early trial 2013west 3604 ( October 16, 2014)

The book value of a corporation is the book value under tax law, and it is legitimate that the corporation's book value is not deducted from the liquidation income when calculating the merger evaluation marginal profit of qualified merger,

Succession to the assets of the Act on the Merger at the book value of consolidated financial statements falls under cases where assets are evaluated and succeeded, and in cases of qualified mergers, liquidation income shall not be deducted when calculating the merger evaluation marginal profit, and it shall be calculated including the unpaid reserve amount

Article 17 (Non-Inclusion of Proceeds from Capital Transactions in Gross Income)

2014Guhap700999 Revocation of revocation of revocation of correction

○○ Securities Corporation

○○ Head of tax office

October 11, 2016

November 11, 2016

1. The plaintiff's claim is dismissed.

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

Cheong-gu Office

The corporate tax accrued from April 1, 2009 to March 31, 2010 owed to the Plaintiff on May 7, 2013 by the Defendant to the Plaintiff.

The disposition rejecting correction of KRW 1,379,420,218 shall be revoked.

1. Details of the disposition;

A. The Plaintiff, established on June 4, 1962, engaged in investment trading business, investment brokerage business, collective investment business, investment advisory business, and trust business, etc. On March 13, 2010, the Plaintiff merged ○○○ Co., Ltd. (hereinafter referred to as “○○○”) (hereinafter referred to as “instant merger”).

나. 원고는 2010. 6. 30.에 2009. 4. 1. ~ 2010. 3. 31. 사업연도(이하 '이 사건 사업연도'라 한다) 법인세 신고시 〇〇〇〇의 △유보금액 중 6,270,092,000원(이하 '쟁점유보금액'이라 한다)은 합병평가차익에 포함되지 않는 것으로 보아 이를 익금에 산입하지 아니한 채 법인세 신고를 하였다가, 2011. 6. 30. 이를 합병평가차익에 포함시키는 것으로 익금산입하여 위 사업연도 법인세 1,379,420,218원(이하 '이 사건 법인세'라 한다)을 수정신고・납부하였다.

C. On February 28, 2013, the Plaintiff filed a claim for correction against the Defendant for the refund of the corporate tax of this case by exclusion of the key reserve amount from taxable income, but the Defendant rendered a disposition rejecting correction on May 7, 2013 (hereinafter “instant disposition”).

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1 through 13 (including branch numbers for those with additional numbers; hereinafter the same shall apply), Eul evidence Nos. 1 and 2, and the purport of the whole pleadings

2. Related statutes;

It is as shown in the attached Table related statutes.

3. Whether the instant disposition is lawful

A. Article 17(1)3 of the former Corporate Tax Act (amended by Act No. 9898, Dec. 31, 2009; hereinafter “former Corporate Tax Act”) provides that a merger marginal profit shall not be included in gross income; however, the proviso excludes a merger marginal profit as prescribed by the Presidential Decree. Article 12(1)1 of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 22184, Jun. 8, 2010; hereinafter “former Enforcement Decree of the Corporate Tax Act”) provides that where assets are evaluated from a merged corporation until the amount reaches the amount under Article 459(1)3 of the former Commercial Act (amended by Act No. 10600, Apr. 14, 201; hereinafter “former Corporate Tax Act”), the book value of assets in excess of the book value of the merged corporation as a merger marginal profit (i.e., the appraised value of assets succeeded to as a merger marginal profit) shall be included in gross income.

In addition, Article 80 (1) of the former Corporate Tax Act provides that "where a domestic corporation is dissolved due to a merger, the amount of liquidation income shall be the total amount of the cost that the stockholders, etc. of the merged corporation receive from the merged corporation deducted the total amount of equity capital as of the date of the registration of the merger of the merged corporation," and Article 122 (3) of the former Enforcement Decree of the Corporate Tax Act provides that "in calculating the amount of liquidation income due to a merger or division of the merged corporation, the surplus included in the total amount of equity capital shall be deducted from the amount of tax adjustment succeeded to the merged corporation,

B. As to whether the merger of this case constitutes the case of valuation and succession of assets

1) The plaintiff's assertion

The plaintiff only succeeded to the assets and liabilities of the merged corporation at the book value of the consolidated financial statements according to the merger accounting rules, and did not succeed to the evaluation of assets. Thus, the case does not fall under the case of the evaluation and succession of the assets stipulated in this case.

