Suwon District Court 2007Guhap994 ( October 16, 2008)

Cho High Court Decision 2005Du1671 ( November 02, 2006)

It can be known that the price for the acquired stocks is determined on the basis of the value per share of the agreed transferred stocks.

In the case of the value exchange on which a provisional exchange takes place, the amount agreed upon between the parties of the exchange itself shall be the transfer value, and it can be known that the price of the transferred stock is determined on the basis of the value of the transferred stock on the basis of the value of the transferred stock as agreed between the plaintiff and the transferor, it is within the legitimate tax amount

2011Nu26703. Revocation of disposition of imposing corporate tax, etc.

AAA, Inc.

Head of Sungnam Tax Office

Suwon District Court Decision 2007Guhap994 Decided January 16, 2008

April 4, 2012

June 13, 2012

1. Revocation of a judgment of the first instance;

2. All of the claims filed by the Plaintiff are dismissed.

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

1. Purport of claim

The Defendant’s imposition of 00 won of corporate tax for the business year 2000 and special rural development tax, and 000 won of securities transaction tax for the Plaintiff on November 19, 2004 shall be revoked.

2. Purport of appeal

The same shall apply to the order.

1. Details of the disposition;

(a) “B and 8 domestic and foreign 8 corporations (CCLtd,CC-II Ltd, and DoDOO Lt, DoDOO OOd, EE Construction, EEB, and FF 8 corporations, both of which belong to DDO and EE Group, and hereinafter referred to as “transferr”. When domestic corporations indicate, the corporation is omitted) among the issued stocks of EEM.com (hereinafter referred to as “EMM”), a KOSDAQ-registered company, owns approximately 47.85%, approximately 7493052, and also owns management rights for EEcom.

B. On March 200, the Plaintiff and the transferor began negotiations to acquire EEM.com stocks owned by the transferor, and the terms and conditions were concluded on June 6, 200, and on June 15, 2000, the stock purchase agreement was concluded, and on July 25, 2000, the subsidiary agreement was concluded, respectively.

1) In the negotiations on June 6, 200, the terms and conditions under which the terms and conditions under which the payment of 30% in cash and 70% in cash is made for the transfer of EEM.com shares are calculated on June 6, 200, and the transferor (DD groups) which selects the terms and conditions under which the payment of 30% in cash and 70% in cash is made for the transfer of EM.com shares will assess the EEM.com shares to 000 won per share, and the EGGG telecom shares to be valued to 00 won per share, with the exchange rate of 1:9.75 won per share, while the transferor (DD groups) which selects the terms and conditions under which the payment of 20% in cash and 80% in cash is made for the transfer of EEM.com shares will assess and transfer the EEM shares to 00 won per share.

2) On June 8, 200, the Plaintiff and EE Group, taking into account the importance of exercising management rights inside the transferor, agreed to receive 76,923 shares of the GGG Telecom (00 - 76,923.00 won = 000 won) equivalent to 000 won in terms of management rights compensation, and decided to grow the transfer price (cash, promissory note, and GG Telecom shares) allocated to both groups in proportion to the ratio of the transferred shares, respectively, by means of payment. At the time, the Plaintiff and EE Group stated the total payment of the cost, and the total payment of the cost, as set forth in Appendix 2.1 of the draft agreement drawn up by the transferor at the time, but this is the amount calculated by adding the value of the stocks of the GG Telecom to the total amount of 100 won in cash and promissory note calculated by adding the value of the stocks of the GG Telecom to the total amount of 00 won in total.

3) The terms of the share purchase contract concluded on June 15, 200 between the Plaintiff and the transferor were as follows: (a) there was no change other than adding 000 won, calculated by adding 4.9795 shares of less than one share to the cash allocated to the transferor, among the existing agreed terms, among the total shares of less than 4.9795 shares per share to be paid by the transferor. According to the above contract, the transferor, in return for transferring the shares of the EEM.com to the Plaintiff, the transferor, in return for transferring the shares of the EEM, the total amount of 00 won (25%), in total of 00,80, in total of promissory notes (35%), and in total of 3,024,397 shares of the GG Telecom (40%). The contracting parties deleted the total amount of the shares transferred out of Appendix 15, 200 and Appendix 2.1, 201.

