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(영문) 대법원 2017. 5. 17. 선고 2014두14976 판결

[증여세부과처분취소][공2017상,1314]

Main Issues

[1] Legislative intent of Article 39(1)1 of the former Inheritance Tax and Gift Tax Act, and the time when the “market price of new shares” is to be the standard for assessing the “market price of new shares” (=the payment date of stock price) / In a case where new shares are issued pursuant to the Securities and Exchange Act and the former Securities and Exchange Act, whether the imposition of gift tax pursuant to Article 39(1)1 of the former Inheritance Tax and Gift Tax Act is contrary to the principle of no taxation without law (negative) / Whether the imposition of gift tax pursuant to Article 39(2) of the former Inheritance Tax and Gift Tax Act or the principle of no taxation equality (negative)

[2] In a case where the issuance of new stocks issued at the price that is higher than the limit under Article 57 of the former Regulations on Issuance and Public Disclosure of Securities due to the occurrence of forfeited stocks arising from the subscription for new stocks held through the stock allocation method meets the requirements for deemed public offering under Article 2-4(4) of the former Enforcement Decree of the Securities and Exchange Act, whether the issuance of new stocks to a third party constitutes “public offering of new stocks” under Article 39(1)1(a) of the former Inheritance Tax and Gift Tax Act (negative)

[3] Whether imposing gift tax on unrealized profits is levied on shareholders who received forfeited shares at a price lower than the market price by calculating the gift benefits as of the date of payment of stock price (negative), and whether the same applies to cases where shares can not be transferred because they are protected (affirmative)

Summary of Judgment

[1] Article 39 (1) 1 of the former Inheritance Tax and Gift Tax Act (amended by Act No. 8828 of Dec. 31, 2007; hereinafter "the Inheritance Tax and Gift Tax Act") provides that in case where a corporation issues new stocks at a price lower than the market price (referring to the price assessed pursuant to Articles 60 and 63) of the new stocks, the shareholder shall impose gift tax on the profits acquired by other shareholders [a] or third party (c) who given the forfeited stocks by giving up the right to receive new stocks, as the value of donated property. In applying Article 39 (2) of the former Inheritance Tax and Gift Tax Act, where there are not less than two minority shareholders who given up the right to receive new stocks, the shareholder shall be deemed to have given up the right to receive new stocks and shall be deemed to have given up the profit.

The legislative intent of Article 39(1)1 of the Inheritance and Gift Tax Act is to promote equality in taxation by imposing tax on the benefits given that if a corporation issues new stocks at a price lower than the market price, the effect of transferring the forfeited stocks to stockholders, etc. who received allocation of forfeited stocks without compensation. Inasmuch as the increase in stock prices between the date of resolution by the board of directors and the date of payment of stock prices is also the benefit that shareholders, etc. who received allocation of forfeited stocks are transferred without compensation from the existing shareholders, etc., in principle, assessing the market price of stocks based on the date of payment of stock prices accords with

Meanwhile, the Securities and Exchange Act and the former Regulations on Issuance and Public Disclosure, etc. of Securities (amended by Act No. 2008-8, Apr. 7, 2007; hereinafter “securities issuance regulations”) have certain limitations on the issue price, etc. of new stocks to ensure fairness and transparency in the issuance of new stocks. Accordingly, the purport and regulatory provisions of the Inheritance and Gift Tax Act, which requires the imposition of gift tax on the transfer of division without compensation, differs from those of the above provisions. Therefore, in cases where new stocks are issued pursuant to the Securities and Exchange Act and the Securities Issuance Regulations, the gift tax is imposed pursuant to the said provisions of the Inheritance and Gift Tax Act, and the said provisions cannot be said to be in violation of the principle

Article 39(2) of the Inheritance and Gift Tax Act provides that if there are not less than two minority shareholders who have waived the right to receive new shares, one minority shareholder shall be deemed to waive his/her right and calculated profits by deeming that it is more complicated to calculate the donation gains by donor, and if the donation amount falls short of the minimum amount of taxation, it may be abused as a means to avoid gift tax. Therefore, it is difficult to view the foregoing provision as inevitable to achieve the purpose of the gift tax system for the benefit arising from capital increase, which is contrary to the principle of excessive prohibition or the principle of tax equality.

