A. Of imposition of penalty tax of KRW 321,727,252 on gift tax of 198 on October 12, 2012 and imposition of penalty tax of KRW 930,163,602 on gift tax of 204, the portion exceeding KRW 654,275,404, among imposition of penalty tax of KRW 930,163,602 on gift tax of 204;

B. The portion exceeding KRW 670,632,288, out of the imposition of penalty tax of KRW 953,417,700 on the gift tax of 2004 as of September 21, 2015

Each cancellation shall be revoked.

2. The plaintiff's remaining claims are dismissed.

3. 9/10 of the costs of lawsuit is assessed against the Plaintiff, and the remainder 1/10 is assessed against the Defendant, respectively.

A. Couria Co., Ltd., a corporation issuing unlisted stocks (hereinafter “Couria”) was established on April 2, 198, and a company that imports and sells goods from the Masama Group, a group of female clothes in Italy. Nonparty 14 and Nonparty 1, the former president of a career group, owned 467,000 shares of Couria, respectively, 50%. Nonparty 1 acquired 23,500 shares owned by Nonparty 14 around August 1996, and completed the transfer of ownership of the said shares in the name of 13 persons, including the Plaintiff.

B. On December 31, 1998, Nonparty 1 entered into an agreement on title trust with the Plaintiff on 188,000 shares of Copis, which he held on December 31, 1998. Accordingly, the Plaintiff completed the transfer of ownership under his own name with respect to 18,00 shares of the above 18,00 shares on the same day. In addition, on December 31, 2000, the Plaintiff completed the transfer of ownership with respect to 5,00 shares of Copis of Nonparty 1, the transfer of ownership for Nonparty 3, Nonparty 4, Nonparty 5, Nonparty 6, and Nonparty 7, whose transfer of ownership was transferred on December 31, 2001, respectively.

C. On December 31, 2003, the Plaintiff completed the transfer of title to Nonparty 7, Nonparty 6, Nonparty 8, and Nonparty 9’s copy shares 118,000 shares, which were confirmed by title trust and fraudulent name theft at the time of tax investigation on August 31, 2003 by the director of the Seoul Regional Tax Office, respectively, on December 31, 2004, as to Nonparty 1’s copy shares 51,392 shares, which were transferred to Nonparty 1 in the future, on December 31, 2004.

D. The Defendant deemed that the Plaintiff was holding a title trust with respect to the cocopy stocks that the Plaintiff transferred from Nonparty 1, and calculated the value of donated property pursuant to the supplementary assessment method, and on October 12, 2012, the Defendant determined and notified each of the following as follows: (i) KRW 1,402,808,450 (including additional taxes); (ii) KRW 157,602,080 (including additional taxes); and (iii) KRW 3,85,42,130 (including additional taxes); and (iv) KRW 2,907,789,920 (including additional taxes); and (v) KRW 1,85,85,865,860 (including additional taxes) of donated shares in 203.

Notice of the appraised value of the value of donated stocks per share on the title trust date included in the main sentence of December 31, 1998, 188 1,402,802,808,450 won on December 31, 2008, 2000 won, 1,402,808,450 won on December 31, 2000, 2068 won on December 31, 2000, 210,340,00 won on 157,60,602 won on December 31, 208, 200, 50, 540, 540, 540, 654, 202 won on December 30, 200, 305, 308, 540, 300, 305, 305, 850, 8529, 297 won on December 318, 2007

E. The Plaintiff’s objection was lodged on January 8, 2013, but was dismissed. The Plaintiff filed an appeal on May 9, 2013, but the Tax Tribunal dismissed the Plaintiff’s appeal on June 30, 2014.

F. On September 21, 2015, the Defendant revoked ex officio each of the imposition of gift tax (including additional tax) other than the imposition of gift tax of KRW 1,402,808,460 (including additional tax) in 1998, and determined and notified each of the additional tax on each of the gift tax of KRW 200, 200, 201, 203, and 2004 as shown in the separate disposition list 2.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1, 3, 12, 19 through 25, Eul evidence Nos. 1 through 4, 7, 9, 15, 18, 19 (including the relevant branch numbers), the purport of the whole pleadings

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

(a) Relevant statutes;

The entries in the attached Table-related statutes are as follows.