2) Determination

"The book value of the merged corporation" under the provisions of this case which determined merger evaluation marginal profit refers to the book value that reflects tax adjustment, etc. If assets are succeeded to at any price other than the book value under the tax law of the merged corporation, it can be deemed as the case where assets are evaluated and succeeded, and in such a case, it

이 사건의 경우 원고의 주장에 의하더라도 원고는 〇〇〇〇의 자산을 승계하면서 세법상 장부가액으로 승계한 것이 아니라 쟁점유보금액을 승계하지 않는 등으로 피합병법인의 연결재무제표상의 자산가액, 즉 세법상 장부가액이 아닌 다른 가액으로 승계하였으므로, 이는 이 사건 조항이 정한 '자산을 평가하여 승계한 경우'에 해당한다고 봄이 타당하다. 따라서, 원고의 이 부분 주장은 받아들일 수 없다.

C. As to whether the instant provision is invalid as double taxation

1) Summary of the Plaintiff’s assertion

쟁점유보금액은 승계되지 않는 세무조정사항(이하 '미승계유보금액'이라 한다)으로서 〇〇〇〇의 법인세 과세소득인 청산소득에 이미 포함되었다. 구 법인세법 시행령 제14조 제1항 제1호 가목에 해당하는 과세이연요건 충족 합병(취득한 주식의 이하 '적격합병'이라 한다)의 경우, 같은 호 다목에 해당하는 과세이연요건 불충족 합병(이하 '비적격합병'이라 한다)과 달리 합병평가차익 산정시 청산소득을 차감하지 않고, 쟁점유보금액, 즉 미승계유보금액을 포함하여 합병평가차익을 산정하도록 한 이 사건 조항은 이중과세로서 무효이다(원고가 이 사건 처분이 이 사건 조항에 따라 산정된 결과인 점은 다투지 않고 있다).

2) Determination

In light of the aforementioned facts and the contents and purport of the instant provision, and the relevant statutes and the following circumstances, even if the instant provision does not provide for the deduction of liquidation income in the calculation of merger evaluation marginal profit, it cannot be deemed as a unconstitutional and unlawful provision contrary to the principle of no taxation without law as a double taxation contrary to tax equity and the principle of no taxation without law, as it violates the principle of no taxation without law. The Plaintiff’s assertion on a different premise is unacceptable.

① Corporate tax on the merger evaluation marginal profit (1) and corporate tax on liquidation income (1) are different from the requirements for the establishment of tax liability, the timing and the taxpayer as follows, and there is no special provision to exclude the overlapping application of both parties. A. requirements for establishment of tax liability are ‘where the merged corporation succeeds to the evaluation of assets' in the case of the former, and ‘where the latter is liquidated by dissolution, merger, etc.'.

B. The time of the establishment of tax liability is the ‘business year in which the merged corporation received succession by evaluating assets in the case of the former', and ‘the date of liquidation' in the case of the latter.

C. In the case of the former, the taxpayer is a merged corporation, and in the case of the latter, a merged corporation.

(2) Article 17(1)5 of the former Corporate Tax Act does not include the merger marginal profits as profits from capital transactions in the calculation of gross income under the proviso. This is the case where the merged corporation evaluates the assets of the extinguished corporation and disposes of depreciation costs or asset disposal losses after succession, and thus, the amount of income decreases. Therefore, the purpose of imposing liquidation income is to impose tax on the unrealized capital gains at the time of the merger, while the purpose of imposing liquidation income is to impose tax on the unrealized capital gains, and its regulatory purpose is different.

