Whether it constitutes a transfer of low price of stocks transferred to a specially related person

Since the land use right does not exist in the legal system of the Republic of Korea, there is no method to evaluate it under the Inheritance Tax and Gift Tax Act, and if the remaining assets are not appropriate for the evaluation method in a foreign country, it is unreasonable to impose tax on the value of stocks

Article 52 of the Corporate Tax Act: Denial of Wrongful Calculation

1. Revocation of a judgment of the first instance;

2. The Defendant’s disposition of imposition of KRW 386,163,010 on October 4, 2004 against the Plaintiff shall be revoked.

3. All costs of the lawsuit shall be borne by the defendant.

The same shall apply to the order.

1. Details of the disposition;

A. On June 17, 1999, ○○○○○○○○○ Branch Corporation (hereinafter referred to as “○○○○○○○○○○○ Branch Corporation”) holding 39,220 square meters of land in ○○ Industrial Complex (hereinafter referred to as “○○○○○○”) (hereinafter referred to as “the instant land use right”), factory facilities, machinery, and other assets were purchased at 12,583,870.97 US dollars (hereinafter referred to as “land use right”) (3,00,000 US dollars, factory facilities, machinery, and equipment 8,50,000,000 US dollars, and 108,83,7797,8797).

B. On the basis of acquisition value, Hong Kong entered the accounts of the instant land use USD 25,790,441, Hong Kong, factory facilities and machinery at USD 6,500,000.

C. On February 25, 2000, the Plaintiff, the president of the Plaintiff, transferred to ○○○○, the sum of 6,975,000 shares of the Hong Kong subsidiaries (hereinafter “instant shares”) and 775,750,000 shares per share to ○○○, a stock company, the Plaintiff’s affiliated company, ○○○○, a total of 1,134,000 shares per share (146.36 won per share at the time of the base date for appraisal) (=7,750,000 won per share (i.e., the exchange rate of Hong Kong at the time of the base date for appraisal). At that time, the Plaintiff requested ○ Accounting Corporation to assess the value of the instant shares, and ○○ Accounting Corporation assessed the value of the instant shares as KRW 142 won per share.

라. 이에 대하여 피고는 이 사건 토지사용권에 관하여 홍콩과학기술원(Hong Kong Science and Technology Parks Corporation)의 고시가격인 1,600 홍콩달러/㎡에 기초하여 62,752,540 홍콩달러(=39,220㎡X1,600 홍콩달러/㎡, 원화로 9,184,382,720원)로 산정하고, 이 사건 토지사용권의 취득가액인 25,790,441 홍콩달러(3,774,688,886원)와의 차액 5,409,693,834원을 순자산가액에 가산하여 〈표1〉기재와 같이 이 사건 주식의 가액을 주당 243원으로 산정하였다.

Table 1

Plaintiff’s evaluation

Evaluation of Defendant

(1) Net asset value.

7,669,724,169 won

7,669,724,169 won

(2) Evaluation difference in land use rights.

5.409.6934 won

(3) Net asset value (1+B)

7,669,724,169 won

13,079,418,003 won

(4) Number of shares issued.

69,750,002 note

(5) Net asset value per share (III/D.)

109 won

187 won

(6) The appraised value per share of stocks owned by the largest shareholder (30% increase).

142 won

243 won

E. The Defendant deemed that the difference between the market price and the transfer price of the instant shares is 748,960,000 won [=(243 won-146.36 won) X7,750,000 won] as a result of a low-price transfer and added profits to the calculation of earnings in accordance with Article 52 of the Corporate Tax Act. On October 16, 2004, the Defendant imposed and notified the Plaintiff of KRW 386,163,010 corporate tax for the business year 200 (hereinafter “instant disposition”).

