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

(a) Status of the parties and ownership of shares in related companies;

1) The Plaintiff ParkB is the head of the ParkCC, the head of the XX Group, and the Plaintiff ParkB is the south.

2) A group holding company and a listed company (former OO brokerage company; hereinafter referred to as “OO beer”) had 7 overseas subsidiaries with multiple domestic corporations, including Y, OO industry corporations, Y, △, and O spirits companies, an affiliate company, and seven foreign subsidiaries. The largest shareholder of OO beer is ParkCC and its specially related parties.

3) △△△ Incorporated, where ParkCC owned 100% shares, (hereinafter referred to as △△△△△△△△) is an affiliate company of the XX Group, engaging in alcoholic beverage wholesale business such as Yangju, etc., and owned 9.8% of the shares of O beer.

4) △△△ Co., Ltd. established on January 12, 2000 (hereinafter referred to as “Nonindicted Co., Ltd.”) is a corporation that manufactures and sells the cryer coolant, and most of the sale was made by means of supply to O beer, and owned 1.2% of the stocks of O beer.

(b) Donations of stocks and return and payment of corporate tax;

1) On November 2007 to December 2007, Plaintiff ParkB acquired 51,100 shares of the non-party company (73%) from Mad, etc. The Plaintiff ParkB acquired 51,100 shares of the non-party company (73%) and Plaintiff Park Jong-B held 18,90 shares of the non-party company (27%) as 00 shares of the non-party company around 2001.

2) On February 5, 2008, ParkCC donated 100% of the shares held by it (hereinafter “instant shares”) to the non-party company without compensation. Accordingly, the non-party company included the difference between the acquisition value and the book value on the account book of the instant shares and the appraised value under the Inheritance Tax and Gift Tax Act (hereinafter “the Inheritance Tax and Gift Tax Act”) in the gross income, and reported and paid KRW 000 of the corporate tax for the business year 2008.

3) The non-party company directly and indirectly owned 11% of the shares of the Occculism due to the aforementioned shares donation by ParkCC. Accordingly, the Plaintiffs, who substantially hold 10% of the shares of the non-party company, became the largest shareholder of the Oculism following the ParkCC and its related parties.

C. Disposition of this case and appeal

1) After investigating the change in the shares of the non-party company, the director of the Seoul Regional Tax Office: (a) deemed that the donation of this case constitutes a cause corresponding to the exchange of business and the change in the organization of the corporation under Article 42(1)3 of the Act; and (b) thus, the increase in the value of the shares of the plaintiffs, which are shareholders of the non-party company, constitutes a donation under Article 2(3) of the Act (hereinafter “the donation of this case”); (c) calculated the value of donated property by evaluating the value of shares of the non-party company as follows, multiplying the increase in the appraised value per share by the number of shares owned by the plaintiffs; and (d) notified the defendant, who is the head of the competent district tax office, on December 16, 2010; and (c) the defendant issued a disposition of imposition of each gift tax of KRW 00 (including additional tax of KRW 000) and KRW 00 (including additional tax of KRW 000) to the plaintiff Park.

Nonparty Company

Total number of shares

The net asset value ( million won)

The appraised value per share;

pre-Donation

70,000

00

00

After Donation

70,000

00

00

Increased amount

00

00

* Increase in net asset value = approximately KRW 000 - Amount equivalent to corporate tax - Amount of KRW 000

** The increase per share = (the increase in net asset value 】 (2/5 x the ratio of reflection of net asset value to net asset value under Article 54 of the Enforcement Decree of the Act x the rate of increase in the largest shareholder under Article 63(3) of the Act)/total number of stocks

2) The Plaintiffs appealed and filed an appeal on January 28, 201, but the Tax Tribunal rendered a decision to dismiss it on December 13, 2011.

Facts without any dispute over recognition, Gap evidence 1 and 2, Gap evidence 1, 2, Eul evidence 3, Eul evidence 1, the purport of the whole pleadings.

2. Whether the instant disposition is lawful

A. The plaintiffs' assertion

1) The principle of no taxation without representation is based on the legal principle that the taxation requirements, such as taxpayers, taxable objects, tax bases, taxable periods, tax rates, etc., and the imposition and collection procedures of taxes, must be prescribed by law, and the clear principle of taxation requirements that the provisions of taxation requirements should be clear and conclusive. However, Article 2(3) of the Act defines the concept of donation, which does not stipulate such taxation requirements, cannot serve as the basis for imposing gift taxes.

