Supreme Court-2017-Du-54791 (Law No. 11, 2018)

The plaintiff seems to have paid the price by recognizing the business value of intangible property held by the merged corporation.

Examining the details and motive of the merger, the current status of the business of the merged corporation and the merged corporation at the time of the merger, and the details of the tax return after the merger in light of the aforementioned legal principles, there is room to view that the Plaintiff, as an intangible asset, such as transaction relation held by the merged corporation

Article 12 (Calculation of Merger Evaluation Marginal Profit)

2018Nu45659 Revocation of Disposition of Corporate Tax Imposition

SOOO○, Inc.

OO Head of the tax office

Judgment prior to remand

Seoul High Court Decision 2016Nu67020 Decided 2017.05

Supreme Court Decision 2017Du54791 Decided October 11, 2018

o October 05, 2018

1. Revocation of a judgment of the first instance;

2. The plaintiff's claim is dismissed.

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

1. Purport of claim

The Defendant’s disposition of imposing corporate tax of KRW 1,188,270,230 (including additional tax of KRW 483,014,853) for the business year of 2008 against the Plaintiff on March 13, 2014 is revoked.

2. Purport of appeal

The same shall apply to the order.

1. Quotation of the reasons for the judgment of the first instance;

This decision is based on Article 8(2) of the Administrative Litigation Act and the main text of Article 420 of the Civil Procedure Act, since the reasoning of the judgment of the court of first instance is the same as the grounds of the judgment of the court of first instance, except to dismiss or add the following matters:

The overall part of the 2nd 5th 5th 6th 2nd 2nd 2nd 2nd 3th 2nd 3th 2nd 2nd 3th 2nd 2nd 2nd 3th 2nd 2nd 2nd 2002nd 2nd 2nd 3th 2nd 2nd 2nd 3

" June 23, 2008, 2008, 2008, hereinafter the same shall apply)" of the 4th 4th scam (does are excluded from the parallel water; hereinafter the same shall apply) shall be " June 24, 2008".

The ○ 5th 9th 9th 10th 9th 10th 10th 2008 was not included in the gross income for the business year 2008, but was treated as losses under the Corporate Tax Act in the business year 2008.

The ○ 7th page 10 of the 7th page "business license" is regarded as "business license".

○ 7,20 and 8, each of the "15.79 billion won" shall be "15,791,228,800 won".

○ 7 pages 21 "15,11,450,00 won" shall be read as "15,11,678,800 won".

○ 8 16 pages 16 add “within the limit of KRW 15,111,678,800 for the combined marginal profit” in front of “gross profit.”

○ 9. The 5. to 24. 9. 9.

“4. Determination

A. Whether the instant goodwill constitutes a merger evaluation marginal profit under the Corporate Tax Act

1) Relevant legal principles

Where a merged corporation succeeds to the evaluation of assets from a merged corporation, the former Corporate Tax Act (amended by Act No. 9267 of Dec. 26, 2008; hereinafter referred to as the "former Corporate Tax Act") shall be imposed on the part exceeding the book value of the merged corporation as a merger evaluation marginal profit (Article 17(1)3 proviso of this Act and Articles 15(2) and 12(1)1 of the former Enforcement Decree of the Corporate Tax Act). In addition, in the case of a merger and consolidation, the business rights appropriated by the merged corporation shall be deemed depreciable assets only where the merged corporation evaluated and succeeds to the assets of the merged corporation and succeeds to the business value of the merged corporation with the trade name, transaction relation, and other trade secrets, etc. (hereinafter referred to as "trade secrets, etc.") of the merged corporation (Article 24

According to the relevant Acts and subordinate statutes, in order to impose the value of business rights as a merger evaluation marginal profit in the case of a corporate merger, the merged corporation is deemed to have paid the consideration by evaluating its business value by recognizing the trade name, etc. of the merged corporation as an intangible asset value that can obtain excess profits from the merged corporation. In this case, the evaluation 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, etc., and it shall not be inferred solely

A) In order to be taxed as a merger evaluation marginal profit of a merged corporation, it should be recognized as the assets of the merged corporation in the first place. Even if a corporation creates an intangible business right due to its internal business activity, it is not recognized as an asset under tax law, and it is recognized as an asset of the merged corporation only if it satisfies the requirements prescribed in the Enforcement Decree of the former Corporate Tax

Tax law and corporate accounting have different purposes and purposes and separately provided for in the corporate tax law. In the event of a merger, the requirements for recognition of goodwill are also such cases. "Requirements for evaluation of the business value of goodwill" under the Enforcement Decree of the Corporate Tax Act was introduced to recognize business goodwill restricted at the time of the amendment of the Enforcement Decree of the Corporate Tax Act on December 31, 1998, and the framework for the merger taxation has been maintained to Article 80-3 (2) of the Enforcement Decree of the Corporate Tax Act amended on June 8, 2010.

