B. On December 1, 2010, the head of the original state tax office imposed an OOO on the Plaintiff’s grandchildren on the imposition of gift tax;

Each cancellation shall be revoked.

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

Cheong-gu Office

The same shall apply to the order.

A. CCC Information and Communications Co., Ltd. (hereinafter referred to as “CC”) is a company operating software development business, and DD (hereinafter referred to as “DD”) is a company operating air pollution prevention facilities and technical construction business.

B. The Plaintiff LAB held 450,000 shares of the CCC (7.85%) and Plaintiff LB held 379,805 shares (6.63%) of the CCC (hereinafter referred to as “instant shares”); and on November 28, 2007, 41 shareholders of CCC, including the Plaintiffs, were transferred 5,418,176 shares of CCC to DD, a corporation listed on KOSDAQ (94.53%) and acquired 17,80,08 shares of new shares issued by DD in return for transfer.

C. The Defendants determined that “the Plaintiff transferred the instant shares to KRW OO per share (OOO) higher than the market price of the instant shares,” and applied Article 35 of the former Inheritance Tax and Gift Tax Act (amended by Act No. 8435, May 17, 2007; hereinafter “former Act”), the head of the Defendant Samsung A tax office imposed gift tax OO on Plaintiff HA on October 1, 2010, and the head of the Defendant principal tax office on December 1, 2010, respectively. < Amended by Act No. 1090, Oct. 1, 2010>

D. The Plaintiffs appealed and requested an examination to the Board of Audit and Inspection, but the said request was dismissed on August 30, 2012.

E. The head of the Defendant Samsung District Tax Office: (a) determined that “the Plaintiff imposed gift tax on the premise that the Plaintiff was a person having a special relationship with D; and (b) rendered ex officio a disposition to rectify the amount of gift tax on July 2, 2013 by reducing the amount of KRW OOO on Plaintiff Won (hereinafter the reduced amount was subject to the disposition of October 1, 2010 and the disposition of imposition on December 1, 2010, which was revised).

[Reasons for Recognition] Facts without dispute, Gap evidence 1 through 3 (including each number, hereinafter the same shall apply), Eul evidence 1 through 3, 9, 15, and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiffs' assertion

Considering that the Plaintiffs are not the specially related parties of D, the transfer value of the instant shares is the value calculated by the accounting firm in accordance with the relevant laws and regulations, and there is no reason for DD to distribute profits to the transferor of CCC shares, the transfer value of the instant shares should be deemed the market value of the instant shares. Therefore, the Plaintiffs cannot be deemed to have transferred the instant shares at a price significantly higher than the market price without justifiable grounds in light of the

B. Relevant statutes

It is as shown in the attached Form.

C. Facts of recognition

1) On June 20, 2007, the Plaintiff entered into a contract with the largest EE to transfer the CCC’s shares of 1,000,000 and its management rights to the OE, and on September 28, 2007, the Plaintiff paid the CCC’s shares of 600,000 shares (10.74%) to the largest EE upon receipt of the CCC’s shares of 1,00 shares (10.74%).

2) The Maximum EE was appointed respectively as the representative director of the CCC on August 8, 2007, and on October 10, 2007, as the representative director of DD on October 8, 2007.

3) On October 12, 2007, DD requested a FF accounting corporation to assess the adequacy of the CCC stock acquisition value.

4) Pursuant to Article 84-7 (1) 1 of the former Enforcement Decree of the Securities and Exchange Act (amended by Presidential Decree No. 20947 of July 29, 2008; hereinafter referred to as the "former Enforcement Decree of the Securities and Exchange Act") and Article 36-12 (1) of the former Enforcement Rule of the Securities and Exchange Act (amended by Ordinance of the Prime Minister No. 885 of August 4, 2008; hereinafter referred to as the "former Enforcement Rule of the Securities and Exchange Act"), FF accounting corporation calculated the price of "CCC stocks" as an OOO under Article 36-12 (3) and (5) of the former Enforcement Rule of the Securities and Exchange Act and Article 32 of the former Enforcement Rule of the Securities and Exchange Act (amended by Ordinance of the Financial Services Commission No. 2009-14 of the Securities and Exchange Act; hereinafter referred to as the "former Securities and Exchange Regulation"), it calculated the price of "CC stocks as an OO value and profits average per share.

