Evaluation of Goodwill in Tax Law by Merger : Review on Seoul High Court 04.03.2015 Pronouncement 2014Nu56545 Adjudication

In this rapidly changing modern capitalism society, it is essential for companies to pursue their efficiency by restructuring like merger and etc.. In this business combinations like merger, intangible assets like goodwill which is unidentifiable necessarily appear. Whereas goodwill between companies to be merged is naturally recognized according to accounting rules, there are many cases that these goodwill is not approved according to tax law. Because, in accordance with tax law, goodwill is only approved in case that specific requirements are met. In particular, there are many cases that goodwill estimated by accounting is not approved by tax law. However, this is presumed to be misjudgement which comes from inaccurately understanding on the nature of goodwill by accounting or how they come out. Therefore, in this research, we will focus on Seoul Administrative Court(Seoul Administrative Court 06.27.2014. Pronouncement 2013Gu/Hap 58344 Adjudication) and Seoul High Court(Seoul High Court 04.03.2015. Pronouncement 2014Nu56545 Adjudication) to find out whether goodwill which comes out during accounting process between listed companies can be approved by tax law. In particular, most judicial precedents have shown decision only on goodwill which came out due to merger between in unlisted companies and it seems to be the first decision on goodwill which come out due to merger between listed companies.