Whether liquidation income of the merged corporation has been unjustly reduced due to the acquisition of shares

Since the plaintiff's acquisition of the combined shares of this case results in a decrease in liquidation income, it is reasonable to view that this constitutes "the case where the liquidation income of the merged corporation is deemed to be unfairly reduced due to the acquisition of the combined shares as stipulated in the Enforcement Decree of this case."

1. The Defendant’s disposition of imposition of penalty tax of KRW 63,809,728 against the Plaintiff on March 2, 2004 shall be revoked.

2. The plaintiff's remaining claims are dismissed.

3. Ten minutes of the lawsuit shall be borne by the plaintiff, and the remainder shall be borne by the defendant.

The Defendant’s disposition of imposition of KRW 638,097,284 and additional tax 63,809,728 against the Plaintiff on March 2, 2004 is revoked.

1. Details of the disposition;

A. On December 27, 1994, the Plaintiff acquired 8,477,846,790 shares of ○○ Industries Co., Ltd. (hereinafter referred to as “the shareholder”) (hereinafter referred to as “the instant combined shares”) of 323,850 shares (the shareholder is the Korea Petroleum Development Corporation; hereinafter referred to as “the 'the 'the 'the 'the 'the 'the 'the 'the 'the 'the 'the 'the ')' (hereinafter referred to as “the 'the ' the 'the ' the ' the '), while combining the 'the 'the 'the 'the 'the 'the 'the 'the ' the ' the 'the ' the ' the ' the ' the ' the ' the ' the '), a shareholder of the above company,

B. The non-party company calculated the liquidation income resulting from the above merger as follows and paid corporate tax on October 29, 1998.

Total amount of merger subsidies

Total amount of equity capital (B)

Liquidation Income Amount

(1) (1-2)

Tax amount payable

Value of shares invested;

10,875,000,000

11,424,933,981

11,437,451,519

3,190,486,420

The amount of corporate household payments;

3,509,535,060

Acquisition value of combined stocks;

8,477,846,790

Total

2,862,385,500

C. (1) (1) The plaintiff's acquisition of the combined shares of this case does not fall under "when the liquidation income of the merged corporation is deemed to be unfairly reduced" under Article 117-2 of the former Enforcement Decree of the Corporate Tax Act (wholly amended by Presidential Decree No. 15970 of Dec. 31, 198), and thus, the acquisition value of 8,47,846,790 won is not included in the calculation of the liquidation income amount. (2) Even if the acquisition value of the combined shares of this case is deemed to be a merger grant, the merger of the non-party company constitutes a correction claim under Article 40 subparagraph 1 of the former Regulation of Tax Reduction and Exemption Act (wholly amended by Presidential Decree No. 15970 of Dec. 31, 1998), and Article 98 of the Enforcement Decree of the Restriction of Special Taxation Act (wholly amended by Presidential Decree No. 15976 of Dec. 31, 199).

(2) On October 20, 199, the Defendant rendered a disposition rejecting correction on the ground that the Plaintiff’s acquisition of the shares of this case constitutes a case where the liquidation income of the non-party company was unjustly reduced, and that the merger between the Plaintiff and the non-party company does not constitute the grounds for non-taxation under the above Adjustment Act.

(3) On April 27, 2001, the Plaintiff filed a lawsuit seeking the revocation of the above corrective refusal disposition with this court Decision 2001Gu15831, and ruled against November 14, 2001. However, the Plaintiff appealed with Seoul High Court 2001Nu19429, and on October 10, 2002, the acquisition value of the instant aggregate shares was included in the liquidation income calculation, but on the other hand, the Plaintiff won the judgment in favor of the Plaintiff on the ground that the liquidation income constitutes non-taxable income stipulated in Article 40 of the Reduction and Exemption Act. On January 27, 2004, the Supreme Court dismissed the Defendant’s appeal on the grounds that the acquisition value of the instant aggregate shares constitutes non-taxable income stipulated in Article 40 of the Reduction and Exemption Act.

D. Accordingly, the Defendant issued the instant disposition imposing KRW 701,907,012 on the Plaintiff on March 2, 2004 under Articles 5(1)1 and 11 of the former Act on Special Rural Development (amended by Act No. 5581, Dec. 28, 1998) and the additional tax on non-payment (3,190,486,420%) 63,809,728 won (=638,097,420%) and 63,809,728 won (=638,097,284,284,010%) on the premise that the said corporate tax is abated or exempted by the Act on Special Rural Development and Fisheries (amended by Act No. 5581, Dec. 28, 1998).