[Ground of recognition] Evidence No. 1, Evidence No. 2-1, Evidence No. 2-2, Evidence No. 4-1, 2-2, Evidence No. 1 to No. 6, and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

In light of the fact that the book value of the instant land use right is low, the book value of the machinery and equipment is high, the Hong Kong Science and Technology Institute is unclear as to whether it is a government public institution, and the purpose of the price calculated, the fairness or accuracy of calculating agency and calculation file are not verified at all, and the instant land use right is equivalent to that of the instant disposition, given that the period of use is limited to 60 years, and the Hong Kong Science and Technology Institute’s public notice price for the instant land use right cannot be calculated at the market price. Since the Hong Kong Company’s Hong Kong subsidiaries comprehensively acquired the instant land use right and factory facilities from ○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○’s land use right cannot be used

(b) Related statutes;

It is as shown in the attached Table related statutes.

(c) Fact of recognition;

(1) Upon request of the Plaintiff, ○○ Accounting Firm calculated the value of the instant shares based on the financial statements prepared in accordance with the Hong Kong Accounting Principles (25 February 25, 2000) on the basis of the financial statements prepared under the Hong Kong Accounting Principles, and Article 54 of the Enforcement Decree of the Inheritance Tax and Gift Tax Act. In calculating the market value of tangible assets, under the premise that the value of the instant shares was the same as the market value of tangible assets at the time when the Hong Kong subsidiaries acquire the tangible assets at the ○○○○○○○○○○○○○○○○○○○○○○○○ on July 23, 1999.

On the other hand, the defendant applied the announced price of the Hong Kong Institute of Science and Technology to the right to use the land of this case, and applied the appraisal of the remaining assets to 00 accounting corporation as it is, and calculated the net asset value and the value of the stocks of this case as stated in the

(2) Upon the request of ○○○○, an accounting corporation assessed the value of the shares of this case on October 27, 2001 on the basis of the financial statements prepared in accordance with the Hong Kong accounting principles on the evaluation base ( September 30, 2001) and Article 54 of the Enforcement Decree of the Inheritance Tax and Gift Tax Act by adding the total amount of 6,049,251,41,417 won under Article 63 of the Enforcement Decree of the Inheritance Tax and Gift Tax Act and Article 63 of the Inheritance Tax and Gift Tax Act (the total amount of the amount of claims secured by the same property where the same property is secured by multiple claims) to the total amount of claims under the title of 4,423,548,583 won and Article 63 of the Enforcement Decree of the Inheritance Tax and Gift Tax Act.

Table 2: Table 2>

Classification

Amount

(1) Net asset value.

12,081,895,346 won

(2) Number of shares issued.

69,750,002 note

(5) The net asset value per share (1/2).

173 won

(6) The appraised value per share of stocks owned by the largest shareholder (30% increase).

24 won

[Reasons for Recognition] Evidence Nos. 7-1, 2, 3, Eul's each entry of Evidence No. 15, the purport of the whole pleadings

D. Determination

(1) As to the subject of the wrongful calculation avoidance

Article 88(1)3 of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 17791, Dec. 5, 2002; hereinafter the same) provides that "where assets are transferred or invested as investment in kind with no compensation or at a price below the market price" as a type of wrongful calculation. Since the Plaintiff’s transfer to a related party is not a tangible asset of Hong Kong subsidiaries, it is not the instant stocks, the subject of the avoidance of wrongful calculation is the instant stocks.

(2) As to the appraisal of the value of the instant shares

(A) Applicable Laws

Article 52 (2) of the Corporate Tax Act provides that the value of assets subject to the avoidance of wrongful calculation shall be calculated based on the market price, and Article 89 of the former Enforcement Decree of the Corporate Tax Act provides that, similar to the transaction in question, the relevant corporation shall be calculated based on the price continuously traded with many and unspecified persons other than related parties or generally traded price between third parties not related parties (paragraph (1)), and where the market price is unclear, the amount appraised by the appraisal corporation under the Public Notice of Values and Appraisal of Lands, etc. Act (excluding stocks, etc. not listed on the Stock Exchange), and the amount appraised by the appraisal corporation under the Public Notice of Values and Appraisal of Lands, etc. of Lands, etc. Act (amended by Act No. 6301, Dec. 29, 200; hereinafter referred to as the “Inheritance Tax and Gift Tax Act”) shall be in the same order

