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

The following facts shall not be disputed between the parties, or may be recognized by considering the whole purport of the pleadings in each entry in Gap evidence 2, 3, Eul evidence 1, and Eul evidence 2-1 through 3:

A. On July 2007, the director of the Seoul Regional Tax Office confirmed that, at the time of the establishment of the BBBB Co., Ltd. (hereinafter “BBB”) on November 13, 2002, the Plaintiff trusted the title trust of 142,00 shares owned by the Plaintiff (hereinafter “instant shares”) to bothA and notified the Defendant of the fact.

B. Accordingly, by applying the legal fiction of donation of title trust property under Article 41-2 of the former Inheritance Tax and Gift Tax Act (amended by Act No. 7010 of Dec. 30, 2003; hereinafter referred to as the "former Inheritance Tax and Gift Tax Act"), the Defendant assessed the outstanding shares of this case as KRW 5,000 per share and calculated as KRW 7,10,000 per share. On October 17, 2008, the Defendant imposed a donation tax of KRW 278,016,30 (= calculated as KRW 153,00,000 + penalty tax of KRW 125,000 + penalty tax of KRW 125,016,30) on the ground that it is difficult to secure the claim for taxation on October 20, 2008, the Defendant jointly designated the Plaintiff as the donee and disposed of the gift tax of this case as KRW 310,000 per share.

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

(1) The Plaintiff and the twoA did not have a title trust agreement on the instant key shares, and the twoA acquired unfairly the instant key shares by taking advantage of the position.

(2) Even if the pertinent shares were held in title trust with both countries, 102,00 out of the instant shares shall be deemed to have been accepted by both countries on February 11, 2003 by the Plaintiff’s 204 board of directors on February 11, 2003, and thus, the Plaintiff returned to the Plaintiff within three months from the donation date, which is the donation reporting period. Thus, the Plaintiff’s donation to both countries is not subject to gift tax pursuant to Article 31(4) of the former Inheritance Tax and Gift Tax Act.

(3) Also, even if the instant shares were held in title trust with both countries, there was no purpose of tax avoidance against the Plaintiff at the time of the said title trust.

(b) Related statutes;

It is as shown in the attached Form.

(c) Fact of recognition;

The following facts shall not be disputed between the parties, or may be acknowledged by considering the whole purport of the pleadings in each entry in Gap's evidence 4 through 6, Gap's evidence 9, 13, and Eul's evidence 3 through 6:

(1) Around August 22, 2002, the Plaintiff entered into a joint agreement on DDR development project (hereinafter referred to as “DDR development project”) with the Governor of Jeollabuk-do and the Seoan-Gun, and the Governor of Jeollabuk-do agreed to provide each of the subsidies of KRW 2 billion for the construction of comprehensive photographing facilities, including a comprehensive photographing pool of KRW 7 billion in size of KRW 12 billion in other facilities, to create DDR development project (hereinafter referred to as “DDR development project”). Accordingly, the Governor agreed to provide the 45,00 square meters site and 2 billion infrastructure construction cost, etc., and the Governor of Jeollabuk-do agreed to provide each of the subsidies of KRW 2 billion in the construction cost of comprehensive photographing facilities through its own investment and private investors.

(2) In promoting the instant film complex creation project, the Plaintiff decided to establish BBB, a private development company, to carry out the said project on behalf of the Plaintiff. At the time, the Plaintiff’s employees, who were the head of the business department, instructed the twoA to take charge of the establishment work, and ordered the twoA to take charge of the establishment work.

(3) The Plaintiff invested a large amount of investment in the establishment and operation of a private development company and becomes a major shareholder, not only the Plaintiff but also the company subject to the inspection of the state administration. However, the Plaintiff decided to invest and hold only 19% of the total issued and outstanding shares of BBB in order to minimize the financial risk if the private company is lost. The remaining 81% of the total issued and outstanding shares were to be raised by means of attracting capital through private investment.

(4) On October 28, 2002, both A and B recommended EE Construction (hereinafter referred to as “E Construction”) which is interested in the above video complex development project to invest in the establishment of BB. EE Construction is to accept this, and it is to calculate 40,000 shares (on a face value of 5,000 won per share) equivalent to 20% of the total outstanding shares, among the shares to be acquired in the name of both BBB at the time of establishment of BB between the twoA and the twoA, to purchase 40,000 shares (on a face value of 5,000 won per share) as a total of 1 billion won per share, and the payment was to use the Plaintiff’s account. Accordingly, both A and B received KRW 1,000 from E Construction on November 5, 2002 through the above account.

(5) On November 13, 2002, both countries established BBBB by paying the above KRW 1 billion as the acquisition price for 200,000 shares issued by BB. The representative director shall: (a) both countries have taken office; (b) 142,00 shares, 71% out of the total shares issued by BBB, in the name of both countries, 7.5%, 15,000 shares and 2.5% shares, 5,000 shares, in the name of H, Park KK, 19% in the name of the Plaintiff; and (c) 38,000 shares, 19% in the name of the representative director; and (d) both countries have taken office in the name of 200,00 shares under the name of 20,00 shares in the name of 40% in the name of E20,000 shares in the name of 40% in the name of E20,000 shares in the name of E2.