4) The terms and conditions of the subsidiaries 200.7.25. The ratio of GG Telecom shares to those of the EEM 20. The ratio of the transfer price of shares to those of 40G telecom shares (60%) and the ratio of cash, etc. to those of the domestic law, shall be partly adjusted, and the ratio of the number of the GG Telecom shares to be paid to those of the shareholders, and the details thereof shall be 00 won, and the total damages to be paid by the transferor, as a result of the negotiations on the Plaintiff’s request for damages arising from the results of the company’s acquisition of the EEM.com’s stocks, shall be 00 won, and 00 won, and the remaining 00 won shall be calculated from 40G Telecom shares to those of the domestic shareholders, and 80G Telecom shares shall be calculated from 70G Telecom shares to those of the domestic shareholders, and the total damages shall be calculated from 07G Telecom 20,000, and the remaining 700G Stock shares shall be calculated from 25G.28.1.0.

C. On July 26, 200, the transferor except ChoB transferred EEM.com to the Plaintiff en bloc and received the transfer proceeds, but ChoB transferred EEM.com stocks on October 5, 2000 in order to avoid heavy taxation due to short-term holding of EEM.com stocks, and received the transfer proceeds.

D. Examining the details of changes in the closing price per share formed in the beginning of the Stock Exchange and the Association at the time of the stocks of GGG Telecom (GGGG) and the EEM.com, the following table is as follows.

E. The Plaintiff reported and paid the corporate tax, special rural development tax and securities transaction tax for the business year 200 and the special rural development tax, and the corporate tax and special rural development tax calculated the transfer value of the GGG Telecom stocks transferred to the transferor other than ChoB on July 25, 2000, the closing price of the Stock Exchange, and the transfer value of the GGG Telecom stocks transferred to the ChoB on October 4, 200, the tax amount calculated based on the tax base calculated by subtracting 15% from the closing price of the GG Telecom stocks of the Stock Exchange on each of the above dates, with the transfer value of the GG Telecom stocks transferred to the ChoB on October 4, 200, and the securities transaction tax calculated based on the tax base calculated by taking the acquisition value of each of the 15% from the closing price of the GG Telecom stocks of the Stock Exchange on each of the above dates.

F. In the course of the tax investigation, the director of the Seoul Regional Tax Office: (a) deemed that the Plaintiff and the transferor traded the share price per share of the GGGG Telecom at KRW 000; and (b) notified the Defendant that the value of the GGG Telecom shares calculated at KRW 000 per share should be calculated at the transfer price of the shares of the GGG Telecom at the transfer price of the corporate tax and securities transaction tax

On Nov. 19, 2004, the defendant corrected and imposed on the plaintiff on Nov. 19, 2004 the corporate tax of 2000 business year, the special rural development tax of 00 won, and the securities transaction tax of 000 won, and the 000% on Oct. 19, 200 (hereinafter referred to as "each of the above dispositions")

G. On February 4, 2005, the plaintiff was dissatisfied with the initial disposition and requested to the National Tax Tribunal on February 4, 2005, and on November 2, 2006, the National Tax Tribunal made a decision of partial acceptance of the above request, and its purport is as follows.

- Since the transfer value, payment method, and the number of shares of the GG Telecom in each stage in the process of stock transaction between the Plaintiff and the transferor have been changed continuously, it cannot be viewed that the price per share of the GGG Telecom was fixed at KRW 00,000 from the beginning of July 25, 200, and the transfer time of July 25, 2000 for which the transaction amount, the number of principal amounts, and the payment method has become final, should be determined as of July 25, 200, and the transfer value of the GG Telecom should be calculated on the basis of KRW 00 per share, the closing price of the Stock Exchange as of July 25, 200, based on the above calculated transfer value, and the tax base and tax amount of the rural special tax and the securities transaction tax should be corrected based on the tax base and tax amount.

