2. The costs of lawsuit are assessed against the plaintiffs.

A. The plaintiffs are the inheritors of the non-party who died on September 30, 2007.

B. From January 30, 2001 to March 31, 2005, the Nonparty: (a) lent KRW 2.42 billion to the Chungcheong Development Co., Ltd. (the representative director is Plaintiff 2 as Nonparty’s Nonparty); (b) on six occasions from January 8, 2002 to October 2, 2002, on six occasions (hereinafter “instant free loan”); and (c) upon the death of the Nonparty, the Plaintiffs applied the annual interest rate of KRW 875,700,00 (the Plaintiff applied the annual interest rate of KRW 9% as publicly notified by the Commissioner of the National Tax Service pursuant to Article 41-4 of the Inheritance Tax and Gift Tax Act (hereinafter “the Act”) to the taxable value of inherited property; and (d) reported to pay KRW 39,166,565,65,65 to the inheritance tax on March 29, 2008.

C. On March 2009, the Central Regional Tax Office: (a) added the amount equivalent to the interest accrued from the instant gratuitous loan to KRW 1,015,180,272 (hereinafter “amount equivalent to the recognized interest”); (b) the underreported amount to KRW 139,480,272 (i.e., KRW 1,015,180,272--875,700,000), including other omitted amounts, and notified the Defendant of the addition to the taxable amount of inheritance tax, and accordingly, on August 11, 2009, the Defendant issued a disposition imposing inheritance tax of KRW 86,15,840 (hereinafter “instant disposition”).

본문내 포함된 표 대여일자 금액 처분청의 이자 계산기간 인정이자상당액(9%) 2002. 1. 8 150,000,000 2003.1.8~2007.1.7 54,000,000 2002. 1. 22 200,000,000 2003.1.22~2007.1.21 72,000,000 2002. 2. 5 1,000,000,000 2003.2.5~2007.2.4 360,000,000 2002. 2. 7 1,000,000,000 2003.2.7~2007.2.6 360,000,000 2002. 3. 28 20,000,000 2003.3.28~2007.3.27 7,200,000 2002. 10. 2 50,000,000 2002.10.2~2007.9.30 22,500,000 계 2,420,000,000원 ？ 875,700,000원 2002. 1. 8 150,000,000 2007.1.8.~2007.9.30 9,801,369 2002. 1. 22 200,000,000 2007.1.22~2007.9.30 12,378,082 2002. 2. 5 1,000,000,000 2007.2.5.~2007.9.30 58,438,356 2002. 2. 7 1,000,000,000 2007.2.7~2007.9.30 57,945,205 2002. 3. 28 20,000,000 2007.3.28~2007.9.30 917,260 계 ？ ？ 139,480,272 합계 2,420,000,000원 ？ 1,015,180,272원

D. The Plaintiffs asserted that their interests that they did not actually inherit and that they were included in the taxable amount of inheritance taxes by mistake, and that the total amount of KRW 1,015,180,272 equivalent to the actual recognized interest should be excluded from the taxable amount of inheritance taxes, and received a request for an examination by the National Tax Service on November 6, 2009, but received a decision of dismissal on December 22, 2009.

[Ground of recognition] Unsatisfy, Gap evidence 1, 2, 3, Eul evidence 1, 2, 3

2. Whether the instant disposition is lawful

A. The plaintiffs' assertion

The plaintiffs asserted that the amount equivalent to the interest recognized as a donation of profit from the gratuitous loan of this case does not constitute "property value donated to a person who is not an heir" under Article 13 (1) 2 of the Act on the grounds as follows.

1) Article 13(1)2 of the Act provides that “property donated to a person who is not an inheritor” and provides the donation contract as a formal requirement. However, since it is difficult to view that there was a donation contract between the decedent and the loyalty development company, it cannot be deemed that the amount equivalent to the recognized interest is a property that belongs to the decedent and has economic value that can be realized in money, and that the inherited property subject to inheritance tax is a legal or de facto right that has property value that can be realized in money. Furthermore, the amount equivalent to the recognized interest and the amount equivalent to the inherited property should be deemed as a property belonging to the decedent and is not a right to inheritance, but a heir is not a right to inherit, and it is unfair to include it in the inherited property as an extended interpretation

2) Even if the Nonparty, a for-profit corporation, a for-profit corporation, lent a loan without compensation to the Chungcheong Development Co., Ltd., a for-profit corporation, is not liable to pay gift tax, and thus, it cannot be deemed as “Donated property,” and thus, deemed donation for the amount equivalent to the interest accrued

3) Article 13(1)2 of the Act limited to the property donated to a person who is not an inheritor within five years from the date of commencing the inheritance. Even if the amount of recognized interest and amount equivalent to the instant gratuitous loan is included in the taxable amount of inheritance taxes, the portion of free loan granted from September 30, 2007, which exceeds five years from the date of commencing the inheritance, and exceeds five years from January 8, 2002 to March 28, 2002, should be excluded.

B. Relevant statutes

Inheritance Tax and Gift Tax Act

Article 13 (Taxable Value of Inherited Property)

(1) The taxable value of inherited property shall be the amount calculated by adding the following value to the value of inherited property after deducting the amount stipulated under Article 14 from the value of inherited property:

1. The value of property donated by an ancestor to his/her heir within ten years before the commencement date;

2. The value of property donated by an ancestor to a person other than his/her heir within five years before commencing the inheritance.