[2] Article 39(1)1(a) of the former Inheritance Tax and Gift Tax Act (amended by Act No. 8828 of Dec. 31, 2007; hereinafter the same) provides that where a corporation issues new stocks at a price lower than the market price, it shall impose gift tax on the profits acquired by other stockholders who renounced the right to receive new stocks to be allocated by the stockholders as the value of donated property by deeming the profits acquired by the forfeited stocks to be the value of donated property by the stockholders. However, the comprehensive provision (hereinafter referred to as the “comprehensive provision”) provides that “the name was changed to the KOSDAQ-listed corporation or the Association-registered corporation (the Securities and Exchange Act was amended by Act No. 7114 of Jan. 29, 2004; hereinafter referred to as “corporation-listed corporation” in combination with the stock-listed corporation) under Article 2(3) of the same Act so that gift tax shall not be imposed even if the market price is lower than the market price by excluding the allocation of new stocks.

In the event that a listed corporation issues new stocks in accordance with the method of public offering of new stocks under the former Securities and Exchange Act (repealed by Article 2 of the Addenda of the Financial Investment Services and Capital Markets Act, Act No. 8635, Aug. 3, 2007; hereinafter the same shall apply), matters concerning the issuance of new stocks shall be publicly announced and, in principle, the issue price shall be determined at a close price to the stock price formed at the securities market, etc. in accordance with strict regulations prescribed by relevant Acts and subordinate statutes (Article 53 and 57 of the former Regulations on Issuance, Public Disclosure, etc. of Securities (amended by Act No. 2008, Apr. 7, 2007; hereinafter the same shall apply).

However, there is no provision that limits the issue price when the forfeited share price occurs and the new shares issued at the price higher than the limit under Article 57 of the Regulations on Issuance of Securities are allocated to a third party and the benefit corresponding to the difference between the market price and the issue price is gratuitously transferred, there is no reason to treat the same as the case where new shares are allocated by means of general offering or deemed to be subject to regulation equivalent thereto from the beginning in the case of gratuitous transfer of the benefit corresponding to the difference between the market price and the issue price. Therefore, in such a case, even if the requirements for deemed recruitment under Article 2-4(4) of the former Enforcement Decree of the Securities and Exchange Act (amended by Presidential Decree No. 20551, Jan. 18, 2008) are satisfied, it shall not be deemed that the “public offering method of the securities subject to exemption”

[3] In light of the language, purport, etc. of Article 39(1)1 of the former Inheritance Tax and Gift Tax Act (amended by Act No. 8828, Dec. 31, 2007; hereinafter the same), a shareholder, etc. to whom forfeited shares are allocated may be deemed to have already obtained profits from the increase of capital when new shares are allocated at a price lower than the market price. According to the foregoing provision and Article 29(4) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act (amended by Presidential Decree No. 26069, Feb. 3, 2015) stipulates, in principle, the base date for calculating donated profits as the payment date for shares is stipulated as the date of calculating the payment for shares. As such, the benefits derived from the issuance of new shares at a low price are capital gains, and thus, it is not deemed to have been realized only when new shares were already acquired at the time of issuing new shares. Moreover, even if there is no possibility that the date of calculating the payment for shares to a minority shareholder for a limited period, it can be deemed as the date to be computed.