Therefore, the shares of this case are not listed on the Korea or the Hong Kong Stock Exchange, and there is no price transacted among many unspecified persons. Thus, the value of the shares of this case should be assessed in such a manner as prescribed by the Presidential Decree in consideration of the assets, profits, etc. of the corporation concerned and Article 89(2)2 of the former Enforcement Decree of the Corporate Tax Act and Article 63(1)1(c) of the Inheritance Tax and Gift Tax Act.

(B) The legality of the assessment method

The Enforcement Decree of the Inheritance Tax and Gift Tax Act (amended by the Presidential Decree No. 17039, Dec. 29, 2000; hereinafter the same applies) provides that the net value of profit or loss (the value per share) shall be the average weighted value of net profit or loss for the last three years per week ± average interest rate formed in the financial market ± the net asset value (the value per share ± the net asset value of the concerned corporation ± the total issued value) ± the net asset value of the concerned corporation ± the net asset value (Article 54), the net asset value shall be the value calculated by subtracting the liabilities from the value assessed in accordance with the provisions of Articles 60 through 66 of the Inheritance Tax and Gift Tax Act as of the base date of appraisal (Article 5), and Articles 60 through 65 of the Inheritance Tax and Gift Tax Act shall be the value assessed for the purpose of imposition of the transfer income tax, etc. in the country where the concerned property is located, and if there is no appraised value, the value assessed by requesting it to two or more domestic appraisal institutions (Article 58-3).

However, the Defendant calculated the net asset value and the stock value of the instant case as stated in the ○○○○○○○○○○○ Accounting Corporation’s appraisal and assessment of the remaining assets by using the ○○○○○○○○○○○○○○ Accounting Corporation’s appraisal and assessment of the instant assets. Even if there exist the publicly notified values, it is difficult to conclude that the Hong Kong subsidiaries did not purchase the instant land use rights at the publicly notified price pursuant to Article 63 of the Enforcement Decree of the Inheritance Tax and Gift Tax Act, and that the appraisal and assessment method of the instant 20th appraisal and assessment of the instant assets, other than the publicly notified price, is the market value of the instant 10th appraisal and assessment method based on the 2nd appraisal and assessment method of the instant 1st appraisal and assessment of the instant assets (this case’s appraisal and assessment method, excluding the 3nd appraisal and assessment method, based on the 1st appraisal and assessment method of the instant 1st appraisal and assessment of the instant assets.)

3. Conclusion

Therefore, the plaintiff's claim shall be accepted as reasonable, and the judgment of the court of first instance which has different conclusions is unfair, so it is revoked, and it is so decided as per Disposition with the cancellation of the disposition of this case.

(b) Related statutes;

○ Denial of wrongful calculation under Article 52 of the Corporate Tax Act

(1) Where the chief of the district tax office having jurisdiction over the place of tax payment or the Commissioner of the competent Regional Tax Office deems that the tax burden of a domestic corporation has been unjustly reduced through transactions with persons with a special relationship as prescribed by the Presidential Decree (hereinafter referred to as "specially related persons"), he may calculate the amount of income for each business year of the relevant corporation without regard to the act or calculation of the amount of income of the relevant corporation (hereinafter

(2) In the application of the provisions of paragraph (1), the standard for determination shall be the prices applied or to be applied in sound and generally accepted practices and normal transactions between persons without a special relationship (including rates, interest rates, rents, exchange rates and other corresponding rates; hereafter in this Article referred to as "market prices").

