Article 27 (Calculation of Deemed Dividends)

In the case of deemed dividends under the respective sub-paragraphs of Article 17 (2) of the Act, the value of assets other than money shall be determined according to the amounts calculated in accordance with the following classifications. <Amended by Act No. 11000, Dec. 29, 2000; Act No. 12377, Feb. 19, 2005; Act No. 10359, Jun. 8, 2010; Act No. 13951, Feb. 17, 2016> 1. Where the acquired assets are shares or equity interests (hereinafter referred to as "shares, etc." in this Article), the amount falling under any of the following items: a. In the case of shares, etc. pursuant to Article 17 (2) 2. and 5. of the Act, the face value or the investment amount. b. In the case of shares, etc. under Article 17 (2) 4. or 6. of the Act, where the requirements under Article 44 (2) 1. and 2. (excluding the portion related to the holding of shares, etc.) or Article 46 (2) 1. and 2. (excluding the portion related to the holding of shares, etc.) of the 「Corporate Tax Act」 are met, or where Article 44 (3) of the 「Corporate Tax Act」 applies, the acquisition cost of the shares, etc. of the merged corporation, split corporation, or the counterparty to the merged split corporation that ceased to exist (hereinafter referred to as "merged corporation, etc." in this item). Provided that, where shares, etc. under Article 17 (2) 4. or 6. of the Act are received along with money and other assets due to merger or split, if the market value of such shares, etc. is less than the acquisition cost of the shares, etc. of the merged corporation, etc., the market value shall apply. c. In the case of stock dividends pursuant to Article 462-2 of the 「Commercial Act」, the issue price. d. In the case of shares, etc. not falling under items a. through c., the market value at the time of acquisition. 2. In cases other than sub-paragraph 1, the market value of the asset at the time of acquisition.

For the calculation of the total amount of deemed dividends from capital reduction or share redemption (including reduction of investment or redemption of equity interests. Hereinafter referred to as "share redemption, etc." in this paragraph) pursuant to Article 17 (2) 1. of the Act, if there are shares, etc. acquired within two years prior to the date of deemed dividend due to the capitalization of capital reserves, which are not regarded as deemed dividends pursuant to the proviso to Article 17 (2) 2. of the Act (excluding shares issued due to the capitalization of the excess over the face value of shares issued pursuant to the main sentence of Article 17 (1) 1. of the 「Corporate Tax Act」, and hereinafter referred to as "short-term redeemed shares, etc." in this paragraph), such short-term redeemed shares, etc. shall be deemed to have been reduced or redeemed first, and the acquisition cost of such short-term redeemed shares, etc. shall be disregarded, notwithstanding Article 2. If a portion of shares, etc. is transferred during the period from the acquisition of short-term redeemed shares, etc. to the date of deemed dividend, the transfer shall be deemed to be from short-term redeemed shares, etc. and other shares, etc. in proportion to the number of shares, etc., and the book value per share or per unit after share redemption, etc. shall be calculated using the following formula. <Amended by Act No. 11675, Feb. 15, 2013> ┌────────────────────────────┐ │ Book Value Per Share or Unit = │ Total Acquisition Cost After Share Redemption, etc. / Total Number of Shares, etc. After Share Redemption, etc. │ └────────────────────────────┘

In applying Article 17 (2) 2. b. of the Act, when a portion of revaluation reserves is transferred to capital or investment, the amount corresponding to the revaluation difference of land pursuant to Article 13 (1) 1. of the 「Asset Revaluation Act」 shall be calculated using the following formula. <Newly Added by Act No. 10674, Dec. 31, 1999; Amended by Act No. 12377, Feb. 19, 2005> ┌───────────────────────────────┐ │ Amount of Revaluation Reserves Transferred to Current Capital or Investment │ × (Revaluation Difference Pursuant to Article 13 (1) 1. of the 「Asset Revaluation Act」 / Revaluation Difference of Assets) │ └───────────────────────────────┘

When calculating the amount incurred to acquire the shares pursuant to Article 17 (2) 1., 3., 4., and 6. of the Act, if a shareholder falls under the category of small shareholders prescribed by the Minister of Economy and Finance considering the ratio of owned shares, etc., and the number of shareholders holding such shares is large or the calculation of the amount incurred to acquire such shares is unclear due to frequent trading of such shares, etc., the face value shall be deemed the amount incurred for the acquisition of such shares. Provided that, this shall not apply when paragraph 3 is applicable, or when the shareholder proves a value other than the face value. <Newly Added by Act No. 11000, Dec. 29, 2000; Amended by Act No. 10168, Feb. 18, 2010; Act No. 17938, Feb. 17, 2021; Act No. 19773, Dec. 30, 2025>