West 46012-10362 ( October 17, 2001)

A corporation

In a case where a juristic person comprehensively takes over a business from an individual entrepreneur, if the succeeded employee did not take over the amount equivalent to the retirement benefits, the retirement benefits equivalent to the service period of the former business operator shall not be included in the calculation of losses.

In the case of E-Question, we refer to the sending date, such as attaching 46012-2941(O. 10, 1998) to our office inquiry, and refer it to this.* In case where a corporation takes over a business comprehensively from an individual entrepreneur, it shall be deemed that the succeeded employee’s retirement benefits equivalent to the period of service before the actual retirement shall not be included in the calculation of losses in the calculation of the total amount of the retirement benefits of the succeeded employee and the total period of service at the former business operator without taking over the amount equivalent to the retirement benefits of the succeeded employee as a whole.

General Rule 2-6-313 of the Corporate Tax Act 【Disposition for Retirement Benefits, etc. at the time of employee transfer or acquisition due to business transfer or acquisition】

1. A summary of the contents of inquiry;

Where an agreement is made to pay retirement allowances of employees by adding up the number of years of continuous service, but the individual company is converted into a corporation without taking over or transferring the amount equivalent to the retirement allowances of the employees succeeded, the method of calculating retirement allowances that the corporation can include as losses

2. Materials on the contents of questioning;

(a) relevant tax laws and regulations (law, enforcement decree, enforcement rule, basic rules);

○ General Rule 2-6-313 of the Corporate Tax Act 【Disposition for Retirement Benefits, etc. at the time of employee transfer or acquisition due to business transfer or acquisition】

(1) Where a corporation has agreed to accept (including takeover of an organization retirement insurance contract) the total amount equivalent to retirement benefits to be paid by all the business operators at the time of takeover while taking over employees from other corporations or business operators due to the causes falling under any of the following subparagraphs, and to pay the total sum of the period of service of the former business operators at the time of payment of retirement allowances to the relevant employees in accordance with the retirement benefits payment rules of the relevant corporation, the estimated amount of retirement benefits under Article 18 (3) of the Decree and the estimated amount of retirement benefits

1. When he has taken over (including the case where two or more workplaces or businesses are taken over) a business from another corporation or individual entrepreneur (it shall be April 1, 1997);

2. Merger of corporations (No. 1, 1997 amended);

3. Transfer between direct or indirect investment-related corporations under the proviso to Article 13(4) of the Rule (amended by April 1, 1997);

(2) Where the retirement benefits are paid by adding up the period of service at the time of acquisition to the former business operator who fails to take over or takes over the shortage of the amount of retirement benefits from the former business operator, the amount which has not been acquired or has been acquired by employees shall be deemed to be the amount of acquisition of liabilities that have no obligation to pay to the former business operator, a detailed statement equivalent to the amount of retirement benefits by employees shall be prepared, reservation of such amount in deductible expenses, disposition in deductible expenses, and disposition in deductible expenses in accordance with Article 94-2 of the Decree, and then the amount which is reverted to the employee concerned in the business year including the date of payment of retirement benefits to the former business operator shall be reserved

(3) If a corporation which has acquired an employee separately manages the amount exceeding 50/100 of the estimated amount of retirement benefits at the time of acquisition among the amount received for retirement benefits under paragraph (1), and appropriates the amount for retirement benefits to be paid at the time of the employee's retirement, such amount shall not be included in the accumulated amount for retirement benefits under Article 18 (3) of the Decree (amended by April 1, 19

(4) Notwithstanding the provisions of Article 13 of the Act and Article 18 of the Decree, an amount equivalent to retirement benefits at the time of transfer of employees paid by a corporation to an employee who takes over the employee where the employment relationship with the employee is substantially extinguished by transferring the employee to another business operator shall be offset by the allowance for severance benefits, and

(b) Similar cases (judicial precedents, judicial precedents, review precedents, established rules, etc.);

○ Corporation 46012-2941, October 10, 1998

Where a corporation provides that, in a comprehensive transfer of business from an individual entrepreneur, the retirement benefits equivalent to the service period of the former entrepreneur shall not be included in the calculation of losses where the succeeded employee pays the retirement benefits by adding up the service period of the former entrepreneur without taking over the amount equivalent to the retirement benefits of the succeeded employee, the retirement benefits equivalent to the service period of the former entrepreneur shall not be dealt with in accordance with