Article 13 (Method of Contribution to Property Invested by Public Interest Corporations)

2. The costs of lawsuit shall be borne by the Plaintiff.

The following facts are not disputed between the parties, or can be acknowledged by comprehensively taking into account the descriptions of Gap evidence 1-2, Gap evidence 3, Eul evidence 4 (the same shall apply to Eul evidence 7), Eul evidence 5, Eul evidence 1-2, Eul evidence 1-2, Eul evidence 3-1 through 4, Eul evidence 4, 5, Eul evidence 6-1, 2, 3, Eul evidence 9, 10, Eul evidence 11-1, 12-1 through 6, Eul evidence 14-1, 2-1, and 14-2, and the whole purport of pleadings:

A. The ○○○○○○○ Electric Industries Co., Ltd. (hereinafter “Nonindicted Company”) was a company engaged in the business of manufacturing military communications equipment, etc. A company established under Article 15, etc. of the Industrial Development Act (amended by Act No. 7092 of Jan. 20, 2004; hereinafter the same shall apply) (hereinafter “the instant association”), which is a corporate restructuring association established under Article 15, etc. of the Industrial Development Act (amended by Act No. 7092 of Jan. 20, 2004), was involved in the capital increase with 3,840,000 won by taking over 5,00 won per share (the total price shall be KRW 19.20,000,000 per share).

B. On September 30, 200 and November 20, 2002, the instant association transferred shares 3,227,696 shares (after face split) owned by the Plaintiff, the representative director of the non-party company, and the director, ○○ (hereinafter referred to as “Plaintiff, etc.”) to the Plaintiff, the director of the non-party company, as of September 30, 200 and the amount equivalent to 604 won per share as indicated below (hereinafter referred to as “each transfer of this case”).

C. From April 30, 2007 to May 18, 2007, the director of the Central District Tax Office conducted a tax investigation of stock change with respect to the non-party company. The employee of the non-party company whose transaction is controlled by the plaintiff et al. through the investment of the association of this case and notified the defendant of the market price of the non-party company (the market price of the non-party company's shares) at the time of transfer by applying the supplementary evaluation method pursuant to Article 63 of the Act, Articles 5 and 19 (2) of the Enforcement Decree of the Act (amended by Presidential Decree No. 17791 of Dec. 5, 2002; hereinafter the same shall apply) and Articles 26 and 19 (2) of the Enforcement Decree of the Act (amended by Presidential Decree No. 17791 of Dec. 5, 202), and by applying the supplementary evaluation method pursuant to Articles 54 to 56 of the Enforcement Decree of the Act.

D. Accordingly, on July 12, 2007, the Defendant calculated the market price at the time of each transfer as indicated below based on the market price of the stocks of the non-party company at each time of the instant case, and calculated the market price at the same time as indicated below, and calculated the amount obtained by subtracting KRW 100 million from the difference with the price as the deemed donation, and imposed each disposition of KRW 188,026,460 on the Plaintiff on September 30, 2002, and KRW 104,557,70 of the gift tax on the ground of the donation made on November 20, 202 (hereinafter “each disposition of this case”).

E. On September 28, 2007, the Plaintiff dissatisfied with each of the instant dispositions, filed an appeal with the National Tax Tribunal on September 28, 2007, but was dismissed on May 19, 2008.

2. Whether each of the dispositions of this case is legitimate

A. The plaintiff's assertion

(1) Article 35(1) of the Act provides that the transferee of the property shall take over the property from a person with a special relationship at a price lower than the market price if it transfers the property to a person with a special relationship at a price higher than the market price (Article 35(1)1 and 2). In light of the fact that the transferor of the property becomes a person with a special relationship (Article 35(1)1 and 2), "a person with a special relationship" under Article 35(1)1 of the Act means a person with a relationship under each subparagraph of Article 19(2) of the Enforcement Decree of the Act with the transferee in the case of a low-price transfer, and a person with a special relationship under each of the above subparagraphs in the case of a high-priced transfer (Article 25(4)1 of the Enforcement Decree of the Act). Thus, in the case of a low-price transfer under Article 35(1)1 of the Act, each of the dispositions of this case on the premise that the plaintiff is a person with a special relationship is unlawful.