H. The defendant, according to the above decision of the judgment on November 16, 2006, reduced corporate tax of 00 won, special rural development tax of 00 won, and special rural development tax of 00 won on July 2000 and 000 won on October 1, 200, respectively, and presumed 00 won on special rural development tax of 200 won again. The defendant revised 00 won on July 12, 2006, but revised 00 won on December 28, 2006, and revised 00 won on December 28, 2006 (after the end, 602, 302, 302, 252 won on July 7, 2000, 200, 2000, 200 won were reduced and 602,302,302, and 252 won on each of the above dispositions, and hereinafter referred to as "the remaining taxes were each disposition after each of the claim.

[Based on recognition] The identification of Gap evidence 1 to 10 (including household numbers, hereinafter the same shall apply), Eul evidence 1 to 15, and the testimony of the witness Ha in the first instance trial, and the purport of the whole pleadings

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

(a) A master of the parties;

1) Plaintiff’s assertion

A) The National Tax Tribunal decided that there was no actual transaction price at the time of transferring the GGG Telecom stocks, and that the tax base and tax amount should be corrected, and the Defendant corrected the reduction accordingly, the reason for each disposition of this case should be deemed to have been changed to the premise that there was no actual transaction price. Nevertheless, the Defendant’s assertion that there exists another actual transaction price is contrary to the binding force of the ruling, and not only goes beyond the reason for disposition subject to the lawsuit of this case, but also cannot be permitted under the substantive law or under the Civil Procedure

(c)

B) In light of the following points, the Plaintiff’s transfer price of the GG Telecom shares against Mediation, and the transfer price of the Plaintiff’s GG Telecom shares should be calculated based on the market price of the GGG Telecom shares at the time of October 5, 200, the transfer date, but otherwise, the disposition of the instant corporate tax and the special tax for rural development, based on the market price at the time of July 25, 200, is unlawful.

(1) According to Article 68(1)3 of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 17033, Dec. 29, 2000; hereinafter the same) Article 68(1)3, the time when the assets of a corporation are transferred is the date of the settlement of the price, and the transfer price of the GGG Telecom stocks to the ChoB shall be calculated based on October 5, 200, the date of the settlement of the price.

(2) According to Article 41 of the former Corporate Tax Act (amended by Act No. 6293, Dec. 29, 2000; hereinafter the same), in the case of a mutual exchange transaction between stocks such as this case, the transfer value of transferred stocks shall be calculated as the market value at the time of acquisition of the stocks

③ In exchanging the shares of GGG Telecom and the EEM.com, the Plaintiff and the ChoB did not set the price of the shares for the shares to be exchanged between the Plaintiff and ChoB, and even if the Plaintiff and ChoB set the price of the shares to be exchanged, in light of the purport that the provisions of the former Corporate Tax Act and subordinate statutes can not be arbitrarily assessed the value of the acquired assets in the exchange of assets between the Plaintiff and ChoB, the transfer price of the shares of the GGG Telecom cannot be calculated on the basis of the price determined by the agreement between the Plaintiff and ChoB. Therefore, in principle, the transfer price of the GGG Telecom shares to the ChoB shall be calculated on the basis of the objective value (market price) of the part corresponding to the GGG Telecom shares acquired by the Plaintiff from ChoB, but it is difficult to calculate the objective value due to the Plaintiff’s lack of management rights due to such reasons as the management rights included therein, and the EEM.com shares can be viewed as the transfer price of the GG Telecom shares.