5) FF accounting firm estimated the sales revenue in 2007 and 2008 of CCC using CCC’s financial data, forecasts data, etc. Based on this, calculated a profit value per share, and the actual sales revenue of CCC was as listed below.

(unit: million won)

Classification

205

206

2007

208

209

Performance

Performance

Estimated

Performance

Differents

Estimated

Performance

Differents

Performance

Sales

OOO

OOO

OOO

OOO

OOO

OOO

OOO

OOO

OOO

net income

OOO

OOO

OOO

OOO

OOO

OOO

OOO

OOO

OOO

6) Pursuant to Article 49(1) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act (amended by Presidential Decree No. 20621, Feb. 22, 2008), trading cases within three months before or after the evaluation base date ( November 28, 2007) which can be recognized as the market price of the instant stocks pursuant to Article 49(1) are as follows:

No.

Date of contract

transferor

A transferee

Transactional Shares

The trading value per share;

1

November 1, 2007

G Kim GG

50,000 Shares (0.87%)

OOOE

2

November 06, 2007

GH

379,805 Shares (6.63%)

OOOE

3

November 28, 2007

41 Plaintiffs, etc.

D

5,418,176 Shares (94.53%)

OOOE

4

December 1, 2007

Both Sections II

YangJ

15,000 Shares (0.23%)

OOOE

5

December 17, 2007

HuK

D

74,000 (1.30%)

OOOE

6

December 31, 2007

YL

MaM

25,000 (0.44%)

OOOE

[Reasons for Recognition] Unsatisfy, Gap evidence Nos. 4, 7, Eul evidence No. 4 to 8, the purport of the whole pleadings

D. Determination

1) Article 35(2) of the former Act provides, “Where property is transferred between persons other than those in a special relationship, the amount equivalent to the profits prescribed by the Presidential Decree shall be presumed to be donated to the person who has acquired the profits by presumed the amount equivalent to the difference between the price and the market price only when property is transferred at a price significantly higher than the market price in light of the transactional practice.” Article 26(6) of the Enforcement Decree of the same Act (amended by Presidential Decree No. 20621 of Feb. 22, 2000) provides, “The value of the transferred property is significantly higher than the market price if there is a difference between the market price and the transferred property and 30/100 or more of the market price.”

On the other hand, Article 60 (1) of the former Act provides that "the value of property on which gift tax is levied shall be based on the market price as of the date of donation," Article 60 (2) of the same Act provides that "the market price under paragraph (1) of the same Article shall be the value which is generally established in the event of free trade between many and unspecified persons, including expropriation, public auction price, appraisal price, etc., which is recognized as the market price under the conditions as prescribed by the Presidential Decree," and Article 60 (3) of the same Act provides that "if it is difficult to calculate the market price in the application of the provisions of paragraph (1), it shall be based on the valuation

2) In general, in light of the fact that the tax authority bears the burden of proving the facts of taxation requirements in a lawsuit seeking revocation of taxation, and the language, content, and form of provision under Article 35(2) of the former Act, the tax authority should prove not only that the transferor transferred the property to a person other than the person having a special relationship at a significantly higher price than the market price, but also that there is no justifiable reason in light of transaction practices (see Supreme Court Decision 2011Du2075, Dec. 22, 2011).

