The requirements for applying the denial of wrongful calculation under Article 52 of the Corporate Tax Act and the criteria for determining whether the comprehensive acquisition of assets by transfer constitutes high-priced acquisition, etc., and the subject of the burden of asserting and proving the “market price” which is the basis for applying the denial of wrongful calculation (=the taxation

Article 52 of the Corporate Tax Act provides that a corporation’s wrongful calculation denial under Article 52 of the Corporate Tax Act is a system that, without a reasonable method by a person having a special relationship, unfairly evades or reduces the tax burden by abusing the various types of transactions listed in each subparagraph of Article 88(1) of the Enforcement Decree of the Corporate Tax Act without using a reasonable method by a person having a special relationship, only when the person having a tax authority denies or reduces the tax burden, and it is deemed that there is an income objectively and reasonably reasonable by the method prescribed in the statutes. In light of the economic person’s perspective, it is limited to cases where it is deemed that a person disregards the economic rationality by making a wrongful and unreasonable act or calculation. Therefore, in a case where a comprehensive acquisition of multiple assets is deemed to be taken over, in principle, not whether the transaction price by individual asset is high-priced acquisition, etc., but rather, whether it constitutes a comprehensive acquisition by transfer by comparison with the market price by all assets. In addition

Article 52 of the Corporate Tax Act, Article 88(1) of the Enforcement Decree of the Corporate Tax Act

Supreme Court Decision 95Nu13296 Decided February 14, 1997 (Gong1997Sang, 818) Supreme Court Decision 2008Du15541 Decided October 28, 2010 (Gong2010Ha, 2188)

[Defendant-Appellee] Non-Appellant Co., Ltd. (Law Firm continental Asia, Attorneys Jeong Jin-jin et al., Counsel for defendant

The Director of Gangnam District Office

Seoul High Court Decision 2012Nu28355 decided May 2, 2013

The appeal is dismissed. The costs of appeal are assessed against the defendant.

The grounds of appeal are examined.

1. The rejection of unfair act and calculation under Article 52 of the Corporate Tax Act is a system under which the taxation authority denies or mitigates the tax burden by abusing the various forms of transactions listed in each subparagraph of Article 88(1) of the Enforcement Decree of the Corporate Tax Act without a reasonable method by a person with a special relationship when a corporation trades with a person with a special relationship. It is limited to cases where a person with a taxation authority denies or reduces the tax burden by using the various forms of transactions listed in each subparagraph of Article 88(1) of the Enforcement Decree of the Corporate Tax Act, and it is deemed that there is an income objectively and reasonably reasonable and reasonable by the method prescribed in the Act and subordinate statutes. In light of the economic person’s perspective, it is limited to cases where it is deemed that a person with a taxation authority neglected the economic rationality by doing so (see, e.g., Supreme Court Decision 2008Du15541, Oct. 28, 201). Therefore, in principle, in a case where a corporation comprehensively takes over various assets, it should be determined whether it constitutes a comprehensive acquisition by transfer compared to the market price (see, etc.

In addition, the tax authority is liable to assert and prove the “market price” which serves as the standard for applying the denial of wrongful calculation (see Supreme Court Decision 2012Du12006, Oct. 25, 2012, etc.).

2. The court below held that the disposition of this case is unlawful on the grounds that the Plaintiff did not comprehensively acquire the entire business division of this case from Maok-si, but did not separately acquire individual assets and liabilities constituting each business division, even if based on the circumstances and evidence alleged by the Defendant, and that it cannot determine whether to separate the investment securities and sales claims, which constitute the business division of this case, and the sales claims, are high-priced, and the defendant's proof as to the market price of the entire business division of this case is insufficient. In light of the above legal principles and records, the above judgment of the court below is just, and there is no error in the misapprehension of legal principles as to the rejection of wrongful calculation

3. Therefore, the appeal 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 Kim Shin (Presiding Justice)