④ If the market price of the EEM.com shares acquired by the Plaintiff from ChoB is 000 won, as the Defendant’s conjunctive assertion, the transfer price of the GGG Telecom shares transferred by the Plaintiff to the transferor except ChoB should be calculated on the basis of the market price of the above EEM.com shares, and if so, the reasonable tax amount of the corporate tax and special rural development tax for the 2000 business year borne by the Plaintiff is less than the amount reported and paid by the Plaintiff. Therefore, the disposition of the instant corporate tax and special rural development

C) The Plaintiff’s transfer value of GGG Telecom shares falls under cases where it is unknown, and the transfer date falls under the case on July 26, 2000 and October 5, 2000, so the amount calculated by subtracting 15% (15%) of the lower price limit from the closing price at the Stock Exchange on each of the immediately preceding trading dates is the securities transaction tax base, and unlike this, the disposition of the instant securities transaction tax by the closing price at the Stock Exchange of July 25, 2000 is unlawful.

2) Defendant’s assertion

In a stock transaction contract between the Plaintiff and the transferor, the parties set the transfer value of GGG Telecom stocks transferred by the Plaintiff at KRW 390,00,000, and the initial disposition premised on this premise is lawful (this case’s each disposition is legitimate as it is within the original disposal scope). Even if the parties to the stock transaction did not have agreed on the transfer value per share of the GGG Telecom stocks at KRW 000,000, the transfer value per share of the EEM stocks transferred by the Plaintiff should be considered as the transfer value of the Plaintiff’s GG Telecom stocks, and the amount of the GGG Telecom stocks assessed based on KRW 00,00,00,000, which was paid in cash from the Plaintiff, should be considered as the transfer value of the Plaintiff’s GG Telecom stocks.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

1) Determination on the assertion relating to the binding force of the ruling

A) The adjudication under Article 37 of the former Administrative Appeals Act and Article 80 of the Framework Act on National Taxes (wholly amended by Act No. 9968, Jan. 25, 2010) are bound by the relevant administrative agency with respect to the recognition and judgment of facts constituting the order of adjudication and the premise thereof, so it is not allowed to take the same disposition again on the ground that it is unlawful and identical in basic facts in relation to the relevant disposition (see, e.g., Supreme Court Decision 2002Du3201, Apr. 25, 2003). In accordance with the binding force of the adjudication, the defendant made a correction for the initial disposition, and the scope of the binding force of the adjudication is limited to the disposition agency and it does not affect the binding force of the court or third party. In this case, the defendant's assertion that the existence of the actual transaction price exists was erroneous, and thus, it cannot be said that it is unlawful for the court to seek revocation and correction of the actual transaction price.

B) In addition, the purport of the decision of the National Tax Tribunal is that "the disposal authority calculates the price per share of the GGG Telecom stocks in determining the market price at issue stocks, 390,000,00 won, and that the transferor and the plaintiff continue to change the transfer price, payment method, payment rate, and the number of the GG Telecom stocks to be paid in lieu of cash in the process of concluding the stock purchase contract, and finally became final and conclusive on July 25, 200, and that the transfer price per share of the GGG Telecom stocks originally calculated should be calculated based on the market price per the GGG Telecom stocks at the time of July 25, 2000, rather than that there is no actual transaction price in relation to the stock transfer (see subparagraph 3, and that the National Tax Tribunal explicitly rejected the Plaintiff's claim that there is no actual transaction price in relation to the stock transfer (see, e.g., National Tax Tribunal's amendment of the first decision of the National Tax Tribunal).

