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red_flag_2(영문) 서울행정법원 2018. 6. 15. 선고 2017구합75897 판결

[증여세부과처분취소][미간행]

Plaintiff

[Defendant-Appellee] Plaintiff (Law Firm Lee & Lee, Counsel for defendant-appellee)

Defendant

Samsung Head of Samsung Tax Office

May 11, 2018

Text

1. The plaintiff's claim is dismissed.

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

The Defendant’s imposition of KRW 1,057,866,750 (including additional tax) on the Plaintiff on January 14, 2015 shall be revoked.

Reasons

1. Details of the disposition;

A. The plaintiff's subscription and conversion of convertible bonds

1) On February 6, 2012, the Plaintiff concluded a contract with Nonparty 1 and Nonparty 1, the largest shareholder, to purchase 3,500,000 shares of the non-party company owned by the non-party 1, together with the management right for the non-party company at KRW 5.8 billion. On February 10, 2012, the Plaintiff agreed to pay the down payment out of the purchase price and deliver documents necessary for the share certificates and the transfer of ownership.

2) On February 6, 2012, the Plaintiff entered into a contract with Nonparty Company and Nonparty Company to acquire KRW 1,99,99,700 of the shares issued as capital increase with capital increase (hereinafter “instant new shares”) and KRW 4.4 billion of the convertible bonds issued by Nonparty Company (hereinafter “instant convertible bonds”). On February 9, 2012, the details of the issuance and capital increase with respect to the instant convertible bonds are as follows: (a) the conversion price of the instant convertible bonds is calculated based on the Financial Investment Services and Capital Markets Act and the provisions on the issuance and public disclosure of securities, etc.

Table 1> Details of issuance of convertible bonds

5% of the acquisition price of the total face value of the coupon on February 9, 2014 (from February 9, 2013 to January 9, 2014), 4,400,000,000 won for Plaintiff 270,000,000 won for Nonparty 2170,000,000 won for Nonparty 390,000,000 won for Nonparty 44,00,000,000,000 won for Nonparty 5, in total, 5,330,000,000 won for Nonparty 5,30,000,000 won for Nonparty 44,00,000,000 won for Nonparty 5.

Table 2> Details of issuance of capital increase issued

Non-party 638,99,970 won, non-party 2415,254,99,860 won, non-party 3299,99,970 won, non-party 3293,99,970 won, non-party 3293,99,99,970 won, non-party 3293,99,970 won, non-party 4138,983,99,99,99,80 won, non-party 4138,983,99,99,970 won, totaling KRW 4,576,270 won, 269,99,99,99,800 won

3) In accordance with each of the above contracts, on February 9, 2012, the Plaintiff paid to Nonparty Company the subscription price for shares issued with capital increase and the subscription price for the instant convertible bonds, and paid the down payment to Nonparty 1 on February 10, 2012, thereby becoming the largest shareholder who owned 28.06% of the total number of Non-Party Company’s issued stocks as stated in Table 3, and on March 16, 2012, the Plaintiff was appointed as the representative director of Non-Party Company.

Table 3: Details of acquisition of the Plaintiff’s shares

Purchase of shares from Nonparty 7, 200, 28.06% of the shares acquired on February 3, 2012, 2012, due to changes in the Plaintiff’s total equity ratio in the number of shares acquired on February 3, 2012, 13.80% of shares issued by a third party;

4) On February 13, 2013, the Plaintiff converted the instant convertible bonds into 5,648,267 shares of the non-party company (hereinafter “instant shares”). At the time of conversion, the value of the instant shares was KRW 1,190 per share.

B. Defendant’s taxation disposition

1) From September 23, 2014 to November 24, 2014, the director of the Central Regional Tax Office: (a) calculated the tax data on the non-party company as the value of donated property and notified the Defendant of the assessment data based on Article 42(1)3 of the former Inheritance Tax and Gift Tax Act (amended by Act No. 13557, Dec. 15, 2015; hereinafter the same) based on Article 42(1)3 of the same Act (amended by Act No. 13557, Dec. 15, 2015; hereinafter the same) as at the time of exercising the conversion right; (b) KRW 1,190 per share, which is the value of the instant stocks at the time of exercising the conversion right; and (c) KRW 2,321,437,737 per share, which is the value of the said stocks at the time of exercising the conversion right.

2) Accordingly, on January 14, 2015, the Defendant imposed a gift tax of KRW 1,057,866,750 (including additional tax) on the Plaintiff for the year 2013 (hereinafter “instant disposition”).

