The market price of each insurance contract shall be deemed a refund for termination of each contract.

Considering the fact that the market price constitutes the contents of the terms and conditions as of the evaluation base date based on the value of future rights, certainty of the terms and conditions, and all other circumstances, it can be assessed as "reasonable value" in consideration of the fact that the market price can receive a refund for termination when the insurance contract is terminated according to the terms and conditions of each insurance contract in this case.

Article 34 of the Inheritance Tax and Gift Tax Act

2014Guhap68140 Revocation of Disposition of Imposition of Gift Tax

AAA and 3

BB Head of the tax office and 2

March 19, 2015

April 2, 2015

1. The portion exceeding KRW 00,000,000 among the disposition imposing gift tax on Plaintiff A on November 13, 2013; the portion exceeding KRW 000,000,000 among the disposition imposing gift tax on Plaintiff CCC; the portion exceeding KRW 00,000,000 among the disposition imposing gift tax on Plaintiff CCC on November 14, 2013; the portion exceeding KRW 00,000,000,000 among the disposition imposing gift tax on Plaintiff FF on November 8, 2013; the portion exceeding KRW 00,000,000,000,000 among the disposition imposing gift tax on Plaintiff GG on Plaintiff on November 14, 2013; and each disposition imposing penalty exceeding KRW 00,000,000,000,000,000 shall be revoked.

2. The plaintiffs' respective remaining claims against the defendants are dismissed.

3. Of the costs of lawsuit, 4/5 are assessed against the Plaintiffs, and the remainder is assessed against the Defendants.

Cheong-gu Office

The imposition of gift tax of KRW 00,00,000 against Plaintiff A on November 13, 2013 by the head of Defendant BB Tax Office, the imposition of gift tax of KRW 00,00,000 against Plaintiff CCC on November 14, 2013 by the head of Defendant DD Tax Office, the imposition of gift tax of KRW 169,94,110 against Plaintiff EE Tax Office on November 8, 2013, and the imposition of gift tax of KRW 157,160,450 against Plaintiff FF on November 14, 2013, respectively.

1. Details of the disposition;

A. On December 28, 2010, Nonparty HH, the part of the Plaintiffs’ external mediation, concluded two immediate pension insurance contracts (life-long) with Nonparty J Life Insurance Co., Ltd. (hereinafter referred to as “J Life Insurance”) and the policyholders and beneficiaries themselves, and immediately paid KRW 1.5 million for each insurance premium. On the same day, Nonparty H H, the part of the Plaintiffs’ external mediation, concluded two immediate pension contracts with Nonparty J Life Insurance Co., Ltd. (hereinafter referred to as “J Life Insurance”) and the mother of Plaintiff AA and CCC, the non-party KK, and immediately paid KRW 0 million for each insurance premium.

B. On January 10, 201, HH concluded with JJ life on January 10, 201, either of the two above two insurance contracts was changed to Plaintiff AA; the other insurance policy holder and beneficiary to Plaintiff CCC; one of the two above two insurance contracts entered into with LL life with Plaintiff GG; and the other insurance policy holder and beneficiary to Plaintiff FG (the first four insurance contracts successively referred to as “the instant ○○ insurance contract,” and collectively referred to as “each insurance contract”).

C. On March 29, 2013, the Plaintiffs reported and paid gift tax in accordance with Article 65(1) of the former Inheritance Tax and Gift Tax Act (amended by Act No. 11130, Dec. 31, 2011; hereinafter “former Inheritance Tax and Gift Tax Act”) and Article 62 subparag. 3 of the Enforcement Decree of the same Act by deeming that the date of commencement of each of the instant insurance contracts (amended by Act No. 11130, Jan. 28, 201) came and at the same time received a donation of the right to receive a life annuity from HH.