Article 88 of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 17791 of Dec. 5, 2002), Article 88 of the former Enforcement Decree of the Corporate Tax Act

(1) "Where it is deemed that the tax burden has been unjustly reduced" in Article 52 (1) of the Act means cases falling under any one of the following subparagraphs:

3. Where assets are transferred or invested as investment in kind with no compensation or at a price below the market price;

○ Article 89 of the former Enforcement Decree of the Corporate Tax Act

(1) In the application of the provisions of Article 52 (2) of the Act, if there is a price generally traded between many and unspecified persons other than a person with a special relationship or between a third party who is not a person with a special relationship, the price shall apply.

(2) In applying Article 52 (2) of the Act, if the market price is unclear, the amount calculated by applying in sequence the following subparagraphs:

1. Where there is a value appraised by an appraisal corporation under the Public Notice of Values and Appraisal of Lands, etc. Act, that value: Provided, That stocks not listed on the Stock Exchange shall be excluded;

2. The amount evaluated by the mutatis mutandis application of the provisions of Articles 38, 39, and 61 through 64 of the Inheritance Tax and Gift Tax Act.

Article 60 of the Inheritance Tax and Gift Tax Act (amended by Act No. 6301 of Dec. 29, 2000), the principle of evaluation, etc.

(1) The value of property on which an inheritance tax or a gift tax is levied under this Act shall be the market price as of the date the inheritance commences or the date of donation (hereinafter referred to as the “date of appraisal”). In such cases, the value appraised by the method of appraisal stipulated in Article 63 (1) 1 (a) and (b) (excluding the cases falling under the provisions of Article 63

(2) The market price under paragraph (1) shall be the price which is considered to be normal in the case of free trade between many and unspecified persons and shall include the expropriation price, public auction price and appraisal price, and others which are recognized as the market price under the conditions

(3) In applying the provisions of paragraph (1), where it is difficult to compute the market price, the value assessed by the methods prescribed in Articles 61 through 65 in consideration of the kind, scale, transaction status, etc. of the relevant property

Article 61 of the Inheritance Tax and Gift Tax Act: Appraisal of Real Estate

(1) Real estate shall be appraised by the methods prescribed in one of the following subparagraphs:

1. Land:

The individual officially assessed land price under the Public Notice of Values and Appraisal of Lands, etc. Act (hereinafter referred to as the “individual assessed land price”): Provided, That the value of the land for which no officially assessed individual land price exists, shall be the amount assessed by the superintendent of the competent tax office by a method as determined by the Presidential Decree, taking into consideration the officially assessed individual land price

2. Buildings:

The value calculated and publicly announced by the Commissioner of the National Tax Service at least once a year in consideration of the new construction price, structure, use, location, year of new construction, etc.

(7) In cases of property for which a de facto lease contract is concluded or the right of lease is registered, the larger amount between the value assessed on the basis of rent, etc. as prescribed by the Presidential Decree and the value assessed under the provisions of paragraphs (1) through (6).

Article 63 of Inheritance Tax and Gift Tax Act: Appraisal of Securities, etc.

(1) The appraisal of securities, etc. shall be conducted by the following methods:

1. Appraisal of stocks and investment shares:

(c) Stocks and investment shares not listed on the Korea Stock Exchange other than item (b) shall be appraised by the method as prescribed by the Presidential Decree in consideration of the corporation's assets

(3) In applying the provisions of paragraphs (1) 1 and (2), 20/100 of the value appraised under the provisions of paragraphs (1) 1 and (2) of this Article shall be added to the value of stocks and equity shares (excluding stocks and equity shares of a corporation that has losses under the provisions of Article 14 (2) of the Corporate Tax Act continuously from a business year within three years before the base date of appraisal) of the largest stockholder, largest investor, and stockholders or investors in a special relationship with the largest stockholder, etc. (hereafter in this paragraph, referred to as the “largest stockholder, etc.”) who are prescribed by the Presidential Decree, but where the largest stockholder, etc. holds in excess of 50/100 of the total number of stocks issued by the relevant corporation, 30/100 shall

○ Enforcement Decree of the Inheritance Tax and Gift Tax Act (amended by Presidential Decree No. 17039 of Dec. 29, 2000)