B. Illegal assertion in the tax investigation procedure and determination thereof

1) The plaintiff's assertion

On January 11, 2012, the Defendant conducted a tax investigation with the Plaintiff on an extension of the scope of the tax investigation on February 16, 2012, and notified the Plaintiff of each of the tax items to be investigated as “fund source investigation” and the reason for the investigation as “verification of suspicion of donation of funds acquired through asset acquisition.” Accordingly, the Plaintiff was subject to a tax investigation under the circumstances where it is unknown whether it would undergo a tax investigation on any of the tax items, and whether it would undergo an investigation on stock trust. As such, the Defendant violated due process by failing to notify specific tax items during the extension of the scope of the tax investigation and the scope of the investigation, each of the instant dispositions

(ii) the facts of recognition

In full view of the purport of Gap evidence 18, Eul evidence 16, Eul evidence 17-1, and Eul evidence 17-2, the Seoul Regional Tax Office did not give prior notice to the plaintiff pursuant to the proviso to Article 81-7 (1) of the Framework Act on National Taxes on January 11, 2012 when conducting a tax investigation with respect to the plaintiff. On the date of the tax investigation, the Seoul Regional Tax Office notified the plaintiff of the ground for the extension of the tax investigation period: ① the tax items subject to investigation, ② the investigation period from January 1, 2003 to December 31, 2004; ③ the investigation period was from January 11, 2012 to February 20, 2012 (41 days); ④ the reason for the investigation was to be designated as the person subject to investigation to verify the alleged donation of assets acquired by you (Article 81-6 (2) of the Framework Act on National Taxes); ② the Seoul Regional Tax Office notified the plaintiff of the extension of the tax amount to the plaintiff 12.

3) Determination

A) According to Article 81-7(1) of the Framework Act on National Taxes and Article 63-6 of the Enforcement Decree of the Framework Act on National Taxes, where a tax official conducts a tax investigation excluding a tax offense investigation under the Procedure for the Punishment of Tax Offenses Act, he/she shall notify the taxpayer subject to the investigation of the tax items to be investigated, the period and reason for the investigation, the name and address or domicile of the taxpayer, and other necessary matters in writing ten days prior to the commencement of the investigation, except in cases where it is deemed impossible to achieve the purpose of investigation due to destruction of evidence, etc. if the prior notification is made. In addition, according to Article 81-9 of the Framework Act on National Taxes and Article 63-1(1)1 of the Enforcement Decree of the Framework Act on National Taxes, a tax official shall notify the taxpayer of the reason and scope thereof in writing.

B) Examining the aforementioned facts in light of the aforementioned relevant provisions, the head of the Seoul Regional Tax Office shall be deemed to have notified the Plaintiff on the date of the tax investigation that “the Plaintiff was donated the acquisition fund of the assets acquired from 2003 to 2004 by the reason of donation of the acquisition fund of the assets acquired by the Plaintiff.” As such, there is no procedural defect in the process of not notifying the specific tax items to be investigated in the course of the tax investigation ( insofar as there is no evidence to deem that there was a procedural obligation to notify the Seoul Regional Tax Office of the gift tax according to the deemed donation of title trust with the tax items to be investigated by the Plaintiff, unless there is any evidence to support that Nonparty 1 and the Plaintiff have secured evident data to recognize the title trust of the stocks at the time of the tax investigation by Nonparty 1 and the Plaintiff. In addition, if the taxpayer subject to the tax investigation did not acquire the stocks with its own funds, the taxpayer is deemed to have received the donation of the acquisition fund from a third party or obtained the title trust of the stocks owned by a third party, so it is difficult in his name.

C) In addition, according to the above facts, the head of Seoul Regional Tax Office, while expanding the scope of the tax investigation, notified the Plaintiff of the extension of the scope of the tax investigation to the effect that “the Plaintiff has received a title trust on the ground of Nonparty 1’s nominal trust of the shares from 1996 to 2002.” Therefore, it cannot be deemed that there was a procedural defect in the procedure where specific tax items to be investigated were not notified in the process of expanding the scope of the tax investigation. In light of the above contents of the notification, it is difficult to conclude that the Plaintiff could not expect that the additional tax investigation would have been conducted on the title trust of the shares in the Couris from 1996 to 2002. The Plaintiff’s assertion on

C. The assertion about the purpose of tax avoidance, etc. and the determination thereof

1) The plaintiff's assertion

A) the first argument

According to the proviso of Article 41-2(2) of the former Inheritance Tax and Gift Tax Act (amended by Act No. 6780, Dec. 18, 2002; effective January 1, 2003; hereinafter “Inheritance Tax and Gift Tax Act”) where a return of tax base for capital gains tax is filed pursuant to the Inheritance Tax and Gift Tax Act, the purpose of tax evasion is not presumed to exist. Thus, once a title holder files a return of tax base for capital gains tax or securities transaction tax base for securities transaction tax from January 1, 1999, the Defendant must prove the existence of the purpose of tax avoidance regarding gift tax on title trust after 2003. Moreover, considering the circumstances where a title holder of a Cocopy share voluntarily files and pays securities transaction tax and capital gains tax on his/her own, it shall be deemed that the Defendant bears the burden of proving the purpose of tax avoidance against transfer act in 1998, 200, and 201.

B) the second argument

The Plaintiff’s acquisition of cocopy shares by Nonparty 14 and Nonparty 1 was carried out in order to maintain the franchise contract between the Courias’s manager and the Scouria Group, and therefore, was clearly aimed at having no relationship with the tax avoidance. Since there was no tax to be avoided through the title trust between the Plaintiff and Nonparty 1, the said act did not have the purpose of tax avoidance.