2) In addition to Article 2(3) of the Act to impose gift tax, separate provisions on the requirements for the imposition of gift tax and the calculation of tax base are necessary. The gift of this case, which caused the gift of this case, is not limited to profits derived from a corporation’s capital transaction, such as conversion, acquisition, and exchange of stocks as stipulated in Article 42(1)3 of the Act, but does not constitute profits gained by transfer of business, transfer of business, exchange of business, change of organization of the corporation, etc., and thus, it does not constitute profits gained by a change in ownership or its value. Thus, Article 42(1)3 of

3) Article 2(2) of the Act provides that gift tax shall not be imposed in cases where income tax or corporate tax is imposed on a donee in order to prevent double taxation. In addition, since the non-party company received the instant shares as a donation and included the amount equivalent to the value thereof in its gross income and paid corporate tax, re-tax cannot be levied on such profits. In addition, in cases where the earned surplus of the non-party company is disposed of as a dividend, the dividend income tax shall be paid in cases where the stocks of the non-party company are transferred, and in such cases, the disposition in this case

4) The donation of this case’s shares is similar to the gratuitous transfer of assets to a specific corporation under Article 41 of the Act. Article 41 of the Act limits the taxable object and scope so that gift tax is imposed within the scope of losses where a shareholder of a specific corporation obtains profits from the transaction of providing assets or services to a specific corporation without compensation. Thus, the donation of this case’s shares to the non-party company, which is not a specific corporation, is excluded from the taxable object pursuant to the above provision.

(b) Related statutes;

It is as shown in the attached Table related statutes.

C. Determination

1) Determination on the first argument

A) Introduction and purport of the complete comprehensive gift taxation

The former Inheritance Tax and Gift Tax Act (amended by Act No. 7010, Dec. 30, 2003; hereinafter the same) borrowed the concept of donation under the Civil Act that "in order to clarify which act constitutes a gift, one of the parties expresses his/her intention to confer property to the other party without compensation and the other party approves it." However, such concept of donation does not have any way to prevent the phenomenon in which gift tax was avoided through the free transfer of property outside the form of donation under the Civil Act, and therefore, the tax authorities prepared a type of gift that is not included in the concept of donation under the Civil Act, but it is judged that the transfer of property was made without compensation to an irregular transaction, and prepared a supplementary device for gift tax assessment (Article 32 through 42 of the former Act).

However, when there is a problem that it is impossible to impose tax on the transfer of property by selecting a method that does not correspond to the provision on the constructive gift of such listed method alone (in fact, when the legal change process of Korea is practically changed through transactions or acts of the type that are not prescribed by the law, it was most cases where the provision on the constructive gift or the presumption of donation that regulates such type late without being exempted from taxation due to lack of legislation, and it was most cases where the provision on the constructive gift or the presumption of donation that regulates such type was newly established at the latest without being taxed). On December 30, 203, by amending the law by Act No. 7010 on December 30, 200, it was introduced a comprehensive gift concept of tax law that is distinct from the concept of donation under the Civil Act to realize the principle of equality in taxation

(b)the contents of the complete comprehensive gift tax;

Article 2 (3) of the Act amended by Act No. 7010 of December 30, 2003 is considered to be a donation under tax law if the tangible and intangible assets, which can calculate economic values, are transferred to another person without compensation or are transferred without compensation by direct or indirect means regardless of the name, form, purpose, etc. of the relevant act or transaction, or if the value of the other person's property increases due to one's act even if the method of transfer is not used, all of the valuable and intangible assets are considered to be a donation under tax law if the other person's property value increases due to one's act. Accordingly, the various regulations stipulated in Articles 33 through 42 of the Act have been changed from "the calculation of the value of the donated property" under the premise that the transfer of the property or increase in value arising from such a type of transaction or act is included in the concept of donation under Article 2 (3) of the Act.

C) Whether gift tax can be imposed by applying Article 2(3) of the Act

As can be seen, ① legislators introduced the concept of donation based on the complete comprehensiveism under Article 2(3) of the Act to impose gift tax on the unpredicted various forms of gratuitous transfer or increase in value. ② Accordingly, the existing provisions on deemed donation have changed from the perspective of calculating the value of donated property. This is the purpose of enhancing predictability as to how to include the concept of donation in any case and presenting the method of calculating the specific value of donated property if there is a similar type of donation (see, e.g., Article 2(3) of the Act only if the existing provisions on deemed donation are listed in the relevant provisions, rather than the example provisions on deemed donation, and only the cases where the existing provisions on deemed donation are stated in the relevant provisions on free transfer of property beyond the concept of donation under the Civil Act, the existence of Article 2(3) of the Act shall be limited to the cases where the concept of donation is comprehensively defined as above, and Article 2(3) of the Act provides that gift tax shall be imposed on the donated property of another person, and thus, it is reasonable to impose property rights under Article 28(3).4) of the Act.