The taxable value of donated property (unit: Won) gift tax (unit):

AA00,000,000,0000,000,000

CCC00,000,0000,000,000,000

GGG000,000,00000,000,000,000

FF00,000,000,0000,000,000

D. The director of the Seoul Regional Tax Office, as a result of planning and inspection on the suspected charge of false donation of insurance proceeds, found that the contract of this case was changed from HH to the Plaintiffs prior to the commencement date of the pension, and that the Plaintiffs received the actual rights of each of the above insurance contracts from HH as of the above alteration date, and accordingly, determined that Plaintiff AA and CCC shall be deemed to have received KRW 0 billion of each insurance premium from HH pursuant to Article 2 of the former Inheritance Tax and Gift Tax Act, and that Plaintiff GGG, and FF shall be deemed to have received KRW 0 billion of each insurance premium, and notified the Defendants of the date of change of each of the respective insurance contracts of imposition of gift tax (on January 10, 2011) as the donation date.

E. Accordingly, on November 13, 2013, the head of Defendant BB Tax Office imposed gift tax of KRW 000,000,000 on Plaintiff AA; the head of Defendant DD Tax Office imposed gift tax of KRW 000,000,000 on Plaintiff CCC on November 14, 2013; and the head of Defendant EE EE Tax Office imposed gift tax of KRW 000,000,000 on Plaintiff BG on November 8, 2013; and KRW 00,000,000 on Plaintiff FF on November 14, 2013 (hereinafter “each of the instant dispositions”).

F. The Plaintiffs were dissatisfied with the request for a trial to the Tax Tribunal. However, on June 26, 2014 (Plaintiff GG, FF) and June 30, 2014 (Plaintiff AAA, CCC) were dismissed.

[Ground of Recognition] Facts without dispute, Gap evidence 1-1, 2, Gap evidence 2-1 through 4, Gap evidence 3-1 through 4, Gap evidence 4-1 through 4, Eul evidence 1-1 through 4, and Eul evidence 1-4, the purport of the whole pleadings

2. Whether each of the dispositions of this case is legitimate

A. The plaintiffs' assertion

1) The Plaintiffs’ donation in the instant case is the right to receive the insurance money upon the occurrence of the insured events under each of the instant insurance contracts. Each of the instant insurance contracts is an immediate pension insurance policy with the content of receiving a monthly pension for the survival of the insured and a certain amount of reserve for the death of the insured. As such, the assessment of the value should be based on the method of assessment of life annuity funds pursuant to Article 65(1) of the former Inheritance Tax and Gift Tax Act and Article 62 subparag. 3

2) The Defendants, based on each of the instant dispositions, cited the National Tax Service’s established rules (written regulations and -166) on February 14, 2013. However, the foregoing established rules are contrary to the existing established rules that, when changing the contractor’s name of the immediate pension insurance, the value of donated property is subject to the method of assessing the right to receive a regular amount. Therefore, applying the above established rules to the Plaintiffs contradicts the principle of prohibition of retroactive taxation.

3) Of each disposition of this case, at least an erroneous payment for unfaithful payment shall be deemed as a justifiable ground for neglecting the duty to report and pay gift tax to the Plaintiffs who trusted the existing interpretation by the tax authorities. Therefore, it should be revoked illegally.

B. Relevant statutes

The entries in the attached Table-related statutes shall be as follows.

(c) Fact of recognition;

1) The main contents of each of the instant insurance contracts are as follows.

A) The first and second insurance contracts of this case

Article 7 (Modification, etc. of Details of Contracts)

1. The contractor may modify the following matters with the consent of the company. In such cases, the consent shall be notified in writing or written on the back of the insurance policy (certificate of insurance coverage):

1. Policyholders;

2. Details of other contracts.

(2) A contractor may change an insurance beneficiary (person receiving the insurance proceeds), and in such cases, consent of the company is not required: Provided, That if the contractor changes the beneficiary (person receiving the insurance proceeds), the beneficiary after the change (person receiving the insurance proceeds) may not oppose the company with his/her right unless he/she notifies the company thereof.

VIII.Rights to cancel contractor's voluntary termination and to withdraw written consent of the insured (persons insured)

(1) A contractor may terminate a contract at any time before the contract is terminated (Provided, That in cases of a life-long pension sentence, it shall not apply), and in such cases, the company shall pay a termination refund under Article 17 (1) to the contractor.

