Seoul Administrative Court 2012Guhap41554 (20 June 2013)

The method of calculating the value per share when a third party passes a resolution to allocate capital increase;

The primary capital increase can not be the same as the secondary capital increase due to the change in the conditions of participants, the issue price, the payment date of stock price, and the restriction on resale, and the assessment period from the date of the resolution of the board of directors and the public notice concerning the primary capital increase to the date before the base date of appraisal shall be used as the assessment period.

Article 63 (1) 1 of the Inheritance Tax and Gift Tax Act

2013Nu21757 Revocation of Disposition of Imposition of Gift Tax

- Appellants

1. The AA 2. EB

1. Samsung director of the tax office; and

Seoul Administrative Court Decision 2012Guhap41554 decided June 20, 2013

November 27, 2013

January 8, 2014

1. All appeals filed by the Plaintiffs and the Defendants are dismissed.

2. The costs of appeal shall be borne by each party.

1. Purport of claim

The imposition of each gift tax on August 25, 201 by the Head of Samsung District Tax Office on the Plaintiff-A on August 25, 201 and the imposition of each gift tax on August 26, 201 by the Head of Mapo District Tax Office against the Plaintiff-B on August 26, 2011 shall be revoked in entirety.

2. Purport of appeal

A. The plaintiffs

The part against the plaintiffs in the judgment of the court of first instance shall be revoked, and all the plaintiffs' claims corresponding to that part shall be accepted.

B. The Defendants

The part against the Defendants in the judgment of the first instance is revoked, and all of the plaintiffs' claims corresponding to that part are dismissed.

1. The part citing the judgment of the court of first instance

The reasoning of the judgment of the court of first instance is as follows: (a) the decision of the court of first instance is dismissed; and (b) the next paragraph is the same as the reasoning of the judgment of the court of first instance; and (c) thus, it is cited in accordance with Article 8(2) of the Administrative Litigation Act and the main sentence of

The following shall be added to July 7, 201, 201, " July 7, 2011," " July 7, 2009," and " July 8, 201," " July 8, 2009," and "○ 5, below sixth:

Article 29(3)1 and (4) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act, which provides for the method of calculating profits arising from the increase of capital, provides for the method of calculating profits arising from the increase of capital, and uses the concept of "the appraised value per share before the increase of capital" as well as the method of evaluating the value of the property subject to the inheritance tax or gift tax under the Inheritance Tax and Gift Tax Act, which is set forth in Article 60 of the Inheritance Tax and Gift Tax Act. In light of such relevant provisions and the literal interpretation, the reason for calculating "the appraised value per share before the increase of capital is based on the method set forth in Article 63(1) of the Inheritance Tax and Gift Tax Act, Article 52-2 of the Enforcement Decree of the Inheritance Tax and Gift Tax Act, which provides for the method of calculating the value of the property before the increase of capital, shall not be deemed to violate the legal principle. The plaintiffs' assertion on other premise is

In addition, even if both the first and second capital increase are measures under a management acquisition agreement as alleged by the plaintiffs, in light of the fact that the procedure and conditions of the capital increase are different, it cannot be deemed that the economic substance of the second and second capital increase is the same. The plaintiffs' assertion on this part cannot be accepted.

The phrase "the 7th fiveth resolution of the board of directors" is regarded as "the 7th resolution of the board of directors and the date of publication", "the 7th resolution of the board of directors shall not be accepted on the premise that the proviso to Article 63 (1) 1 (a) of the Inheritance Tax and Gift Tax Act should be interpreted narrowly)", and "the 7th resolution below the 7th "the 7th resolution of the board of directors" shall be considered as "the 7th resolution of the board of directors and the date of publication", respectively.

In light of various circumstances, including the fact that the issue price is to be determined in accordance with the relevant regulations in the case of a listed corporation, the Plaintiffs asserts that the Plaintiffs cannot be subject to penalty taxes in relation to the instant disposition, as there are justifiable grounds for not being able to expect the Plaintiffs to fulfill their obligations.

Under the tax law, penalty taxes are administrative sanctions imposed in accordance with the law in order to facilitate the exercise of the right to impose taxes and the realization of tax claims, where a taxpayer violates a return and tax liability under the law without justifiable grounds, and the taxpayer’s intentional or negligent negligence is not considered, and the land or mistake of the law does not constitute justifiable grounds (see, e.g., Supreme Court Decision 2013Du1829, May 23, 2013). In light of such legal principles, in cases where capital increase is made by a third party in accordance with the pertinent law, such as the Inheritance Tax and Gift Tax Act, it appears that the Plaintiffs can be predicted that the instant disposition will be imposed on the market price of new stocks, and thus, it cannot be deemed that the non-taxable practice was established if a listed corporation’s securities, etc. were issued by determining the issue price in accordance with the relevant law, and it cannot be deemed that the Plaintiffs were unreasonable to expect the Plaintiffs to perform the duty due to the instant disposition, or that there is no justifiable reason to impose the duty on the Plaintiffs.

3. Conclusion

The judgment of the first instance is justifiable. All appeals filed by the Plaintiffs and the Defendants are dismissed.