D) Whether the alteration in equity value of the plaintiffs due to the donation of the shares of this case constitutes a donation under Article 2 (3) of the Act

Article 63(1)(c) of the Act and Article 54(1) of the Enforcement Decree of the Act stipulate that the net value of the company's profit and loss and net asset value shall be weighted average in the appraisal of the stocks of an unlisted corporation, and Article 63(3) of the Act provides that the largest shareholder's stocks have a higher value than the stocks of the minority shareholder, considering that the company's management right or management right has been attached to the company's stocks, and that the largest shareholder has a higher value than the stocks of the minority shareholder, it should be assessed by adding 30/10 (if the largest shareholder, etc. holds more than 50/100 of the total number of stocks issued by the relevant corporation, hereinafter referred to as "management right premium").

In the instant case, ParkCC donated the instant shares to the non-party company, thereby raising net assets equivalent to the amount obtained by deducting the corporate tax from the value of the shares. Furthermore, the value of the non-party company owned by the plaintiffs increased by the difference between the value of the shares before and after the donation in accordance with the evaluation regulations of the law. However, ParkE shall be deemed to have increased the value of the shares of the non-party company owned by the plaintiffs through the contribution of the non-party company to donate the instant shares to the non-party company. Therefore, this constitutes "donation" under Article 2 (3) of the Act. Accordingly, the Plaintiffs' benefits from the instant donation are subject to gift tax.

2) Determination on the second argument

A) Article 42 (1) 3 of the Act and Article 31-9 (2) 5 of the Enforcement Decree of the Act provide that if the profit accrued from the capital transaction of a corporation, such as investment, reduction of capital, merger, division, conversion of stocks, or gains from the acquisition or transfer of business, business exchange, or organizational change of a corporation, etc., the ownership or value of the relevant property is changed, and if the difference in the value is more than 30/10 of the value of the relevant property before and after the change in the value, or if the amount is more than 300 million won, the said difference shall be deemed to be the value of the property

B) Since the donation of the instant shares does not constitute a “capital transaction of a corporation” under the former part of Article 41(1)3 of the Act, we examine whether it can be seen as a “acquisition or transfer of business, business exchange, business restructuring, etc.” under the latter part of the above provision.

Generally, a transfer of business under the Commercial Act refers to a bond contract to be transferred as a whole to maintain its identity, which is a functional asset as an organic integration organized by a specific business purpose (see, e.g., Supreme Court Decision 2005Da602, Jul. 22, 2005). The restructuring of a corporation refers to changing a stock company to another type of company while maintaining its identity as a limited company. However, Article 41(1)3 of the Act provides that the value of shares should be changed by the "transfer of business and restructuring, etc." and it does not limit the reasons for change in the value of shares to the transfer of business and reorganization. Therefore, it is reasonable to view that there is a significant change in the business or organization of a company to the extent corresponding thereto, and that the value of the company's shares increases due to this, the value of the property can be calculated by applying Article 42(1)3 of the Act.

6. According to the above legal principles, 10% of the shares were donated to the non-party company. 2 The non-party company's business contents were different from each other because it operated the wholesale business, such as double-stock owners. Since the non-party company did not control over the non-party company due to the donation of the shares, 4% of the total value of the shares of the non-party company's shares were more likely to have entered into the fields other than the existing business through its subsidiary. 3 The shareholders' general shareholders' meeting is to decide on the appointment of inspector (Article 36 of the Commercial Act), 388, 409 of the Commercial Act, and 40 of the company's total value of the shares transferred to the non-party company for the purpose of transferring the shares of the non-party company's shares to the non-party company's non-party company's non-party company's non-party company's non-party company's non-party company's non-party company's non-party company's non-party company's non-party company's non-party-party company's non-party company's non-party company's non-party company's non-party company's non-party company's non-party.