Article 13 (Types and Grounds for Payment of Insurance Money)

If any of the following events occurs to an insured (person subject to insurance) with respect to an insured worker, the company shall pay the insurance money agreed upon to the beneficiary (person who receives the insurance money) (see attached Table 1; hereinafter the same shall apply):

1. When the insured (person subject to insurance) lives on the date falling under the amount of annuity: A survival pension in the form of annuity payment;

Article 17 (Refunds upon Termination)

1. The termination refund payable upon termination of the contract under the terms and conditions shall be calculated in accordance with the manual for calculation of insurance premiums and liability reserves.

(2) The public disclosure interest rate applicable at the time of calculating the refund for termination (the annual welfare 3.0% and the minimum guarantee rate of 2.0% after 10 years) shall apply the interest rate prescribed in Article 16 (Application and Public Notice) and where the public disclosure rate is changed, the changed public disclosure rate from the date of change shall apply.

(3) In cases of punishment for inheritance pension, the company shall provide the contractor with a list of the refund for termination by the lapse period.

[Attachment 1] Standard Table of Insurance Money Payment

【Life Pension】

Pension shall be paid according to the form of pension chosen by the contractor as follows:

If the insured (person subject to insurance) resides on the relevant date of the annual annuity, the amount calculated by applying the publicly notified interest rate to the "amount of accumulation of the pension contract" at the time of the commencement of the pension shall be paid on the relevant date of the insurance contract every year as the inheritance pension (payment of the "amount of accumulation at the time of

1) The term “amount of accumulation of pension contracts” refers to the amount accumulated at a publicly notified interest rate on the basis of the date calculated from the date of payment of the net insurance premium under the pension contract (the amount obtained by subtracting the risk insurance premium and the additional insurance premium for the month), as stipulated in the calculation method.

2. The calculation of the amount of the survivors' pension is calculated by applying the publicly notified interest rate, and if the publicly notified interest rate is modified, the amount of the survivors' pension will also be modified.

6. In the case of an inheritance pension type, the "amount accumulated" at the time of death shall be paid when the insured dies, and this contract shall be extinguished;

8. The insurance period of this insurance is from the time of accession to the life annuity type and that of an inheritance pension type, the life annuity type and that of an inheritance pension type, from the time of subscription, to the end of the annual payment period (10 years, 15 years, 20 years, 25 years, 30 years, and 30 years).

B) The third and fourth insurance contracts of this case

Article 7 (Modification of Details of Contracts)

(1) A contractor may modify the following matters with the consent of the company. In such cases, he/she shall notify the consent in writing or shall write his/her intention on the back of the insurance policy (insurance policy):

1. Amount of insurance coverage;

2. A contractor or a beneficiary (a person who receives an insurance money);

3. Details of other contracts.

Article 8 (Voluntary Termination of Contractors)

A contractor may terminate a contract at any time before the contract is terminated, and in such cases, the company shall pay the cancellation refund to the contractor pursuant to Article 17 (1): Provided, That a life annuity type may be extended only for the insurance period prior to the commencement of a life annuity type.

Article 12 (Types and Grounds for Payment of Insurance Money)

If any of the following events occurs to the insured (beneficiary) during the insurance period, the company shall pay the insurance money agreed upon to the beneficiary (beneficiary of the insurance money) (refer to Table 1. table of the payment of insurance money):

1. When an insured person in cases of an individual contract during the insurance period after the commencement of pension benefits, and a principal insured person or an insured person in cases of a married couple's contract live on the relevant day of insurance contracts each year: The payment of a monthly survivors' pension shall be made in accordance with the form of pension payment;

2. When an insured person in cases of an individual contract during the insurance period, or a principal insured person or an insured person in cases of a marital contract has died: Payment of the death insurance amount;

Article 17 (Refund Money for Loss)

1. The cancellation refund payable upon termination of a contract under this terms and conditions shall be calculated in accordance with the manual for calculation of insurance premiums and liability reserves.

(2) The public disclosure interest rate applicable at the time of calculating the refund for cancellation (the minimum interest rate shall be 3.0% per annum within ten years from the date of the contract, and 2.0% per annum within ten years) shall be the interest rate prescribed in Article 16 (Application and Public Notice): Provided, That where the public disclosure rate is changed, it shall be applied on the basis of the changed public disclosure rate from the date of change.

(3) A company shall provide a contractor with a ticket of refund upon cancellation of each transitional period: Provided, That a life annuity shall be limited to the insurance period prior to the commencement of a life annuity.

