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

Cheong-gu Office

The Defendant’s disposition of imposing the gift tax of KRW 000,00,000 (including the additional tax for additional tax of KRW 000,000,000 for additional tax of KRW 00,000 for additional tax of KRW 00,000 for additional tax of KRW 00,000 for additional tax of KRW 00,000 for additional tax of KRW 20,000) on the Plaintiff on August 22,

A. On May 30, 2008, the Plaintiff’s father (the father) donated 00,000 shares of DDD Co., Ltd. (hereinafter “DDDD”) owned by CCC to EE (hereinafter “EEE”) (the gift of this case”) (the “EE”), which the Plaintiff owns 100% of shares. EE was a corporation with deficits, and the Plaintiff was notified of 00,000 won of gift tax and gift tax (the gift tax before it was amended by Act No. 9916, Jan. 1, 2010; hereinafter “Gift”) pursuant to Article 41(1)1 of the former Inheritance Tax and Gift Tax Act (the Inheritance Tax and Gift Tax Act, which was amended by Act No. 9916, Oct. 1, 2010; hereinafter “DD”), and the gift tax of 00,000,000 won on May 30, 2008; 300,000 shares and 300.

B. Meanwhile, on December 16, 2002, Nonparty FF transferred 0,000 shares of HHH corporation (hereinafter “HHH”) to Nonparty GG (hereinafter “instant share transfer”); on the basis of the findings of the director of regional tax office’s investigation, the Defendant: (a) determined and notified the Plaintiff on December 16, 2002, that the substance of the instant share transfer between FF and GG was a donation to the Plaintiff by CCC’s shares; and (b) on August 22, 2013, Nonparty FF decided and notified the Plaintiff of KRW 00,000,000 (including the gift tax levied on gift on December 16, 2002 as KRW 00,000,000 (hereinafter “instant disposition”).

C. In addition, on May 30, 2008, the Defendant calculated gift tax pursuant to Article 47(2) of the former Inheritance Tax and Gift Tax Act (amended by Act No. 9269 of Dec. 26, 2008; hereinafter “former Inheritance Tax and Gift Tax Act”) and notified the Plaintiff of KRW 00,000,00 (including general and minor penalty tax, KRW 00,000,000, and penalty tax for unlawful under-reported return) pursuant to Article 47(2) of the former Inheritance Tax and Gift Tax Act (amended by Act No. 9269 of Dec. 26, 2008; hereinafter “former Inheritance Tax and Gift Tax Act”).

D. On October 24, 2013, the Plaintiff filed an appeal with the Tax Tribunal on the instant disposition. However, upon dismissal on November 26, 2014, the Plaintiff filed the instant lawsuit on February 16, 2015.

E. Meanwhile, after the filing of the instant lawsuit, the Seoul Administrative Court rendered a judgment revoking the first disposition of this case on the ground that "the application of Article 42 (1) 3 of the Inheritance Tax and Gift Tax Act to the instant gift on January 8, 2015 is unlawful (2014Guhap660)" (the instant case). Accordingly, the Defendant corrected the said amount of KRW 00,000,000 (including additional tax on negligent return of KRW 00,000,000,000 for additional tax on negligent return of KRW 00,000,000,000 for additional tax on negligent return of KRW 10,000,000 for additional tax on negligent return of KRW 20,00,000 for additional tax on negligent return of KRW 20,00,000)", "the first disposition of this case was made on May 30, 200," [the grounds for recognition, Gap evidence Nos. 1 through 31, and 1].

2. The assertion and judgment

A. The plaintiff's assertion

1) The substance of the instant stock transfer

The transfer of the instant shares, namely, that the FF transferred 0,00 shares of HH to GG on December 16, 2002 cannot be deemed to have been donated to the Plaintiff by CCC. The instant disposition was conducted on a different premise, and thus is unlawful.

2) The reported amount of tax credit

As the Defendant considers the transfer of shares as a gift and subject to cumulative taxation, the Plaintiff’s tax burden has increased. As such, the amount of the reported tax credit should be increased as to the portion subject to cumulative taxation by deeming the transfer of shares as a gift.

(iii) double taxation;

Since the application of 20% of the tax without filing a return on the transfer of stocks of this case, it is unreasonable to impose tax by applying 40% of the tax without filing a return on the transfer of stocks of this case as double taxation.

