2. The costs of appeal shall be borne by the Defendant.

The imposition of gift tax on the plaintiff on December 4, 2015 by the defendant shall be revoked on December 302, 2015.

2. Purport of appeal

The judgment of the first instance is revoked. The plaintiff's claim is dismissed.

A. The Plaintiff and thisB are the Plaintiff’s spouse CC and the spouse eB’s EE (hereinafter “EEE”) were established for the purpose of the supply and demand of parts and the supply of parts, etc. of EE (hereinafter “EEE”) on 2002. XX. Since its establishment, DD is a controlling shareholder and representative director who holds 70% of the shares issued on the register of shareholders, and the number of shares and shares listed on the register of shareholders of EEEE in the register of shareholders are listed in attached Table 1.

B. The Plaintiff was appointed to the auditor of the EE on January 2006, and this BB resigned from the auditor of the EE on the same day. The transfer income tax return (No. 2) drafted on June 2006 under the name of this BB stated that this BB transferred all of the EE shares owned by the Plaintiff at KRW 25,000,000 per share to KRW 10,000,000,000 per share. Accordingly, the register of shareholders of the EE became listed on January 2006, 2006, on behalf of this B, the Plaintiff was registered as a shareholder holding 2,500 shares of the EE shares as shown in the attached Form 1 and attached Form 2, and thereafter the Plaintiff acquired shares from October 207 to December 2012, 200, the Plaintiff acquired shares of the EE shares to be less than KRW 30,500 per share (No. 30,000).

C. The transfer income tax return (No. 3) drafted in the Plaintiff’s name on August 2014, 2014, indicated that this BB acquired all of the instant shares in the Plaintiff’s name as KRW 60,000 per share of KRW 10,000 per share of KRW 10,000,000, and accordingly, the EE’s register of shareholders was recorded as the shareholder of the instant shares on July 2014 instead of the Plaintiff as shown in Appendix 1.

D. Around July 2015, the FF regional tax office requested this B to provide explanatory data on the grounds that the acquisition value of the instant shares differs from the actual value of the instant shares, and this B submitted a shareholder title trust confirmation document (Evidence A5) stating that “I will submit this confirmation document, as I would like to report only the transfer and acquisition to the account office as I would like to be entrusted with the accounting due to lack of tax knowledge in the process of trusting the shares in the name of the GGG business operator at the time of registration of the GG business operator, due to lack of tax knowledge in the process of trusting the shares to AA.”

E. Accordingly, the Defendant: (a) deemed that thisB was the title trust of the instant shares to the Plaintiff; and (b) applied the main text of Article 45-2(1) of the former Inheritance Tax and Gift Tax Act (amended by Act No. 13557, Dec. 15, 2015; hereinafter “former Inheritance Tax and Gift Tax Act”); (c) on December 4, 2015, the Defendant issued a notice of tax payment of gift tax to the Plaintiff by both 302 and 300; and (d) the Ministry of Trade, Industry and Energy for the Trade, Industry

F. The Plaintiff dissatisfied with the instant disposition and filed a tax appeal with the Tax Tribunal on March 15, 2016, but was dismissed on June 29, 2016.

G. The Defendant changed the reason for the disposition of the instant case as it was merely a title trustee, since the actual owner of the instant shares after the testimony of the witness BB and ED was merely a title trustee, since ED was merely a title trustee.

2. Relevant statutes;

Attached Form 3 shall be as listed in attached Table 3.

3. The plaintiff's assertion and judgment

A. Summary of the plaintiff's assertion

1) The Defendant initially deemed that the Plaintiff was entrusted with the shares of this case from the BB, and subsequently changed the grounds for the disposition to be entrusted with the name of the owner from the D in the first instance. Such change is not allowed because the basic facts are not identical.

2) AB or DD entered the instant shares in the name of the Plaintiff irrespective of the Plaintiff’s intent by forging the Plaintiff’s seal in order to make the appearance of 2,500 shares out of the instant shares to be transferred to the Plaintiff by this BB, and preparing a certificate of stock transfer (No. 2-4). On July 2014, 2014, the Plaintiff forged the Plaintiff’s seal and forged the Plaintiff’s seal to make the appearance of the instant shares to be transferred to this BB, thereby preparing a certificate of stock transfer (the same as the evidence No. 1 and No. 3). The Plaintiff was merely subject to the illegal use of the Plaintiff’s name from this B or DD, and there was no agreement to receive the instant shares in the name of the Plaintiff. Therefore, the instant disposition based on this premise is unlawful.