Article 41-4 (Donation of Profits from Gratuitous Loan, etc. (Amended by Act No. 7010, Dec. 30, 2003)

(1) Where money exceeding 100 million won has been loaned from a related person at an interest rate lower than the appropriate interest rate, the amount classified as follows shall be deemed the value of donated property of the borrower on the date of borrowing the money. In such cases, if the period of lending is not fixed, it shall be deemed one year, and if the period of lending is not fixed, it shall be deemed one year, and if the period of lending is at least one year, it shall be deemed that a new loan has been

1. Where a loan is granted without compensation: An amount calculated by multiplying the amount of loan by the appropriate interest rate;

2. Where a loan is obtained at an interest rate lower than the appropriate interest rate: An amount obtained by subtracting an amount equivalent to the amount actually paid interest from the amount obtained by multiplying the amount of loan by the appropriate interest rate;

(2) The scope of persons in a special relationship under paragraph (1), the method of calculating 100 million won or more money, reasonable interest rate, and other necessary matters shall be prescribed by Presidential Decree.

Article 41-4 (Presumption of Donation of Money Loans)

(1) Where money not less than one hundred million won is loaned from a person in a special relationship with no compensation or at an interest rate lower than a reasonable interest rate, any of the following amounts shall be deemed donated on the date on which the money is loaned. In such cases, where the loan period is not determined, it shall be deemed that the loan period is one year, and where the loan period is not less than one year, it shall be deemed that the new donation has been made on the

1. Where a loan is received without compensation, an amount calculated by multiplying the loan amount by the appropriate interest rate; and

2. Where a loan is made at an interest rate lower than the appropriate interest rate, an amount obtained by subtracting the amount equivalent to the interest actually paid from the amount obtained by multiplying the loan amount by the appropriate interest rate.

(2) The scope of persons in a special relationship under paragraph (1), the method of calculating funds of not less than one hundred million won, adequate interest rate and other necessary matters shall be determined by the Presidential Decree.

(c) Markets:

1) With respect to the addition of the taxable amount of inheritance tax of the so-called donated property (the Act amended in 2003 adopted the so-called complete comprehensive taxation method in relation to the gift tax and amended the former provisions on deemed donation from "the former provisions of Article 41-4 of the Act to "the value of donated property" to "the value of donated property", so it is inappropriate to regard "the profit from free loan, etc. of money" under Article 41-4 of the Act as the previous donation. However, since the gratuitous loan of this case occurred in 202, the concept of "the deemed donation" should be used).

Considering the fact that the original meaning of donation is not a donation but a donation is not a donation but a case where economic effect such as the donation is practically generated, and it is subject to gift tax by prescribing it as a donation subject to gift tax, the need to prevent an inheritor from evading the application of high rate of inheritance tax due to the donation prior to the commencement of inheritance is the same as the case of a donation subject to another gift subject to gift tax, and therefore, the "donation" under Article 13 (1) of the Act cannot be interpreted as limited to the original meaning of donation (see Supreme Court Decision 96Nu1361 delivered on July 25, 197).

If it is interpreted that the value of donated property is not included in the taxable amount of inheritance taxes, if there is a possibility of being subject to high rate of inheritance taxes, the high rate of inheritance taxes can be exempted.

In addition, to the extent that it does not undermine the legal stability and predictability oriented by the principle of no taxation without law, a teleological interpretation in accordance with the purpose and social norms shall be permitted to the extent that such interpretation does not violate the principle of no taxation without law, on the ground that the value of donated property under Article 13(1) of the Act is included in the value of donated property.

Therefore, although a gratuitous loan, such as this case, is included in the concept of a typical donation, it is only stipulated in the previous law to clarify it, and even if it is given without compensation, it causes economic effects such as the actual donation by giving up the amount equivalent to the interest. Therefore, in the aspect of substantial taxation, it is reasonable to add the amount equivalent to the interest to the taxable amount of inheritance tax, considering it as a donation in the aspect of substantial taxation

2) As to exemption from gift tax on profit-making corporations:

According to Article 4(1) of the former Inheritance Tax Act (amended by Act No. 4283, Dec. 31, 1990), there is no exception provision that the value of the exempted property among the donated property added to the value of inherited property shall be deducted from the value of inherited property. Article 67-7 of the former Regulation of Tax Reduction and Exemption Act is merely a provision on exemption from the gift tax, and thus, it cannot be inferred that the inheritance tax is exempted from the gift tax (see Supreme Court Decision 93Nu16017, Feb. 8, 1994).

In light of the above legal principles, even if the inheritance tax was imposed by adding up the taxable amount of inheritance tax, the amount of tax additionally borne by the plaintiffs is limited to the amount of proceeds from such cumulative taxation, and in the case of a profit-making corporation under Article 4 (1) of the Act, it cannot be deemed that the benefit of excluding the application of progressive taxation of inheritance tax, which is a policy objective, should be determined to be exempted from gift tax. Therefore, the plaintiff's assertion

3) As to whether “within five years from the commencement date of inheritance” is applicable

Article 41-4 of the Act provides that "where the period of loan is not fixed, the period of loan shall be deemed one year, and where the period of loan is not less than one year, it shall be deemed to have been newly granted each year on the day following the date on which one year elapses and the relevant amount shall be calculated." Accordingly, it is necessary to uniformly interpret and apply the above provision in the Act as a whole. Accordingly, the amount equivalent to the recognized interest of this case shall be calculated only from the commencement date of inheritance to the date of September 30, 2007, which begins from October 2, 2002, by deeming that a new loan has been granted each year within the limit of five years from the commencement date of inheritance, it is not in violation of the purport of the above provision, and this part of the plaintiff

3. Conclusion

Therefore, the plaintiffs' claim of this case is dismissed in entirety as it is without merit, and it is so decided as per Disposition.

Judge Ori (Presiding Judge) Kim Young-sik