[Reference Provisions]

[1] Articles 11, 37(2), 38, and 59 of the Constitution of the Republic of Korea; Article 39(1)1 and (2) of the former Inheritance Tax and Gift Tax Act (amended by Act No. 8828 of Dec. 31, 2007) / [2] Article 39(1)1 (a) of the former Inheritance Tax and Gift Tax Act (amended by Act No. 8828 of Dec. 31, 2007); Article 2(3) of the former Securities and Exchange Act (amended by Act No. 8635 of Aug. 3, 2007); Article 2-4(4) of the former Enforcement Decree of the Securities and Exchange Act (amended by Presidential Decree No. 2051 of Jan. 18, 2008); Article 39(1)1 and (2) of the former Inheritance Tax and Gift Tax Act (amended by Presidential Decree No. 2051 of Dec. 36, 2007)

Plaintiff-Appellant

Plaintiff (Law Firm LLC, Attorneys Gyeong-soo et al., Counsel for the plaintiff-appellant)

Defendant-Appellee

The Director of Gangnam District Office

Judgment of the lower court

Seoul High Court Decision 2014Nu924 decided November 11, 2014

Text

The appeal is dismissed. The costs of appeal are assessed against the plaintiff.

Reasons

The grounds of appeal are examined.

1. Determination as to whether Article 39(1)1 and (2) of the former Inheritance Tax and Gift Tax Act is unconstitutional, and the meaning and scope of the market value (ground of appeal Nos. 1, 2 and 7)

A. Article 39(1)1 of the former Inheritance Tax and Gift Tax Act (amended by Act No. 8828, Dec. 31, 2007; hereinafter “Gift”) provides that in case where a corporation issues new stocks at a price lower than the market price (referring to the price assessed pursuant to Articles 60 and 63) of the new stocks, the shareholder shall impose gift tax on the profits acquired by other shareholders [a] or third party (c) who given the forfeited stocks by giving up the right to receive new stocks, as the value of donated property. In applying paragraph (2) of the same Article, where there are not less than two minority shareholders who given the right to receive new stocks when they give up the right to receive new stocks, the shareholder shall be deemed to have given up the right to receive the new stocks and calculate the profits therefrom.

The legislative intent of Article 39(1)1 of the Inheritance and Gift Tax Act is to promote tax equality by imposing tax on the benefits given that if a corporation issues new stocks at a price lower than the market price, the benefit arising from the increase in the capital has the effect of transferring the forfeited stocks to stockholders, etc. who received the allocation of forfeited stocks without compensation. As such, the increase in stock prices between the date of resolution by the board of directors and the date of payment of stock prices is also the benefit that shareholders, etc. who received the allocation of forfeited stocks without compensation from the existing shareholders, etc., in principle, an assessment of market price of stocks based on the

Meanwhile, the Securities and Exchange Act and the former Regulations on Issuance and Public Disclosure, etc. of Securities (amended by Presidential Decree No. 2008-8, Apr. 7, 2007; hereinafter “securities issuance regulations”) impose certain restrictions on the issue value, etc. of new stocks to ensure fairness and transparency in the issuance of new stocks. As such, the aforementioned provisions of the Inheritance and Gift Tax Act, which seeks to impose gift tax on the transfer of a father without compensation, differs from the purport and regulatory provisions thereof. Therefore, in cases where new stocks are issued in accordance with the Securities and Exchange Act and the Securities Issuance Regulations, the gift tax is imposed pursuant to the said provisions of the Inheritance and Gift Tax Act, and the said provisions cannot be said to be in violation of

Article 39(2) of the Inheritance and Gift Tax Act provides that if there are not less than two minority shareholders who have waived the right to receive new shares, one minority shareholder shall be deemed to waive his/her right to receive the new shares, and the gains therefrom shall be calculated by deeming that it is complicated to calculate the donation gains by donor, and if the donation amount falls short of the minimum amount of taxation, it may be abused as a means to avoid gift tax. Therefore, the foregoing provision is difficult to view that it is inevitable to achieve the purpose of the gift tax system for the benefit arising from capital increase as an inevitable reason to achieve the purpose of the gift tax system for the