In addition, the legislative intent of Article 35(2) of the former Act is to cope with and promote fairness in taxation by imposing gift tax on the profits earned by the other party to the transaction in a case where profits equivalent to the difference between the price and the market price are actually transferred without compensation through an abnormal method manipulating the transaction price for the benefit of the other party to the transaction. However, since the transaction between the unrelated parties is not in conflict with each other, it is difficult to deem that the difference was donated to the other party to the transaction solely on the basis that there is a difference between the price and the market price. Thus, Article 35(2) of the former Act added taxation requirement that "for the transaction between the unrelated parties, there is no justifiable reason in light of the transaction practice". Considering these factors, it is reasonable to deem that the party to the transaction who transferred or acquired the property at a higher price has reasonable reason to believe the transaction price at a reasonable price reflecting the objective exchange value, and even if there was any objective reason to deem the transferee’s acquisition of the property at the transaction price at a reasonable economic point, it is reasonable to see Article 35(2013).

3) In full view of the following circumstances, the evidence presented by the Defendants alone is insufficient to deem that the Plaintiffs transferred the shares of this case at a price significantly higher than the market price without justifiable grounds in light of transaction practices, and there is no other evidence to acknowledge otherwise (in so doing, it is reasonable to deem that D was an improper reason from the perspective of a reasonable economic person that the acquisition of the shares of this case at the above price was an improper reason). Accordingly, the above assertion by the Plaintiffs is justifiable.

A) The substantial value of shares cannot be determined in the sole figures based on a strict objective accuracy, as determined in consideration of various factors, such as market value, profit value, and relative value, other than the value of assets (see Supreme Court Decision 2009Du19465, Feb. 10, 201).

B) The transfer value of the instant shares was calculated by the FF accounting corporation pursuant to Article 36-12(3) and (5) of the former Enforcement Rule of the Securities and Exchange Act and Article 32 of the former Securities Issuance Rule. Considering that the FF accounting corporation’s appraisal of the instant shares was made by DD, the transaction partner of the Plaintiffs, the transfer value of the instant shares is regarded as a normal transaction based on free will between the parties having equal relationship.

C) There is no evidence to acknowledge that the Plaintiffs actively participated in the appraisal of the instant shares by the FF accounting firm or there was mutual collusion with DD. Moreover, there is no reason for FF accounting firm to excessively assess the transfer value of the instant shares. Moreover, there is no reason to deem that the transfer value of the instant shares was calculated based on the false data or the unexpected value that was either calculated based on the false data.

D) Article 60 of the former Act provides that the value of the property on which the gift tax is levied shall be calculated on the basis of the market price as of the date of donation, and where it is difficult to calculate the market price, it shall be calculated on the basis of a supplementary assessment method as stipulated in Article 63 of the former Act. It is reasonable to view that the value of the stocks calculated by an outside appraisal organization pursuant to the provisions of the Securities and Exchange Act

E) The Plaintiffs do not constitute a person with a special relationship with DD, and there is no other circumstance that D or D’s shareholders distribute profits to the Plaintiffs through the transfer of the instant shares. In addition, on November 28, 2007, 39 shareholders, including institutional investors, of CCC transferred CCC’s shares 4,588,371 shares to D, a transfer price of the instant shares, to OOE per share, the transfer price of the instant shares.

F) The Defendants predicted that FF accounting corporation recorded net income of approximately KRW OOOO in 2008, and in fact, CCC recorded approximately OOOOOO loss in the year 2008, asserted that the transfer value of the instant shares calculated by FF accounting corporation cannot be deemed as the market price in light of the record of net loss of KRW OOOO in the year 2008. However, in light of the fact that a considerable portion of net loss ( drug OO loss) takes up by FF accounting corporation, it is difficult to deem that the transfer value of the instant shares calculated by FF accounting corporation was calculated on the basis of an unexpected value without base.

G) From a policy perspective, if the transaction value between unrelated parties is higher or lower than the value calculated by the supplementary evaluation method and all of them are subject to taxation, private autonomy, such as the determination of the transaction value through free negotiations between the parties to the transaction, may be infringed. Therefore, in order to impose gift tax on deeming that the transaction value is transferred to a person without a special relationship at a higher price than the market value, there is no justifiable reason in light of the transaction practice and that the transaction value is obviously higher than the market value.

3. Conclusion

Therefore, the plaintiffs' claims of this case are justified, and all of them are accepted, and it is so decided as per Disposition.