2) Determination on the assertion of transfer timing

The former Corporate Tax Act (amended by Act No. 10423, Dec. 30, 2010) does not have any separate provision concerning the time of acquisition of assets acquired through exchange, and under the principle of no taxation without law, the provisions concerning the time of acquisition of other tax-related Acts, such as the Income Tax Act or the business year to which the income and deductible expenses accrue under the former Corporate Tax Act cannot be applied as they are, but the time of recognition of corporate accounting is deemed to be when the economic benefits inherent in the assets concerned are highly likely to bring into the company and when the cost or value can be measured reliable, and the time of acquisition and transfer of assets by exchange is reasonable to determine the time of acquisition of assets by the same standard, and it is reasonable to view the time of acquisition of stocks by the transferor to be the time of actual disposal of the assets acquired through exchange to the Plaintiff. In light of the fact that it is reasonable to view the time of acquisition of stocks by the transferor 20GM from 200 to 207 GM. 2050 to 250G shares acquired by exchange (see the above Decision 2070GM.207.7 G.207.207G shares.7.7.207.

3) Determination as to the lawfulness of the disposition of the corporate tax and special rural development tax of this case

A) Relevant regulations and legal principles

Article 11 of the former Enforcement Decree of the Corporate Tax Act, upon delegation of Article 15(3) of the former Corporate Tax Act, provides that one of the profits shall be "transfer value of assets" in subparagraph 2, and Article 72(1) of the former Enforcement Decree of the Corporate Tax Act, upon delegation of Article 41(1)3 of the former Corporate Tax Act, provides that the method of calculating the acquisition value of assets, stocks, etc. acquired by the person himself/herself, and assets, stocks, etc. acquired by the person himself/herself, through investment in kind, shall be the market value at the time of acquisition. In full view of the contents and intent of each provision as above and each provision, the amount to be included in gross income shall be based on the market value at the time of acquisition of assets acquired through exchange, unless there are special circumstances, and "the market value" means the objective value formed through the general and normal exchange of stocks. Thus, even in cases where a large amount of stocks is acquired through the exchange of management rights, if there is an objective and objective price to be considered as the market value at the time of the exchange.

B) Whether the transaction price of the EM.com’s stocks can be seen as the market price of the stocks

According to the above evidence and facts of recognition, while the plaintiff and transferor are working in the negotiation process, the market price for the EEM shares is examined by the Korea Stock Exchange, etc., and based on these results, the reasonable price of the shares is calculated at KRW 00 through 000 per share in consideration of management credit and payment means. The plaintiff and transferor do not have any special relationship, and the final transaction amount was determined based on the plaintiff's asset loss for EEM., the transaction between the plaintiff and transferor is conducted in a general and normal manner. Furthermore, the issue is whether the agreed 0GM price reflects the objective exchange value at the time. The difference between the price of the shares and the 0GM price at KRW 10,000,000,000, and the average transaction price at KRW 00,000,000,000,000,000,000,000,000,000,000,000,000.

C) Actual transfer value, legitimate tax amount, etc.

If the actual transfer value itself can be seen as the market price, it can be calculated at the same level as the actual transfer value under the securities transaction tax according to the legal doctrine of exchange. Ultimately, the issue of calculating the lawful tax amount of the corporate tax and special rural development tax of this case is related to the issue of whether it is possible to verify the actual transaction price in the exchange transaction like the securities transaction tax. As seen below 4), the Plaintiff and the transferor agreed on the price per share of the GG Telecom stocks at KRW 000 and then set the price for the transfer of the EEM. As seen earlier. As such, as seen earlier, it is reasonable to view that both the corporate tax of this case and the special rural development tax of farming and fishing villages calculated on the basis of the tax amount per share of the lower GG telecom stocks at KRW 00,000 within the reasonable tax amount. The disposition of the corporate tax of this case and special rural development tax of this case is legitimate. The Plaintiff’s assertion otherwise cannot be accepted.