(2) The Defendant determined the transferor of the instant shares as the instant association and deemed that the Plaintiff had a special relationship with the instant association. However, the instant association cannot be a party to the contract because it constitutes a partnership under the Civil Act, and thus, the transferor of the instant shares becomes a partner of the instant association and whether both parties to the transaction have a special relationship should be determined based on the association members. However, each of the instant dispositions taken on the premise that the transferor of the instant shares is the instant association

(b) Related statutes;

Article 35 (Presumption of Donation at Time of Transfer of Low Price or High Price)

Article 13 (Method of Contribution to Property Invested by Public Interest Corporations)

Article 19 (Inheritance Deductions of Financial Property)

Article 26 (Scope of Low or High Price Transfer and Related Persons)

Article 15 (Registration, etc. of Corporate Restructuring Association)

Article 13 (Organization Deemed a Juristic Person)

Article 8 (Application, Approval, etc. of Organizations Deemed Corporations)

Article 14 (Special Taxation for Investment in Small and Medium Business Start-Up Investment Company, etc.)

Article 1 (Tax Liability)

C. Determination

(1) As to the first argument

In this case, the plaintiff should determine whether the transferor has a special relationship on the basis of the plaintiff, who is the transferee, and the plaintiff is an officer of the non-party company, who is a juristic person controlled by the association of this case through investment. From the perspective of the non-party association, the non-party association is not a person with a special relationship, and therefore, the plaintiff cannot be deemed a person with a special relationship since it cannot be an employee of the non-party association. Therefore, the plaintiff cannot be deemed a transferee of the self-transfer,

The provision of Article 35(1)1 of the Act provides for a person who has a special relationship with a transferor or transferee (hereinafter referred to as a "transferr, etc.") and an employee (including an officer of a corporation controlled by investment) in relation to the scope of "a person having a special relationship" under Article 35(1)1 and 2 of the Act, in cases where a property is transferred from a person having a special relationship at a price lower than the market price, and Article 35(1)2 of the Act provides for a person who has a relationship with a transferor or transferee (hereinafter referred to as "transferr, etc.") as a person who has a special relationship with an employee (including an officer of a corporation controlled by investment).

In light of the purport of Article 26(4)1, Article 19(2)2, and Article 13(6)2 of the Enforcement Decree of the same Act, the term “special relationship” under Article 35(1)2 of the same Act refers to “a relationship between a transferor, etc. and an employee (including an officer of a corporation controlled by investment),” and it means that a person in such relationship is regarded as a person having a special relationship between the transferor, etc., as alleged by the Plaintiff, and the employer is only a person having a special relationship from the standpoint of the transferee, and the transferee is not deemed a person having a special relationship from the standpoint of the employer.

Therefore, the Plaintiff is an executive officer of the non-party company, who is a juristic person under the control of the instant association through investments, and thus, the Plaintiff and the instant association are related parties. Thus, the instant disposition based on the premise that the Plaintiff had been transferred at a low price from the instant association in a special relationship is legitimate. The Plaintiff’s assertion

(2) On the second argument

(A) The rules of the instant association (hereinafter referred to as the “laws”) stipulate the following (No. 7).

1) Name and location of this association: The name of this association is ○○○○ Corporate Restructuring Association No. 1, and the name of the association is ○○○○○○○○○○○○, Seoul, ○○○○○○○○, a general partner located on the nineth floor of the ○○○○○○○○○○, a corporation (hereinafter referred to as “○○○○○○○ Investment”) has its principal office (Article 2).

2) Qualification and composition of a partner: ① A partner shall be a person who has invested at least one unit in a cooperative (Article 12); ② A partner shall be a general partner (○○○○○ Sable Co., Ltd.; Park Dop) and a partner with limited liability (including individuals, other organizations, and foreign corporations) (Article 13).

3) A decision-making body: ① A decision-making body shall have a general meeting of partners; ② The general meeting shall have a decision-making body; ② The general meeting shall have a decision-making body shall have an important matter concerning the operation of the partnership; ② The general meeting shall be held within 90 days after the end of each business year; the general meeting shall be held when a request is made for convening a general meeting or for convening a majority of the members supervising affairs; and a request is made for convening a general meeting of partners shall be made; ③ Except as otherwise provided in this Code, the resolution of the general meeting of partners shall be subject to the general resolution; the voting rights of the partners shall be one vote for each contribution unit; and the non-united exercise of voting rights shall not

4) An operating agency and representative agency: (1) An executive partner shall, on behalf of the partnership members, manage, operate, and distribute the partnership's assets, select an invested enterprise, invest, etc. in the name of the partnership; and (2) An executive partner shall be the appointed party under Article 49 of the Civil Procedure Act in cases where the partnership performs a judicial act (Article 25).