3) Even if it is recognized that BB or DoD trusted the instant shares to the Plaintiff, this part of the cargo transport agent business that EE had already been conducted in order to obtain the right to supply parts from JJ and eliminate preferential costs, and changed the 2,500 shares out of the instant shares in this case’s audit position of BB and the name of BB, and the Plaintiff’s holding of the instant shares is not subject to Article 45(1) of the former Inheritance Tax and Gift Tax Act for lack of the purpose of tax avoidance.

B. Determination as to whether to permit a change in the grounds for disposition

1) Since the subject matter of a lawsuit seeking revocation of taxation is objective existence of the tax amount determined by the tax authority, the tax authority may submit new data that can support the legitimacy of the tax base or tax amount recognized in the relevant disposition, or exchange and change the reason within the scope that maintains the identity of the disposition, and does not necessarily mean that the tax authority can determine the legality of the disposition only by the data at the time of the disposition, or only the reasons for the disposition at the time of the disposition. Even if the tax authority recognized the title truster as the donor at the time of the initial disposition of gift tax as the donor, it does not change the basic fact of taxation within the scope of the same taxable cause (see, e.g., Supreme Court Decisions 2009Du1617, Jan. 27, 2011; 93Nu14059, Dec. 21, 1993).

2) The Defendant initially deemed that the Plaintiff was entrusted with the shares of this case from BB, and subsequently disposed of the shares of this case, but in the trial of this case, the Plaintiff changed the reason that the actual holder of the shares of this case was entrusted with the shares of this case under the name of the trustee. This change is permitted within the scope of maintaining the identity of the disposition, within the scope of maintaining the identity of the disposition. Accordingly, this part of the Plaintiff’s assertion is without merit (from the following, it is deemed that the Defendant made the disposition of this case under the name of the truster).

C. Determination on whether a title trust relationship exists

1) The provision on deemed donation under Article 45-2(1) of the former Inheritance Tax and Gift Tax Act shall apply in cases where the actual owner and the nominal owner enter into a registration, etc. in the name of the nominal owner by agreement or communication with respect to property, the transfer or exercise of the right requires registration, etc., and such registration, etc. is not applicable in cases where the actual owner unilaterally enters into a registration, etc. in the name of the nominal owner, regardless of the intent of the nominal owner. In such cases, the tax authority may prove only that the actual owner is different from the nominal owner. The burden of proving that the registration, etc., of the nominal owner took place as a unilateral act of the actual owner regardless of the intent of the nominal owner should be borne by the claiming owner

2) According to the testimony of the witness BB and ED, it is acknowledged that the actual owner of the instant shares, including 2,500 shares initially held in the name of EEEB, and the Plaintiff is registered only in the name of the shareholder registry as the owner of the instant shares, and that the Plaintiff is not the actual owner of the instant shares. Furthermore, in full view of the following circumstances, the Plaintiff’s 2,50 shares out of the instant shares are deemed to have been transferred to the Plaintiff on January 17, 2006 under the overall purport of EE’s audit and inspection, as well as the acquisition of the instant shares, and the evidence submitted by the Plaintiff alone is insufficient to prove that the Plaintiff unilaterally changed the instant shares under the Plaintiff’s name regardless of the Plaintiff’s intent.

① On January 2006, the Plaintiff claimed that the husband issued a certificate of seal impression to take the office of the EEE audit and issued it to the husband, and did not have any explanation as to the acquisition of shares. However, in the case of non-listed corporations such as EE, the status of executive officers is ordinarily the shareholder’s performance (on January 2006, EE was registered as the shareholder of EE), and thisCC was registered as the director and shareholder of EEE at the time of its establishment. At the time of its establishment, thisCC and the Plaintiff were deemed to have been aware of this. Accordingly, the Plaintiff’s demand for a certificate of seal impression from thisCC and did not hear any explanation as to the acquisition of shares, or did not ask any explanation as to the acquisition of shares, is contrary to the empirical rule.

In addition, since the relationship between the Plaintiff at the time and thisCC, EB, and ED was developed, it seems that DD had no reason to specifically conceal the change of EB shares in the name of the Plaintiff to the Plaintiff or ECC.

