Open Decision Ledger · Tax & international taxation
Related-party share price and a market price made unclear by the management premium
Supreme Court, June 1, 2023, 2019Du38472 (judgment)
No holding summary · checked against points at issue. The official text publishes no summary of the holding for this decision. The quotation and factors in this record are copied verbatim from the points at issue; the evidence for each axis is taken from the points at issue, the order and the reasons.
Case name: 법인세부과처분취소
Official text on the National Law Information Center
Question
Where a company agreed in a memorandum of understanding to transfer shares of the KOSDAQ-listed company it controlled to a related party, could the agreed price not be regarded as the market price under Article 52(2) of the former Corporate Tax Act, and were the shares a case where the market price was unclear because of the difficulty of valuing a management premium?
Holding
Yes on both points. The Supreme Court accepted that the price of KRW 33,531 per share fixed in the memorandum did not appropriately reflect the objective exchange value of the shares, and that the shares were a case where the market price was unclear because the management premium could not easily be valued. The price computed under Article 89(2)(ii) of the Enforcement Decree of the former Corporate Tax Act by applying Article 63(1) and (3) of the former Inheritance and Gift Tax Act mutatis mutandis, as recalculated at KRW 37,285 per share with 26 October 2010 as the valuation date, was the market price, and the addition to income under Article 52 of the former Corporate Tax Act, as reduced by the amended assessment, was lawful.
Points at issue, verbatim
양해각서에 따른 거래가격을 위 주식의 객관적인 교환가치를 적정하게 반영한 시가로 볼 수 없고, 위 주식은 경영권 프리미엄 산정의 어려움으로 인하여 시가가 불분명한 경우에 해당하므로, 위 처분이 적법하다고 본 원심판단을 수긍한 사례
Unofficial English translation
the transaction price under the memorandum of understanding cannot be regarded as the market value properly reflecting the objective exchange value of the said shares, and the said shares fall under a case in which the market value is unclear due to the difficulty of calculating a management premium, so that the court below held that the said disposition was lawful, and the Supreme Court affirmed that determination
Disposition
Dismissed Stated in the decision
상고를 기각한다. 상고비용은 원고가 부담한다.
Unofficial English translation
The appeal is dismissed. The costs of the appeal are borne by the plaintiff.
Form of the test
Existing test applied Stated in the decision
원심은 판시와 같은 이유로 이 사건 거래가격을 이 사건 주식의 객관적인 교환가치를 적정하게 반영한 시가로 볼 수 없고, 이 사건 주식은 경영권 프리미엄 산정의 어려움으로 인하여 시가가 불분명한 경우에 해당하므로 피고가 구 법인세법 시행령 제89조 제2항 제2호에 따라 구 상증세법 제63조 제1항, 제3항을 준용하여 평가한 가액을 이 사건 주식의 시가로 보아 이 사건 처분을 한 것은 적법하다고 판단하였다.
Unofficial English translation
The court below determined, for the reasons stated in its holding, that the transaction price in this case cannot be regarded as the market value properly reflecting the objective exchange value of the shares in this case, that the shares in this case fall under a case in which the market value is unclear due to the difficulty of calculating a management premium, and that it was lawful for the defendant to make the disposition in this case by regarding the value evaluated by applying Article 63 (1) and (3) of the former Inheritance Tax and Gift Tax Act mutatis mutandis pursuant to Article 89 (2) subparagraph 2 of the former Enforcement Decree of the Corporate Tax Act as the market value of the shares in this case.
Factors
- 양해각서에 따른 거래가격을 위 주식의 객관적인 교환가치를 적정하게 반영한 시가로 볼 수 없고
- 위 주식은 경영권 프리미엄 산정의 어려움으로 인하여 시가가 불분명한 경우에 해당하므로
- 관할 세무서장이 구 법인세법 시행령 제89조 제2항 제2호에 따라 구 상속세 및 증여세법 제63조 제1항, 제3항을 준용하여 계산한 가격을 위 주식의 시가로 평가한 다음
- 구 법인세법 제52조에 따라 차액을 익금에 산입하여 갑 회사에게 법인세를 경정·고지한 사안에서
Unofficial English translation
• the transaction price under the memorandum of understanding cannot be regarded as the market value properly reflecting the objective exchange value of the said shares, and
• the said shares fall under a case in which the market value is unclear due to the difficulty of calculating a management premium, so that
• the head of the competent district tax office, applying Article 63 (1) and (3) of the former Inheritance Tax and Gift Tax Act mutatis mutandis pursuant to Article 89 (2) subparagraph 2 of the former Enforcement Decree of the Corporate Tax Act, evaluated the price calculated thereunder as the market value of the said shares, and then
• in a case in which the difference was included in gross income pursuant to Article 52 of the former Corporate Tax Act and corporate tax was revised and imposed on Company A,
Relation to precedent
Cannot be determined Not in the decision
Decisions referred to
해당 본문 참조
Burden of proof
Not addressed Not in the decision
Open question and revisit condition
What evidence shows that the difficulty of valuing a management premium makes the market price of these shares unclear rather than leaving the published trading prices to fix it?
A later decision on who bears the burden of proving market price in a deemed-computation case would require this entry to be read again, since this decision rejected that argument without allocating the burden. Any amendment to Article 52 of the former Corporate Tax Act, to Article 89 of its Enforcement Decree, or to Article 63 of the former Inheritance and Gift Tax Act would also call for a fresh reading.
Cross-family AI independent reading & axis check
7 of 8 axes matched GPT-6 Astra (OpenAI, codex CLI) · 2026-10-25
A reader from another model family (GPT-6 Astra), given the official text but not the primary reading, agreed on 7 of the 8 axes; the readings differed on axis 8 (open question and revisit condition).
