Seoul Administrative Court 2015Guhap74586 (07 April 2016)

Scope of gift tax on gains from donation arising from transactions with specific corporations

Article 41(1) of the Inheritance Tax and Gift Tax Act provides that “The purpose of Article 41(1) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act is to delegate to the Presidential Decree whether the shareholder’s profit should be deemed as not only the calculation of the shareholder’s profit, but also the shareholder’s profit, and Article 3

Article 41 of the Inheritance Tax and Gift Tax Act: Donation of Benefits through Transactions with Specified Corporation

2016Nu44362 Revocation of Disposition of Imposition of Gift Tax

GuAA Foreign Affairs

BB Director of the Tax Office

2016.04.07

8.08.18

2, 2016.22

1. Partial citement of judgment of the first instance;

The reasoning of the judgment of this court is "1. Reasons for the disposition" and "2. Whether each disposition of this case is legitimate or not."

Until the plaintiffs' assertion, b. related laws and regulations, c. fact of recognition, 5 of the first instance court's decision.

Article 31(6) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act provides that "The Inheritance Tax and Gift Tax Act Article 41(1) shall apply."

each year in the reasoning of the judgment of the first instance, except for the addition of "shall be null and void beyond the scope of the delegation."

Part II of the decision of the court of first instance (sections 11 to 5 of the decision of the court of second instance) and Part II to 15 of the decision of the court of second instance

ter up to 19 pages). Thus, Article 8(2) of the Administrative Litigation Act, the main text of Article 420 of the Civil Procedure Act

this subsection shall be quoted by the court.

2. Parts that vary from the judgment of the first instance court;

D. Determination

1) The portion of "the gains prescribed by Presidential Decree" under Article 41 (1) of the former Inheritance Tax and Gift Tax Act is tax law.

Whether it is null and void in violation of the principle of rate and the principle of prohibition of comprehensive delegation

Article 2 (1) of the former Inheritance Tax and Gift Tax Act provides that the gift tax shall be levied on the donated property of another person.

The term "donation" in paragraph 3 is defined as the name, form and purpose of the act or transaction.

, in person or by another person, tangible and intangible property that can calculate economic value; or

A gratuitous transfer without consideration by an indirect method (including a case of conveying at a significantly low price)

(c) provide that it shall mean an increase in the property value of another person by means of or by means of an investment in the property;

c. Article 31(1) provides that “The donated property under the provisions of Article 2 shall give rise to property belonging to the donee.”

All articles having economic value that can be liquidated into money and property value that can be liquidated into money;

Legal or de facto rights are included in all rights.

The contents of the above provisions and the various forms of property in which legislators are not expected to be unpredicted;

Article 2 of the former Inheritance Tax and Gift Tax Act to impose gift tax on a transfer or increase in value

(3) The scope of taxation of gift tax is expanded by introducing the concept of donation with the complete universalism in paragraph (3).

Accordingly, the existing regulations on deemed donation changed into the calculation regulations of donated property.

Article 41(1) of the Inheritance Tax and Gift Tax Act provides that one of them shall be the one under Article 41(1) of the same Act.

the scope of section 15(b)(3)(3)(3)(2)(3)(3)(2)(2)(2

of this section, even if not specifically specified, the scope of inherent delegation in the same section; or

Since the guidance can be sufficiently recognized, the foregoing provision shall not be subject to the principle of no taxation without law and prohibition of comprehensive delegation.

No violation of the principle shall be deemed to be a violation.

Therefore, this part of the plaintiffs' assertion is without merit.

2) The delegation under Article 31(6) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act under Article 41(1) of the same Act

Whether it is null and void beyond scope

A) ① The former Inheritance Tax and Gift Tax Act (amended by Act No. 9916, Jan. 1, 2010; hereinafter the same shall apply) amendment

Article 41 (1) of the former Inheritance Tax and Gift Tax Act (the former Inheritance Tax and Gift Tax Act)

A person who has a special relationship with a stockholder or investor of a person (hereafter referred to as a "specific corporation" in this Article)

through transactions falling under any of the following subparagraphs with such specified corporations; or

(2) If an investor obtains a benefit, the amount equivalent to such benefit shall be the shareholder of the specified corporation.

(2) The former Enforcement Decree of the Inheritance Tax and Gift Tax Act (amended by Presidential Decree No. 1790, Dec. 2, 2003)

30. The former Enforcement Decree of the Inheritance Tax and Gift Tax Act before the amendment (amended by Presidential Decree No. 18177)

section 31(6) of the Act provides that “The shareholders or investments of a specified corporation shall be made in accordance with section 41(1) of the Act.”

profit deemed donated by the person shall be equivalent to the profit falling under any of the following subparagraphs:

shares or equity shares increased by multiplying the number of shares or equity shares of a person provided for in paragraph (5).

(3) Presidential Decree No. 18177 on December 30, 2003

Article 31(6) of the amended Enforcement Decree of the Inheritance Tax and Gift Tax Act (Article 31 of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act

Paragraph 6 is the same as Paragraph 6; hereinafter referred to as "Article 31 (6) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act";

The profit pursuant to Article 41 (1) of the Act shall be the profit pursuant to paragraph (5) of the same Article which falls under any of the following subparagraphs:

was amended as "the amount to be calculated by multiplying the shares or equity shares of the person set forth therein by the ratio of such shares or equity shares"

(c)

B) However, Article 31(6) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act is delegated to the former Inheritance Tax and Gift Tax Act before the amendment

- 5-

Supreme Court Decision 2006 Decided March 19, 2009

Article 41(1) of the former Inheritance Tax and Gift Tax Act (amended by Act No. 19693)

Paragraphs (2) and (2) shall, where a corporation has actually gained a profit by receiving a donation, such profit.

