Suwon District Court-2018-Gu Partnership-62936 ( dated 24, 2019)

In addition to the existing title trust stocks, the provisions on deemed donation for gratuitous grant allocated according to the capitalization of earned surplus.

Unlike the judgment below, since it is judged that the capital surplus or earned surplus is not a free share allocated in proportion to the shares held by capital surplus or earned surplus, it is subject to the provision

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

2018Nu70082 Revocation of Disposition of Levying Gift Tax

JeonA et al.1

c. Head of c Tax Office

Suwon District Court Decision 2018Guhap62936 Decided October 11, 2018

April 12, 2019

May 24, 2019

1. The part against the defendant among the judgment of the court of first instance is revoked, and the plaintiffs' claims corresponding to the revoked part are dismissed in entirety.

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

1. Purport of claim

The Defendant’s disposition of imposition of gift tax amounting to KRW 3,005,250 on January 1, 2006 and KRW 297,114,040 on December 2, 2010 shall be revoked in entirety.

2. Purport of appeal

The same shall apply to the order.

1. Scope of the judgment of this court;

The court of first instance dismissed the plaintiffs' claim with respect to the gift tax devolving upon January 201, 206, which the defendant imposed on the plaintiffs on May 11, 2017, and revoked the plaintiffs' claim with respect to the gift tax devolving upon December 2010. Since only the defendant appealed with respect to the part against the defendant, the scope of the judgment of the court of first instance is limited to the claim for revocation of the disposition of gift tax devolving upon January 12, 2010.

2. Details of the disposition;

The reasons to be stated in this part are as stated in the corresponding part of the judgment of the court of first instance except for the following parts. Thus, this Court shall accept it in accordance with Article 8(2) of the Administrative Litigation Act and the main sentence of Article 420 of the Civil Procedure Act.

Part 2 of the judgment of the court of first instance shall be "No. 29, 2010" in Part 13, "No. 31, 2010."

The Inheritance Tax and Gift Tax Act (hereinafter "the Inheritance Tax and Gift Tax Act") shall be amended into "the former Inheritance Tax and Gift Tax Act (amended by Act No. 11130, Dec. 31, 201; hereinafter "the Inheritance Tax and Gift Tax Act")" on the third and fourth parts of the judgment of the first instance.

3. Whether the instant disposition is lawful

A. Summary of the plaintiffs' assertion

The reasons for this Court to be stated are the same as the corresponding part of the judgment of the court of first instance, and thus, they shall be quoted in accordance with Article 8(2) of the Administrative Litigation Act and Article 420 of the Civil Procedure Act.

B. Relevant statutes

The entries in the attached statutes are as follows.

C. Determination

1) Whether procedural illegality exists

The reasons for this Court to be stated are the same as the corresponding part of the judgment of the court of first instance, and thus, they shall be quoted in accordance with Article 8(2) of the Administrative Litigation Act and Article 420 of the Civil Procedure Act.

2) Determination as to whether title trust was held by the shares No. 2 of this case

A) Whether the provision on deemed donation is applicable

The main text of Article 45-2(1) of the Inheritance Tax and Gift Tax Act is one of the exceptions to the substance over form principle under Article 14 of the Framework Act on National Taxes, and is a provision that is limited within the extent of realizing tax justice by preventing title trust from being abused as a means of tax avoidance, and thus, is a provision that is to be applied to the extent of realizing tax justice by preventing the actual owner of stocks and the nominal owner from abusing the retained earnings under a different state. Even if a corporation that issued stocks without compensation is allocated to the nominal owner as a result of the transfer of retained earnings, the net assets or profits of the issuing corporation and the equity ratio of the actual shareholder do not change, and it cannot be said that there is no purpose of additional tax avoidance other than the purpose of tax avoidance due to the title trust of existing stocks, barring special circumstances (see Supreme Court Decision 2009Du21352, Jul. 14, 201).

According to the health class, Gap evidence 6's statement on this case ***'s statement on the state of changes in stocks, etc. 20,000 common shares on March 24, 2010 and 34,00 common shares on December 31, 2010, Plaintiff Jeon Soo-a stated that the shares of this case were allocated as capital free of charge.

However, the following circumstances recognized by the purport of the statement and the entire pleading as stated in the evidence No. 6 of this case, i.e., the Plaintiffs stated that the Plaintiff Ba contributed KRW 100,000,000 to 170,000 on March 24, 2010 and 170,000 on December 31, 2010 for the addition of capital *** after the institution of the instant lawsuit, the date of the closing of argument in the first instance court. The Plaintiffs stated that the Plaintiff Ba contributed to capital increase of KRW 60,00,000 on March 24, 2010, and that the capital increase is also increased by KRW 100,000 as well as KRW 34,00,00 on December 31, 2010, in view of the fact that the shares were distributed to the Plaintiff Ka without compensation in proportion to the above allegations, and that the shares were not allocated to the Plaintiff Ga’s capital increase without compensation.

B) Whether the actual owner and the nominal owner are different, etc.