C) the third assertion

From 200 to 2004, the Plaintiff’s act of completing a change of title in its own name with respect to Nonparty 1’s co-ownership shares is merely that the Plaintiff returned to the Plaintiff the name of shares held in title trust with Nonparty 1 around December 1998, which was held in title trust with the third party as the next title truster after being held in title trust with Nonparty 1, and there was no express or implied agreement on the title trust between the Plaintiff and Nonparty 1. Therefore, each transfer of title cannot be deemed as a new purpose of tax avoidance, and it cannot be deemed that the Plaintiff obtained a re-title trust with Nonparty 1, the same person.

D) the fourth argument

Since shares 118,00 shares for the change of ownership for the year 2003 were returned to the Plaintiff confirmed as the real owner according to the result of the tax investigation, it cannot be deemed that Nonparty 1 had the purpose of tax avoidance. Furthermore, if gift tax was imposed again even if the same taxable, taxable period, and tax item were already imposed, it constitutes double taxation, and thus, it is unlawful.

2) Determination on the first argument

A) According to Article 43(1)1 and (2) of the former Inheritance and Gift Tax Act (wholly amended by Act No. 5193, Dec. 30, 1996; Act No. 5582, Dec. 28, 1998); Article 32(1) of the former Enforcement Decree of the Inheritance and Gift Tax Act (amended by Presidential Decree No. 15971, Dec. 31, 1998; Act No. 15971, Dec. 31, 1998; hereinafter “registration, etc.”) which applies to the imposition of gift tax on a gift in 198, where the actual owner is different from the nominal owner, the actual owner shall be presumed to have donated to the nominal owner, notwithstanding Article 14 of the Framework Act on National Taxes, but where registration, etc. is made in another person’s name without any purpose of tax avoidance and where the actual owner is a legal representative or custodian, and where it is not required to do so under the name of the trust business operator.

According to Article 41-2(1)1 and (2) of the former Inheritance and Gift Tax Act (amended by Act No. 6780 of Dec. 18, 2002), which applies to the imposition of gift tax on each gift in 2000 and 2001, in cases where the actual owner and the nominal owner are different from any other property in need of a registration, etc. on the transfer of rights or the exercise of rights, excluding land and buildings, the value of the property shall be deemed to have been donated to the actual owner on the date when the property is registered, etc. as the nominal owner notwithstanding Article 14 of the Framework Act on National Taxes, but the same shall not apply to cases where the property is registered, etc. in another person’s name without any purpose of tax avoidance.

Article 41-2 (1) 1 and (2) of the former Inheritance and Gift Tax Act (amended by Act No. 7010 of Dec. 30, 2003) which applies to the imposition of gift tax on gift in 2003 shall be added to the same contents as Article 41-2 (1) 1 and (2) of the former Inheritance and Gift Tax Act (amended by Act No. 6780 of Dec. 18, 2002) which applies to the imposition of gift tax on gift in 203.

Article 45-2(1)1 of the former Inheritance and Gift Tax Act (amended by Act No. 8828 of Dec. 31, 2007) that applies to the imposition of gift tax on gift in 2004 and Article 45-2(2)2 of the former Inheritance and Gift Tax Act (amended by Act No. 7010 of Dec. 30, 2003) are same as Article 41-2(1)1 and (2) of the said former Inheritance and Gift Tax Act.

B) As seen earlier, the purport of Article 41-2(1)1 and (2) of the former Inheritance and Gift Tax Act (amended on December 18, 2002) is to impose gift tax by deeming the same as the title trust even in a case where a long-term transfer is not made despite the acquisition of shares. In such a case, if the transferor of shares files a report on the details of ownership change in the process of filing a report on the tax base of capital gains tax or securities transaction tax, it shall be excluded from the subject of taxation without presumption of tax avoidance purpose. Therefore, unlike the case where the transferee imposes gift tax on the transferor of shares for the reason that the transferee did not complete the transfer of shares for a long time, unlike the case where the transferee did not complete the transfer of shares for the transfer of shares, the Plaintiff’s assertion that the transfer of shares was tax base and the securities transaction tax base return to the Plaintiff on the transfer of the shares cannot be presumed to have been tax avoidance purpose under the name of Nonparty 1, 201.

3) Judgment on the second argument

A) The legislative intent of the provision on “the constructive gift or presumption of gift of the property in title trust” in the above 2) is to recognize an exception to the substance over form principle to the effect that the act of tax avoidance using the title trust system is effectively prevented, thereby realizing the tax justice. Thus, if the title trust was established for any reason other than the purpose of tax avoidance, and only a minor reduction of tax incidental to the said title trust occurs, it cannot be readily concluded that the purpose of tax avoidance exists. However, in light of the legislative intent as seen above, it cannot be determined that the purpose of the title trust was determined based on the constructive gift or presumption of gift only if the purpose of the title trust is not included in the purpose of tax avoidance, and it cannot be deemed that there was an intention of tax avoidance. In this case, the burden of proving that there was no purpose of tax avoidance in the name of the claimant (see Supreme Court Decisions 2007Du1931, Apr. 9, 2009; 2007Du175, Sept. 8, 2011).