5) Transfer of the status of a partner: Where a partner who is a juristic person is dissolved for reasons other than merger, a partner may withdraw when he/she is declared dead, incompetent or quasi-incompetent, when he/she is declared bankrupt, when expulsion is made, or when other extenuating circumstances arise; however, the refund of the principal invested at the time of withdrawal is reserved until the dissolution of the cooperative (Article 17, 21). On the other hand, a partner may transfer his/her status with the consent of the general partner and the consent of the partner holding contribution units amounting to at least 2/3 of the total amount of investment (if the equity shares of the partner who intends to dispose of are less than 10/100 of the total amount of investment, only the consent of the general partner is required); a person who newly becomes a partner after acquiring the status of a partner is transferred the status of the partner,

6) Limited liability of general partners: Other partners, excluding general partners, shall be liable only to the extent of their investments and shall not be held liable for the obligations of the present association in excess of the amount of their investments (Article 26).

7) Operation and management of partnership property: ① Operation and management of partnership property shall be the partnership property of the union members; shares of each union members shall be the proportion of the number of contribution units; ② Management of partnership property in the name of the union by separating it from other property than partnership property; keeping records of account books and conducting the re-inspection, etc. in the name of the union; and ③ No union may borrow funds or provide payment guarantee against it as security (Article 30, 31).

(B) Determination

1) Regarding the legal nature of the instant association, the instant association uses the name of the association, the title of the association, the general partner acts for the association members in performing the affairs of the association members, the property of the association shall be joint-ownership; the regulations stipulate that the association shall be the designated party in the event that the association acts in court, thereby denying its party capacity; Article 15(2) of the Industrial Development Act provides that one of the requirements for registration as a corporate restructuring association shall meet the standards prescribed by the Presidential Decree; and Article 15(2) of the Industrial Development Act provides that one of the requirements for registration as a corporate restructuring association shall meet the standards prescribed by the Presidential Decree. In light of the above, there is no room to regard the instant association as a partnership under the Civil Act.

However, in distinguishing between a partnership and a non-corporate body without a legal personality under the Civil Act, it should be determined on the basis of the strongness of its organization. Since the association is established under a contractual relationship with which two or more persons agree to operate a joint business by investing money, other property, or labor among themselves, it is subject to restrictions from group nature, but the personal identity of its members is sufficiently revealed, the non-corporate body has a characteristic of organization as an independent entity that can be the subject of rights and obligations separate from the personal identity of its members (see Supreme Court Decision 9Da4504 delivered on April 23, 199). In full view of the above facts, the association of this case has its own proper purpose, establishing rules with the nature of an association, have organization such as establishing a general meeting of members and a representative (executive member) who is a decision-making body, and the association has a method of resolution or execution of its affairs, and it has a method of management and withdrawal of the company's own corporate personality as a representative of the above company and other associations, regardless of its major shareholder.

The plaintiff argues that the corporate restructuring association's non-corporate restructuring association's non-corporate restructuring association's non-corporate group falls under Article 13 (1) 1 of the Framework Act on National Taxes (amended by Act No. 6782 of Dec. 18, 2002; hereinafter the same shall apply) and as a result, Article 14 (1) 5 of the Restriction of Special Taxation Act (amended by Act No. 6762 of Dec. 11, 2002) provides that the corporate restructuring association's non-corporate restructuring association's non-corporate income tax is a non-corporate association's non-corporate restructuring association's non-corporate association's non-corporate entity. However, Article 1 (1), 2, and (3) of the Income Tax Act (amended by Act No. 6781 of Dec. 28, 2002); Article 13 (1) and (2) of the Framework Act on National Taxes (amended by Presidential Decree No. 17830 of Dec. 17, 2002).18).

2) Therefore, in determining whether a person has a special relationship under Article 35 (1) 1 of the Act, it shall not be determined on the basis of the relationship with the Plaintiff, as alleged by the Plaintiff, based on the relationship with the Plaintiff.

On the other hand, the Plaintiff was the representative director of the non-party company who invested more than 50% of the total shares at the time of each transfer of this case, and thus, the Plaintiff and the association of this case had a special relationship under Articles 26(4)1 and 19(2)2 of the Enforcement Decree of the Act at each time of transfer of this case. The Plaintiff’s assertion on this part is without merit

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit. It is so decided as per Disposition.