(6) On November 19, 2002, after the establishment of BBB, the Plaintiff came to know that the Plaintiff had been aware of the fact that both banks paid 19% (38,000 shares) of the shares of 19% (38,00 shares) were to be held by the Plaintiff, and paid 1,90,000 won to the account of BBB by depositing 1,000 won in the account of BBB. On November 20, 2002, the Plaintiff became aware of the fact that the shareholder composition of BB was made up of 2B and did not invest 1,000% of the shares in the account of 30% of the shares (38,000 shares) and the actual shareholders of this PF and Kim GG, the Plaintiff refused to pay 1,000 shares, but both banks completed the transfer of shares in the name of 30% of the Plaintiff on March 10, 2003.

(7) Meanwhile, on September 24, 2003, EE Construction filed a lawsuit against the Plaintiff and BB seeking the return of KRW 1 billion of the share purchase price paid by EE Construction to both countries (former District Court Decision 2003Da3309, Jun. 10, 2005) and arranged for sale of KRW 40,000 of the shares of EE Construction to a third party until December 31, 2005, the Plaintiff acquired the shares of KRW 40,000,00 of the shares of EE Construction to be sold to the said third party. However, if the sale is not made within the above period, the Plaintiff received 40,000 shares from E Construction, and received the notification of transfer to BBB, and received the notification of transfer of the shares of KRW 1,000,000,000,000,0000,000,000 of the shares, in lieu of the aforementioned resolution.

(8) Both A and B around May 21, 2003, the regular audit period of KFS, owned by the Plaintiff, but only left in their own name for the convenience of tax reduction, etc. at the time of sale, they stated that they do not own.

D. Determination

(1) Determination on whether a title trust is held

In light of the following circumstances, i.e., (i) BBB’s nature as an employee of the Plaintiff’s business head from November 13, 2002 to March 2003, 200; (ii) the company that actually carries out the role and duty of the Plaintiff under the Convention for the Creation of Video Ethaculs between Jeollabuk-do and Haan-gun, and the Plaintiff as an employee of the Plaintiff, was established as a subsidiary suitable for the Plaintiff’s investment in the implementation of the film complex creation project; and (iii) the two countries were to take charge of the establishment of BBB’s business upon the Plaintiff’s instruction; and (iv) the Plaintiff continued to carry out the Plaintiff’s duty as the head of the business head of the Plaintiff’s employee at the time of entering into the contract for the purchase of stocks with the EE Construction on October 28, 2002 and BBB; and (iii) the two countries’ shares were merely owned by the Plaintiff’s employee at the time of sale of the instant shares under the name of 100%.

(2) Determination on whether a gift tax return was made within the deadline for filing a gift tax

Article 31(4) of the former Inheritance Tax and Gift Tax Act provides that where the donated property is returned within three months (three months from the date of donation) from the date of reporting the tax base of gift tax under Article 68 by agreement between the parties concerned after receiving the donation, the donation shall be deemed not to have existed from the beginning. According to Article 41-2(1) of the same Act, where the actual owner and the nominal owner are different in cases of the property, the title owner shall be deemed to have been donated to the actual owner on the date of registration, etc. as its nominal owner.

As to the instant case, 102,00 shares out of the 102,00 shares were established by BBB, and the shareholders registry was prepared on November 13, 2002, and the transfer of title was completed in the Plaintiff’s name on March 19, 2003. Thus, both countries returned the said shares to the Plaintiff after March 19, 2003. Accordingly, the donee (BA) did not constitute a case where the gift tax base return was returned within 3 months from the donation date, which is the filing date of the gift tax base return, and on February 11, 2003, the date on which the Plaintiff decided to return the said shares from both countries, which is the date on which the board of directors was held by the Plaintiff to return the said shares. Therefore, this part of the Plaintiff’s assertion is without merit (the Plaintiff’s assertion that the above shares should not be returned to the Plaintiff on February 11, 2003, as well as the date on which the above shares were returned to BBB.

(3) Determination as to whether the purpose of tax avoidance exists

(A) The legislative purport of Article 41-2(1) of the former Inheritance Tax and Gift Tax Act is to effectively prevent the act of tax avoidance using the title trust system and realize the tax justice. Thus, if it is recognized that the title trust was made for any reason other than the tax avoidance purpose, and it is merely a minor reduction of tax incidental to the said title trust, it cannot be deemed that there was a "tax avoidance purpose" under the proviso of the same Article, and the burden of proving that there was no tax avoidance purpose in the title trust has the burden of proving that there was no other purpose than the tax avoidance purpose (see Supreme Court Decision 2004Du13936, May 25, 2006). On the other hand, the fact that there was no other purpose than the tax avoidance purpose, but the title holder who bears the burden of proving the burden of proof was not related to the tax avoidance purpose in the title trust, and there was no objective evidence to prove that the title trust was not subject to tax avoidance purpose in the future (see, e.g., Supreme Court Decision 20120Du204.

(B) On the other hand, the Plaintiff alleged that there was no tax avoidance purpose in the title trust of this case. However, the evidence submitted by the Plaintiff alone is insufficient to acknowledge that there was no tax avoidance purpose in the title trust of this case, and there is no other evidence to acknowledge it (In light of the evidence No. 5, it is recognized that both A and B stated that the Plaintiff was held in the name of both A and B for convenience in order to reduce tax when selling the key stocks of this case owned by the Plaintiff). Accordingly, this part of the Plaintiff’s assertion is without merit.

3. Conclusion

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