B) As to the assertion that there exists a separate purpose irrelevant to tax avoidance

In light of the circumstances such as: (a) the Plaintiff did not make any assertion to the effect that “the purpose of title trust was to maintain the franchise agreement of the Courier Group” at the stage of tax investigation and tax trial; (b) the title trust itself was denied by Nonparty 1; and (c) the mere fact that the Plaintiff’s assertion was made by itself, it is difficult to deem that there was an obvious and irrelevant purpose to avoid taxation, such as tax evasion, which should have been distributed to possess the Courier stocks to avoid statutory restrictions or meet the statutory requirements, and there is no evidence to acknowledge otherwise. The Plaintiff’s assertion on this part is without merit.

C) As to the assertion that there was no tax to be avoided

(1) Facts of recognition

① From January 25, 1988 to May 14, 2003, when the company reorganization procedure for the career company of the corporation (hereinafter “the career”), Nonparty 1 took place as the parent company and took overall charge of the management of the career group as the chairperson of the career group consisting of 27 affiliated companies. The career was settled on September 7, 1997. Nonparty 1 is currently liable to pay KRW 17.6 billion in total, including gift tax, capital gains tax, securities transaction tax, global income tax, etc. imposed on himself from 2004 to 2014.

② On September 13, 1996, the Plaintiff assumed office as the representative director of the couria, and was in charge of couria’s management.

③ From 1998 to 2004, the net income has continuously been generated in the Couria for the pertinent period. The total amount is KRW 8,884,954,330 for the pertinent period. The distributable profit of Couria during the pertinent period is KRW 415,902,357 for the business year 1998, KRW 418,195,829 for the business year 1999, KRW 556,459,065 for the business year 2,548,010,508, KRW 2001 for the business year 2,543,540, KRW 940 for the business year 3,543,63,619, KRW 132 for the business year 203,468,5365 for the business year 200.

④ Coina acquired a vehicle transport vehicle with a tangible asset in 2000.

[Ground of recognition] Facts without dispute, Gap evidence 2, 13, 14, 17, Eul evidence 8 (including relevant numbers), the purport of the whole pleadings

(2) Considering the following circumstances known from the above fact of recognition, it is difficult to view that there was no tax to be avoided at the time of title trust or in the future by objective and conclusive evidence to the effect that there was no tax to be avoided at the time of title trust of coina stocks, and it is difficult to view that the Plaintiff’s assertion on this part is proven to the extent that it would not be doubtful.

① Determination as to whether there was the purpose of tax avoidance or not is based on the time of title trust of the Couris shares. Since there was a distributable profit in Courisia at the time of title trust of the Couris shares, Nonparty 1, the real shareholder of Courisia, could have anticipated the imposition of dividend income tax. The mere fact that Couris shares were held in title trust or did not actually distribute dividends to the Plaintiff cannot be readily concluded that there was no purpose of tax avoidance in the title trust of the Couris shares.

② Nonparty 1, around August 1996, was the one stockholder of the coconscis by acquiring 50% of the coconscison shares from Nonparty 14 around 1996. Thus, it appears that there is room for Nonparty 1 to pay the deemed acquisition tax pursuant to the main sentence of Article 105(6) and subparagraph 2 of Article 22 of the former Local Tax Act (amended by Act No. 6312, Dec. 29, 200) upon acquiring the vehicle transport equipment around 200 by acquiring the vehicle transport equipment (whether the vehicle transport vehicle is subject to non-taxation or reduction, and whether the amount of deemed acquisition tax is minor shall be proved specifically by the Plaintiff).

③ According to Article 86 of the former National Tax Collection Act (amended by Act No. 10527, Apr. 4, 201) and Article 83(1)1 of the Enforcement Decree of the same Act (amended by Presidential Decree No. 19422, Mar. 29, 2006), where the national tax notified to the taxpayer is delinquent and the taxpayer is found to have no property, a disposition of deficit may be issued if the taxpayer is found to have been made. Nonparty 1 was in arrears with taxes at the time of title trust of copis shares, and thus, there was a possibility of evading tax payment by falsely writing the state in which no property exists due to the said title trust and taking a disposition of deficit.