[Reasons for Recognition] Facts without any dispute, Gap's 1, 4 through 7, Eul's 1 through 4, the purport of the whole pleadings and arguments

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

1) The Plaintiff acquired the instant convertible bonds issued by a non-party company, which was not a specially related person, on the ground that the terms and conditions of issuance, such as the conversion price of the instant convertible bonds, were appropriately determined in accordance with the relevant Acts and subordinate statutes at the time of issuance. Therefore, even if the Plaintiff obtained profits from the conversion of the instant convertible bonds, it cannot be deemed that the Plaintiff received assets without compensation without significantly low prices or consideration, and it is unreasonable to impose gift tax on the basis of the fact that

2) Article 40 of the former Inheritance Tax and Gift Tax Act that provides for the method of calculating profits from the conversion of convertible bonds, etc. into stocks only provides for the case where convertible bonds, etc. are acquired from a specially related person. As such, profits derived from the conversion of convertible bonds of this case are not subject to regulation under Article 40 of the aforementioned Act. Article 42 of the former Inheritance Tax and Gift Tax Act provides that a type of comprehensive principle introduced to levy gift tax on an irregular act. As such, transactions not falling under a modified or circumventive gift among the types of transactions not provided for in Article 40, which are individual example provisions, may not be taxed based on Article 42 of the aforementioned Act.

3) Article 42(3) of the former Inheritance Tax and Gift Tax Act excludes the application of Article 42(1) of the same Act where a transactional transactional practice is deemed to exist between persons who are not a specially related person. Determination as to whether a specially related person was a specially related person should be based on the time of acquiring convertible bonds. The Plaintiff was not a specially related person by holding less than 30% of the shares of the non-party company at the time of the conversion of the instant convertible bonds as well as at the time of the conversion of the instant convertible bonds, and as seen in the foregoing Section 1, profits from the conversion of the instant convertible

(b) Related statutes;

The entries in the attached Table shall be as specified in the relevant statutes.

C. Determination

1) Whether the Plaintiff’s profit is subject to gift tax

A) Article 2(3) of the former Inheritance Tax and Gift Tax Act provides that “donation” shall be deemed to have been transferred without compensation to another person, or transferred at a significantly low price, or increased another person’s property value by means of a direct or indirect method, in which economic value can be calculated without relation to the name, form, purpose, etc. of the donation. Article 42(1)3 of the same Act and Article 31-9(1)4 of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act (amended by Presidential Decree No. 24576, Jun. 11, 2013; hereinafter the same) shall be deemed to have been donated where the amount obtained by subtracting the value of conversion from the value of stocks at the time of conversion exceeds KRW 100 million.”

B) Articles 32 through 42 of the Inheritance Tax and Gift Tax Act amended by Act No. 5193 of Dec. 30, 1996 puts a provision on the donation as a donation, although there is a little distance from the donation under the Civil Act, the type of donation accompanied by the gratuitous transfer of economic benefits. However, the above provision on the deemed donation has limitations in blocking the transfer of property without proper tax burden due to the lack of gift tax in the case of gratuitous transfer of property through new financial techniques or capital transactions, etc. However, the Inheritance Tax and Gift Tax Act amended by Act No. 6301 of Dec. 29, 200 does not fit the above deemed donation provision, but adopted the so-called “the so-called “the so-called “the so-called “the so-called “the so-called “the so-called “the so-called “the so-called “the so-called “the donation donation” under the Civil Act” as well as the “the so-called “the so-called “the value of property subject to taxation” under the Civil Act.

Considering such progress of amendment, Article 42 of the former Inheritance Tax and Gift Tax Act is one of the provisions for calculating the value as referred to in Article 40 of the same Act, and can serve as the basis for calculating the value of donated property to the gratuitous transfer due to capital transactions, such as the conversion of convertible bonds not provided for in Article 40 of the same Act.

C) According to the following facts or circumstances acknowledged by comprehensively taking account of the descriptions in subparagraphs B through 7 and the overall purport of the pleadings, profits from the conversion of the instant convertible bonds shall be subject to taxation pursuant to Article 2(3) of the former Inheritance Tax and Gift Tax Act, and the value of donated property may be calculated and taxed pursuant to Article 42(1)3 of the same Act.

