Definitions of goodwill

The so-called so-called so-called "business right" refers to an intangible property value, such as the company's tradition, social credibility, location conditions, existence of a special manufacturing technology or special transaction relationship, etc., which can bring more profits than the profits raised by other companies operating the same kind of business due to the monopoly of the manufacturing and sale.

Article 43 of the Corporate Tax Act

Suwon Industrial Co., Ltd. (former trade name): Song Young-gu, Attorney Song Jin-jin et al., Counsel for the defendant-appellant-appellee

The director of the tax office

Seoul High Court Decision 82Gu610 decided March 15, 1984

The appeal is dismissed.

The costs of appeal shall be borne by the plaintiff.

We examine the grounds of appeal.

1. Regarding ground of appeal No. 1

According to the legal determination of the court below, the so-called Seojin Industrial Co., Ltd. was merged with the non-party 1 corporation on Apr. 11, 197 and changed its trade name to Seojin Industrial Co., Ltd. (former Seojin Industrial Co., Ltd.) by absorbing the amount of 10,000 won of the previous 1 corporation on the 20th anniversary of the merger, the plaintiff Co., Ltd.'s total amount of 10,000 won of the previous 20,000 won of the previous 10,000 won of the total amount of 10,000 won of the new shares issued to the 20th 3th 1,000 won of the previous 20,000 won of the new shares issued to the 196th 1,000 won of the previous 20,000 won of the total amount of 10,000 won of the new shares issued to the merged Co., Ltd., Ltd. (the above 16th 3th 3,00).

The gist of the grounds of appeal on this part of the Plaintiff’s legal representative is that the liquidation income in the case of a corporate merger under Article 43(3) and (5) of the Corporate Tax Act shall be calculated by deducting the total amount of paid-in capital and surplus funds as of the date of the merger of the extinguished corporation from the total amount of the stocks, money and other assets received by stockholders of the extinguished corporation, but if there is any deficit brought forward of the extinguished corporation, it shall be offset within the scope of surplus funds of the extinguished corporation, and if there is no deficit brought forward of the extinguished corporation, it shall be deemed that there is no deficit brought forward. Therefore, the problem of deficit brought forward shall be treated in accordance with Article 43(5) of the Corporate Tax Act, and it shall not be considered as the object of avoidance by reflecting the corresponding amount brought forward in the calculation of the paid-in capital of the extinguished corporation, and if it is correct to treat the corresponding amount brought forward as the object of avoidance at the time of the first merger,

However, in calculating the liquidation income amount of the Gu Seojin-jin as determined by the court below, the appeal is just based on the defendant's erroneous understanding of the defendant's taxation disposition of this case, and the defendant did not deduct KRW 120,193,918 as of the date of the first merger from the paid-in capital of the Gu Seojin-jin as of the date of the second merger, but only paid-in capital equivalent to the net asset value of the Seocho Industrial Corporation among the increased capital amount due to the first merger of the Gu Seojin-jin, and there was no payment of capital equivalent to the above deficit, although the plaintiff did not have any payment of capital equivalent to the above deficit, it is clear that the Gu Seojin-jin's arbitrarily appropriated the assets after the first merger, and it is clear that the liquidation income equivalent to the above amount has been realized. Thus, in calculating the liquidation income amount of the domestic corporation due to the merger of the domestic corporation, it cannot be viewed that there is no reason to deduct the remaining amount of the merged corporation's paid-in capital from the remaining amount of the merged corporation within the scope of the grounds for appeal.

2. Regarding ground of appeal No. 2

The so-called so-called so-called "business right" refers to intangible property value, such as excessive profit-making by other companies operating the same kind of business through the monopoly of manufacture and sale, including the company's tradition, social credibility, location conditions, existence of special manufacturing technology or special trading relationship, etc., and the court below's decision is just and reasonable in holding that, under the same premise, the Seocho Industrial Company was established as a manufacturer of electronic equipment on April 1, 1964, since 1970 and it has produced and sold a title and mppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppp, etc.

3. Regarding ground of appeal No. 3

According to the reasoning of the judgment below, the court below determined that, upon collecting macro evidence and confirming the fact that the non-party, who is the shareholder of the non-party, was 78.7 percent of the total number of shares issued by the Seowon Industrial Co., Ltd. prior to the first merger, and therefore, there is a special relationship between the old Seojin-jin and Seowon Industrial Co., Ltd. as provided by Article 46 (1) 3 of the Enforcement Decree of the Corporate Tax Act. Thus, the above appropriation of operating rights after the first merger is an act of unreasonably reducing the tax burden on the old Seojin's income in transactions with the Seowon Industrial Co., Ltd. with the related party, and the above determination of the court below is just, and therefore, it cannot be said that there is no error in the rejection of unfair calculation as provided by Article 20 (1) of the Corporate Tax Act, and thus, the court below's determination of the above facts cannot be said to be erroneous in the misapprehension of the legal principles or the determination of the final facts, and thus, the judgment of the court below's rejection of operating rights of the second merger.

4. Therefore, the appeal of this case 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 on the bench.

Justices Park Jong-soo (Presiding Justice)