early 209west3546 (28. 2010.06)

Merger evaluation marginal profit shall not be included in deductible expenses unless it is appropriated as the reserve fund.

Where a merger evaluation marginal profit is not appropriated as a lump sum depreciation reserve or as a compressed account reserve, the merger evaluation marginal profit shall be included in the calculation of earnings, and the amount equivalent thereto shall not be deemed unlawful on the ground that it is not included in the calculation of losses. However, the merger price paid in excess of intangible property value shall be the business

Article 44(1) of the Corporate Tax Act; Article 80(4) of the Enforcement Decree of the Corporate Tax Act

Article 23 of the Corporate Tax Act; Article 24 of the Enforcement Decree of the Corporate Tax Act

2010Guhap3777 Revocation of Disposition of Imposing corporate tax

○○ Co., Ltd.

○ Head of tax office

May 19, 2011

June 30, 201

1. The defendant's disposition of imposing corporate tax of KRW 1,065,374,00 for the year 2004 against the plaintiff on June 1, 2009 exceeds KRW 490,273,253, and the disposition of imposing corporate tax of KRW 272,407,200 for the year 2005, corporate tax of KRW 90,353,930 for the year 2006, and corporate tax of KRW 309,037,050 for the year 207 shall be revoked.

2. The plaintiff's remaining claims are dismissed.

3. One-fourth of the costs of lawsuit shall be borne by the Plaintiff, and the remainder by the Defendant, respectively.

The Defendant’s imposition of corporate tax of KRW 1,065,374,00 for the Plaintiff on June 1, 2009, corporate tax of KRW 272,407,200 for the year 2005, corporate tax of KRW 90,353,930 for the year 2006, and corporate tax of KRW 309,037,050 for the year 2007 shall be revoked.

1. Details of the disposition;

A. On May 3, 1991, the Plaintiff (Co., Ltd. prior to the change on October 1, 2004: AAtech was established on May 3, 1991, and was engaged in the ○○○ (hereinafter “○○”) Co., Ltd. on August 9, 2004, the BB of the Co., Ltd. on September 28, 2006, and the CCCT on October 25, 2007.

B. The defendant calculated the tax base for the above taxable period by adding the above amount to the gross income for 2004 business year on the ground that the merger evaluation marginal profit was not included in the calculation of earnings by evaluating the land and buildings of 000 days when the plaintiff merged the 2,032,107,729 (hereinafter "the merger evaluation marginal profit of this case") by succeeding the land and buildings of 200 days ("the merger evaluation marginal profit of this case"), but the above amount was not included in the calculation of the gross income for the business year of 2004, and adding the excess amount of labor expenses to the deductible expenses for the business year of 2004 or 2007, and on June 1, 2009, the defendant corrected and notified the plaintiff on June 1, 2009, the corporate tax of 1,065,407,200 won, corporate tax of 206,353,930 won, corporate tax of 207,3050 won (hereinafter "each disposition").

[Ground of recognition] Unsatisfy, Gap evidence 1 to 4, Eul evidence 1 to 4, each 1 to 9

Each entry, the purport of the whole pleadings

2. Whether each of the dispositions of this case is legitimate

A. The parties' assertion

(1) The plaintiff's assertion

(A) Although the merger evaluation marginal profit of this case is subject to the inclusion in the calculation of earnings, at the same time, the requirements for inclusion in the calculation of losses under Article 44(1) of the former Corporate Tax Act (amended by Act No. 9898, Dec. 31, 2009; hereinafter the same shall apply) have also been satisfied, but the Plaintiff’s agent’s mistake did not include the above amount in the calculation of earnings and the tax adjustment of inclusion in the calculation of losses. Therefore, if the Defendant included the merger marginal profit of this case in the calculation of earnings, the amount should be included in the calculation of losses again through the tax adjustment, but the Defendant calculated the corporate tax base for the business year of 2004 without including the instant merger marginal profit of this case in the calculation of the corporate tax base for the business year of 204.

(B) The cost of the merger that the Plaintiff paid in excess of the net asset value on the ○○ Day

16,315,813,095 won, as consideration for the goodwill prescribed in Article 24(4) of the Enforcement Decree of the Act, the Plaintiff appropriated it as the goodwill, and treated it as the full reduced loss at the time of settlement of accounts for the business year 2004. Since misunderstanding does not include the total amount of tax adjustment for the business year 2004, the depreciation costs shall be included in deductible expenses for the business year 2004 and the following business

(2) The defendant's assertion

(A) Whether the amount equivalent to the merger evaluation of this case should be included in the calculation of losses in the business year of 2004, since the Plaintiff did not comply with the above procedures under the Corporate Tax Act, it shall not be included in the calculation of losses for the business year of 2004.

(B) It is not possible to recognize the business right of the Plaintiff’s assertion that has not been assessed by appropriate means.

(b) Related statutes;

It is as shown in the attached Table related statutes.

