(1) Where a merged corporation is dissolved in the course of a merger, the assets of the merged corporation shall be deemed transferred to a surviving corporation. In such cases, capital gains or losses accruing from the transfer (referring to the amount calculated by deducting the value referred to in subparagraph 2 from the value referred to in subparagraph 1; hereafter in this Article and Article 44-3, the same shall apply) shall be included in the gross income or deductible expenses when the merged corporation calculates the amount of income for the business year in which the registration date of the merger falls:
1. Transfer value that the merged corporation has received from the surviving corporation;
2. Value calculated by deducting the total book value of liabilities from the total book value of assets (hereafter in this Sub-section, referred to as "net book value of assets") as of the registration date of the merger of the merged corporation.
(2) In applying paragraph (1), for a merger that meets each of the following requirements (hereinafter referred to as "qualified merger"), capital gains or losses on a transfer may be deemed nil, considering the value referred to in paragraph (1) 1 as the net book value of assets as of the registration date of the merger of the merged corporation; provided, capital gains or losses on a transfer may be nil, as prescribed by Presidential Decree, deeming it as a qualified merger, although the requirements prescribed in subparagraph 2, 3 or 4 are not met, in inevitable circumstances prescribed by Presidential Decree: <Amended on Dec. 31, 2011; Dec. 19, 2017; Dec. 24, 2018; Dec. 21, 2021>
1. A merger should be conducted between domestic corporations which have continued to operate their business for at least one year as on the registration date of the merger; provided, a corporation prescribed by Presidential Decree, the sole purpose of which is to merge with other corporations shall be deemed to meet the requirements prescribed in the main clause;
2. Where the value of the stocks, etc., of a surviving corporation or the parent corporation (referring to a domestic corporation holding the total number of outstanding stocks or total investment amount of a surviving corporation as at the registration date of the merger) of the surviving corporation is at least 80/100 of the total costs of the merger received by the stockholders, etc., of a merged corporation in return for such merger; the stocks, etc., shall be distributed, as prescribed by Presidential Decree; and the stockholders, etc., of the merged corporation prescribed by Presidential Decree hold such stocks, etc., until the last day of the business year in which the registration date of the merger falls;
3. The merging corporation shall continue the business succeeded from the merged corporation until the end of the business year in which the merger is registered; provided, a merged corporation prescribed by Presidential Decree, the sole purpose of which is to merge with another corporation, shall be deemed to meet the requirements prescribed in the main clause;
4. Where the ratio of employees transferred to the surviving corporation to the employees specified by Presidential Decree, among employees of the merged corporation as at one month before the date of registration of the merger, is at least 80/100 and the ratio remains unchanged until the end of the business year in which the merger is registered.
(3) In either of the following cases, capital gains or losses on a transfer may be nil, deeming it as a qualified merger, notwithstanding paragraph (2): <Amended on Dec. 31, 2011; Dec. 20, 2016; Dec. 24, 2018>
1. Where a domestic corporation merges with or is merged into another corporation which holds the total number of outstanding stocks or the total amount of investment;
2. Where corporations whose total number of outstanding stocks or total amount of investment is held by the same domestic corporation are merged with each other.
(4) Matters necessary for calculating the transfer value, the net book value of assets, and the total costs of a merger; and criteria for determining the continuance or discontinuance of the business succeeded under paragraphs 1 through 3 shall be prescribed by Presidential Decree.[This Article Wholly Amended on Dec. 30, 2010]