A. C Co., Ltd. (hereinafter “C”) is an unlisted corporation that is established on January 5, 1981 and carries on the manufacture and sale of vessel parts, and is under the management of the Plaintiffs’ denying D.

B. The E Co., Ltd. (hereinafter “E”) is a corporation established by the Plaintiffs, D, and F with the intent of engaging in construction business on March 30, 2005 (the capital at the time of its establishment is KRW 550 million, and D invested KRW 250 million, the Plaintiffs, and F, respectively).

C. C transferred its business department and design department to E on January 1, 2006, but merged E on September 1, 2008 (hereinafter “instant merger”). D.

The Plaintiffs, who were holding 50% of the shares of E at the time of the instant merger due to the acquisition of shares of E from D and F since 2006, received each of the shares of 1,375,000 shares as new shares for merger.

The following table shall apply to the changes in the equity ratio of each shareholder of C before and after the merger of this case.

Plaintiff A 1,045,770, Nov. 45, 770, 770, and 764, Aug. 37, 590, Plaintiff B 764, 590, Aug. 37, 200, 190, 421, 910. - 6,421, 921, 910. 74.05 Plaintiff A 1,045, 775, 375,002, 139, 59018.01 (hereinafter referred to as “G”).

900,000.9.86 - 900,000.7.57 Total 9,132,270.0 2,750,000 11,882,270.0

E. As a result of the investigation of the corporate tax for the business year from October 25, 2010 to December 10, 2010 with respect to C, the Commissioner of Busan Regional Tax Office: (a) established E and transferred C’s business department to E; and (b) increased shares owned by the Plaintiffs through the instant merger after two years and eight months (hereinafter “instant transaction”); (c) the instant transaction constitutes a gift under Article 2(3) and (4) of the former Inheritance Tax and Gift Tax Act (amended by Act No. 11609, Jan. 1, 2013; hereinafter “Capital Tax Act”); and (d) donated to the extent that the Plaintiffs increased shares from D and G, the existing shareholders of C.