Article 31 (Insurance Contract Loans)

1. The contractor may receive a loan (hereinafter referred to as "insurance contract loan") in the manner determined by the Company within the scope of the refund upon cancellation of this contract.

(2) A contractor may repay the loan of insurance contracts and interest interest of insurance contract loans under paragraph (1) at any time, and if the repayment is not made, the principal and interest of insurance contracts may be deducted from the payment made on the date a cause for payment of insurance money, cancellation refund,

[Attachment 1] Table of Insurance Payment

【Immediate pension type】

(c) Inheritance pension type;

(1) Franchises;

Payment at the Time of Contract Price Payment

The period of life-long pension insurance (life-long) shall be one month after the commencement of guarantee;

Responsibility for the pension contract on the date of each month from the date of existence on the insurance contract each year;

The amount equivalent to interest calculated on the basis of the reserve

B Payment of the monthly pension amount

Pension premium paid temporarily by the insured (persons insured) during the life insurance period (life insurance period) + 10% of the insurance premium paid temporarily by the insured + at the time of death

Contract Liability Reserve upon Death

Name of insurance types;

Insurance Period

The period of coverage beginning before the commencement of pension

From the date of subscription that there is no type of immediate pension, inheritance pension type; to the date of subscription;

Payment period of pension shall be the time of annuity payments.

The immediate pension type every month: Payment on the relevant day of each month after the date on which the contract falls;

1. Insurance period

2. Payment cycle of pension and payment period of pension;

3. The pension contract liability reserve means the amount calculated by applying the publicly notified interest rate based on the net insurance premium for the pension contract (the amount obtained by subtracting the net insurance premium and the estimated project cost from the business insurance premium) as stipulated in the "Calculation Method of Insurance Premiums and the Liability Reserve."

4. Since a survivor pension is calculated by applying the publicly notified interest rate, if the publicly notified rate is changed, the survivor pension will also be changed.

2) As of January 10, 201 of each of the instant insurance contracts, the refund for termination (or refund for cancellation; hereinafter referred to as “resumpt refund”) as of January 10, 201 is the KRW 1,081,00,000 for each of the instant insurance contracts, and KRW 945,185,50 for each of the instant insurance contracts, respectively.

[Reasons for Recognition] Facts without dispute, Gap evidence 1-1, 2-2, Gap evidence 2-1 through 4, Gap evidence 5-1, 2, Gap evidence 6-1, 2, Gap evidence 7-1, 7-2, and the purport of the whole pleadings

D. Determination

1) Appraisal of rights under an insurance contract

A) Article 31(1) of the former Inheritance Tax and Gift Tax Act provides that “The donated property shall include all things belonging to the donee and having economic value convertible into money and all de facto or de facto rights having property value.” Article 60 of the Enforcement Decree of the same Act provides that “The value of the property on which gift tax is levied under this Act shall be based on the market value as of the date of donation (paragraph (1)). Where it is difficult to calculate the market value, the market value shall be the value assessed according to the methods prescribed in Articles 61 through 65 (3) in consideration of the type, scale, transaction circumstances, etc. of the pertinent property.” Article 65(1) of the same Act provides that “The value of the donated property shall be appraised according to the method prescribed by Presidential Decree based on the nature, contents, and remaining period of the relevant right, and the value of the property on which the gift tax is imposed shall be calculated according to the name and condition of each tax-related Act or the value of the property assessed according to Article 61(2) of the same Act, regardless of its nature and condition of its original rights, shall be calculated according to the title of title.”

B) In light of the above relevant laws and regulations, examining the instant case’s return, and considering the following circumstances, the “market price of each of the instant insurance contracts” is reasonable to regard the “market price of each of the instant insurance contracts as the refund for termination.”

① In full view of the fact that Article 60(2) of the former Inheritance Tax and Gift Tax Act provides for a definition that corresponds to the essence of the market price and there is no other provision on the definition of the market price under the former Inheritance Tax and Gift Tax Act; Article 60(3) of the former Inheritance Tax and Gift Tax Act provides for an alternative where it is difficult to compute the market price under Article 61 through 65 of the same Act; and Articles 61 through 65 of the former Inheritance Tax and Gift Tax Act provides for a method of reasonably estimating the market price, the value assessed by the methods under Articles 61 through 65 of the same Act pursuant to Article 60(3) of the former Inheritance Tax and Gift Tax Act constitutes the market price that serves as the basis for calculating the value of the property on which the gift tax is levied (see Supreme Court Decision 2012Du3200, Jun.