4) Determination as to whether the disposition of the securities transaction tax of this case is legitimate

A) Relevant legal principles

Under Article 7 subparag. 3 of the former Securities Transaction Tax Act (amended by Act No. 6302 of Dec. 29, 200), and Article 4 subparag. 1 of the former Enforcement Decree of the Securities Transaction Tax Act (amended by Presidential Decree No. 17040 of Dec. 29, 2000), where stocks listed on the Stock Exchange are transferred without going through the Stock Exchange, the transfer value of the stocks shall be the tax base, and where the transfer value shall not be known, or where the value is lower than the value assessed by the method of calculating by multiplying the trading quantity of the stocks, etc. transferred (hereinafter referred to as the "evaluation method of transfer") by the market price of the stocks, etc. publicly announced by the Stock Exchange on the date of the immediately preceding transfer by the quantity of the stocks, etc. at issue, the "transfer value of stock certificates" shall be the value at issue, not the ordinary market price reflecting the objective exchange value, and where a simple exchange transaction is made, the actual transfer value cannot be confirmed, and if there is no objective value difference between the transfer value and 19.

B) Whether it constitutes a value exchange

We examine whether the exchange transaction between the plaintiff and the transferor constitutes the above value exchange.

(1) Whether there exists an agreed transaction value

In full view of the above evidence and recognized facts, the price for the first exchange telecom shares, and the foreign shareholders, when converting the price of 00 won to 76,923 shares of GG telecom shares, and the price of 4.9795 shares used in converting the price of 00 won to 00 won in cash as the result of the Plaintiff’s loss of assets, and the price of 00 won used in converting the price of 00 won to 0G telecom shares into 00 won per share, and the agreement was reached between the Plaintiff and the transferor regarding this content. In addition, the agreement between the Plaintiff and the transferor was reached on July 25, 200 that the price of the shares was 0G Telecom shares to be transferred to 0.0, and that the price of the shares was 0G Telecom shares to be transferred to 60,000 won in the process of the negotiations on the shares of 2G Telecom shares to 60,000 won in the same way as the actual transaction price agreed between the Plaintiff and the transferor.

(2) Whether the agreed transaction value is supported by objective monetary value

According to the above evidence and the facts of recognition, the trading price per share at the Korea Stock Exchange, and at the GGG Telecom stocks, shall be KRW 00 on June 5, 200, KRW 000 on June 15, 200, and KRW 000 on July 25, 200, and KRW 000 on July 26, 200, and KRW 00 on July 26, 200 if the market price is easy to grasp as listed stocks, concluding an exchange contract by reflecting the objective market price, such as the amount of stock exchange transaction, is consistent with the empirical rules and social norms, and KRW 390,00,00 on one share of the GG Telecom stocks agreed upon with the exchange party on June 5, 200 on June 5, 200, and the agreed trading price shall be determined as supporting the objective monetary value.

(3) Sub-decisions

The instant share swap transaction constitutes a transaction in which the value of the goods taken over through the exchange between the parties to the exchange is determined based on objective monetary value and the settlement amount is paid based on such value, and is a case where a value exchange is made. The Plaintiff and the transferor may be deemed to have determined as the price for the transfer of the shares of the EEM by adding cash, etc. to the value of the shares of the GGGG Telecom calculated based on the price for each share of the GGG Telecom stocks agreed upon

C) a reasonable amount of tax

As above, in the value exchange where provisional exchange takes place, the amount agreed between the parties concerned is the transfer value, and the transaction value agreed upon between 2,943,9627 and 00 won (=2,943,627 note x00) can be considered as the actual transfer value. This is higher than the transfer value assessment method [the amount calculated by subtracting 15% from the closing price of the GGG Telecom Stock Exchange (00 won and 000 won) on July 25, 2000 and October 4, 200, the transfer value shall be calculated based on the actual transfer value. However, the defendant is no longer entitled to the securities transaction tax assessment tax of this case and calculated based on 346,40,000 won per share of the GG Telecom stocks before the date of transfer, so the defendant is no other legitimate scope of the securities transaction tax of this case.

5) Sub-committee

Each disposition of this case is lawful.

3. Conclusion

The defendant accepted an appeal filed by the defendant and revoked the judgment of the first instance. All of the claims filed by the plaintiff are dismissed.