① On February 6, 2012, the Plaintiff entered into a contract on the acquisition of new shares and convertible bonds of this case with a non-party company, and entered into a contract on the sale of KRW 8,143,00,000 per share of 3,000,000 per share of 1,143,000 shares issued by the non-party company (hereinafter “CB”) that the Plaintiff trusted under the name of the non-party 8 and the non-party 9. As above, the ratio of KRW 8,029,99,300 per share to be paid by the non-party company to the Plaintiff is 5,30,000 + KRW 2,69,99,99,300 + KRW 2,69,300 as 5,30,000 per share with the above subscription price and convertible bonds issued by the non-party company to the non-party company. Furthermore, the ratio of new shares acquired by the Plaintiff at the time of issuance of the convertible bonds is about 744,6.

In full view of the timing of concluding the above series of contracts, transaction value, Plaintiff’s new stocks, etc., the Plaintiff’s assertion that the non-party company purchased CBB’s shares for the purpose of business diversification and the expansion of new and renewable energy business, or that the company issued the new stocks and convertible bonds of this case for the purpose of raising funds for business management according to the accumulation of deficit cannot be trusted.

② On February 2, 2012, the Plaintiff acquired the shares and management rights of the non-party company from the non-party 7, who is the representative director and the largest shareholder of the non-party company, and acquired the new shares of this case, and became the largest shareholder and the representative director of the non-party company

In normal sense, it is reasonable for the Plaintiff to take over the instant convertible bonds at the time of acquisition of the right to manage the Nonparty Company to obtain the results of management after obtaining the right to manage the Nonparty Company. However, when the Plaintiff acquired the instant convertible bonds at the time of acquisition of the right to manage the Nonparty Company, the Plaintiff would exercise the right to conversion and gain profits from the difference between the stock value and the conversion value by exercising the right to conversion. If the stock value of the Nonparty Company is lower than the conversion value, the Plaintiff would not exercise the right to conversion and thereby obtain options to secure the stable interest of the principal and the amount equivalent to the interest accrued at the maturity of maturity.

Therefore, the issuance of convertible bonds of this case was conducted in order to stably distribute the business performance to the plaintiff who is the largest shareholder and the representative director of the non-party company as the largest shareholder of the non-party company. Thus, when profits from the conversion of convertible bonds of this case based on this transaction are transferred without compensation through new financial techniques or capital transactions, etc., it is subject to taxation consistent with the purport of Articles 2(3) and 42 of the former Inheritance Tax and Gift Tax Act to impose gift tax in time.

③ As indicated in the Plaintiff’s land registration, the portion of profits from capital transactions, such as convertible bonds, was deleted under Article 42 as the former Inheritance Tax and Gift Tax Act was amended by Act No. 13557, Dec. 15, 2015. In the case of regulating a specific type of transaction or act, profits from a transaction that does not fall under such type may not be taxed by the complete universal principle under Article 2(3) of the Inheritance Tax and Gift Tax Act (see Supreme Court Decision 2013Du13266, Oct. 15, 2015). Ultimately, due to the amendment, profits from conversion, etc. of convertible bonds, etc., newly established at the time of the amendment under Article 40 of the Inheritance Tax and Gift Tax Act and Article 41-3(8) of the Inheritance Tax and Gift Tax Act (Donation of profits from listing of stocks, etc.) are excluded from taxable objects.

However, as at the time of the conversion of the instant convertible bonds, Article 42 of the former Inheritance Tax and Gift Tax Act provides for the method of calculating the value of donated property with respect to profits arising from the conversion, etc. of other types of convertible bonds which are not clearly provided for in Article 40 of the said Act, the instant disposition cannot be deemed unlawful on the grounds of subsequent amendment of the Act.

D) Therefore, the Plaintiff’s profits derived from the conversion of the instant convertible bonds constitute subject to gift tax, and the Plaintiff’s assertion in part 2) is without merit.

2) Whether the object of taxation is excluded under Article 42(3) of the former Inheritance Tax and Gift Tax Act

A) Time to determine whether a person is a specially related person under Article 42(3) of the former Inheritance Tax and Gift Tax Act

(1) Article 42(3) of the former Inheritance Tax and Gift Tax Act provides that “Where a transaction between persons who are not specially related persons determined by Presidential Decree is deemed to have justifiable grounds in light of transaction practices, Article 42(1) shall not apply.”

(2) Considering the content of the relevant laws and regulations and the progress of the amendment, it is reasonable to view that Article 42(3) of the former Inheritance and Gift Tax Act applies only when not only the acquisition of convertible bonds but also the exercise of convertible rights is not a specially related person on the following grounds.

