Market price of listed shares in disallowance of transfer-income tax avoidance

1. 01Question

   When deciding whether a resident's transfer of listed shares to a specially related corporation is subject to disallowance of transfer-income tax avoidance, what market price of the shares is deemed, and does the exclusion in Article 167(6) of the former Income Tax Act Enforcement Decree apply only where the individual transferred at the closing price on the transaction day set by Article 89(1) of the Corporate Tax Act Enforcement Decree?

2. 02Holding

   The market price of listed shares transferred is, absent special circumstances, only the average of the daily closing prices published in the two months before and after the transfer date, calculated under Article 63(1)(i)(a) and (b) of the former Inheritance and Gift Tax Act as deemed by the latter part of Article 60(1) of that Act; where the shares are held by a largest shareholder and others, a 20 per cent premium is added to that average. Article 167(6) of the former Income Tax Act Enforcement Decree does not align the market price applicable to individuals and corporations; it only removes disallowance from the individual where the consideration equals the market price under Article 89 of the Corporate Tax Act Enforcement Decree, so that Article 52 of the Corporate Tax Act does not apply to that corporation's transaction, that is, where the transfer was made at the closing price on the transaction day. The plaintiff transferred at KRW 8,800 per share, not at the closing price of KRW 9,200, so the exclusion did not apply and KRW 11,478 per share was the correct market price.

   Points at issue, verbatim

   개인이 한국거래소에서 특수관계에 있는 법인에 상장주식을 양도한 경우 구 법인세법 시행령 제89조 제1항이 정하는 시가인 해당 거래일의 종가로 양도한 때에 한하여 구 소득세법 시행령 제167조 제6항에 따라 개인에게 양도소득의 부당행위계산부인 규정이 적용되지 않게 되는지 여부(적극)

   Unofficial English translation

   Whether, where an individual transfers listed shares on the Korea Exchange to a corporation having a special relationship with the individual, the provisions on the disregarding of accounting calculations of unjust transactions under the former Income Tax Act are not applied to the individual pursuant to Article 167 (6) of the former Enforcement Decree of the Income Tax Act only where the transfer is made at the closing price of the relevant transaction date, which is the fair market value prescribed in Article 89 (1) of the former Enforcement Decree of the Corporate Tax Act (affirmative)

3. 03Disposition

   Dismissed Stated in the decision

   상고를 기각한다. 상고비용은 원고가 부담한다.

   Unofficial English translation

   The appeal is dismissed. The plaintiff shall bear the costs of the final appeal.

4. 04Form of the test

   Elements stated Stated in the decision

   양도소득의 부당행위계산부인 대상 여부를 판단함에 있어 양도하는 상장주식의 시가는 특별한 사정이 없는 한 구 상증세법 제60조 제1항 후문에 의하여 제63조 제1항 제1호 (가)목 및 (나)목의 평가방법에 따라 산정한 ‘양도일 이전·이후 각 2개월 동안 공표된 매일의 종가 평균액’만이 시가로 간주된다고 봄이 타당하다.

   Unofficial English translation

   In determining whether the transfer of capital gains is subject to the disregarding of accounting calculations of unjust transactions, the fair market value of the listed shares being transferred shall, absent special circumstances, be deemed to be only the "average of the daily closing prices published during each of the two months before and after the date of transfer" calculated in accordance with the valuation methods under items (a) and (b) of subparagraph 1 of Article 63 (1), by virtue of the latter part of Article 60 (1) of the former Inheritance Tax and Gift Tax Act.

5. 05Factors

   • 양도소득의 부당행위계산부인 대상 여부를 판단함에 있어 양도하는 상장주식의 시가를 산정하는 방법
   • 개인이 한국거래소에서 특수관계에 있는 법인에 상장주식을 양도한 경우 구 법인세법 시행령 제89조 제1항이 정하는 시가인 해당 거래일의 종가로 양도한 때에 한하여 구 소득세법 시행령 제167조 제6항에 따라 개인에게 양도소득의 부당행위계산부인 규정이 적용되지 않게 되는지 여부(적극)

   Unofficial English translation

   • The method of calculating the fair market value of listed shares being transferred in determining whether the transfer of capital gains is subject to the disregarding of accounting calculations of unjust transactions

   • Whether, where an individual transfers listed shares on the Korea Exchange to a corporation having a special relationship with the individual, the provisions on the disregarding of accounting calculations of unjust transactions under the former Income Tax Act are not applied to the individual pursuant to Article 167 (6) of the former Enforcement Decree of the Income Tax Act only where the transfer is made at the closing price of the relevant transaction date, which is the fair market value prescribed in Article 89 (1) of the former Enforcement Decree of the Corporate Tax Act (affirmative)

6. 06Relation to precedent

   Follows earlier decisions Stated in the decision

   대법원 2011. 1. 13. 선고 2008두4770 판결

   Unofficial English translation

   Supreme Court Decision 2008Du4770 decided January 13, 2011

   Decisions referred to

   [1] 대법원 2011. 1. 13. 선고 2008두4770 판결

7. 07Burden of proof

   Not addressed Not in the decision

8. 08Open question and revisit condition

   What special circumstances can displace the deemed market price of listed shares in a disallowance case?

   An amendment to Article 167(6) of the former Income Tax Act Enforcement Decree or to Article 89(1) of the former Corporate Tax Act Enforcement Decree would require this entry to be read again, as would a later decision departing from Supreme Court Decision 2008Du4770.

Read 2026-10-25 · Cross-read 2026-10-25. All quotes matched against the official text. The Chinese-character placeholders the court used for anonymised parties are given in their Korean readings, and parenthetical Chinese-character glosses are omitted.

Every entry is published only after all quotes have been matched character by character against the official text, and audited by an independent second reading from a different model family across all eight axes. Both agreed axes and text-grounded interpretive divergences are recorded openly. The ledger is a research record, not an assessment of the court or advice on any matter.