Open Decision Ledger · Tax & international taxation
Simultaneous cross-shareholding and non-income-generating assets
Supreme Court, June 24, 2026, 2024Du34641 (judgment)
Case name: 법인세부과처분및소득금액변동통지처분취소
Official text on the National Law Information Center
Question
Does Article 342-2(1) of the Commercial Act invalidate a subsidiary's acquisition of its parent's shares where the two companies acquire each other's shares at the same time so that the parent-subsidiary relationship is formed by both acquisitions at once, and what does 'non-income-generating asset' mean under Article 88(1)(ii) of the Enforcement Decree of the former Corporate Tax Act?
Holding
Article 342-2(1) of the Commercial Act, introduced to prevent the harm of mutual shareholding, makes a subsidiary's acquisition of its parent's shares void as of right. But the provision defines parent status by the number of shares held, presupposes an acquisition made after the relationship has formed, and is backed by criminal penalty, so it prohibits acquisitions only between companies already in a parent-subsidiary relationship; a simultaneous cross-acquisition that forms the relationship is not caught by it. A 'non-income-generating asset' under Article 88(1)(ii) of the Enforcement Decree of the former Corporate Tax Act is an asset that does not contribute to the corporation's earning of income or is unrelated to it, and whose chance of yielding income through its management in the future is slight.
Summary of the holding, verbatim
특정 회사의 모회사로 될 다른 회사 주식의 취득과 다른 회사의 특정 회사 주식 취득에 의한 모자회사 관계 형성이 동시에 이루어진 경우에 대해서까지 상법 제342조의2 제1항이 적용된다고 볼 수는 없다.
Unofficial English translation
It cannot be regarded that paragraph (1) of Article 342-2 of the Commercial Act applies even to cases in which the acquisition of shares of another company that is to become the parent company of a specific company and the formation of a parent-subsidiary relationship through another company's acquisition of shares in the specific company occur simultaneously.
Disposition
Dismissed Stated in the decision
상고를 모두 기각한다. 상고비용은 피고들이 부담한다.
Unofficial English translation
All appeals are dismissed. The appeal costs shall be borne by the defendants.
Form of the test
Elements stated Stated in the decision
‘무수익 자산’이란 법인의 수익파생에 공헌하지 못하거나 법인의 수익과 관련이 없는 자산으로서 장래에도 그 자산의 운용으로 수익을 얻을 가능성이 희박한 자산을 말한다.
Unofficial English translation
The term "non-income-producing asset" means an asset that fails to contribute to the generation of the corporation's income or is unrelated to the corporation's income, and for which there is little possibility of obtaining income from the operation of such asset in the future.
Factors
- 주식의 상호보유로 인한 부작용을 방지하기 위하여 도입된 규정으로서
- 이미 모자회사 관계가 형성되어 있는 회사들 사이에서만
- 그 위반행위는 형사처벌의 대상이 되므로
- ‘무수익 자산’이란 법인의 수익파생에 공헌하지 못하거나
- 장래에도 그 자산의 운용으로 수익을 얻을 가능성이 희박한 자산을 말한다
Unofficial English translation
• as a provision introduced to prevent the adverse effects arising from mutual shareholdings,
• only among companies where a parent-subsidiary relationship has already been formed,
• since the violation thereof is subject to criminal punishment,
• a "non-income-producing asset" means an asset that fails to contribute to the generation of the corporation's income or
• means an asset for which there is little possibility of obtaining income from the operation of such asset in the future
Relation to precedent
Follows earlier decisions Stated in the decision
대법원 2000. 11. 10. 선고 98두12055 판결(공2001상, 58), 대법원 2023. 4. 27. 선고 2023두31263 판결
Unofficial English translation
Supreme Court Decision 98Du12055 decided November 10, 2000 (Gong 2001 Sang, 58), Supreme Court Decision 2023Du31263 decided April 27, 2023
Decisions referred to
[1] 대법원 2003. 5. 16. 선고 2001다44109 판결(공2003상, 1309) / [2] 대법원 2000. 11. 10. 선고 98두12055 판결(공2001상, 58), 대법원 2023. 4. 27. 선고 2023두31263 판결
Burden of proof
Not addressed Not in the decision
Open question and revisit condition
Does the same analysis apply where one company's acquisition of the other's shares is linked to the other's acquisition but neither acquisition is made in a single transaction, and the courts must decide which acquisition formed the relationship?