4) Judgment on the third argument

A) The evidence submitted to this court alone is difficult to view that Nonparty 1, on December 31, 1998, granted the right to dispose of the shares held in title to the Plaintiff 45,500 shares (excluding the shares held in title to the Plaintiff on December 31, 1998, from 233,500 to 18,00 shares held in title to the Plaintiff on December 31, 1998) to a third party, and it is difficult to view that Nonparty 1 granted the right to dispose of the shares held in title to a third party again. According to the above facts, Nonparty 1 should be deemed to have held the title to a third party, such as Nonparty 2. However, the title holder on the list of shares held in name to a third party on December 200, 200, 201, 203, 2003, and 204 as otherwise alleged by the Plaintiff, the title trustee had changed the shares held in title to a third party.

B) Considering the following circumstances that can be seen by adding the overall purport of the pleadings to the statements in the evidence Nos. 8, 10, and 11, the provision on deemed donation of title trust property shall apply to the transfer of title to Nonparty 2, etc. in the name of the Plaintiff for the joint title trust for the said period. Therefore, this part of the Plaintiff’s assertion is without merit.

(1) Such change of the title trustee terminates the title trust relationship between Nonparty 1 and Nonparty 2, the former trustee, and at the same time, a new title trust relationship between Nonparty 1, the truster, and the Plaintiff, the new trustee.

(2) The risk of tax avoidance was removed due to the extinguishment of the former title trust relationship, and it is deemed that the new title trust relationship was established between Nonparty 1 and the Plaintiff.

(3) On April 20, 2004, Coico reduced its capital from KRW 4,670,00,000 to KRW 2,670,000,000. Nonparty 1 received payment of KRW 2,670,00,000 on the same day. In addition, on January 7, 2006, the Plaintiff and Nonparty 1 sold 40% of the total issued shares of Coico for Nonparty 1. The remainder of 60% after the sale of the said shares, Nonparty 1 and the Plaintiff divided them on an equal basis with 30% and exercised the same rights as to the company’s management right, and Nonparty 1 filed a lawsuit for confirmation of non-existence of the resolution of the general meeting of shareholders against Coico in light of the agreement between Nonparty 1 and the actual owner of Coico in 2004 and the actual owner of Coico in 200, 2004.

5) Judgment on the fourth argument

As seen earlier, inasmuch as the actual owner of Cocopy shares transferred to the Plaintiff’s name on December 31, 2003 is not the Plaintiff, but Nonparty 1, the Plaintiff’s assertion premiseding that the Plaintiff is the actual owner of the said shares, is without merit. Moreover, inasmuch as the gift tax imposed by the Plaintiff on Nonparty 1 for the reason that the Plaintiff held a title trust with Nonparty 13 and 4, is a gift tax on Nonparty 1’s title trust with the said non-party 13, etc. on the gift tax imposition, the imposition of gift tax on the gift of 2003 on the ground that the non-party 1 held a title trust with the Plaintiff around 203 does not constitute double taxation.

Therefore, this part of the plaintiff's assertion is without merit.

D. As to the lapse of the exclusion period of imposition and the determination thereof

1) The plaintiff's assertion

If a title trust act is deemed as a donation, it cannot be deemed that the title trustee has a duty to report the taxable value and tax base of the gift tax. Thus, in a case where a title trustee fails to submit a gift tax return under Article 68 of the Inheritance and Gift Tax Act, the exclusion period for imposition of 15 years under the proviso to Article 26-2(1)4 of the Framework Act on National Taxes is not applicable and the exclusion period for imposition of 10 years is applicable. However, the imposition of gift tax for 1998, 200, and 201, respectively, was made after the expiration of the exclusion period for imposition of 10 years, and thus, is illegal.

2) Determination

A) According to the main sentence of Article 26-2(1)4(b) of the former Framework Act on National Taxes (amended by Act No. 8139 of Dec. 30, 2006), gift tax may not be imposed after the expiration of ten years from the date on which it is possible to impose it. However, if a taxpayer fails to submit a return under Article 68 of the Inheritance and Gift Tax Act, it may not be imposed after the lapse of fifteen years from the date on which it is possible to impose it. According to the main sentence of Article 12-3(1)1 of the former Enforcement Decree of the Framework Act on National Taxes (amended by Presidential Decree No. 19893 of Feb. 28, 2007), the following day of the deadline for filing a report or the deadline for submitting a report on tax base and amount of national tax begins from the date on which the deadline for filing a report or the deadline for filing a report begins. The reported national tax includes not only national tax

B) In light of the legitimacy of the Plaintiff’s assertion as seen earlier, it should be examined whether the title trustee is obligated to report the taxable value and tax base of donated property even in the case of deemed donation or presumption of donation of title trust property. However, considering the following circumstances, not only the person who received the donation by agreement between the parties, but also the person who is deemed or presumed to have received the donation by law, should be deemed to have the duty to report the gift tax (see Supreme Court Decision 2002Du2826, Oct. 10, 2003).