[Reasons for Recognition] Facts without dispute, Gap evidence 1, 8, 9, 10, Eul evidence 1, 5, 2-1, 2, 3-1, 2, and 3

2. Whether the disposition is lawful;

A. The plaintiff's assertion

(1) The Plaintiff’s acquisition of the instant combined shares was only one of the normal transaction processes in accordance with the pre-determined merger plan in accordance with the government’s policy for the consolidation of public enterprises, and thus, it cannot be deemed that the liquidation income has reduced unfairly. Thus, the instant disposition based on this premise is unlawful.

(2) Even if the acquisition value of the instant combined stocks is included in the total amount of the merger subsidies and subject to corporate tax, the disposition of imposition of additional tax, out of the instant disposition, is an illegal disposition that merely states that there is a justifiable reason not attributable to the Plaintiff’s failure to pay taxes.

B. Relevant statutes

It is as shown in the attached Form.

(c) Fact of recognition;

The following reasons are that the Plaintiff acquired the instant shares and merged with the non-party company.

① The National Assembly and the Board of Audit and Inspection pointed out the problems that the domestic oil pipeline business, which was dualised by the Plaintiff and Nonparty Company, was inefficient, and the President of the National Assembly and the Board of Audit and Inspection ordered the implementation of the plan to reform the management of public enterprises on October 5, 1993.

② On October 21, 1993, the "Economic Planning Board" Evaluation Committee of Government-Invested Institutions, a telegraphic person of the Ministry of Finance and Economy, passed a resolution on the "Promotion Plan for the Management of Government-Invested Institutions". At the time, the Government Organization Act was prepared on November 20, 1993 in the Ministry of Trade, Industry and Energy, which was under the overall control and coordination of the Director General of the Dara Economic Planning Bureau, and selected the Plaintiff and the non-party companies as the object of consolidation and reported it to the Economic Planning Board.

③ However, as to the above plan of the Ministry of Trade, Industry and Energy, ○○ Heavy Industries, a shareholder of the non-party company (at the time, 51% shares of the non-party company were owned by 49%) asserted and opposed to the privatization of the non-party company, and at the same time, intended to transfer its shares to the non-party company, and the Ministry of Trade, Industry and Energy revised the plan to realize the unification of management by transferring the shares of the non-party company owned by the open air to the plaintiff as an investment company

④ On December 29, 1993, according to the revision plan to the Ministry of Trade, Industry and Energy, the management evaluation committee of the Ministry of Trade, and the management evaluation committee of the Ministry of Trade, Industry and Energy established the "plan for privatization of public enterprises and coordination of functions", and the policy of the Ministry of Economic Planning that combines with the plaintiff of the non-party company was indicated. The above plan was formulated on January 1, 1994, and accordingly, was aimed at promoting the integration under the responsibility of the Ministry of Trade, Industry and Energy from February 16, 1994. The plan was formulated on January 16, 1994, by establishing the "plan for the unification of the national oil pipeline business."

⑤ The basic framework was that the above Japaneseization was conducted under the initiative of the Ministry of Trade, Industry and Energy, converting the non-party company into the Plaintiff’s investment company at the first stage, and integrating the two houses following the completion of the Plaintiff’s construction of the pipelines at the second stage. The acquisition of the non-party company’s shares was in accordance with the policy set by the Ministry of Trade, Industry and Energy to cope with the integration and opposition of the ○○○ oil at the time the Ministry of Trade,

④ Accordingly, as seen earlier on December 27, 1994, the Plaintiff acquired 323,850 shares (total shares 51%) of the total shares of the non-party company owned by the United States Corporation in KRW 8,477,846,790. On December 3, 1996, the Ministry of Trade, Industry and Energy (the Ministry of Commerce, Industry and Energy was reorganized in accordance with the Government Organization Act amended by Act No. 4831, Dec. 23, 1994; the name was changed to the Ministry of Commerce, Industry and Energy pursuant to the Act amended by Act No. 5529, Feb. 28, 1998) to consolidate the non-party company, and acquired and merged 49% shares owned by the non-party company from among the remaining shareholders of the non-party company by the Plaintiff on July 30, 1998.