(1) For the purpose of Article 49 (2) of the Act, the term “the market price recognized as the market price under the conditions as prescribed by the Presidential Decree, such as the expropriation, public sale price, appraisal value, etc.” means, limited to the cases of sale, appraisal, expropriation, auction (referring to an auction under the Civil Procedure Act; hereinafter the same shall apply in this paragraph) or public auction within a period of not more than six months before or after the base date of appraisal, which is confirmed pursuant to the provisions of the following

1. If the fact of sale and purchase of the relevant property exists, the transaction value: Provided, That this shall not include cases where the transaction value is deemed objectively unfair, such as transactions with persons with a special relationship as referred to in Article 26 (4);

2. In case where there exist the appraisal values of the relevant property (excluding the properties prescribed in Article 63 (1) 1 of the Act) by the reliable appraisal institutions as prescribed by the Ordinance of the Ministry of Finance and Economy (hereinafter referred to as the “appraisal institutions”), the average value of such appraisal values: Provided, That in case where there exist the appraisal values which are appraised by the relevant appraisal institutions as prescribed by the Ordinance of the Ministry of Finance and Economy (hereinafter referred to as “appraisal institutions”), those falling under any one of the following items shall be excluded, and in case where the relevant appraisal values fall short of 80/100 of the values appraised pursuant to the provisions of Articles 61, 62, 64 and 65 of the Act, the head of a tax office (including the regional tax office, etc.;

(a) Values inappropriate for the purpose of paying inheritance tax or gift tax;

(b) Value of the relevant property not appraised in the original form as of the standard date of appraisal;

3. Where there exists a fact of expropriation, auction or public sale of the property concerned, the amount of compensation, the amount of auction or public sale;

Article 50 of the Enforcement Decree of the Inheritance Tax and Gift Tax Act

(1) For the purpose of the proviso of Article 61 (1) 1 of the Act, the term “amount appraised by such methods as prescribed by the Presidential Decree” means the amount appraised by the superintendent of the competent tax office (where there is a request from the superintendent of the competent tax office having jurisdiction over the place of tax payment and the superintendent of the competent tax office having jurisdiction over the location of relevant land, it shall be the superintendent of the competent tax office having jurisdiction over the location of relevant land) pursuant to a comparative table under Article 10 (2) of the Public Notice of Values and Appraisal of Lands, etc.

Article 51 of the Enforcement Decree of the Inheritance Tax and Gift Tax Act

(1) The value of superficies under Article 61 (5) of the Act shall be determined by an amount calculated by multiplying the value of land on which the superficies is established by the rate as determined by the Ordinance of the Ministry of Finance and Economy, by the remaining number of years of the superficies, by the method as determined by the Ordinance of the Ministry of Finance and Economy. In this case, Articles 280 and 281 of the Civil

(2) The value of the right to acquire real estate (including the right to acquire a building and its appurtenant land when a building is completed) and the right to use a specific structure under Article 61 (5) of the Act shall be based on the aggregate of the amount paid not later than the standard date of appraisal and the amount equivalent to the frame and premium as of the standard date of appraisal: Provided, That if there exists a value under Article 165 (1) 1 (b) of the Enforcement Decree of the Income Tax

(3) In applying the provisions of paragraph (2), the term “right to use specific facilities” means a right to use specific facilities, membership right, or other rights which, regardless of their titles, is given to a person who becomes a member of an organization which agrees to exclusively use the relevant facilities or use them under favorable conditions in comparison with the general users.

(4) For the purpose of Article 61 (6) of the Act, the term “method as prescribed by the Presidential Decree” means the value required where other facilities and structures (excluding the assessment en bloc of a land or building) are again constructed or again acquired (hereafter in this paragraph, referred to as “re-acquisition value, etc.”) which deducts the depreciation costs as prescribed by the Ordinance of the Ministry of Finance and Economy from the installation date of such facilities and structures to the assessment date. In this case, where it is difficult to compute the re-acquisition value, etc., the value under Article 80 (4) of the Enforcement Decree of the Local Tax Act may be the value of the relevant facilities and structures (referring to the value added in case where there exists a value assessed separately from the relevant facilities and structures under each subparagraph of Article 76

(5) In the application of the provisions of paragraph (4), the facilities and structures attached to the collective housing shall be deemed to have been evaluated collectively as land or buildings.