(1) The concept of a gift under the Inheritance and Gift Tax Act includes deemed donation or presumption as well as general donation. As such, the title trustee of an asset that requires the transfer of rights or the registration thereof is also treated the same as a donee under the Inheritance and Gift Tax Act. However, according to the main text of Article 68(1) and Article 4(1) of the former Inheritance and Gift Tax Act (amended by Act No. 6780, Dec. 18, 2002), a donee who is liable to pay the gift tax must report the taxable value and tax base of the gift tax to the head of the district tax office having jurisdiction over the place of tax payment within three months from

(2) There is no provision regarding the absence of obligation to report gift tax under the Inheritance and Gift Tax Act.

(3) If there is no reporting deadline due to the lack of reporting obligation in the case of deemed donation or presumption of donation, any inconsistency may arise that the exclusion period of imposition does not run due to the lack of the starting point of the exclusion period under the law in the case of the imposition of gift tax.

(4) Whether an act constitutes the subject of gift tax is clearly stipulated in the relevant statutes, and thus, it cannot be deemed impossible to expect a trustee to report the taxable value and tax base of gift tax. In addition, it is difficult to deem that the trustee’s freedom not to report the taxable value and tax base of gift tax is included in the area protected by the freedom of conscience under the Constitution, and it is difficult to deem that the trustee’s property right or the right to pursue happiness

C) As seen earlier, the trustee of shares, such as the Plaintiff, bears the duty to report the taxable value and tax base of the gift tax as seen earlier. As such, so long as the Plaintiff did not submit a gift tax return, the exclusion period for imposition of each gift tax in 198, 200, and 2001 should be deemed 15 years. Therefore, the Plaintiff’s assertion on this part is without merit.

E. The assertion of illegality on negligent tax returns and determination thereof

1) The plaintiff's assertion

Since no penalty tax may be imposed on the plaintiff who does not have the obligation to report gift tax, each imposition of penalty tax on general non-reported tax is unlawful.

2) Determination

Under the tax law, in order to facilitate the exercise of the right to impose taxes and the realization of tax claims, where a taxpayer violates a tax return and tax liability under the tax law without justifiable grounds, the taxpayer’s intention and negligence is not considered as administrative sanctions imposed as prescribed by the tax law; on the other hand, such sanctions should be imposed on the taxpayer for nonperformance of tax obligations unless there are justifiable grounds, such as where the taxpayer is deemed to be not aware of his/her duty, or where it is unreasonable for him/her to expect the fulfillment of his/her duty (see, e.g., Supreme Court Decision 2010Du1622, Apr. 28, 2011).

As seen earlier, since the duty to report the taxable value and the tax base of the gift tax is not exempted with respect to the gift tax subject to the deemed donation of title trust or the presumption of donation, as long as the Plaintiff failed to fulfill such duty to report, an additional tax on general non-declaration may be imposed. The Plaintiff cannot be deemed to have justifiable grounds for failing to fulfill such duty to report the title trust of shares of each colon’s own stocks. Thus, the Plaintiff’s assertion on this part is without merit

F. Illegal assertion of calculation of the tax base and determination thereof

1) The plaintiff's assertion

A) According to Article 41-2(1) of the former Inheritance and Gift Tax Act (amended by Act No. 6780, Dec. 18, 2002; effective January 1, 2003), “where the relevant property is a property requiring a transfer of a title, the property shall be deemed to have been donated on the date following the end of the year following the year in which the date of acquisition of ownership falls.” Therefore, in imposing gift tax on each gift in 2003 and 204, the imposition of gift tax on each gift in 2004 should have been made on January 1, 2005 and January 1, 2006 as the base date for calculating the tax base, it was unlawful since the tax base was calculated on the basis of the value of the cocolon stocks as of each transfer date.

B) In light of the fact that there is a public auction value for a person who does not correspond to a specially related person in around 2009, and that there is no significant change in the annual sales from 2001 to 2010 in the total assets, the public auction value of a cocococococococococos stocks is the market price that serves as the basis for calculating the tax base. Even though there is a significant difference between the public auction value and the value calculated through the supplementary evaluation method by the Defendant, the Defendant calculated the tax base of each gift tax assessment based on the value calculated by the supplementary evaluation method, each gift tax imposition disposition is unlawful.

C) According to Article 55(1)1 of the former Inheritance and Gift Tax Act (amended by Act No. 7010 of Dec. 30, 2003 and enforced on Jan. 1, 2004), the tax base is “the amount of the pertinent title trust property” in the deemed donation of title trust property. Thus, the Defendant’s calculation of the tax base by applying the same provision on the imposition of gift tax on donation in 2004 is unlawful.

2) Determination on the illegal assertion on the base date for calculation of tax base

A) As seen in paragraph (c)(2)(b) above, Article 41-2(1) of the former Inheritance and Gift Tax Act (amended by Act No. 7010 of Dec. 30, 2003) and Article 45-2(1) of the former Inheritance and Gift Tax Act (amended by Act No. 8828 of Dec. 31, 2007), which applies to the imposition of gift tax on gift in 2003 as seen in subparagraph (c)(2)(b) of the same paragraph, are applicable to cases where a gift tax is levied on the transferor of stocks due to the failure to complete a long-term transfer of ownership, and thus, the above provision is not applicable to the Plaintiff who completed a transfer of ownership after receiving a title trust.