[Ground of recognition] Unsatisfy, entry of Gap evidence 2 to 7, purport of whole pleadings

D. Determination

(1) Whether the acquisition value of the shares of this case should be excluded from the total amount of the merger subsidies

Article 117-2 of the former Enforcement Decree of the Corporate Tax Act (hereinafter referred to as the "Enforcement Decree provision of this case") provides that the liquidation income of the merged corporation is calculated as the amount of the liquidation income of the merged corporation when the acquisition of the merged corporation is deemed to be unreasonably reduced due to the merger of the merged corporation, in case where the acquisition of the merged corporation's stocks or investment (combined stocks) was made by the merged corporation, the acquisition value of the combined stocks shall be deemed to be the amount of the liquidation income of the merged corporation. The purpose of the above provision is to impose the unrealized profit (net asset market value - net asset cost) of the corporation extinguished due to the merger. Thus, the "where the acquisition is deemed to be unreasonably reduced due to the acquisition" under the Enforcement Decree of this case is not necessarily a subjective element, but it should be determined according to whether the acquisition of the combined stocks was made as part of the merger (see Supreme Court Decision 91Nu499, May 26, 192).

According to the above facts, it can be known that the Plaintiff acquired the shares of this case for the merger of the non-party company, and that if the Plaintiff paid the amount equivalent to the above acquisition value to the shareholders of this case as the merger subsidy without acquiring the shares of this case, the total amount of KRW 19,352,846,790 (the face value of new shares issued to ○○ Heavy Industries + KRW 10,875,00,000 + the amount of the merger subsidy + KRW 8,477,846,790) shall be included in the liquidation income. In fact, since the Plaintiff acquired the shares of this case in advance and reduced its liquidation income, it is reasonable to view that the liquidation income of the merged corporation falls under the case where it is deemed that the liquidation income of the merged corporation was reduced unfairly due to the acquisition of the shares of this case.

Therefore, the plaintiff's assertion that the acquisition value of the shares of this case should be deducted from the merger subsidy is without merit.

(2) Whether there are justifiable grounds for failure to pay the special rural development tax of this case

Under the tax law, in order to facilitate the exercise of taxation rights and the realization of tax claims, where a taxpayer violates various obligations, such as a return and tax payment, as prescribed by the individual tax law without justifiable grounds, the taxpayer’s intention and negligence is not considered as administrative sanctions. On the other hand, where a taxpayer is not aware of his/her obligations, and there is a circumstance where it is unreasonable for the taxpayer to be unaware of his/her obligations, or where it is unreasonable for him/her to expect the performance of his/her obligations, and there is a justifiable reason that it is impossible for him/her to neglect his/her obligations (see, e.g., Supreme Court Decision 96Nu15404, Aug. 22, 1997). In addition, when the tax law is technically difficult to interpret, it is too harsh for the taxpayer to be subject to imposition of additional taxes, beyond the scope of simple legal land or misunderstanding, and even in this case, it is too harsh for the taxpayer to be subject to imposition of additional taxes (see, e.g., Supreme Court Decision 2002Nu36393.

In this case, the plaintiff's acquisition value of the shares of this case for daily use is deemed as the merger subsidy and paid corporate tax accordingly, and then whether it is reasonable to regard the above acquisition value as liquidation income, and even if it is deemed as liquidation income, it is also discussed whether it falls under the object of non-taxation under the early depreciation Act. However, there was a divided opinion between the defendant who is the tax authority and the court. This seems to be due to the difficulty in interpreting tax-related Acts, not simply due to mistake of facts or mistake of law, but due to the difficulty in interpreting the tax-related Acts. In this situation, even though the acquisition value of shares of this case constitutes liquidation income, it is deemed that the liquidation income of this case constitutes liquidation income, but the judgment that the corporate tax on the liquidation income is subject to non-taxation under the early depreciation Act, changing the previous position that the defendant considered the above liquidation income as the object of non-taxation under the above liquidation income as the tax base for special rural development tax, and added it to this, it is reasonable to deem that there is any justifiable reason to deny the plaintiff's duty to report and pay special tax.

Therefore, it is unlawful to impose penalty tax in the disposition of this case.

3. Conclusion

Therefore, the part of the claim of this case seeking revocation of the imposition of additional tax is justified, and the remaining claims are dismissed as it is without merit. It is so decided as per Disposition.