Cancellation of KRW 26.5 billion of Capital Gains Tax with respect to the Transfer of Newly Issued Shares Following a Reverse IPO

Regarding the transfer of the right to purchase newly issued shares that have increased in value after a reverse IPO, the tax authority took issue with whether such transfer of purchase rights should be treated as a deemed gift for the transferee.  Upon Lee & Ko’s persuasive argument as to how such transfer was justifiable under the conventional business practice in the relevant industry, the taxpayer prevailed on all issues at the Tax Tribunal.