The early 2014 middle 1694

Whether the shares in question can be viewed as a title trust with no tax avoidance purpose

In this case, there is no error in imposing gift tax on the claimant in light of the fact that there is a possibility that the truster will be avoided the global income tax on the dividend income in the future, and that there is room for avoiding the secondary tax liability by maintaining the equity ratio of 49% after incorporation.

Article 45-2 of the Inheritance Tax and Gift Tax Act

2014Guhap5798 Revocation of Disposition of Imposition of Gift Tax

****

port of origin

December 10, 2015

January 14, 2015

1. All of the plaintiff's claims are dismissed.

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

Cheong-gu Office

The Defendant’s taxation of KRW 22,287,520 on February 3, 2014 against Plaintiff**, as well as KRW 22,287,520 on gift tax for the year 2013 and KRW 21,613,780 on gift tax for the year 2008, KRW 21,613,780 on gift tax for the year 2012, and KRW 3,153,940 on March 1, 2014 against Plaintiff *, respectively (the date of the disposition of gift tax for the year 2008, as stated in the written complaint request * the date of the disposition of the gift tax for the year 2008 on the Plaintiff * appears to be the clerical error of “the date of February 3, 2014” as “the date of the disposition of the gift tax for the year 2008”).

1. Details of the disposition;

A. Dong** (hereinafter referred to as the “instant company”) is a company that was established on January 17, 2008 and engages in the business of printing Lavia and its business of manufacturing synthetic resin products, wholesale and retail business, etc.

B. The Plaintiffs, who were executives and employees of the instant company, were employed on January 2, 2008 and retired on October 2009, but were employed again on March 201, 201, and were employed until now. Plaintiff South* was employed on January 2008 and retired on March 201.

C. On January 17, 2008, Kim* accepted the new shares of the company of this case and thereafter, 3,100 shares of the company of this case were transferred to the plaintiff **,2,00 shares, and 2,00 shares were transferred to the plaintiff **, respectively. On October 23, 2012, the 10,00 shares out of the shares issued with capital increase was additionally trusted to the plaintiff ****, and on August 31, 2013, the 12,00 shares transferred to the plaintiff ** in the name of the plaintiff ** (hereinafter referred to as the "each shares of this case").

D. On February 3, 2014, the Defendant: (a) deemed that the title trust of the instant shares was deemed as a gift pursuant to Article 45-2(1) of the Inheritance Tax and Gift Tax Act (hereinafter “Inheritance Tax and Gift Tax Act”); (b) imposed a gift tax of KRW 22,287,520 on the Plaintiff* on February 3, 2014; and (c) imposed a gift tax of KRW 2,037,80 on the Plaintiff* in 2008; and (d) imposed a gift tax of KRW 21,613,780 on the Plaintiff* in March 1, 2014; and (b) imposed a disposition of imposition of KRW 3,153,940 on the Plaintiff* in March 208 (hereinafter collectively referred to as “instant disposition”).

E. The Plaintiffs were dissatisfied with the request for a trial. However, the Tax Tribunal on June 18, 2014

The dismissal was dismissed.

[Ground of recognition] Facts without dispute, entry of Gap evidence 1 through 7 (including branch numbers for those with additional numbers; hereinafter the same shall apply) and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiffs' assertion

The title trust of the instant shares to the Plaintiffs, Kim*, an internal director of the instant company, is due to the management necessity of officers and employees, such as the promotion of morale and the convenience of financing, and thus, there was no purpose of tax avoidance, so it cannot be deemed as a donation.

B. Relevant statutes

Attached Table 2 shall be as stated in the relevant statutes.

C. Determination

1) The legislative purport of Article 45-2(1) of the Inheritance Tax and Gift Tax Act is to recognize an exception to the substance over form principle in the purport that the act of tax avoidance using the title trust system is effectively prevented, thereby realizing the tax justice. Thus, if it is recognized that the title trust was made for any reason other than the purpose of tax avoidance, and it is merely a minor tax reduction incidental to the said title trust, it cannot be readily concluded that there was such a purpose of tax avoidance. However, in light of the legislative purport as seen above, only when the purpose of the title trust is not included in the purpose of tax avoidance, it is impossible to determine that there was a purpose of tax avoidance by applying the proviso of the above provision, and thus, it cannot be said that there was no purpose of tax avoidance. In addition, the burden of proving that there was no purpose of tax avoidance

Supreme Court Decision 2013Du9779 Decided October 17, 2013 (see, e.g., Supreme Court Decision 2013Du9779).