Article 31(6) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act, even if only the calculation is delegated by the Presidential Decree.

shareholders, even if the value of the shares has not been increased due to the donation to the corporation

(1) The scope of delegation is to be deemed to have been derived from the scope of delegation.

The effect was called ‘fficacy'.

C) The old award amended by Act No. 9916, Jan. 1, 2010, after the above Supreme Court ruling was pronounced.

Article 41 of the Inheritance Tax and Gift Tax Act (the same as Article 41 of the former Inheritance Tax and Gift Tax Act applied to this case; hereinafter)

Paragraph 1 of Article 41 is a corporation which has losses, or is under suspension or discontinuance of business (including any such corporation).

under this section, a person who has a special relationship with the shareholders or investors of a particular corporation

shareholders of a specified corporation or a shareholder of such specified corporation by conducting any of the following transactions with such corporation:

Where an investor has acquired any profits determined by Presidential Decree, the equivalent amount of such profits.

"The value of the donated property of the shareholders or investors of a specified corporation" was revised.

D) The purport of the Supreme Court’s ruling under the foregoing B, and the text and text of Article 41(1) of the former Inheritance Tax and Gift Tax Act

Comprehensively taking account of the foregoing, Article 41(1) of the former Inheritance Tax and Gift Tax Act as well as the calculation of profits earned by shareholders

shall be delegated to the Presidential Decree in respect of whether the shareholder’s interest is to be deemed to have been obtained.

It is reasonable to view that it is the purport of Article 31(6) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act is delegation to the parent law.

As a result, it becomes no longer null and void due to a new establishment.

E) Therefore, this part of the plaintiffs' assertion is without merit.

3) The instant exemption from obligation constitutes “donations” subject to the gift tax under the former Inheritance Tax and Gift Tax Act.

or any profit arising from the increase of capital by excessively infringing the property right of this case.

in comparison with the donation of the corporation and the dissolution of the corporation, the plaintiffs shall, without reasonable grounds, be discriminated against.

Whether it is illegal because it violates the equality principle.

Article 31(6) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act before the amendment shall read “Article 41(1) of the Act.”

interest in which shareholders or investors of a particular corporation are deemed to have been donated shall be exempted from the liability of the corporation.

increased amount of money equivalent to the benefit derived from the receipt, acceptance, or repayment;

An amount calculated by multiplying the per share value of a type or investment share by the number of stocks of the persons referred to in paragraph (5).

As stated in the above, it is possible to interpret the same as the plaintiffs, but the application of this case to this case.

Article 31(6) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act which is the benefit under Article 41(1) of the Act

amount equivalent to the profit derived from the exemption, acceptance, or repayment of the liabilities of the corporation;

The amount shall be calculated by multiplying the ratio of stocks or investment shares of the persons prescribed in paragraph (5).

Since there is a provision that the value of donated property shall be calculated by the method such as the defendant.

Ultimately, Article 41(1) of the former Inheritance Tax and Gift Tax Act is a transaction such as gratuitous provision of property with a specific corporation.

(1) The former Enforcement Decree of the Inheritance Tax and Gift Tax Act, regardless of whether the largest shareholder, etc. actually obtained

31. Benefits prescribed in Paragraph 6 of Article 31 shall be deemed to have been received and deemed to have been donated by legal fiction

(1) If the purpose of legislation of Article 41(1) of the Inheritance Tax and Gift Tax Act is to be met, it shall be re-written to the specified corporation.

corporate tax on the value of donation by offsetting the value of donation as deficit after donation; and

Gift tax on illegal donations that give benefit to shareholders, etc. of a specific corporation without bearing any burden.

(2) in the case of a closed non-listed corporation, different from the general listed corporation.

In fact, it is impossible to calculate the fair price of shares, 3. The shareholders of the unlisted company are unlisted companies.

In light of the fact that many intangible benefits such as cost processing are available, free of charge

Even in cases where the value per share of an unlisted corporation before and after the donation is incidental to all, the shareholders of such corporation;

Therefore, it cannot be readily concluded that there is no profit gained from the debt exemption of this case.

corporation of this case held by such corporation on the ground that the value of its shares was all incidental to that of the corporation

Article 41 (1) of the former Inheritance Tax and Gift Tax Act does not apply to "donations which are subject to gift tax"; or

each disposition of this case to which it applies is unlawful by excessively infringing the property right or resulting from the increase of capital;

Compared with the donation of profits and dissolution of a corporation, the Plaintiffs without reasonable grounds

Since it is dealt with, it cannot be deemed illegal as it violates the principle of equality.

Therefore, each part of the plaintiffs' assertion is without merit.

3. Conclusion

Therefore, the plaintiffs' claims in this case are dismissed for all reasons, and the judgment of the court of first instance is so dismissed.

As the conclusion differs from that, the defendant's appeal is accepted and the judgment of the first instance is revoked and the plaintiff is revoked.

All claims are dismissed, and it is so decided as per Disposition.