4) Method of imposing an undue underreporting additional tax

Even if an unfair under-reported penalty tax is imposed, it shall be calculated by deducting the amount of tax payable from the calculated tax amount under Article 47-2 (5) of the Framework Act on National Taxes, so it shall be calculated by deducting the amount of tax payable from the calculated tax amount.

(b) Related statutes;

Attached Form is as shown in the attached Form.

C. Determination

1) Whether the substance of the instant share transfer is a gift

In addition to the reasoning of the aforementioned disposition and the purport of the entire argument, the Plaintiff’s claim that the instant transfer of shares was not a donation to the Plaintiff on October 8, 2014, and the Plaintiff filed a lawsuit seeking revocation of the instant second disposition. However, the Seoul Administrative Court’s rejection of the Plaintiff’s claim on the ground that “it is reasonable to deem that the instant transfer of shares was a donation of HH’s 0,000 shares owned by the Plaintiff via the FF, a title trustee,” (Seoul Administrative Court Decision 2014Guhap69761). (The Plaintiff appealed on July 9, 2015). Therefore, barring any special circumstance, the substance of the instant transfer of shares should be deemed a donation to the Plaintiff of CCC, and the Plaintiff’s assertion on this part is unacceptable since it did not submit any evidence subsequent thereto.

(ii) whether the reported tax credit is appropriate;

① Article 69(2) of the former Inheritance Tax and Gift Tax Act provides that "where a taxpayer files a return on the tax base of gift tax, the amount which is deferred pursuant to the provisions of Article 74 of the same Act or other Acts shall be deducted from the amount of gift tax calculated; 2." Article 65-2 of the Enforcement Decree of the Inheritance Tax and Gift Tax Act provides that "the amount of gift tax to be deducted or reduced from the amount of tax calculated pursuant to the provisions of this Act or other Acts" shall be the amount equivalent to 10/100 of the amount which is deducted from the amount of tax calculated pursuant to the provisions of this Act or other Acts; and Article 65-2 of the Enforcement Decree of the Inheritance Tax and Gift Tax Act delegated by the taxpayer shall refer to the amount of gift tax calculated on the tax base reported by the deadline for filing the return of the tax base of gift tax pursuant to the provisions of Article 68 of the Act."

3) Whether double taxation is levied

① The Defendant’s imposition of non-reported penalty tax on the instant disposition is based on Article 78(1) of the former Inheritance Tax and Gift Tax Act (amended by Act No. 6780 of Dec. 18, 2002) while the non-reported penalty tax on the instant disposition is imposed pursuant to Article 47-3(2) of the former Framework Act on National Taxes (amended by Act No. 9263 of Dec. 26, 2008). As such, each applicable provision is different. (2) Under the tax law, in cases where a taxpayer violates various obligations prescribed by the tax law without justifiable grounds, the Defendant intends to impose administrative sanctions as prescribed by the Act and induce compliance with the tax law. As such, it is necessary to separately impose the penalty tax on the instant disposition and induce compliance with the tax law even if the taxpayer fails to file a report on the tax base due to re-donation as well as the comprehensive taxation without filing a report on the tax base due to re-donation. (3) In rendering the instant disposition, the Plaintiff’s assertion that non-reported penalty tax on the instant disposition is unlawful.

4) Whether the method of imposing unjust underreporting additional tax is appropriate

Article 47-3 (2) of the former Framework Act on National Taxes (amended by Act No. 9263 of Dec. 26, 2008) explicitly provides that "an amount equivalent to 40/100 of the amount calculated by multiplying the ratio of an amount equivalent to the underreported tax base by the calculated tax amount shall be added to the calculation method of the underreported additional tax," and in addition to the overall purport of the arguments and arguments as seen earlier, the defendant imposed an unfair under-reported additional tax on May 30, 2008 as stated below in the initial disposition of this case on May 30, 2008 (the notice below was corrected to the disposition of this case, but the unfair under-reported additional tax is also deemed to have been calculated according to the same method). Accordingly, since the defendant's method of imposing the under-reported additional tax is consistent with the above legal provisions, the plaintiff's assertion on this part cannot be accepted.

3. Conclusion

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