Any amendment to Article 342-2 or Article 625-2 of the Commercial Act, or a later decision holding that a cross-acquisition completed at different times does fall within the provision, would require this entry to be read again. So would a change to Article 88(1)(ii) of the Enforcement Decree of the former Corporate Tax Act.
Cross-family AI independent reading & axis check
6 of 8 axes matched GPT-6 Astra (OpenAI, codex CLI) · 2026-10-24
A reader from another model family (GPT-6 Astra), given the official text but not the primary reading, agreed on 6 of the 8 axes; the readings differed on axis 2 (holding), axis 8 (open question and revisit condition).
Axis 2 (Holding): Primary “Article 342-2(1) of the Commercial Act, introduced to prevent the harm of mutual shareholding, makes a subsidiary's acquisition of its parent's shares void as of right. But the provision defines parent status by the number of shares held, presupposes an acquisition made after the relationship has formed, and is backed by criminal penalty, so it prohibits acquisitions only between companies already in a parent-subsidiary relationship; a simultaneous cross-acquisition that forms the relationship is not caught by it. A 'non-income-generating asset' under Article 88(1)(ii) of the Enforcement Decree of the former Corporate Tax Act is an asset that does not contribute to the corporation's earning of income or is unrelated to it, and whose chance of yielding income through its management in the future is slight.” vs Independent “An acquisition violating the prohibition is void, but the prohibition applies only to an already existing parent-subsidiary relationship, not one formed simultaneously with the acquisition. A non-income-producing asset either fails to contribute to or is unrelated to corporate income and has little prospect of generating income through future use.”
Both agree on the share-acquisition rule, but the independent English answer makes lack of income contribution and lack of income relation cumulative rather than alternative conditions, although its Korean answer matches the primary reading.
특정 회사의 모회사로 될 다른 회사 주식의 취득과 다른 회사의 특정 회사 주식 취득에 의한 모자회사 관계 형성이 동시에 이루어진 경우에 대해서까지 상법 제342조의2 제1항이 적용된다고 볼 수는 없다.Axis 8 (Open question and revisit condition): Primary “Does the same analysis apply where one company's acquisition of the other's shares is linked to the other's acquisition but neither acquisition is made in a single transaction, and the courts must decide which acquisition formed the relationship?” vs Independent “What evidence establishes that an asset has little prospect of generating income through future use?”
The primary reading asks about linked acquisitions occurring in separate transactions, while the independent reading asks how to prove low prospects of future asset income.
특정 회사의 모회사로 될 다른 회사 주식의 취득과 다른 회사의 특정 회사 주식 취득에 의한 모자회사 관계 형성이 동시에 이루어진 경우에 대해서까지 상법 제342조의2 제1항이 적용된다고 볼 수는 없다.Raw 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 16 January 2024 (2023Nu42456), held that the plaintiff and a steel company, referred to as the outsider company, had each acquired the other's shares at the same time, so that the plaintiff's acquisition did not contravene Article 342-2(1) of the Commercial Act. On the tax side it held that the acquisition was not void in civil law and that the outsider company's financial condition gave it enterprise value, so the shares were not a non-income-generating asset, and that the purchase price was proper consideration under the contract rather than money lent without connection with business, so it was not an unrelated advance.
Supreme Court standard: The Supreme Court found no error. On the first ground it held that the court below had not misread the meaning of Article 342-2(1), since the provision bars only acquisitions between companies already in a parent-subsidiary relationship and does not reach a cross-acquisition that forms the relationship at the same time. On the third ground it held that the meaning of a non-income-generating asset had not been misread and the necessary fact-finding had been done. It held the second ground to be no more than an attack on fact-finding and evidence selection, which is not a legitimate ground of appeal, and on the fourth ground it held that the court below had not misread the law on unrelated advances, dismissing all the defendants' appeals on the unanimous opinion of the participating Justices.
Distinguishing conditions
- A case in which one company already holds more than half of the other's issued shares before it acquires the other's shares, so that the acquisition falls on companies already in a parent-subsidiary relationship.
- An acquisition falling within an exception such as a comprehensive share exchange, share transfer, merger or purchase of all of another company's business, or one necessary to execute the company's rights, followed by a disposal within six months.
- A share holding whose operation may still yield income in the future, since the definition of a non-income-generating asset requires that chance to be slight.