B. As to the unconstitutionality of Article 39(1)1 of the Inheritance and Gift Tax Act, the lower court determined that if the issue price of new shares was determined as of the date of resolution by the board of directors pursuant to the Securities and Exchange Act, it cannot be deemed as a violation of the principle of no taxation without law to ensure legal stability and predictability on the basis that gift tax may be imposed on the basis of the date of payment of shares pursuant to the said provision. Furthermore, as to the unconstitutionality of Article 39(2) of the Inheritance and Gift Tax Act, the lower court determined that the said provision did not consider the method of minimizing taxpayers’ damage, and that it cannot be deemed as violating the excessive prohibition principle or tax equality principle without considering the method of minimizing taxpayers’ damage. Furthermore, the lower court determined that Article 39(1)1 of the Inheritance and Gift Tax Act does not immediately apply to the issuance price of new shares where a listed corporation issues new shares with the delegation of the Securities and Exchange Act’s order to ensure fairness and transparency in the issue price of new shares.

Such determination by the lower court is justifiable in light of the legal doctrine as seen earlier. In so determining, the lower court did not err by misapprehending the legal doctrine on the unconstitutionality of Article 39(1)1 and (2) of the Inheritance and Gift Tax Act, and the meaning and scope of application of the market price prescribed in the said provision, contrary to what

2. Determination on the scope of application of the instant provision (Ground of appeal No. 5)

A. Article 39(1)1(a) of the Inheritance and Gift Tax Act provides that when a corporation issues new stocks at a price lower than the market price, a gift tax shall be imposed on the profits acquired by other stockholders who renounced the right to receive the allocation of new stocks as the value of donated property by deeming the profits acquired by other stockholders who received the allocation of forfeited stocks as the value of donated property. However, the comprehensive provision thereof (hereinafter “instant provision”) provides that a stock-listed corporation or an Association-registered corporation under the Securities and Exchange Act (amended by Act No. 7114, Jan. 29, 2004; hereinafter “corporation-listed corporation” in combination with a stock-listed corporation is changed to the name of a KOSDAQ-listed corporation; hereinafter “corporation-listed corporation”) shall be excluded from the scope of “distribution” so that gift tax shall not be imposed even if the new stocks are allocated at a price lower than the market price.

In case where a listed corporation issues new shares in accordance with the method of public offering of new shares under the former Securities and Exchange Act (amended by Act No. 8635 of Aug. 3, 2007, Feb. 4, 2009; hereinafter the same shall apply), it shall make public the matters concerning the issuance of new shares and, in principle, determine the issue price at a price close to the share price formed on the securities market, etc. (Articles 53 and 57 of the Securities Issuance Regulation), and take into account the fact that it is inevitable to issue a discount to a certain extent to raise funds through public offering of new shares through the securities market, etc.

However, there is no provision that limits the issue price of new shares issued at the price higher than the limit under Article 57 of the Securities and Exchange Regulation. Accordingly, in a case where the interests corresponding to the difference between the market price and the issue price are gratuitously transferred to a third party, there is no reason to treat the same as the case where new shares are allocated by means of general offering or deemed to be subject to regulation in the same manner as that of a third party’s offering, from the beginning, even if the requirements for deemed solicitation under Article 2-4(4) of the former Enforcement Decree of the Securities and Exchange Act (amended by Presidential Decree No. 20551, Jan. 18, 2008) are satisfied, even if the requirements for deemed solicitation under Article 2-4(4) of the former Enforcement Decree of the Securities and Exchange Act are satisfied, the issue price of new shares issued at the price higher than

B. The lower court determined that the first capital increase shares in the instant case did not constitute the subject of gift tax exemption on the ground that it did not constitute the acquisition of forfeited shares by deemed public offering under the Securities and Exchange Act, on the ground that the issue price at which 30% discount rate was applied to the forfeited shares were determined and allocated to the Plaintiff to a third party. As such, the capital increase with new capital increase in the third party’s method would be contrary to Article 57(2) of the Securities and Exchange Act that limits the discount rate to 10%.

