the transfer value and the acquisition value are unclear in calculating gains on transfer which are the tax base of special surtax, the amount based on the standard market price determined by the President shall be the transfer value and the acquisition value respectively. Here, where the transfer value and the acquisition value are unclear, not only where the transfer value and the acquisition value are unclear but also where either of them is unclear in terms of equity (see Supreme Court Decision 87Nu662 delivered on December 12, 1987).

However, according to Article 7 of the Addenda of the Enforcement Decree of the Corporate Tax Act (Presidential Decree No. 7464 of December 31, 1974), the acquisition value of assets acquired before December 31, 1974 shall be the book value assessed by the current market price (if the market price cannot be determined, January 1, 1975; hereinafter the same shall apply) on the basis of the current market price as of January 1, 1975, but the value calculated by multiplying the book value before December 31, 1974 by the increase rate of wholesale prices during the holding period from the date of acquisition until December 31, 1974 from the date of acquisition until December 31, 1974, if the market price is higher than the value appraised by the current market price as of January 1, 1975, the acquisition value shall be determined as the acquisition value, and it shall be interpreted that the current market price cannot be determined by the increase rate of 197-14,197.

Therefore, the judgment of the court below that the transfer value and the acquisition value should be based on the standard market price calculated pursuant to Article 124-2 (6) of the Enforcement Decree of the Corporate Tax Act and Article 115 (1) 1 of the Enforcement Decree of the Income Tax Act on the ground that the transfer value and the acquisition value should be determined solely by the acquisition on or before December 31, 1974 and transfer after January 1, 1982.

The issue is that, on January 1, 1975, the current market price of the land, etc. transferred after the acquisition on or before December 31, 1974 under Article 7 of the Enforcement Decree of the Corporate Tax Act, if the current market price is unknown, the current market price is deemed the acquisition price if the current market price is unknown on or after January 1, 1975. However, in this context, the amount assessed according to the standard market price refers to the standard market price in the case where the acquisition price is unclear, and it cannot be deemed as the actual acquisition price. In calculating gains on transfer, which is the tax base of special surtax pursuant to Article 59-2 (3) of the Corporate Tax Act, the standard market price should be followed in the case where either the transfer price and the acquisition price are unclear, and there is no reason to discuss.

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.

Justices Ansan-man (Presiding Justice)