Article 52 of the Enforcement Decree of the Inheritance Tax and Gift Tax Act, and other Tangible Assets

(1) The term “current base value prescribed by the Presidential Decree” in Article 62 (1) of the Act means the value stipulated in each of the following subparagraphs:

1. For ships, the value according to the standard market prices under Article 80 (1) of the Enforcement Decree of the Local Tax Act;

2. For standing timber subject to the Aircraft, Vehicles, Construction Machinery and Standing Timber Act, the value based on the standard market price under Article 80 (2) of the Enforcement Decree of the Local Tax Act.

(2) The evaluation under Article 62 (2) of the Act shall be made according to the following subparagraphs:

1. The appraised value of goods, products, semi-finished goods, goods in process, raw materials, and other similar movables and movables subject to ownership, which is expected to be acquired at the time of disposal thereof;

2. Evaluation of paintings and curios, which are not for sale, shall be based on the average value appraised by two or more experts by specialized field according to the following classification: Provided, That if the value falls short of the appraised value appraised by the appraisal council composed of three or more experts commissioned by the director of a regional tax office, it shall be based on such appraisal value

(a) Books and telegraphics;

(b) Dognets, earth and steel products;

(c) Woodcraft and folklore;

(d) Lineal reasons; and

(e) Handcraft;

(f) Other curios; and

3. Assessment methods of animals subject to ownership and other tangible property, the assessment methods of which are not provided for separately in this Decree, shall be based on the value assessed by applying mutatis mutandis the provisions of subparagraph 1

○ Evaluation of Non-listed stocks Article 54 of the Enforcement Decree of the Inheritance Tax and Gift Tax Act

(1) Stocks and contribution shares not listed on the Korea Stock Exchange (hereafter in this Article, referred to as “nonlisted stocks”) under Article 63 (1) 1 (c) of the Act shall be the value assessed by the following formula:

The value per share = The weighted average amount of net profits and losses for the latest three years per week ¡Àthe average interest rate formed by financial institutions shall be determined by the Ordinance of the Ministry of Finance and Economy (hereinafter referred to as the “net value of profits and losses”).

(2) Where the value of unlisted stocks appraised under paragraph (1) falls short of the value appraised by the following formula, the value shall be the value appraised by the following formula:

The value per share = the net asset value of the corporation ± (hereinafter referred to as the “net asset value”).

(3) In the application of the provisions of paragraphs (1) and (2), where a corporation that has issued stocks or investment shares under Article 63 (1) 1 (c) of the Act owns stocks or investment shares not more than 10/100 of the total number, etc. of outstanding stocks of a corporation that has issued other unlisted stocks, the evaluation of the other unlisted stocks may be based on the acquisition value provided for in Article 74 (1) 1 (e) of the Enforcement Decree of the Corporate

(4) In applying the provisions of paragraph (1), “total number of issued stocks” shall be based on the total number of issued stocks as of the evaluation base date.

Article 55 of the Enforcement Decree of the Inheritance Tax and Gift Tax Act: Calculation method of net asset value

(1) The net asset value under Article 54 (1) shall be the value obtained by subtracting liabilities from the value appraised under Articles 60 through 66 of the Act as of the evaluation base date.