③ 이 사건 조항이 적격합병의 경우 비적격합병의 경우와 달리 합병평가차익을 산정할 때 청산소득을 공제하는 규정을 두고 있지 않다. 비적격합병의 경우 합병신주를 시가로 평가하여 취득하므로, 시가에 상당하는 합병대가에서 장부가액, 즉 액면가액을 기준으로 산정하는 자기자본총액을 뺀 부분에 대한 과세가 청산소득에 대한 과세에서 이루어지는 데 반하여, 적격합병의 경우에는 주식을 액면가액으로 평가하여 취득하므로 실제 청산소득이 발생하여 법인세가 과세되는 예가 거의 없다. 이러한 점에 대한 고려로 적격합병의 경우에는 청산소득을 차감하는 규정을 두지 않고 있다. 이 사건의 경우에도 실제로 청산소득이 발생하지 않아 〇〇〇〇이 관련 법인세를 납부하지 않았다. 다시 말해, 비적격합병과 같이 청산소득을 공제하는 규정이 있다고 하더라도 공제될 금액이 전혀 없다는 것이다. 또한 적격합병과 비적격합병 사이에 위와 같은 과세상 차이점이 존재하고, 합병시에 적격합병을 할 것인지, 비적격합병을 할 것인지를 대상 법인들이 스스로 선택할 수 있으므로, 이 둘을 달리 취급하는 것을 두고 조세평등주의에 반한다고 보기도 어렵다.

④ In calculating the amount of liquidation income from a merger or division of a corporation, Article 122(3) of the former Enforcement Decree of the Corporate Tax Act provides that the surplus included in the total amount of equity capital shall be deducted from the amount of tax adjustment that is succeeded to the merged corporation, etc. in the event of the merger or division, and shall be calculated by adding the amount of non-deductible income to the amount of non-deductible income from the amount of tax adjustment that is succeeded to in the calculation of liquidation income in the said tax adjustment. However, such provision does not provide that the amount of succeeded reserve shall be excluded from the income in order to prevent the subsequent inclusion of the amount of income in the disposal of assets related to the merged corporation at the time of the disposal of assets related to the merged corporation after the merger or division, nor does it be deemed as aimed at preventing the merger evaluation

⑤ Following the amendment of the former Corporate Tax Act on December 31, 2009, the amount imposed by dividing the liquidation income and the merger evaluation marginal profit at the time of the merger before the amendment is integrated into transfer profit and loss, and, in case of qualified merger, the transfer profit and loss of the merged corporation is zero, and in case of qualified merger, the amount of the transfer profit and loss of the merged corporation is changed to be taxed at the time of later disposal of the merged corporation. It is difficult to view that the method of taxation of the income generated in relation to the merger was changed only to the method of taxation on the income generated in relation to the merger and the method of taxation by dividing the merger marginal profit

4. Conclusion

The plaintiff's claim is dismissed on the ground that it is without merit.

Related Acts and subordinate statutes

director of the former Corporate Tax Act (amended by Act No. 9898 of Dec. 31, 2009)

Article 16 (Constructive Dividends or Distributions)

(1) The amount falling under any of the following subparagraphs shall be deemed the amount of profit dividends or surplus earnings distributed from a corporation and subject to the application of this Act:

2. The value of stocks, etc. acquired through the transfer of all or part of corporation's surplus funds into capital or financing: Provided, That this shall not apply where amounts falling under any one of the following items are transferred to capital:

(a) Capital reserve fund under Article 459 (1) 1, 1-2, 1-3, 2, 3 and 3-2 of the Commercial Act (excluding the excess amount provided for in the proviso to Article 17 (1) 1, and marginal profit accruing from the evaluation of corporations undergoing merger or that from the evaluation of dividing companies, etc. prescribed by Presidential Decree, and in cases of gain from the retirement of treasury stocks or treasury-invested shares, limited to the transfer of capital after two years have elapsed from the date of retirement, in cases where the market price under Article 52 (2) does not exceed the acquisition

5. The amount of the sum of the value of stocks, funds, and other assets which stockholders, etc. of a corporation which is extinguished in the course of a merger (hereinafter referred to as an "merged corporation") receive from a corporation which is established or surviving in the course of such merger (hereinafter referred to as "merged corporation") in excess of the amount necessary for the acquisition of the stocks, etc.