3) Judgment on the third argument

The double taxation generally refers to the imposition of two same or similar taxes on the same taxable object. The plaintiffs paid corporate tax on the asset receipt profit of the shares of this case to the non-party company, and when the non-party company disposes of the earned surplus, the plaintiffs pay each income tax on the capital gains when the plaintiffs transfer the shares of the non-party company. Therefore, again, imposing gift tax on the plaintiffs is a double taxation. We examine the following parts:

A) double taxation of corporate tax and gift tax

The corporate tax paid by the non-party company due to the donation of the shares in this case was paid to the total amount of the value appraised by the non-party company pursuant to Article 63 of the Act, etc. (including approximately KRW 000). The gift tax imposed on the plaintiffs due to the donation of the shares in this case was made with respect to the amount calculated by adding the management premium of the non-party company owned by the plaintiffs (total amount of KRW 000) that the plaintiffs acquired to increase the value of the shares in the non-party company owned by the non-party company owned by the plaintiffs, as the value of the non-party company increased to the value of the shares in this case. Accordingly, since the gift tax imposed on the non-party company due to the donation of shares in this case differs between the person to whom the income belongs, the person to whom the gift tax is to be imposed, and the method of calculating the tax base, it is difficult to view that

B) Whether dividend income tax and gift tax are double taxation

If profits accrue from the business performance of a corporation and earned surplus are distributed to the shareholders after paying corporate tax, the dividend income tax under the Income Tax Act is imposed on the shareholders. Such dividend income tax is a tax to be borne by the shareholders if the shareholders are not only the plaintiffs but also the shareholders of the corporation. It is natural that the corporate system separates the profits of the company from the profits of the shareholders by allowing the companies having independent personality to independently engage in profit activities and recognizing the status as the subject to whom the profits and losses accrue. However, if the income on which corporate tax was imposed is distributed to the shareholders and becomes subject to income tax, it may result in double taxation of the same profits. Thus, our tax law provides a dividend income tax system through Gros-up (Article 56 of the Income Tax Act) if the shareholders are individuals to coordinate this, and a system that does not include a certain portion of the dividend income from the subsidiary if the shareholders are a corporation (Article 18-2 and Article 18-3 of the Corporate Tax Act).

As seen above, dividend income tax is imposed pursuant to the Income Tax Act on the profits earned by the shareholders by disposing of the corporate profits to the shareholders of the corporation. The gift tax in this case is imposed pursuant to the gift tax Act on the Plaintiffs’ property increased due to the increase in the value of the shares of the non-party company owned by the Plaintiffs, and the relevant taxable objects and applicable laws, taxation requirements, tax rates, etc. are different. Accordingly,

C) Whether gift tax and transfer income tax are double taxation

In cases where a donee transfers the donated assets, pursuant to Article 97(1) of the Income Tax Act and Article 163(9) of the Enforcement Decree of the same Act, the transfer income tax shall be calculated based on the value calculated by subtracting the appraised value from the transfer value by deeming it as the actual transaction value at the time of acquisition. Therefore, in cases where gift tax is imposed on the increase in the value of stocks of the non-party corporation increased due to the donation of the stocks in this case, the increased portion is recognized as necessary expenses at the time of the transfer of stocks

If the Plaintiffs continued to hold shares without transferring the shares of the non-party company, the Plaintiffs would gratuitously enjoy the profit corresponding to the increase in the value of shares without tax burden, and the primaryly, the right of management is transferred, such as the non-party company holding 100% of shares, and the secondly, the right of management, such as the exercise of the right of management of the non-party company holding a certain share, which eventually led to the State’s assistance in the transfer of shares to the Plaintiffs without compensation.

4) Judgment on the fourth argument

Article 41 of the Act and Article 31 of the Enforcement Decree of the Act on this Act provide property to the specific corporation, such as deficit corporations, where persons having special relationship with shareholders of the specific corporation provide property free of charge to the specific corporation, the gift tax is levied on the donated property value by multiplying the equity ratio of shareholders of the specific corporation within the limit of relevant deficit by the

However, since the non-party company does not correspond to a specific corporation, Article 41 of the Act does not apply to the donation of the shares of this case, and rather, it is more similar to the transfer of the business stipulated in Article 42 (1) 3 of the Act, rather than the mere donation of the shares of this case. Therefore, the plaintiffs' assertion that Article 41 of the Act shall apply to the donation of shares of this case is not accepted.

3. Conclusion

If so, all of the plaintiffs' arguments are without merit, they are dismissed. It is so decided as per Disposition.