The judgment below is reversed and the case is remanded to Seoul High Court.

The grounds of appeal are examined.

1.(a)

Where a merged corporation succeeds to the evaluation of assets from a merged corporation, the former Corporate Tax Act (amended by Act No. 9898, Dec. 31, 2009; hereinafter the same shall apply) shall be imposed as a merger evaluation marginal profit from the value of the assets in excess of the book value of the extinguished corporation

[The proviso of Article 17(1)3, the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 22184, Jun. 8, 2010; hereinafter the same shall apply)

In the case of a merger, the goodwill appropriated by the merged corporation shall be deemed depreciable assets, limited to assets of business value due to mutual trade relations and other trade secrets, etc. (hereinafter “trade names, etc.”) of the merged corporation, where the merged corporation succeeds to the evaluation of the assets of the merged corporation and succeeds to the business of the merged corporation.

(Article 24(4)(b) of the former Enforcement Decree of the Corporate Tax Act.

According to the relevant laws and regulations, in order to impose the value of business rights as a merger evaluation marginal profit in the case of a merger of corporations, the merged corporation can be deemed as an intangible asset value that can obtain excess profits from the trade name, etc. of the merged corporation and evaluated the business value and paid the consideration.

In this case, the assessment of business value shall be objectively determined by comprehensively taking into account various circumstances, such as the details and motive of the merger, the current business status of the merged corporation and the merged corporation at the time of the merger, and the details of tax return after the merger, and it cannot be inferred solely on the basis that the goodwill

The detailed reasons are as follows.

(1) In order to be taxed as a merger evaluation marginal profit of the merged corporation, it should be recognized as the assets of the merged corporation.

Even if a corporation creates an intangible asset value through its internal business activities, it is not recognized as an asset under tax law, and the merger is an extinguished corporation.