【Holding】
[1] Standard for calculating the tax base of acquisition tax arising from the deemed acquisition of corporate assets by an oligopolistic shareholder (= the total assets of the corporation), and whether, where the tax base is calculated on the basis of total assets according to the financial statements and other books, etc. of the corporation, it must be calculated based on the book value at the time of the deemed acquisition (affirmative) / Whether the same applies where the taxpayer liable for deemed acquisition tax voluntarily reports the tax base (affirmative)
[2] Whether the book value of a corporation must be used as the tax base of acquisition tax regardless of whether it corresponds to the actual acquisition price (negative), and whether the same legal principle applies when calculating the tax base on the basis of the total assets subject to acquisition tax according to the financial statements and other books, etc. of the corporation pursuant to Article 10(4) of the former Local Tax Act (affirmative)
【Summary of Decision】
[1] Under Article 7(5) of the former Local Tax Act (before being amended by Act No. 19230, Mar. 14, 2023) and Article 10(4) of the former Local Tax Act (before being amended by Act No. 18655, Dec. 28, 2021; hereinafter the same), a person who has become an oligopolistic shareholder under Article 46 subparag. 2 of the Framework Act on Local Taxes by acquiring shares or equity of a corporation is deemed to have acquired the real estate, etc. of the corporation, and the tax base is the amount obtained by dividing the total value of such real estate, etc. by the total number of shares or contributions of the corporation and multiplying it by the number of shares or contributions acquired by the oligopolistic shareholder; the oligopolistic shareholder must report the tax base and other necessary matters as prescribed by ordinance, provided that where no report is made, no reported value is stated, or the reported value is less than the tax base, the head of the local government shall impose acquisition tax using as the tax base the amount calculated by the above method on the basis of the total assets subject to acquisition tax according to the financial statements and other books, etc. of the corporation.
Under these provisions, an oligopolistic shareholder is deemed to have acquired the assets of the corporation upon becoming an oligopolistic shareholder, the tax base of the resulting acquisition tax is calculated based on the total assets of the corporation at the time of such deemed acquisition, and where the tax base is calculated on the basis of total assets according to the financial statements and other books, etc. of the corporation, the tax base must be calculated based on the book value at the time of the deemed acquisition. The same applies where the taxpayer liable for deemed acquisition tax voluntarily reports the tax base. This is because the tax base to be reported by an oligopolistic shareholder under the latter part of Article 10(4) of the former Local Tax Act means the legitimate tax base for deemed acquisition tax, and therefore, as long as the reported value falls short of the legitimate tax base calculated on the basis of the total assets subject to acquisition tax according to the financial statements and other books, etc. of the corporation, the tax authority should be regarded as being able to calculate the tax base differently from the reported content.
[2] Article 10(1), the main text of (2), and (5)3 of the former Local Tax Act (before being amended by Act No. 18655, Dec. 28, 2021; hereinafter the same) provide that the tax base of acquisition tax shall be the value at the time of acquisition, which shall be the value reported by the acquirer, but that for acquisitions whose acquisition price is proven by a written judgment or corporate books, etc. as prescribed by Presidential Decree, the actual acquisition price shall be the tax base.
The purport of regarding the book value of a corporation as the acquisition value and using it as the tax base in this way presupposes that the book value of a corporation, which as an objectified organization is less likely to manipulate transaction prices, is in principle credible enough to be regarded as corresponding to the actual acquisition price; therefore, the book value of a corporation need not unconditionally be used as the tax base of acquisition tax regardless of whether it corresponds to the actual acquisition price. Furthermore, this legal principle applies equally when, in relation to deemed acquisition tax, the tax base is calculated on the basis of the total assets subject to acquisition tax according to the financial statements and other books, etc. of the corporation pursuant to Article 10(4) of the former Local Tax Act.
【Referenced Statutes】
[1] Article 10(4) of the former Local Tax Act (before being amended by Act No. 18655, Dec. 28, 2021); Article 7(5) of the former Local Tax Act (before being amended by Act No. 19230, Mar. 14, 2023) [2] Article 10(1), (2), (4), and (5)3 of the former Local Tax Act (before being amended by Act No. 18655, Dec. 28, 2021)
【Referenced Precedents】
[1] Supreme Court Decision 83Nu103, December 13, 1983 (Gong1984, 194)
Supreme Court Decision 2007Du11399, March 14, 2008
[2] Supreme Court Decision 92Nu15895, April 27, 1993 (Gong1993Ha, 1612)
(Source: Supreme Court Decision 2026Du30758, August 12, 2026 | Judicial Information Disclosure Portal, Precedents)
2026. 10. 14. · By Attorney Dongwoo Shin
Call
KakaoTalk
E-mail