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Taxation issue with transfering, receiving for the particular stock
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2018-04-12
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            Taxation issue with transfering,receiving for the particular stock

 

                                                                            10th April 2018

                                                                             Written byJu Sik, Kim

                                                                             Translatedby Eun Kyung, Park

 

1. Outline

Shareholder of corporation AA try totransfer stocks of AA Co., as of Nov 2017.

Let me find out the issue for it.

 

2. AA corporation’s Status(as of Oct 2017)

 (1)Assets in the statement of financial position.

Asset

Debt and capital

1. liquid asset

1. liquid debt

(1) quick asset

500,000,000

(1) advances received

510,000,000

(2) short term debt

845,243,198

Total debt

1,355,243,198

capital

(2) inventory

900,000,000

1. capital

50,000,000

2. deficiencies

5,243,198

Total capital

44,756,802

Total asset

1400,000,000

Total debt and capital

1,400,000,000

 

(2) Stock status

 1)Issued stock number: 10,000

 2)Amount per one stock: 5000 KRW

 3)Shareholder status : one shareholder retain 100%

(3) Estimated amount per one stock

-30/Sept/2017: 4,400 KRW

(4) Amount to sell

-uncertain

 

3. Case review

 (1)Particular stock

  Real estate amount ratio

  • Real estate, building, landfrom total asset is 50/100 corporation

Stock’s possessionratio

  • One shareholder and affiliateparty from corporation total stock is 50/100

Transfering ofstocks’ ratio

One shareholderor other shareholder who has above two conditions has to transfer 50/100 overform total.

 (2) Transfering tax rate rate for theparticular stock

    Progressive tax rate is applied

 (3) Whether construction land is belong to thenon business land.

  “farm”

Farm in the cityarea is classified as non business land in the metropolitan city, megaopolis,etc.

Forests andfileds

Forests andfield in the outside of forests protection are classified as non business land.

Specialoccasion

 

(4) Conclusion

AA corporation: progressive tax rate isapplied.

If the land is not under construction it isregarded as non business land and 10% tax will be applied additionally.

If it is under construction it is regardedas business purpose land for the period from acquisition date to 2 years.

Retain period of possession of businesspurpose land from the total retain should be considered.

 

4. Related law

 (1)Income tax law94

(2) Income taxlaw 104

(3) Corporationtax law 55-2 etc   

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