B) In the case of a merger, the issue of requirements for recognizing a business right as an asset under the tax law is different from the issue of whether it is appropriate to calculate the business right value in excess of the net asset value of the merger cost when determining the appropriateness of the specific method of evaluation. Therefore, requiring the evaluation of the business value of a trade name, etc. is inconsistent with the precedents that affirm the appropriateness of the evaluation of the business right according to the difference theory.

C) The taxation of merger evaluation marginal profit is imposed upon the acquisition of tangible and intangible assets that were held by the merged corporation prior to the merger. Article 15(2) of the former Enforcement Decree of the Corporate Tax Act merely refers to the calculation method, and does not relate to the conceptual capital reserve (Article 16(1)2(a) of the former Corporate Tax Act). The merger marginal profit between the net asset value transferred by the merged corporation and the face value of the merged new stocks cannot be the requirement for taxation of merger marginal profit.

2) Specific determination

A) As seen earlier, the merger marginal profit cannot be the requirement for taxation of merger marginal profit. Therefore, whether the value of business rights can be taxed as a merger marginal profit under the former Corporate Tax Act is not the existence of merger marginal profit, but it should be examined whether the merged corporation can be deemed to have paid consideration by evaluating the business value of intangible assets of the extinguished corporation in accordance with the aforementioned legal doctrine.

B) In full view of the purport of the entire pleadings, the following facts can be acknowledged in each entry of Gap evidence Nos. 4, 9, Eul evidence Nos. 3 and 5 (including each number):

(1) In the year 2006 and 2007, the Plaintiff was faced with a crisis, such as the possibility of delistinging a large amount of deficit by recording a large amount of loss, and there was a need to find a new business power to overcome this.

(2) On the other hand, among the total assets as of the end of 2007, KRW 5.1 billion, current assets, such as cash assets and sales bonds, account for approximately KRW 3.9 billion, and tangible assets, such as machinery, etc., account for approximately KRW 28.0 million. However, a series of business years in 2006 and 2007 showed a high operating profit rate of KRW 12.5% and KRW 20.9%, respectively, and a large amount of income was reported in succession without compensation. Such circumstances were reflected in calculating the profit-making value of the stocks of the extinguished corporation in accordance with the relevant provisions.

(3) The Plaintiff included approximately 15.7 billion won in the account book, the difference between the merger cost and the net asset value succeeded from the merged corporation, as business rights, and when each corporate tax is returned from 2008 to 2011, the Plaintiff voluntarily appropriated it as business rights, which are assets under tax law, as business rights, and processed the total amount of KRW 15.7 billion in deductible expenses in four years during the four years. There was no revised report even before the Defendant rendered the instant disposition.

C) Examining the above details and motive of the merger in this case, the current business status of the merged corporation and the merged corporation at the time of the merger in this case, and the details of the tax return after the merger in this case, etc., in light of the above legal principles, it is reasonable to deem that the Plaintiff was merged with the payment for consideration by recognizing the business value as a whole intangible property, such as transaction relation, held by the merged corporation at the time of the merger. In particular, the merger ratio is governed by relevant provisions, such as the Securities and Exchange Act, and it is possible to appropriately determine the appraised value of intangible property from the total merger price less the net asset value from the total merger price. Therefore, in order to recognize it as a business right under tax law, it does not necessarily require a separate active calculation process at the time of the merger. In addition, it is difficult to see otherwise on the ground that

D) Therefore, this case’s business right constitutes a merger evaluation marginal profit under the Corporate Tax Act, and this part of the Plaintiff’s assertion on a different premise is without merit.

B. Whether it violates the principle of non-taxable practice or prohibition of retroactive taxation

The evidence submitted by the Plaintiff alone is insufficient to recognize that there was a non-taxation practice of tax authorities that does not impose tax on the business rights in the case that the merged corporation appropriates the difference between the net asset value of the merged corporation and the value of the new stocks issued by the merged corporation as the business rights, and there is no other evidence to acknowledge it. Rather, the National Tax Service published the authoritative interpretation that the business rights appropriated as depreciable assets by evaluating the business value, such as trade names, etc. under Article 24(4) of the Enforcement Decree of the Corporate Tax Act in September 2003 are included in the merger evaluation under Article 12(1)1 of the Enforcement Decree of the Corporate Tax Act. The plaintiff recognized the business value of intangible assets, such as the transaction relation, which the merged corporation

Therefore, the plaintiff's assertion that the disposition of this case violates the principle of non-taxation or prohibition of retroactive taxation under Article 18 (3) of the Framework Act on National Taxes is without merit.

C. Whether there is a justifiable reason not to mislead the Plaintiff into neglecting his/her duty

The plaintiff asserts that the above non-taxation practices were trusted and failed to fulfill the obligation to report and pay corporate tax, but it cannot be recognized as non-taxation practices asserted by the plaintiff as seen earlier.

Therefore, on a different premise, the Plaintiff’s assertion that there is a justifiable ground for not being able to prove the Plaintiff’s negligence of duty is without merit.

2. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit. Since the judgment of the court of first instance is unfair with different conclusions, the defendant's appeal is accepted, and the judgment of the court of first instance is revoked and the plaintiff's claim is dismissed as per Disposition.