① Article 42(1)3 of the former Inheritance Tax and Gift Tax Act provides that profits accruing from the “conversion” phase of convertible bonds shall be subject to taxation. In such cases, such profits shall be calculated by subtracting the “value of stock conversion, etc.” from the “value of stock at the time of stock conversion, etc.” In accordance with the statutory provisions of Article 42(1) of the same Act, a donee is a person who has converted shares at a lower price than the value of the stock at the time of stock conversion, etc., and a donor is a company issuing shares that undermine the conversion, etc. of shares at a lower price than the value of the stock at the time of stock conversion. Although there was no change in the company’s profits or losses other than the change of liabilities to capital at the time of conversion, it cannot be deemed that the issuing company has lost an opportunity to procure more capital by offering new stocks at the time of conversion to the value of stocks at the time of

② The former Inheritance Tax and Gift Tax Act, which was wholly amended by Act No. 5193 on December 30, 1996, imposed only the difference between the value of stocks and the value of conversion to be delivered at the time of acquisition of convertible bonds, etc., under Article 40 of the “Presumption of Donation of Convertible Bonds Benefits”. However, since profits derived from convertible bonds, etc. occur even when conversion is actually made, in order to impose profits from the distribution stage through the exercise of convertible rights, Article 40 of the former Inheritance Tax and Gift Tax Act, amended by Act No. 6301 on December 29, 200, began to impose taxes on the profits from the conversion of convertible bonds, etc. In light of the above amendment process, it is reasonable to deem that the donation profits from the conversion of convertible bonds, etc. are related to the distribution stage, if the related party is at the time of exercise of convertible rights, such as the related party as referred to in Article 42(3) of the former Inheritance Tax and Gift Tax Act.

③ As indicated in the Plaintiff’s pointed out, convertible bonds are issued upon confirmation of the conversion condition, conversion price, agreed interest rate, etc., and only conversion is made upon the issuance of convertible bonds according to the conditions granted at the time of acquisition. However, as seen earlier, the non-party company immediately issued the instant convertible bonds in order to allocate profits to the Plaintiff who is the largest shareholder of the non-party company and the representative director of the non-party company when the increase in the stock value of the non-party company occurs in the future. As can be seen, even if the acquisition of convertible bonds was not a specially related person, there is a long time the risks arising from the transaction between the specially related person at the time of exercising the conversion right. Therefore, it is unreasonable to apply

B) Whether a transaction is between unrelated persons

(1) Article 31-9(3) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act provides that “Any related person prescribed by Presidential Decree” under Article 42(3) of the former Inheritance Tax and Gift Tax Act refers to a person who has a relation falling under any subparagraph of Article 12-2(1) with a person who obtains a benefit.

Article 12-2 (1) 3 of the former Inheritance Tax and Gift Tax Act provides that "a person falling under any of the following items is an specially related person," and Article 12-2 (1) 3 of the same Act provides that "an enterprise belonging to an enterprise group prescribed by Ordinance of the Ministry of Strategy and Finance, by which the principal exercises de facto influence on its management, is an individual." The term "enterprise belonging to an enterprise group prescribed by Ordinance of the Ministry of Strategy and Finance" refers to an affiliated company belonging to an enterprise group falling under any of the subparagraphs of Article 3 of the Enforcement Decree of the Monopoly Regulation and Fair Trade Act (hereinafter "Fair Trade Act").

(2) Using the expression “company belonging to an enterprise group as provided by Ordinance of the Ministry of Strategy and Finance” in Article 12-2(1)3 (a) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act is clear from the language and text of Article 12-2(1)3 (a) simply to expand the scope of specially related persons if the individual exercises de facto influence if the individual is an individual, as well as to the affiliates belonging to an enterprise group under the Fair Trade Act. Furthermore, Article 12-2(1)6 of the former Inheritance Tax and Gift Tax Act that “a corporation in which the principal holds not less than 30/10 of the total number of issued and outstanding shares is a specially related person” does not have any reason to apply the above subparagraph 6 to the determination as to whether a person is a specially related person under subparagraph 3, as it is expressly stipulated in subparagraph 3 concurrently and concurrently with subparagraph 3. Accordingly, an individual is related

(3) According to the facts seen earlier, the Plaintiff, as the representative director and the largest shareholder of the non-party company at the time of exercising the right to convert the instant convertible bonds, was exercising influence over the management of the non-party company as the largest shareholder. Therefore, regardless of whether the Plaintiff held 30/10 or more of the total number of shares issued by the non-party company at the time of converting the instant convertible bonds, the Plaintiff had a relation with the non-party company under Article 12-2(1)3 of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act, and thus, Article

C) Sub-determination

Therefore, the plaintiff's assertion on the part of 2. A. 3 is without merit.

3. Conclusion

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

(attached Form omitted)

Judges Cho Jae-hee (Presiding Judge)