Examining the reasoning of the lower judgment in light of the foregoing legal doctrine, the said determination by the lower court is justifiable. In so determining, the lower court did not err by misapprehending the legal doctrine regarding the scope of non-taxation under the instant comprehensive provision, as otherwise

3. Determination on taxation of unrealized profits (Ground of appeal No. 6)

A. In light of the language, purport, etc. of Article 39(1)1 of the Inheritance Tax and Gift Tax Act, a shareholder, etc. to whom forfeited shares are allocated may be deemed to have already obtained profits from the increase of capital when new shares are allocated at a price lower than the market price. According to the delegation under the aforementioned provision and Article 29(4) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act (amended by Presidential Decree No. 26069, Feb. 3, 2015) stipulates, in principle, the base date for calculating the donated profits as the payment date of stocks as the date of the purchase of new shares. Since the donated profits arising from the issuance of new shares at low price are capital gains, it is not deemed to have been realized only when the new shares already acquired at the time of the issuance of new shares are disposed of. Moreover, the purpose of preventing losses incurred to minority shareholders due to a decline in the value of stocks is to prevent the sale of stocks for a certain period of time. If the gift tax is calculated based on the intention of the parties to the transfer profit on donation, even if there is no concern to impose the transfer profit.

B. As of the payment date of stock price, the lower court determined that the imposition of gift tax by calculating the donation gains from the second capital increase with new stocks cannot be deemed unlawful as a taxation on unrealized profits. In light of the legal doctrine as seen earlier, the lower court’s determination is justifiable, and did not err by misapprehending the legal doctrine on the calculation of the gift gains from the property subject to

4. Determination on justifiable grounds for non-taxation (Ground of appeal No. 3)

In light of the fact that Article 39(1)1 of the Inheritance and Gift Tax Act does not stipulate that gift tax shall not be levied on the grounds that the Plaintiff’s acquisition of each of the instant shares was based on capital increase with consideration under the Securities and Exchange Act, which is a mandatory provision, unlike Articles 35(2) and 42(3) of the Inheritance and Gift Tax Act.

Examining the reasoning of the lower judgment in light of relevant provisions and legal principles, the lower court’s determination is justifiable. In so determining, the lower court did not err by misapprehending the legal doctrine on general non-taxation requirements for gift tax

5. Determination on non-taxation practices (Ground of appeal No. 4)

In order to establish a non-taxation practice with respect to the tax act of the tax authority, there must be an intention to not only impose taxes on a certain matter over a considerable period of time, but also to impose taxes on the tax authority for any special circumstances, knowing that the tax authority is able to impose taxes on the matter. Such public opinion or intent must be expressed explicitly or implicitly. Such public opinion or intent must be expressed explicitly or implicitly. However, there must be circumstances to deem that the tax authority expressed its intent not to impose taxes on the matter, unlike mere omission of taxation. In this case, if the tax authority’s expression of intent is merely a general theoretical expression of opinion, the above principle does not apply (see Supreme Court Decision 200Du5203, Apr. 24, 2001).

Inasmuch as there exists a non-taxation practice of gift tax on capital increase with consideration by a third party allotment method, the allegation in the grounds of appeal that the instant disposition is unlawful is practically disputing the selection of evidence or fact-finding that belong to the lower court’s exclusive jurisdiction, and thus cannot be deemed a legitimate ground of appeal. Furthermore, even in light of the record, the lower court did not err by misapprehending the legal doctrine on the existence of non-taxable practice, contrary to what is alleged in the grounds of appeal, in so doing, by misapprehending the legal doctrine on the existence of non-taxable practice, and failing to exhaust all necessary deliberations, contrary to what is alleged in the grounds of appeal.

6. Determination on additional tax (Ground of appeal No. 8)

The lower court determined that the Plaintiff could not be deemed to have justifiable grounds for exempting penalty. Examining the reasoning of the lower judgment in light of the relevant legal principles and records, the lower court’s determination is justifiable, and did not err by misapprehending the legal doctrine on justifiable grounds for exempting penalty, contrary to what

7. Conclusion

The Plaintiff’s appeal is without merit, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Park Poe-young (Presiding Justice)

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