(c) Fact of recognition;

(1) Before the combination of ○○ Day, the Plaintiff engaged in the manufacturing of key parts, etc. of high-frequency electric power source devices, such as TV and monitors, and high-frequency electric power source devices used for OA equipment, such as reproduction machines, based on the source technology of high-frequency transformers. The ○○ Day runs the manufacturing business of semiconductors, L CDs, etc.

(2) In the future, the Plaintiff: (a) pursuant to the expansion of the market in connection with the manufacture of semiconductors and CDs in Korea; and (b) anticipated that the ○○ Day will be the brightness of the business; and (c) requested Bright Accounting Firm to assess the merger ratio between the Plaintiff and the Plaintiff on May 15, 2004. At the time, the Plaintiff issued 6.6 million common share of KRW 500,000,000, and 3.74,204 common share of KRW 10,000,000,000,000 per face value.

(3) Pursuant to Article 190-2 of the Securities and Exchange Act, which was enforced on May 18, 2004, Article 84-7 of the Enforcement Decree of the same Act, Article 36-12 of the Enforcement Rule of the same Act, Article 82 of the Regulations on Issuance and Public Disclosure of Securities, the value per share of the Plaintiff’s issued stocks shall be 3,808.39 won, the value per share of the Plaintiff’s issued stocks shall be 81,244.81 won, and the merger ratio (stock value) between the Plaintiff and the ○○○ Date shall be 1:3311.

Before December 31, 2003, Bright accounting corporation understood the stock value of the ○○ date as the intrinsic value that increased the value of assets and the profit value, calculated the value of assets by adding and adding some adjustment items to 19,106.5 won per share in the capital total amount on the balance sheet, calculated the profit value as 122,670.35 won per share based on the estimated profit and loss ratio for the next two business years (204 and 2005 business years) and calculated the profit value per share on the basis of this.

Bilateral accounting corporation prepared an estimated cost and revenue estimates in 2004 and 2005 for the year of 2002, the average annual growth rate of about 17.9% compared to the preceding year in 2002 and the increase of 15.4% compared to the preceding year in 2003. It is anticipated that the investment amount of the four semiconductors/L CD companies in Korea in 2004 will be increased by at least 30% compared to the preceding year, and 10 trillion won will continue to exist. In particular, since most investment plans are concentrated in construction projects scheduled to be completed in 204, the increase in the total revenue amount of the ○○○ Factory Industries in 204 and the increase in the total revenue amount of the 3rd Industrial Complex in △△△△△△△△△△△△, which is the total cost of the 203rd Industrial Complex in 203 and the total cost of the 2003rd Industrial Complex in 203.

(4) On May 18, 2004, the Plaintiff entered into a merger contract with the shareholders of ○○○○ Day with a face value of 374,204 shares per 374,204 shares per ○○○○○ Day, which issued 500 shares per 7,982,935 shares per ○○○○ Day.

(5) At the time of the merger contract, the net asset value on the ○○ Day was KRW 9,916,111,315, and the Plaintiff issued shares (7,982,935 note X 3,286 won per share) equivalent to KRW 26,231,924,410 in consideration of the merger to the shareholders of ○○○○○ Day.

(6) The Plaintiff appropriated KRW 16,315,813,095, which is the difference between the merger cost and the net asset value on the ○○ day, in the operating account, and then disposed of the cost as an intangible asset reduced loss on December 2004. On March 2005, the Plaintiff added the said value to deductible expenses and disposed of the said value by other means in the process of tax adjustment.

(7) With respect to the business portion succeeded to ○○ Day, the Plaintiff obtained approximately KRW 1.5 billion in 2004, approximately KRW 7.6 billion in 2005, KRW 4.4 billion in 2006, KRW 6.1 billion in 2007, KRW 2.6 billion in 2008, KRW 4.2 billion in 2009, KRW 4.2 billion in 2009, and KRW 8.1 billion in 2010.

[Ground of recognition] Facts without dispute, Gap's 4, 5 evidence, Gap's 6-1 to 7, Gap's 9, 10, and 11, and the purport of the whole pleadings

D. Determination

(1) Judgment on the Plaintiff’s first argument

Article 44 (1) of the Act provides that, as a merger satisfying the requirements in the subparagraphs, where the merged corporation succeeds to the assets of the extinguished corporation, the amount equivalent to marginal profits from the merger evaluation of the relevant assets among the value of the assets succeeded by the merged corporation may be included in deductible expenses in calculating the income amount for the business year which includes the date the merger is registered, as prescribed by the Presidential Decree, and Article 80 (4) of the Enforcement Decree of the Act provides that the amount to be included in deductible expenses shall be included in lump sum depreciation in

