Supreme Court upholds inheritance tax valuation rules

The Supreme Court said a presidential decree provision used to calculate inheritance and gift tax liabilities is valid and does not overstep legislative authority. The ruling, delivered April 2 in case 2025Du35499, dismissed a challenge against the assessment of property values.

The case centered on whether Article 49, Paragraph 1 of the former Enforcement Decree of the Inheritance and Gift Tax Act exceeded the scope delegated by Article 60 of the parent law. The court found the decree remains within the legislative discretion granted to address changing socioeconomic conditions fairly. The justices reasoned that the legislature intended to allow flexible responses to economic shifts while ensuring fair calculation of taxable 'market price.'

In its decision, the high court defined property evaluation as calculating the monetary value of assets based on a specific point in time. It reiterated that the former tax act mandates using market price, understood as an objective exchange price established among an unspecified number of people, as the primary standard for taxation. The court noted that the enforcement decree provides representative examples of situations that qualify as market value rather than creating an exhaustive list.

Specifically, the bench upheld the proviso in Article 49, Paragraph 1, which allows transaction prices from outside the standard evaluation period to be used as the taxable value if they reflect objective exchange value. The court concluded this clause concretizes requirements for fair valuation and does not constitute an invalid regulation beyond the scope of the parent law's delegation.