[1] Meaning of Article 8-3 (1) 3 of the former Enforcement Decree of the Corporate Tax Act “the trade name of the merged corporation shall be changed to the trade name of the merged corporation,” and whether the trade name of the merged corporation may be deemed to be included in Article 8-3 (1) 3 of the former Enforcement Decree of the Corporate Tax Act even in cases where the trade name of the merged corporation is changed to a trade name similar to that of the merged corporation, which does not reach the degree that the

[2] The case holding that the above disposition is unlawful in a case where Gap corporation incorporated with the trade name of "Clophone corporation" was imposed corporate tax on the ground that it constitutes the requirement under Article 8-3 (1) 3 of the former Enforcement Decree of the Corporate Tax Act on the ground that the above merger constitutes the requirement under Article 8-3 (1) 3 of the former Enforcement Decree of the Corporate Tax Act, where Gap corporation was merged with "Clophone corporation" and completed the registration of merger, and registered the same day with its trade name as "Clophone corporation" as "Clophone corporation" and reported and paid corporate tax for the business

[1] In light of the proviso of Article 8 of the former Corporate Tax Act (wholly amended by Act No. 5581 of Dec. 28, 1998) and Article 8-3 (1) 3 of the former Enforcement Decree of the Corporate Tax Act (wholly amended by Presidential Decree No. 15970 of Dec. 31, 198; hereinafter “former Enforcement Decree”), the legislative intent and language of Article 8-3 (1) 3 of the former Enforcement Decree of the Corporate Tax Act (wholly amended by Presidential Decree No. 15970 of Dec. 31, 1998; hereinafter “former Enforcement Decree”), “the trade name of the merged corporation shall be registered as the trade name of the merged corporation as the trade name of the merged corporation” under Article 8-3 (1) 3 of the former Enforcement Decree shall be deemed to include not only the case where the trade name of the merged corporation is registered as the same as the trade name of the merged corporation, but also the case

[2] The case holding that in a case where Gap corporation established with the trade name of "Clophone corporation" denied the corporate tax deduction on the grounds that the merger registration was completed on March 27, 1997 on the same day and the trade name was changed as "Clophone corporation" (hereinafter "the registration of change in this case"), and reported and paid corporate tax for the business year 197 and 1998 after deducting losses incurred at the time of the merger, and the tax authority made the registration of change in the corporate tax for the above merger under the proviso of Article 8 of the former Corporate Tax Act (wholly amended by Act No. 5581 of Dec. 28, 1998), the above merger cannot be deemed as unlawful or identical to the registration of change in the trade name of the merged corporation on the ground that the registration of change in the corporate tax deduction constitutes the registration of change in the name of the merged corporation as "the trade name of the merged corporation" under Article 8-3 (1) 3 of the former Enforcement Decree of the Corporate Tax Act (wholly amended by Presidential Decree No. 15970 of Dec. 31, 1998)

[1] Article 8 (see current Article 13) of the former Corporate Tax Act (wholly amended by Act No. 5581, Dec. 28, 1998); Article 8-3 (1) 3 (current Deletion) of the former Enforcement Decree of the Corporate Tax Act (wholly amended by Presidential Decree No. 15970, Dec. 31, 1998) / [2] Article 8 (see current Article 13) of the former Corporate Tax Act (wholly amended by Act No. 5581, Dec. 28, 1998); Article 8-3 (1) 3 (current Deletion) of the former Enforcement Decree of the Corporate Tax Act (wholly amended by Presidential Decree No. 15970, Dec. 31, 1998)

LLC (Attorneys Son Ji-yol et al., Counsel for the plaintiff-appellant)

Head of the District Tax Office

Seoul High Court Decision 2009Nu17393 decided January 22, 2010

The appeal is dismissed. The costs of appeal are assessed against the defendant.

The grounds of appeal are examined.

The proviso of Article 8 of the former Corporate Tax Act (wholly amended by Act No. 5581 of Dec. 28, 1998; hereinafter “former Act”) provides that a merger deemed to be a merger for the purpose of unreasonably reducing the tax base in determining the corporate tax and prescribed by the Presidential Decree shall not be deducted the deficit in the case of a merger. Article 8-3(1) of the former Enforcement Decree of the Corporate Tax Act (wholly amended by Presidential Decree No. 15970 of Dec. 31, 1998; hereinafter “former Enforcement Decree”) provides for the requirements of “merger as prescribed by the Presidential Decree” under the proviso of Article 8-3(1) of the former Enforcement Decree of the Corporate Tax Act (wholly amended by the Presidential Decree No. 15970 of Dec. 31, 1998; hereinafter “former Enforcement Decree”) and subparagraph 3 thereof provides that “the trade name of the merged corporation shall be registered as a trade name of the merged corporation.” In light of the legislative purport and literal meaning of each of the above Act, it includes a trade name of the merged corporation.

According to the reasoning of the judgment below and the records, the plaintiff is a company incorporated with the trade name of "edon sate" corporation with the main business of engaging in high quality polys, special compounds, and nonchemicals manufacturing business, etc. for construction and industrial use. The plaintiff merged with "Korea Researchphone corporation (the company incorporated on June 26, 1985 with the manufacture, sale, wholesale, and real estate leasing business of various electronic equipment, such as EON, etc. as its main business), and the same day after completion of the merger registration on March 27, 1997 and registered the change (hereinafter "the registration of change in this case"). In light of the trade name and the change after the merger of each company, the registration of change in this case cannot be deemed to constitute a case of mutual registration of change to the same trade name as that of the merged corporation, or a case of mutual registration of change to the extent that ordinary persons might mislead the merged corporation as the trade name of the merged corporation. Thus, it cannot be deemed to constitute a case of mutual registration of change as stipulated in Article 8-3 (1)3 of the former Enforcement Decree.

Although the reasoning of the judgment below is somewhat inappropriate, it is justifiable to conclude that the disposition of this case is unlawful on the ground that the registration of this case did not meet the requirements prescribed in Article 8-3 (1) 3 of the former Enforcement Decree. Therefore, contrary to what is alleged in the ground of appeal, there is no error of law by misapprehending the principle of no taxation without representation or the legal principles on the deduction of losses carried forward

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 Lee In-bok (Presiding Justice)