In case where the land acquired by a corporate merger as non-business land of a corporation falls under the acquisition subject to an excessive acquisition tax, whether the price of the land recorded in the corporate accounting book at the time of the merger shall be deemed the actual acquisition price and shall be deemed the tax base of the acquisition tax (negative)

Even if land acquired by a corporate merger as land for non-business use of a corporation and its acquisition is subject to heavy acquisition tax, it is reasonable to deem that the acquisition at this time is free of charge. Thus, it shall not be deemed that the price of the land recorded in the corporate book at the time of the merger under Article 111 (5) 3 of the former Local Tax Act (amended by Act No. 5406 of Aug. 30, 1997) is the actual acquisition price and shall not be deemed the tax base of acquisition tax.

Article 104 Subparag. 8, Article 110 Subparag. 4, and Article 111(5)3 of the former Local Tax Act (amended by Act No. 5406 of Aug. 30, 197)

Korean Commercial Station Development Co., Ltd. (Attorney Kim Dong-dong, Counsel for the defendant-appellant)

The head of Mapo-gu Seoul Metropolitan Government

Seoul High Court Decision 97Gu34510 delivered on October 29, 1998

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

We examine the grounds of appeal.

Article 104 subparagraph 8 of the former Local Tax Act (amended by Act No. 5406 of Aug. 30, 1997; hereinafter referred to as the "Act") provides that acquisition subject to acquisition tax means the sale, exchange, inheritance, donation, contribution, contribution, investment in kind to a corporation, creation of land through construction, reclamation, reclamation, reclamation, etc. of public waters, and all other similar acquisitions, which are original acquisition, succession acquisition, or acquisition without compensation or without compensation. Article 110 subparagraph 4 of the same Act provides that acquisition tax shall not be imposed on a corporate merger, but this provision does not apply to a case of acquisition of a corporation which is acquired through a corporate merger, and Article 111 (5) 3 of the same Act provides that acquisition tax shall be based on the actual or annual tax base of acquisition tax, notwithstanding the proviso of paragraph (2) and the proviso of paragraph (3) of the same Article, and that acquisition tax shall not be imposed on a corporation which is acquired through a corporate merger and acquisition without compensation, and therefore the price of land shall not be determined as the acquisition without compensation.

In the same purport, the court below is just in holding that the land of this case acquired by the plaintiff by absorbing the non-party Hanyang Electronic Accounting Corporation as non-business land of a corporation under Article 112 (2) of the Act, but it is subject to acquisition tax, and since the acquisition of the land of this case by the merger constitutes gratuitous acquisition, it cannot be determined as acquisition tax base based on the statutory standard price, and there is no error in the misapprehension of legal principles as to the land for non-business use of a corporation, the free acquisition, and the calculation of tax base under Article 111 of the Act, or the incomplete deliberation.

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 Lee Jin-hun (Presiding Justice)