Rather, in consideration of the fact that there is a future cooperation from the plaintiff, such as a certificate of personal seal impression, and there is a possibility of tax issues following the acquisition of shares, it is more likely that thisCC or the plaintiff should explain in advance the reason that the shares in the name of the plaintiff are changed (the request of the JJ related to the exclusive supply of parts) and receive the consent or understanding thereof.

② With respect to FF regional tax office’s request for explanation data, this BB submitted to the Plaintiff a written confirmation that the instant shares were nominally held in trust with the Plaintiff, under the title “certificate of shareholder title trust.” According to the witness witness witness testimony, the said written confirmation document is prepared after consultation with the accounting office, and it cannot be readily denied the value of evidence, barring any special circumstances, since it is difficult to view that the document was drafted compulsorily or falsely prepared against the will of the originator (see, e.g., Supreme Court Decision 2001Du2560, Dec. 6, 2002).

③ As shown in the Plaintiff’s assertion, some testimonys made by AL witness of the first instance trial, EB, and ED cannot be easily believed in light of the above ①, the circumstances described in the above paragraph (2), the relationship with the Plaintiff, and the content and attitude of the testimony, etc. The Plaintiff filed a complaint with the Plaintiff for the fabrication of private documents and the use of the private document, or the fact that the suspension of indictment was made after the tax authority’s resolution on gift tax against the Plaintiff on July 2014 to recognize the suspicion of fabrication of the private document by BB regarding the acquisition of the shares of the Plaintiff on the grounds that the aforementioned indictment was made after the tax authority’s resolution on gift tax against the Plaintiff. Ultimately, it is difficult to view that the instant shares were changed in the name of the Plaintiff regardless of the Plaintiff’s intent, in view of the fact that criminal conciliation was made according to the agreement between the Plaintiff and BB, and the Plaintiff revoked

④ Although the appraiser KimM in the first instance trial assessed that it is impossible to determine whether the Plaintiff’s name affixed on the Plaintiff’s share transfer certificate is identical to the Plaintiff’s share transfer certificate, it is because the Plaintiff’s name was defective due to the increase of power, salvation, etc., and the Plaintiff’s name was considerably similar to the Plaintiff’s share transfer certificate. In light of the following: (a) the Plaintiff’s name is deemed the same as the Plaintiff’s share transfer certificate; (b) it is difficult to view the Plaintiff’s name as the Plaintiff’s share transfer certificate as the Plaintiff’s share transfer certificate as the Plaintiff’s share transfer certificate; (c) it is supported by the Plaintiff’s share transfer certificate as a title trust with the Plaintiff’s consent or understanding.

D. Determination as to whether the purpose of tax avoidance exists

1) In light of the legislative purport of Article 45-2(1) of the former Inheritance Tax and Gift Tax Act, in order to effectively prevent tax avoidance by using the title trust system and realize the tax justice, if it is recognized that the title trust was made for any reason other than the purpose of tax avoidance, and that only the reduction of minor taxes incidental to the said title trust occurs, such title trust cannot be deemed as having "the purpose of tax avoidance" as stipulated in subparagraph 1 of the proviso of the same paragraph (see, e.g., Supreme Court Decisions 2017Du38621, Jun. 29, 2017; 2014Du7866, May 16, 2014).

2) According to the facts without dispute, Gap evidence Nos. 5, 9, 15, 16, 18, and 19, each entry of Eul evidence Nos. 6 through 10, 18, and 19, and the testimony of the witness KimN of the first instance trial, the following facts are recognized:

A) At the time of establishment of the JJ as a collaborative entity of the JJ, the EE had its head office within the JJP1 plant and was engaged in the dispatch and management of subordinate workers, the work of the JJ’s raw materials and products shipping agency.

B) On August 8, 2005, EE entered into a temporary transaction agreement with JJ on the condition that EE is to temporarily carry out the VMI (Vendor Management Ltd.) project with the monopoly of parts to the local factory of the JJ for one year. At the time, JJ at the time, in order to enter into this Agreement with the EE, the part of the EE’s existing cargo transport agent project is separately removed, and the nominal owner of the business is not a shareholder or an officer of the EE.