Meanwhile, according to the main text of Article 41-2(1) of the former Inheritance and Gift Tax Act (amended by Act No. 7010, Dec. 30, 2003) and the main text of Article 45-2(1) of the former Inheritance and Gift Tax Act (amended by Act No. 8828, Dec. 31, 2007) (amended by Act No. 8828, Dec. 31, 2007), in cases where the actual owner and the nominal owner of an asset requiring a transfer of ownership are different, the value of the relevant asset shall be deemed to have been donated to the actual owner on the date when the transfer of ownership is made to the nominal owner. Therefore, in cases of stocks to be transferred for the exercise of rights against the issuing company, the value of stocks calculated on the basis of the date when the transfer of ownership is made shall be deemed to have

B) Therefore, it is legitimate for the Defendant to calculate the value of donated property based on December 31, 2003 and December 31, 2004, the transfer date of the transfer date of cocopis shares. Therefore, this part of the Plaintiff’s assertion is without merit.

3) Determination as to the allegation of illegality in the method of appraisal of cocopis shares

A) According to Articles 60(1) and 60(2) of the former Inheritance and Gift Tax Act (amended by Act No. 9916, Jan. 1, 2010); and Article 49(1)3 of the former Enforcement Decree of the Inheritance and Gift Tax Act (amended by Presidential Decree No. 18177, Dec. 30, 2003), where a public auction of the relevant property is established within three months before and after the date of donation (hereinafter “evaluation period”), the value of donated property shall be appraised based on the market price, which is the value generally recognized as being established where a free transaction is made between unspecified persons as of the date of donation. Meanwhile, if a public auction of the relevant property is established within the period of three months before and after the date of donation (hereinafter “evaluation period”), the value of donated property shall be recognized as its market price during the period of appraisal under the former Enforcement Decree of the Inheritance and Gift Tax Act, which applies to the imposition of gift tax in 2004 (amended by Presidential Decree No. 18139, Aug. 19, 20, 200005). 1).

B) Comprehensively taking account of the overall purport of the statements and arguments in Eul evidence No. 8, the National Federation of Korea applied for a public sale order with respect to 190,000 shares of the Cocopy as Seoul Central District Court No. 2008 Taz. 2008, 19247 to order sale of 190,000 shares, and it is recognized that 80,000 shares of the above shares out of 984,000 shares (12,30 won per share), 50,000 shares of 492,00,000 won per share on January 13, 2009 (1 unit price of 9,840 won per share), non-party 15 to sell them to non-party 15 (30,0039,90 won per share) on January 40, 209, 300,39,000 won per share

C) First, in the imposition of gift tax on each gift in 198, 200, 201, and 2003, the above public sale price is not the value determined in the public sale procedure conducted within three months before and after the transfer date of cocouri stocks, which is the base date for each appraisal, and thus, it cannot be recognized as the market price of couri stocks held in title in the Plaintiff, respectively, on or around 1998, 200, 2001, and 2003. Therefore, it is lawful for the Defendant to calculate the value of cocouri stocks held in title to the Plaintiff during the above period according to the supplementary assessment method. Thus, this part of the Plaintiff’s assertion is without merit.

D) In the case of the imposition of gift tax on gift in 2004, the following circumstances revealed in the above facts: (i) there exists a four-year interval between the time of the determination of the above public sale price and December 31, 2004, which is the standard date of appraisal; (ii) there is a change in the management status of the above public sale price, such as the time of the determination of the above public sale price and the commencement of the dispute over ownership over the above standard date of appraisal in around 2008 between the Plaintiff and Nonparty 1; and (iii) the above public sale price itself is also 2,460 won per share (i.e., 12,300 won per share - 9,840 won per share) and it is difficult to view that the above public sale price falls under the “value deemed to be ordinarily established when a free transaction is made between many unspecified persons.” Therefore, the Plaintiff’s assertion that the above public sale price was legitimate in 2004 cannot be recognized as the market price of the registered shares to the Plaintiff.

4) Determination as to the allegation of illegality in the return of re-donation

A) According to Articles 55(1) and 47(1) and (2) of the former Inheritance and Gift Tax Act (amended by Act No. 7010, Dec. 30, 2003), the tax base of the gift tax shall be calculated by subtracting the amount of donated property deduction, etc. under Article 53 of the same Act from the taxable amount of gift taxes. In the case of a deemed gift under a title trust, if the total amount of donated property (including the value of donated property received from the same person) received from the same person within 10 years before the date of the relevant title trust exceeds 10,00 won, the taxable amount of gift taxes shall be calculated by adding that amount to the taxable amount of gift taxes.