(2) In applying the provisions of paragraph (1), the amount related to the evaluation of assets and liabilities such as deferred assets, reserve funds and allowances as prescribed by the Ordinance of the Ministry of Finance and Economy, shall be deducted or added from the value of assets

○ Method of calculating net profits and losses for the last three years per share under Article 56(1) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act

(1) The weighted average amount of net profits and losses per share for the latest three years under Article 54 (1) shall be the value falling under any of the following subparagraphs. In this case, where such value is not more than zero, it shall be zero:

1. The amount calculated by the following formula:

The weighted average amount of net profit and loss per share for the preceding three years = [the net profit and loss per share for one business year in which one year has elapsed before the commencement of the inheritance) + (the net profit and loss X2 per share for one business year in which two years have elapsed before the commencement of the inheritance) + (the net profit and loss per share for one business year in which three years have elapsed before the commencement of the inheritance) X6

2. Average value of estimated profits per share, calculated by two or more specialized credit assessment institutions prescribed by the Ordinance of the Ministry of Finance and Economy or accounting corporations under the Certified Public Accountant Act, according to the standards prescribed by the Ordinance of the Ministry of Finance and Economy (limited to cases where the standard date and the date of calculating estimated profits per share and the date of commencing an inheritance or donation falls within the same year, in cases where a return on the return on the tax base of inheritance tax and the gift tax base is filed within the time limit for

(2) In applying the provisions of paragraph (1) 1, the number of stocks for each business year shall be the total number of stocks issued as of the end of each business year: Provided, That where any capital increase or capital reduction without compensation is made within three years before the base date of appraisal, the total number of stocks issued as of the end of each business year before the capital increase or capital reduction without

(3) The amount of net profits and losses under paragraph (1) 1 shall be the amount obtained by subtracting the amount under subparagraph 2 from the amount calculated by adding the amount under subparagraph 1 to the income for each business year under Article 14 of the Corporate Tax Act. In this case, where the reserves or reserves included in deductible expenses are temporarily returned in calculating the income for each business year in accordance with the provisions of tax-related Acts, the amount divided in proportion to the income for each business year to be returned

1. The amount under subparagraphs 4, 6 and 7 of Article 18 of the Corporate Tax Act and other amount as prescribed by the Ordinance of the Ministry of Finance and Economy;

2. The amounts under the following items:

(a) The amount of corporate tax for the concerned business year, the amount of special rural development tax imposed on the tax base or the amount of income-proportional resident tax;

(b) The amount under subparagraphs 3 through 5 and 27 of Article 21 of the Corporate Tax Act, and the amount paid or payable due to the nonperformance of collection under each tax-related Act;

(c) Amounts provided in Articles 24 through 26 and 28 of the Corporate Tax Act, and Articles 135 through 137 of the Restriction of Special Taxation Act and other amounts prescribed by the Ordinance of the Ministry of Finance and Economy;

○ Evaluation of overseas property under Article 58-3 of the Enforcement Decree of the Inheritance Tax and Gift Tax Act

(1) Where it is inappropriate to apply the provisions of Articles 60 through 65 of the Act to the inherited or donated property in a foreign country, the amount appraised by the country in which the property concerned is located for the purpose of levying the transfer income tax, inheritance tax, gift

(2) If there is no appraised amount under paragraph (1), the value which the director of the tax office, etc. requests two or more domestic or foreign appraisal agencies to take account of the appraised amount.

Article 15 (Evaluation Principles, etc.) of the Enforcement Rule of the Inheritance Tax and Gift Tax Act (amended by Ordinance of the Ministry of Finance and Economy No. 137 of April 3, 2000)

(1) “Public appraisal institutions as prescribed by the Ordinance of the Ministry of Finance and Economy” in Article 49 (1) 2 of the Decree means the appraisal corporations under the Public Notice of Values and Appraisal of Lands, etc. Act.

(2) In appraising properties under the provisions of Articles 49 through 63 of the Decree, the prices of foreign properties shall be appraised at the prices converted according to the basic exchange rate or arbitrated exchange rate under the Foreign Exchange Transactions Act as of the base date of appraisal.

(3) The term “specialized credit-rating institutions determined by the Ordinance of the Ministry of Finance and Economy” in Article 56 (1) 2 of the Decree means the specialized credit-rating institutions referred to in Article 36-13 (1) 2 of the Enforcement Decree