The purport of Article 44(1) of the Act, which permits the inclusion of the amount equivalent to the merger evaluation marginal profit in deductible expenses in the calculation of deductible expenses by the method of lump-sum depreciation, is that it will be a burden on restructuring and improvement of the financial structure through a merger when the merger evaluation is carried out in the calculation of gross income. Therefore, in case where the merger evaluation is applicable under certain requirements for deferment of taxation (such as a merger between domestic corporations, continuity of business, and delivery of stocks to the cost of merger), a lump-sum depreciation reserve or compressed keeping reserve fund for the business year to which the date of the merger registration belongs can be included in deductible expenses at the same time as the business year to which the date of the merger registration belongs, and in order to achieve the effect of deferred taxation by again adding the amount equivalent to the merger evaluation marginal profit to deductible expenses by the lump-sum depreciation reserve or the advanced keeping reserve fund as above in the business year to which the date of the merger registration belongs, it is difficult to view that the tax base and tax amount should be included in deductible expenses in the calculation of deductible expenses in the calculation of deductible expenses.

Therefore, in this case where the plaintiff did not appropriate the merger evaluation marginal profit of this case as lump sum depreciation reserve or the advanced depreciation reserve, the defendant cannot be deemed unlawful on the ground that the defendant added the merger evaluation of this case to the plaintiff's gross income for the business year 2004, and did not include the corresponding amount in the deductible expenses.

(2) Judgment on the second argument by the Plaintiff

(A) Article 23(1) and (2) of the Act and Article 24(1)2 and (4) of the Enforcement Decree of the Act provide that where a merged corporation evaluates and succeeds to a merged corporation’s assets, the goodwill calculated by the merged corporation shall be included in the calculation of losses as depreciable assets, limited to the amount paid for business value due to the trade name, transaction relationship, trade secrets, etc. of the merged corporation. Article 12(1)1 of the Enforcement Decree of the Act provides that the goodwill shall be included in the calculation of losses as depreciable assets, separately from the transfer and acquisition assets in the process of the transfer and acquisition of the business, if the amount is acquired with compensation taking into account the legal status such as permission and authorization for the transfer business, business convenience, geographical conditions, business secret, credit, reputation, transaction preference, etc., such amount is assessed according to an appropriate evaluation method.

According to the above facts, in order to operate manufacturing business of TV and monitor, etc. based on the source technology of high-frequency transition machines, the Plaintiff calculated the price for the merger by recognizing technical capabilities, transaction relations, etc. of the ○○ Day as intangible property value that can make it possible for the Plaintiff to gain excessive profits from the business, and thus, it is reasonable to deem that there is any price for the merger that the Plaintiff paid to the ○○○ shareholders in excess of the net asset value at the time of the merger, which is the object of depreciation.

Furthermore, as to whether the Plaintiff calculated the goodwill in accordance with appropriate evaluation methods

In the future, ① the Plaintiff’s market related to the manufacture of semiconductors and CDs in Korea is expanding so that the ○ Day is expected to be brightness, and the Plaintiff’s main business is to combine ○○ Day, ② the sales of the product on ○○ Day or the construction revenue related to the clean studio business is growing, and it is anticipated that it will continue to continue in the future, and there was a high intangible value such as technical or business secrets related to the clean studio business held by ○○ Day.

The third, the business portion succeeded from the ○○ day after the merger has continuously occurred, and the net profit per year from 2004 to 2010 exceeds the value of the Plaintiff’s shares paid as the price for the merger. (4) It seems that ○○ day in calculating the stock value based on the total amount of capital on the ○○ day’s balance sheet and the estimated cost and revenue statement on the future business year, etc. (e.g., the Plaintiff and ○○ day do not appear to have unfairly neglected the value of the ○○ day; and (e) it is difficult to view that even if both the Plaintiff and ○ day make a mutual investment or all of the above 16,315,813,095 won are recognized as the price for business rights, it is difficult to regard it as tax evasion even if they are recognized as the price for business rights. In light of the above, it appears that the Plaintiff’s value of shares paid to ○○ day in excess of the net asset value of the Plaintiff’s ○ day as the appropriate price for business source.

(B) Meanwhile, when calculating a reasonable tax amount of KRW 16,315,813,095 paid by the Plaintiff in return for the Plaintiff’s goodwill (including KRW 1,359,651,091, and KRW 3,263,162,619, which thereafter is included in deductible expenses) as deductible expenses, the corporate tax for the year 2004 shall be KRW 490,273,250, and the corporate tax for the year 2005, 2006, and 2007 shall not be paid by the Plaintiff. The details are as shown in the separate corporate tax calculation statement.

Therefore, the Defendant’s imposition disposition of KRW 490,273,253 of corporate tax for the year 2004 against the Plaintiff on June 1, 2009, in excess of KRW 490,273,253 of corporate tax for the year 2004, and corporate tax for the year 2005, KRW 90,353,930 of corporate tax for the year 2006, and KRW 309,037,050 of corporate tax for the year 207, is unlawful.

3. Conclusion

Therefore, the plaintiff's claim of this case is reasonable within the scope of the above recognition, and the remaining claim is dismissed as it is without merit. It is so decided as per Disposition.