Article 17 (Non-Inclusion of Gains from Capital Transactions in Gross Income)

(1) The following profits shall not be included in gross income in calculating the income amount of a domestic corporation for each business year:

(c)

3. Merger marginal profits: Provided, That this shall not include merger evaluation marginal profits as prescribed by the Presidential Decree (hereinafter referred to as “merger marginal profits”);

Article 44 (Inclusion of Amount Equivalent to Merger Evaluation Marginal Profit in Calculation of Losses)

(1) Where a merged corporation succeeds to evaluation of and succession to the assets of a merged corporation, an appropriate amount for the evaluation of merger marginal profits on the assets concerned (limited to assets prescribed by Presidential Decree) may be included in deductible expenses in calculating the income amount for the business year which includes the date of the merger registration, as prescribed by Presidential Decree:

1. A merger shall be between domestic corporations which have continued to operate business for not less than one year as of the date of merger registration;

2. Where stockholders of an extinguished corporation receive the price for such merger from the merged corporation, the total amount of the price shall be 95/100 or more of the value of the stocks; and

3. The merged corporation shall continue the business succeeded from the extinguished corporation by the end of the business year in which the merger is registered.

(2) Where the merged corporation which has included the amount equivalent to the merger marginal profit under the provisions of paragraph (1) in deductible expenses discontinues the business succeeded from the extinguished corporation within 3 years from the beginning date of the business year following the business year in which the merger marginal profit is registered, the amount included in deductible expenses shall be included in

(3) A merged corporation which wishes to be subjected to paragraph (1) shall submit a detailed statement on merger evaluation marginal profit under the conditions as prescribed by the Presidential Decree.

(4) In applying the provisions of paragraphs (1) and (2), matters necessary for the criteria for judging the continuation or discontinuance of succeeded business, amounts to deductible expenses or inclusion in the gross income, and the method of inclusion thereof shall be prescribed by Presidential Decree.

Article 80 (Calculation of Liquidation Income Amount due to Merger)

(1) Where a domestic corporation is dissolved due to a merger, the liquidation income (hereinafter referred to as "settlement income from a merger") shall be the amount calculated by deducting the total amount of the cost that stockholders, etc. of an extinguished corporation receive from the merged corporation minus the total amount of equity capital of

(1) The former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 22184, Jun. 8, 2010)

Article 12 (Calculation of Merger Evaluation Marginal Profit)

(1) "Merger evaluation marginal profit as prescribed by Presidential Decree" in Article 16 (1) 2 (a) of the Act means the amounts under subparagraphs 1, 3 (limited to surplus funds falling under the main sentence of Article 16 (1) 2 of the Act), and 4 (referring to the amount calculated by the mutatis mutandis application thereof in cases of corporations other than stock companies) calculated by adding the amounts under each of the following subparagraphs in sequential order until the amount under Article 459 (1) 3 of the Commercial Act (hereafter in this Article, referred to as "merger marginal profit") is reached: Provided, That in cases falling under Article 14 (1) 1 (c), it shall be the amount under subparagraph

1. Where assets are evaluated and succeeded from an extinguished corporation, the portion of the value of the portion in excess of the book value (for cases falling under Article 14 (1) 1 (c), this shall mean the value of the balance of the book value of the assets and liabilities of the succeeded extinguished corporation and the total cost of merger under Article 16 (1) 5 of the Act) of the extinguished corporation

2. Where the total cost of merger under the provisions of Article 16 (1) 5 of the Act (in case of stocks, the amount evaluated in accordance with their face value) does not reach the capital of the extinguished corporation, the amount of the deficiency;

3. The amount calculated in sequence from the surplus other than that falling under the main sentence of Article 16 (1) 2 of the Act among capital surplus of the extinguished corporation.