On the other hand, according to Article 55(1) of the former Inheritance and Gift Tax Act (amended by Act No. 7010, Dec. 30, 2003; Act No. 9916, Jan. 1, 2010) Article 55(1) of the former Inheritance and Gift Tax Act (amended by Act No. 9916, Dec. 30, 200), it shall be calculated by subtracting the amount of title trust property from the amount of the donated property in question, (2) the amount obtained by deducting 30,000 won from the amount of the donated property in question, and (3) in other cases, the amount

B) Considering the language and text of Article 55(1) of the former Inheritance and Gift Tax Act (amended by Act No. 7010, Dec. 30, 2003; Act No. 9916, Jan. 1, 2010; Act No. 9916, Jan. 1, 2004); the tax base of the gift tax on the gift of 2004 shall be deemed not to include the value of donated property under the previous title trust to the Plaintiff; thus, the tax base of the gift tax on the gift of 2004 shall be deemed not to be included in the value of donated property under the title trust of the Plaintiff. Therefore, the tax base of the gift tax on the gift of 204 shall be deemed to be KRW 2,035,68,512, which is the value of donated property under the title trust of the stocks of the Plaintiff on December 31, 204. Nevertheless, the Defendant calculated the tax base of the gift tax on the gift of 2004.

C) The imposition of gift tax on the gift in 2004 and the imposition of additional tax on the gift tax shall be calculated as a legitimate tax amount.

(1) In a lawsuit seeking the revocation of a taxation disposition, the subject matter of adjudication is whether the tax base and the tax amount notified by the tax authority exist objectively. In a case where the tax base and the tax amount recognized by the disposition are excessive compared to the legitimate tax base and the tax amount, the disposition of imposition is unlawful only to the extent exceeding the legitimate tax base and the tax amount (see Supreme Court Decision 88Nu6504, Mar. 28, 1989)

(2) The amount of a political party tax calculated based on KRW 2,035,68,512, which is the above legitimate tax base, is KRW 654,275,404 of the gift tax in 2004 and additional tax KRW 670,632,288 of the gift tax in 204, as indicated in the attached Table of Calculation of Political Tax Amount, and the portion in excess of the imposition of the gift tax in 2004 and the penalty tax on the gift tax in 204 should be revoked. The Plaintiff’s assertion is with merit within the scope of recognition.

G. The assertion of defects in the duty payment notice and the determination thereof

1) The plaintiff's assertion

The imposition of penalty tax on gift tax in 198 is illegal since the defect of the duty payment notice is concerned.

2) Determination

When both principal tax and additional tax are to be imposed by a tax payment notice, the individual tax amount and the basis for calculation thereof should be stated in the tax payment notice separately. In addition, where multiple types of additional tax are to be imposed, it is a clear principle that a taxpayer can per se know the details of each tax assessment by classifying the amount and the basis for calculation thereof by different types of additional tax. As such, where only the total amount of additional tax is stated without disclosing the type and the basis for calculation of the additional tax (see Supreme Court en banc Decision 2010Du12347, Oct. 18, 2012). Provided, That even if there is any defect in the details required by related Acts and subordinate statutes, the defect of the tax payment notice can be corrected or cured if it is evident that a taxpayer has already entered all necessary matters in the tax payment notice prior to the tax payment notice, etc., and thus, it does not interfere with the determination of whether to appeal such disposition and appeal (see Supreme Court Decision 200Du3989, Mar. 27, 2001).

Comprehensively taking account of the purport of Gap evidence Nos. 12-1 and 4-1-1 of evidence Nos. 12-1 and 4-1, the defendant, on October 12, 2012, entered only the amount of gift tax (3,134,578,000 won), tax rate (40%) calculated gift tax (1,093,831,200 won), total amount of additional tax and additional tax on the gift tax (321,727,252 won), deducted tax amount (12,750,00 won), deducted tax amount (1,402,808,450 won), and did not state entirely the type and tax amount of each of the above additional tax and the basis for calculation thereof. However, there is no evidence to deem that the defendant notified the plaintiff of the type and tax amount of the additional tax prior to the above disposition.

Therefore, since there is a defect in the process of imposing additional taxes among the imposition of gift tax and additional tax on gift tax in 198, the imposition of additional tax on gift tax in 198 must be revoked in an unlawful manner. The plaintiff's assertion on this part is with merit.

3. Conclusion

Therefore, among the plaintiff's claim of this case, the part of the disposition imposing additional tax on the gift tax of 1998 and the disposition imposing additional tax on the gift tax of 2004, which exceeded the pertinent legitimate amount, is justified. Thus, the plaintiff's remaining claims are dismissed as it is without merit. It is so decided as per Disposition.

[Attachment]

Judges Lee Jin-hun (Presiding Judge)

1) Article 68(1) of the former Inheritance and Gift Tax Act (amended by Act No. 6048 of Dec. 28, 1999) that applies to the imposition of gift tax on gift in 198 is also the same as the above provision.