Sustainability 2017, 9(9), 1523; doi:10.3390/su9091523
Taxpayer’s Perception to Tax Payment in Kind System in Support of SMEs’ Sustainability: Case of the South Korean Government’s Valuation of Unlisted Stocks
1
School of Business, Dongguk University (Seoul), 30, Pildong-ro 1-gil, Jung-gu, 04620 Seoul, Korea
2
Department of Business Administration, Seoul National University of Science and Technology, 232 Kongneung-ro, Nowon-gu, 01811 Seoul, Korea
*
Author to whom correspondence should be addressed.
Received: 4 August 2017 / Revised: 19 August 2017 / Accepted: 24 August 2017 / Published: 26 August 2017
(This article belongs to the Special Issue Sustainability in SMEs)
Abstract
In Korea, unlisted stock shares are accepted as payment for inheritance tax. In the case of insufficient cash, a taxpayer can pay the government with listed or unlisted stocks (hereinafter referred to as “tax payment in kind”). The drawback of this tax payment system is that receiving tax paid with stocks is subject to the valuation of the government and selling the stocks to an open market requires another valuation. The results of these two valuations show considerable differences, and, therefore, the selling price in the open market is very low. This study analyzes how taxpayers recognize the differences in the valuation results of these unlisted stocks and how the differences affect the pricing for repurchasing the stocks from the open market. Results show that high valuation of unlisted stocks in tax payment in kind drives buyers to lower the purchasing price in the open market. This finding implies a problem in the government’s valuation method of unlisted stocks collected as tax. View Full-TextKeywords:
SMEs sustainability; tax practitioner’s advice; unlisted stock; stock valuation; tax payment in kind
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Kim, K.; Yoon, S. Taxpayer’s Perception to Tax Payment in Kind System in Support of SMEs’ Sustainability: Case of the South Korean Government’s Valuation of Unlisted Stocks. Sustainability 2017, 9, 1523.
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