Axis 8 (Open question and revisit condition): Primary “What evidence shows that the difficulty of valuing a management premium makes the market price of these shares unclear rather than leaving the published trading prices to fix it?” vs Independent “What evidence would establish an objectively reliable control premium sufficient to avoid supplementary statutory valuation?”
The primary reading asks whether published trading prices could fix the market price instead of the premium difficulty, while the independent reading asks what evidence would reliably establish the control premium.
양해각서에 따른 거래가격을 위 주식의 객관적인 교환가치를 적정하게 반영한 시가로 볼 수 없고, 위 주식은 경영권 프리미엄 산정의 어려움으로 인하여 시가가 불분명한 경우에 해당하므로, 위 처분이 적법하다고 본 원심판단을 수긍한 사례Raw responses and comparison record: Protocol · Blind readings (JSONL) · Axis comparison (JSONL) · SHA-256 (JSON)
Lower-court contrast & scope of application
Lower-court reading vs. Supreme Court holding
Lower-court context: The Seoul High Court, in its judgment of 20 March 2019 (2018Nu66199), held that the agreed price of KRW 33,531 per share did not appropriately reflect the objective exchange value of 1,500,000 shares of Company Credu, and that the shares fell within the case where the market price was unclear because the management premium could not easily be valued. It therefore treated KRW 37,285 per share, computed on the memorandum date of 26 October 2010, as the market price and upheld the remaining assessment after the partial reduction. It also held that the transfer to related party Samsung SDS at a price below that market price lacked economic rationality.
Supreme Court standard: The Supreme Court held that the appellate findings were sound when set against the provisions, the legal principles and the record. On the first ground it found no error such as a misreading of the law on the burden of proving market price; on the second, no misreading of the law on economic rationality. It dismissed the plaintiff's appeal by the unanimous opinion of the Justices.
Distinguishing conditions
- A memorandum price that does reflect the objective exchange value of the shares, since the Court relied on the finding that this price did not.
- Shares whose market price follows from the published daily closing prices on the Korea Exchange without valuing a management premium.
- A share transfer not made to a party in a special relationship, since Article 52 addresses income reduced unduly by a transaction with such a party.
Record verification notes
Set the memorandum price of KRW 33,531 per share against the reassessed KRW 37,285 per share on the 26 October 2010 valuation date, and against the first assessment of KRW 57,064 per share built on the 22 November 2010 date with a 30 percent major-shareholder uplift. Confirm which statutory versions govern: the Corporate Tax Act and its Enforcement Decree before 30 December 2010 and the Inheritance and Gift Tax Act before 31 December 2011. Since the Court rejected the burden argument without allocating the burden, the file must show what each side offered on price.
From the official text
Points at issue
갑 주식회사가 특수관계에 있는 을 주식회사와 갑 회사가 최대주주인 병 주식회사의 발행주식을 일부를 양도하기로 하는 내용의 양해각서를 체결 후, 그에 따라 위 주식 양도계약을 체결하여 장외거래를 통해 위 주식을 양해각서에 따른 가격에 양도하였는데, 관할 세무서장이 구 법인세법 시행령 제89조 제2항 제2호에 따라 구 상속세 및 증여세법 제63조 제1항, 제3항을 준용하여 계산한 가격을 위 주식의 시가로 평가한 다음, 갑 회사가 위 주식을 시가보다 낮은 가격으로 양도한 것으로 보아 구 법인세법 제52조에 따라 차액을 익금에 산입하여 갑 회사에게 법인세를 경정·고지한 사안에서, 양해각서에 따른 거래가격을 위 주식의 객관적인 교환가치를 적정하게 반영한 시가로 볼 수 없고, 위 주식은 경영권 프리미엄 산정의 어려움으로 인하여 시가가 불분명한 경우에 해당하므로, 위 처분이 적법하다고 본 원심판단을 수긍한 사례
Unofficial English translation
A case in which Company A, a stock company, entered into a memorandum of understanding with Company B, a stock company related to Company A, providing for the transfer of part of the issued shares of Company C, a stock company of which Company A is the largest shareholder, and, in accordance therewith, entered into a share transfer agreement and transferred the said shares over the counter at the price set forth in the memorandum of understanding, whereupon the head of the competent district tax office, applying Article 63 (1) and (3) of the former Inheritance Tax and Gift Tax Act mutatis mutandis pursuant to Article 89 (2) subparagraph 2 of the former Enforcement Decree of the Corporate Tax Act, evaluated the price calculated thereunder as the market value of the said shares, and then, deeming that Company A had transferred the said shares at a price lower than the market value, included the difference in gross income pursuant to Article 52 of the former Corporate Tax Act and revised and imposed corporate tax on Company A; this is a case in which the court below held that the said disposition was lawful, on the ground that the transaction price under the memorandum of understanding cannot be regarded as the market value properly reflecting the objective exchange value of the said shares, and that the said shares fall under a case in which the market value is unclear due to the difficulty of calculating a management premium, and the Supreme Court affirmed that determination of the court below
Summary of the holding
The official text publishes no summary of the holding for this decision. The quotation and factors in this record are copied verbatim from the points at issue; the evidence for each axis is taken from the points at issue, the order and the reasons.
Order
상고를 기각한다. 상고비용은 원고가 부담한다.
Unofficial English translation
The appeal is dismissed. The costs of the appeal are borne by the plaintiff.
Provisions referred to
구 법인세법(2010. 12. 30. 법률 제10423호로 개정되기 전의 것) 제52조 제1항, 제2항, 구 법인세법 시행령(2010. 12. 30. 대통령령 제22577호로 개정되기 전의 것) 제89조 제1항, 제2항 제2호, 구 상속세 및 증여세법(2011. 12. 31. 법률 제11130호로 개정되기 전의 것) 제63조 제1항, 제3항
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.
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