C) Accordingly, EE changed from EB to the Plaintiff on January 2006, 2006, and changed 2,500 shares out of the instant shares in the name of BB on the same day.

In February 2006, this BB established a personal business entity called X. 'GGGGG' and operated the EE after being transferred the part of the existing cargo transport agency business.

D) On June 6, 2006, EE entered into this Agreement with JJ on VI projects, and on April 2007, the head office of JJP1 factory was transferred to the outside of JJP1 factory. ThisB closed down 'GGG' on April 2007, and the EE re-run the cargo transport agency business, which was in excess of 'GGGGGGG'.

3) Furthermore, in full view of the following circumstances recognized as above and each evidence, 2,500 shares of the instant shares were ultimately changed from the name of the Plaintiff in the name of the Plaintiff at the request of the JJ in order to avoid preferential costs that may be caused by the EEE acquired in addition to a cargo transport agency business, and the remaining shares of this case were acquired in the name of the Plaintiff on the basis of the status of shares held in the register of shareholders when EEE grants capital increase, and thus, the title trust of the instant shares in the name of the Plaintiff is irrelevant to the purpose of tax avoidance.

① Determination as to the purpose of tax avoidance should be based on the time of entry of title holders under the title trust. Doese holds only 70% of the shares from the time of establishment of EEE, and the remaining 30% of the shares were in the name of a third party. Thus, even if 2,500 shares out of the shares of this case, which were already in the name of EB, were changed in the name of the Plaintiff, it is difficult to deem that Doese had a separate tax avoidance purpose at the time of the said change, since there was no change in the name of the Plaintiff.

② On January 2006, 2500 shares of the instant case were changed from the name of the Plaintiff to the Plaintiff at the time of the change from the name of the Plaintiff, the status of the EE’s auditor, which is irrelevant to taxes, such as global income tax, was also changed to the Plaintiff.

③ EE does not have any global income tax that was avoided from title trust of the instant shares due to the lack of any distribution of dividends after its establishment. Even if the payment of dividends was made on January 2006, 2006, the change in the name of 2,500 shares out of the instant shares, and there was no change in the number or equity ratio of the remaining shareholders except BB due to the change in the name of 2,500 shares out of the instant shares, and it seems that there was no change in the number or

④ In the event that the instant shares were changed from the name of the Plaintiff to the name of the Plaintiff, there is no reason to return the instant shares in the name of the Plaintiff. However, the instant shares were re-converted from the Plaintiff’s name on July 2014 to the name of this BB, and the earned surplus of EE was KRW 783, 276, 2005, 895, 2006, 622, 2013, 4,520, 4,520, 480, 480, 5,385, 547, and thus, there was no reason to support the instant shares in the name of the Plaintiff, including the fact that the instant shares were returned from the Plaintiff’s name to the Plaintiff’s name, even if there was a further increase in the possibility of dividends and the amount of dividends available when the instant shares were changed to the name of the Plaintiff.

⑤ Meanwhile, the instant shares were 6,00 shares that were changed to the Plaintiff’s name on January 2, 2006 from October 2007 to December 2, 2012, 2000 via 4 additional shares offering. The shares that were acquired in the Plaintiff’s name during each of the above capital offering process were acquired in the Plaintiff’s name on the basis of the previous shares held in the register of shareholders for the purpose of avoiding D from eE’s managerial necessity, and thus, the title trust in the Plaintiff’s name on the said shares was irrelevant to the purpose of tax avoidance (see, e.g., Supreme Court Decision 2017Du39419, Dec. 13, 2017).

(6) Although the Defendant asserted that DoD had the objective of evading gift tax, capital gains tax, and evading the application of the progressive tax rate based on global income aggregate taxation on dividend income, by title trust of the instant shares under the Plaintiff’s name, the said title trust did not have been realized as alleged by the Defendant, and even if there exists such risk of tax avoidance, it is merely a minor reduction of tax incidental to the title trust.

E. Sub-committee

Therefore, since the main text of Article 45-2(1) of the former Inheritance Tax and Gift Tax Act does not apply to the issuance of the instant shares under the Plaintiff’s name for tax avoidance purpose, the instant disposition should be revoked in an unlawful manner.

4. Conclusion

Therefore, the judgment of the first instance court is just and the defendant's appeal is dismissed. It is so decided as per Disposition.