4. The amount equivalent to earned surplus of the extinguished corporation;

Article 14 (Evaluation, etc. of Value of Assets)

(1) The value of property other than money among the property acquired pursuant to the subparagraphs of Article 16 (1) of the Act shall be as follows:

1. Where the acquired assets are stocks or investment shares (hereinafter referred to as "stocks, etc."), the amount under the following items:

(a) In cases of stocks, etc. under Article 16 (1) 2, 3, 5, and 6 of the Act (in cases of stocks, etc. under subparagraphs 5 and 6 of the same paragraph, limited to cases where the market price of the stocks, etc. under Articles 44 (1) 1 and 2, and 46 (1) 1 and 2 of the Act is higher than their face value or equity investment amount, and where stocks, etc. meet the requirements under subparagraphs 1 and 2 of the same paragraph, respectively, and Article 46 (1) 1 and 2 (c) of the Act), face value or equity investment amount [in cases of stocks, etc. acquired by a corporation under Article 51-2 (1) 2 of the Act (hereafter in this Article,

(b) The issue value (in cases of stock dividends received by an investment company, etc., it shall be zero) in cases of stock dividends under Article 462-2 of the Commercial Act;

(c) In other cases, the market price as provided in Article 52 of the Act at the time of its acquisition (hereinafter referred to as the “market price”): Provided, That in case of profits received by distribution from a specially related person under Article 88 (1) 8, the amount shall be deducted;

Article 122 (Calculation of Amount of Liquidation Income due to Merger)

(1) The total cost of merger under Article 80 (1) of the Act shall be the sum of the amounts under each of the following subparagraphs:

1. The total cost of merger under Article 16 (1) 5 of the Act;

2. The amount added up under Article 80 (2) of the Act: Provided, That in case that the requirements falling under each of the following items are met, the amount shall be the sum of the value of stocks acquired by stockholders, etc. of a merged corporation under item (b) and the amount that is not used for the acquisition of stocks, from among the transfer amount of combined stocks, to the value of stocks

(a) The merged corporation and the extinguished corporation shall not be persons with a special relationship at the time that the merged corporation acquires combined stocks, etc. referred to in Article 80 (2) of the Act (hereafter in this Article, referred to as “combined stocks, etc.”) from stockholders, etc. of the extinguished

(b) A merged corporation (referring to the stocks newly issued by the merged corporation) in an amount equivalent to 95/100 or more of the amount of transfer of combined stocks shall be acquired within seven days after stockholders, etc. of an extinguished corporation transfer combined stocks, etc. to the merged corporation;

(c) Requirements under Article 44 (1) 1 and 2 of the Act;

3. The sum of the amounts falling under any one of the following items paid by the merged corporation:

(a) The corporate tax imposed on liquidation income of an extinguished corporation and the national tax imposed on the corporate tax (including the abated tax amount); and

(b) Resident tax imposed on the corporate tax under item (a) of the Local Tax Act;

(2) In the application of the latter part of Article 80 (2) of the Act, the value of stocks delivered shall be the value calculated under each subparagraph of Article 14 (1).

(3) In calculating the amount of liquidation income from a merger or division of corporations pursuant to Articles 80 and 81 of the Act, the surplus included in the total amount of equity capital shall be deducted from the amount of tax adjustment that is succeeded to the merged corporation, etc. in the event of the merger or division, and the amount shall be added to the

director of the former Commercial Act (amended by Act No. 10600 of April 14, 201)

§ 459. Capital reserve

(1) A company shall accumulate the following amounts as capital reserve:

3. In case of a merger between companies, if the value of assets succeeded from the extinguished company exceeds the amount of debts succeeded from the said company, the amount paid to its shareholders, and the amount of capital increase or the amount of capital increase or merger of the surviving company, such amount in excess; and