Furthermore, as the nominal owner who bears the above burden of proof, there was an obvious objective irrelevant to the tax avoidance to the extent that it is deemed that there was no tax avoidance purpose in the title trust, and the fact that there was no tax avoidance at the time of the title trust or at the time of the future is proved to the extent that the ordinary person is not doubtful, based on objective and conclusive evidence (see Supreme Court Decision 2004Du11220, Sept. 22, 2006). Whether there was such tax avoidance purpose or not should be determined at the time of the title trust of stocks at the time of the title trust, and it should not be determined as to whether there was a tax evasion thereafter (see Supreme Court Decision 2012Du546, Nov. 28, 2013).

2) Examining the following circumstances in light of the aforementioned legal principles, Kim* has a clear purpose of tax avoidance and tax avoidance in title trust of the shares of this case against the plaintiffs, or it is insufficient to recognize that there was no tax avoidance or tax avoidance in the future at the time of title trust. The plaintiff's assertion is without merit, as there is no evidence to acknowledge otherwise.

① The Kim* acquired 10,00 shares all the new shares issued on January 17, 2008, as shown in the annexed shares ownership transfer sheet, and held that 5,100 shares out of which were held in title trust with the plaintiffs, as the above title trust was held.

The shares of the principal, excluding shares, have been set at 49%, and thereafter on October 23, 2012

Of the shares 50,00 shares, 24,50 shares out of 50,00 shares were acquired under the name of the principal, and 10,000 shares were maintained as 49% of the shares in the name of the principal, 24,500 shares were transferred under the name of the Plaintiff** by entry of change of title in the name of the principal. On August 31, 2013, Plaintiff South** transferred the shares held in title to the principal under the name of the principal to Plaintiff **, instead of transferring the shares held in the title trust to the principal, the shares ratio of the principal except for the title trust continues to be 49%. Kim* by adjusting the formal share ratio through the use of the title trust to the Plaintiffs.

② The Plaintiffs, as their officers and employees of the instant company, are included in the specially related person at the time of determining the oligopolistic shareholder Kim***, arguing that Kim* does not have any possibility to avoid the secondary tax liability of oligopolistic shareholders due to the above title trust. However, according to Articles 20(2), 18-2 subparag. 2, and 1-2(2)1 subparag. 2 of the Enforcement Decree of the Framework Act on National Taxes, the specially related person refers to the person with economic relationship, such as the pertinent taxpayer, officers, and other employees. However, the Plaintiffs are the officers and employees of the instant company, and are not those with economic relationship with the secondary tax liability, and are not included in the oligopolistic shareholder

③ The Company of this case shall be 24,904,765 won in 2008, 52,306,348 won in 2009, and 2010

67,249,372, 73,574,501 (including profits from modification of errors), 2012

Since there was a surplus of undispositionable profits of KRW 390,552,227 in total, KRW 77,061,178, and KRW 95,456,063 in total, KRW 2013, KRW 390,552,227 in total, there was a possibility of dividend payment. Accordingly, Kim*(*) due to the title trust of the instant shares, due to the title trust of the instant shares, could avoid the application

④ Meanwhile, although the Plaintiffs asserted that Kim* was in title trust of the instant shares due to managerial needs, such as the promotion of the morale and the convenience in raising funds by executives and employees, it is difficult to view that the title trust of shares is not helpful in preventing the departure of executives and employees and inspiring their desire to work, since the executives and employees do not have any substantial right to the relevant shares due to the title trust of shares, and thus, the benefits from the interest rate that may be gained at the time of borrowing funds from financial institutions are deemed to have little effect.

3. Conclusion

Therefore, the plaintiffs' claims are dismissed in entirety as it is without merit. It is so ordered as per Disposition.

shall be ruled.