Record verification notes
Build a dated timeline of who acquired whose shares and at what percentage, since the rule turns on whether the relationship already existed when the acquisition was made. Then value the shares against the definition of a non-income-generating asset, looking at whether they can contribute to income and what the chance of income from managing them is, and check which version of the Corporate Tax Act and its Enforcement Decree applied.
From the official text
Points at issue
[1] 상법 제342조의2 제1항을 위반하여 자회사가 모회사의 주식을 취득하는 것이 당연히 무효인지 여부(적극) 및 위 규정은 이미 모자회사 관계가 형성되어 있는 회사들 사이에서만 적용되는지 여부(적극) / 특정 회사의 모회사로 될 다른 회사 주식의 취득과 다른 회사의 특정 회사 주식 취득에 의한 모자회사 관계 형성이 동시에 이루어진 경우, 위 규정이 적용되는지 여부(소극) [2] 부당행위계산의 유형을 정하고 있는 구 법인세법 시행령 제88조 제1항 제2호의 ‘무수익 자산’의 의미
Unofficial English translation
[1] Whether a subsidiary's acquisition of shares of its parent company in violation of paragraph (1) of Article 342-2 of the Commercial Act is automatically void (affirmative), and whether the said provision applies only among companies where a parent-subsidiary relationship has already been formed (affirmative) / Whether the said provision applies where the acquisition of shares of another company that is to become the parent company of a specific company and the formation of a parent-subsidiary relationship through another company's acquisition of shares in the specific company occur simultaneously (negative) [2] The meaning of "non-income-producing asset" in subparagraph 2 of paragraph (1) of Article 88 of the former Enforcement Decree of the Corporate Tax Act, which prescribes the types of unfair computation of income
Summary of the holding
[1] 상법 제342조의2 제1항, 제2항, 제625조의2 제1호의 문언과 취지, 내용, 전체적인 체계를 종합적으로 고려하면, 상법 제342조의2 제1항은 주식의 상호보유로 인한 부작용을 방지하기 위하여 도입된 규정으로서, 상법 제342조의2 제1항을 위반하여 자회사가 모회사의 주식을 취득하는 것은 당연히 무효이다. 다만 상법 제342조의2 제1항은 그 법문 자체로 모회사에 해당하는지를 소유주식의 수를 기준으로 하면서, 모자회사 관계가 형성된 후에 자회사에 의한 모회사 주식의 취득을 상정하고 있고, 그 위반행위는 형사처벌의 대상이 되므로, 이미 모자회사 관계가 형성되어 있는 회사들 사이에서만 자회사가 모회사 주식을 취득하는 것을 금지하는 규정이라고 보아야 한다. 따라서 특정 회사가 다른 회사의 주식을 취득한 시점에 다른 회사도 그 회사의 주식 50%를 초과하여 취득함으로써, 특정 회사의 모회사로 될 다른 회사 주식의 취득과 다른 회사의 특정 회사 주식 취득에 의한 모자회사 관계 형성이 동시에 이루어진 경우에 대해서까지 상법 제342조의2 제1항이 적용된다고 볼 수는 없다. [2] 구 법인세법(2018. 12. 24. 법률 제16008호로 개정되기 전의 것) 제52조 제4항의 위임에 따라 부당행위계산의 유형을 정하고 있는 구 법인세법 시행령(2019. 2. 12. 대통령령 제29529호로 개정되기 전의 것) 제88조 제1항 제2호의 ‘무수익 자산’이란 법인의 수익파생에 공헌하지 못하거나 법인의 수익과 관련이 없는 자산으로서 장래에도 그 자산의 운용으로 수익을 얻을 가능성이 희박한 자산을 말한다.
Order
상고를 모두 기각한다. 상고비용은 피고들이 부담한다.
Unofficial English translation
All appeals are dismissed. The appeal costs shall be borne by the defendants.
Provisions referred to
[1] 상법 제342조의2 제1항, 제2항, 제625조의2 제1호 / [2] 구 법인세법(2018. 12. 24. 법률 제16008호로 개정되기 전의 것) 제52조 제4항, 구 법인세법 시행령(2019. 2. 12. 대통령령 제29529호로 개정되기 전의 것) 제88조 제1항 제2호
Read 2026-10-24 · Cross-read 2026-10-24. 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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