The provision on deemed donation under Article 45-2(1) of the Inheritance Tax and Gift Tax Act shall apply in cases where a real owner or a nominal owner makes a registration, etc. in the future of the nominal owner by agreement or communication with respect to property, the transfer or exercise of the right of the nominal owner. As such, in cases where a tax office unilaterally makes a registration, etc. in the name of the nominal owner regardless of the intent of the nominal owner, it shall not apply. In such cases, the tax office must establish only the fact that the actual owner is different from the nominal owner, and the burden of proof that the registration, etc. of the nominal owner was made in the unilateral act of the real owner regardless of the intent of the nominal owner should be borne by the nominal owner who

First, with respect to whether the owner of the second shares and the nominal owner of the second shares are different, the following circumstances, which are recognized by the purport of the statement and the entire pleadings as follows, namely, Plaintiff Jeon Soo-a, who was an individual entrepreneur in 2005 ******* the employee employed by being employed in the fiber, paid all the money deposited after the transfer of the first shares and the second shares, to Plaintiff Ho, who prepared and submitted a written confirmation of the fact of transactions, and Plaintiff Jeon-a, who was an individual entrepreneur ******** in the corporate body in the operation of textile *** in the corporate body in the operation of textile *** in the representative director and the real owner of the second shares, are different from the actual owner because the title owner of the second shares in this case is determined to be Plaintiff Jeon-a or the real owner.

Furthermore, with respect to whether the name of the nominal owner was unilaterally used regardless of the intent of the nominal owner, the following circumstances, namely, Plaintiff Jeon Sooa, who was recognized by the respective descriptions of No. 7 and No. 10 and the purport of the whole pleadings, i.e., the personal business chain ************************ there was an entry with a certificate of personal seal impression issued on January 15, 2009, at the time of acquiring the shares of this case, even though there was an entry with the certificate of personal seal impression issued on December 29, 2010, when the shares of this case were acquired, the evidence submitted by the Plaintiffs alone is insufficient to recognize that the title of shares of this case No. 2 was a unilateral act of Plaintiff Jeon Sooa regardless of the intent of Plaintiff Jeon Sooa, and there is no other evidence to acknowledge this otherwise. Therefore, the Plaintiffs’ assertion is without merit.

C) Whether the purpose of tax avoidance is tax avoidance

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 with the purport of effectively preventing the act of tax avoidance using the title trust system and realizing the tax justice. Thus, the proviso of the same Article is applicable only where the purpose of tax avoidance is not included in the purpose of the title trust, and in such a case, the burden of proving that there was no purpose of tax avoidance can be proved by means of proving that there was a purpose other than the purpose of tax avoidance. However, as for the fact that there was no purpose of tax avoidance, the burden of proving that there was no purpose of tax avoidance can be proved by means of proving that there was a purpose other than the purpose of tax avoidance. However, as the title holder who bears the burden of proof, there was an obvious purpose irrelevant to the tax avoidance in the title trust to the extent that there was no purpose of tax avoidance in the title trust, and it is necessary to prove that there was no tax avoidance in the future at the time of the title trust or in the absence of tax avoidance (see, e.g.

In light of the following circumstances which are acknowledged by the evidence mentioned above and the purport of Gap evidence No. 11 and the whole pleadings, it is insufficient to recognize that the evidence submitted by the plaintiffs was a clear purpose unrelated to tax avoidance and tax avoidance at the time of title trust or there was no tax evasion at the time of title trust, and the plaintiffs' assertion is without merit, since there is no other evidence to acknowledge it.

① On January 27, 2006 *** Issuing 10,00 shares of 10,00 shares, the Plaintiff set the shares of 2,50 shares out of 10,00 shares to Plaintiff Jeona and 2,600 shares to be 49% in the form of each title trust to Kima, and thereafter, on March 24, 2010 and December 31, 2010, only 26,460 shares out of 54,00 shares increased on March 24, 201 and 54,00 shares issued on December 31, 200, transfer the ownership of 26,460 shares to Plaintiff Jeona, etc. under a title trust with Plaintiff Jeona, etc., thereby evading the secondary liability for tax payment of oligopolistic shareholders pursuant to Article 39(1)2 and (2) of the former Framework Act on National Taxes (amended by Act No. 1124, Dec. 31, 2011).

②*** There was a possibility that dividends may be distributed because there was a earned surplus in the amount of 1,462 million won in 2010, and 1,975 million won in 2011. Thus, even if dividends were not paid in 2010 and 2011, it became possible to avoid the application of the progressive tax rate based on the cumulative taxation on global income in the future.

③ Meanwhile, the Plaintiffs did not at all assert and prove whether the title trust of the shares 2 in this case was an obvious other purpose than that of tax avoidance, even though they asserted that the title trust was not the purpose of tax avoidance.

4. Conclusion

The plaintiffs' claim against the second shares of this case is dismissed as it is without merit. Since the judgment of the first instance is unfair in conclusion, the defendant's appeal is accepted, and the part against the defendant in the judgment of the first instance is revoked and all of the plaintiffs' claim corresponding to the revoked part is dismissed.