(b) Whether the act of transferring low-price shares through a differential dividend resolution constitutes "property donation made without compensation" as provided by Article 40 (1) 1 of the Enforcement Decree of the Corporate Tax Act concerning non-Inclusion of donations in deductible expenses (negative)

B. In light of the purport of Article 18 of the Corporate Tax Act and Article 40 (1) 1 and 2 of the Enforcement Decree of the same Act concerning the non-deductible of donations, the above subparagraph 1 of the same Article refers to cases where assets are transferred without consideration and immediately can be acknowledged as the substance of donations as soon as they are transferred without consideration. Thus, in the case of normal dividends between a corporate shareholder and a shareholders who have no special relationship, where it is deemed that different dividends have been adopted as a means of exchanging or transferring the dividends received in excess of part of the stocks to which dividends were paid, the above subparagraph 1 of the same Article does not apply, regardless of whether the donations under subparagraph 2 constitute donations.

The case is remanded to the Gwangju High Court.

1. The judgment of the court below

According to the reasoning of the judgment below, the court below rejected non-party 1's act of calculating the market price of the above non-party 1's shares at the 0th 5th 6th 2th 7th 6th 6th 6th 6th 6th 6th 6th 6th 6th 6th 6th 6th 6th 6th 6th 6th 6th 6th 6th 6th 6th 6th 6th 6th 6th 6th 6th 6th 6th 6th 6th 6th 6th 6th 6th 6th 6th 6th 6th 6th 6th 6th 6th 6th 6th 6th 6th 6th 6th 8th 6th 6th 6th 6th 6th 6th 600 6th 6th 6th 6th 600 6th 6th 6th 8000.

2. Judgment on the grounds of appeal

A. As to the portion of wrongful calculation (ground of appeal Nos. 1, 2, and 3)

As determined by the court below, if a non-party company composed of the plaintiffs' corporate shareholders and seven individual shareholders makes a differential resolution of the same amount as at the time of original adjudication with the consent of all the above shareholders, and as a result, dividends have been made at its regular shareholders' general meeting, it is acknowledged that the plaintiffs corporation and the above other shareholders have used the above dividends resolution as a means of transaction on the basis of an agreement to transfer the shares to other shareholders in return for the above partial excess dividends in accordance with the principle of shareholder equality in substance. Thus, it is not acceptable to accept the theory that the plaintiffs exercised voting rights at the shareholders' general meeting of the non-party company and the above shareholders in a special relationship with the plaintiffs, and that there was no "transaction" under Article 20 of the Corporate Tax Act with the above 78,320 (76,120+2,200) share shares paid to the plaintiffs at the above regular shareholders' general shareholders' meeting and the above 700,400,400,400,000 won shares paid to them.

Furthermore, in the above case, it is deemed that the tax burden on the corporate income of the plaintiffs has been unjustly reduced and the object to be denied. Since the plaintiffs' act of distributing profits from the transfer of the shares received in the case of normal dividends to the shareholders with a special relationship through the aforementioned differential distribution resolution, the avoided tax amount shall be calculated based on the difference between the case where the plaintiffs transferred the above shares to the shareholders with a special relationship at normal price, and it shall not be calculated based on the face value of the shares simply. The judgment below to the same purport is just and acceptable.

B. As to the non-deductible part of contribution (ground of appeal No. 4)

Article 18 of the Corporate Tax Act provides that "the donation under Article 18 of the Enforcement Decree of the same Act shall be deemed to fall under any of the following subparagraphs," while Article 40 (1) of the same Act provides that "the value of property donation which is made free of charge to a third party (excluding his employees) without any direct connection with the business of the juristic person" in subparagraph 1 of the same Article provides that "the value of property donation which is made free of charge to a third party (excluding his employees)" in subparagraph 2 of the same Article provides that "the amount which the juristic person transfers the assets to a person who has no special relation as provided in Article 46 (1) without any justifiable reason, or is deemed to have been actually donated among the difference by purchasing the assets at a price higher than the arm's length price. In this case, the normal price shall be either 30/100 of the market price or 30/100 of the market price, apart from the purpose of each provision above, it shall be deemed that the above subparagraph 1 provides that there is no possibility for the plaintiffs to exchange the above stocks with the above special relation shareholders as the above.

The judgment of the court below is erroneous in the misapprehension of legal principles as to the interpretation of the above provision, which affected the conclusion of the judgment.

3. The judgment of the court below is reversed and remanded. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Park Jong-ho (Presiding Justice)