(2) An insurance contract takes effect upon conclusion, and even if it can be terminated, it acquires a right under an insurance contract.

③ By changing HH to a policyholder, the Plaintiffs acquired rights and obligations under the insurance contract, such as termination of the contract, revocation right, claim for termination refund, designation and change right of beneficiary, claim for insurance loan, obligation to pay insurance premium upon occurrence of an insured event, and obligation to notify the insurance premium upon occurrence of an insured event. In accordance with the terms and conditions of each of the instant insurance contracts, the Plaintiffs acquired the right to refund insurance premium upon termination and the right to receive the payment of premium, respectively. Such status of the policyholder constitutes donated property under Article 31(1)

④ Under Article 65(1) of the Inheritance Tax and Gift Tax Act and Article 60 subparag. 1 of the Enforcement Decree of the same Act, the right to refund insurance premiums is conditional rights acquired when the condition of suspension, which is earlier termination, (the right to depend on whether the validity or termination of a conditional juristic act established on the fulfillment of the future uncertain fact). Under Article 65(1) of the former Inheritance Tax and Gift Tax Act and Article 60 subparag. 1 of the Enforcement Decree of the same Act, the market price can be assessed as "reasonable value taking into account the facts constituting the contents of conditions as of the evaluation base date based on the value of the first right, the certainty of conditions, and all other circumstances, and when the insurance contract is terminated in accordance with the terms and conditions of each

On the other hand, the right to receive the installment payments is assessed against the market price under Article 65 of the former Inheritance Tax and Gift Tax Act and Article 62 of the Enforcement Decree of the same Act, and the market price is lower than the market price of the right to refund the

(5) If so, it is necessary to assess the rights of each insurance contract of this case by either the market price of the right to refund insurance premiums or the market price of the right to receive payment.

Even if an insurance contract is established and the contract becomes effective, the insurance claim is not only abstract right before the occurrence of the insurance accident, but also right can be exercised from that time after the occurrence of the insurance accident (see, e.g., Supreme Court Decision 2007Da19624, Nov. 13, 2008). Thus, the right of the policyholder’s insurance contract generated by the policyholder is an abstract insurance claim (in the case of a pension insurance, the term “the maturity of the payment date of the insurance premium” shall be deemed an insurance accident for which specific insurance claims occur) of the right to refund the insurance premium to the Governor, and it is not determined as a specific right. Since the supplementary method is applied when it is impossible to calculate the price of the insurance premium traded by many and unspecified persons, it is reasonable to select the party whose market price is equal to the market price. However, the market price of the right to refund the insurance premium has not been determined by the Ordinance of the Ministry of Strategy and Finance, such as the right to receive the gift tax after the conclusion of the insurance contract and the amount of the gift tax.

C) The Defendants asserted to the effect that, inasmuch as there is no difference between “the Plaintiff’s acquisition of the rights under each insurance contract of this case” and “HH directly donated 1.15 million won or one billion won to the Plaintiffs respectively, the substance of each insurance contract of this case is that HH should be deemed to have donated 1.15 million won or one billion won to the Plaintiffs respectively, respectively. However, as seen earlier, the tax base of gift tax should be calculated on the basis of the market price of donated property at the time of donation, as well as each of the above insurance premiums paid by HH to JJ and LLL life shall be calculated on the basis of the market price of donated property at the time of donation, and each of the above insurance premiums paid by HH to the beneficiaries consist of net insurance premiums for attracting and managing insurance contracts (i.e., design company’s allowance, sales promotion expenses, store operation expenses, employees’ benefits, etc.). Among these net insurance premiums, it shall not be deemed that HH directly assessed the portion not directly paid to the Plaintiffs as the Plaintiffs or its termination refund 15 billion won.

2) Whether the principle of retroactive taxation prohibition is violated

The principle of trust and good faith, the principle of trust and good faith, or the principle of respect for non-taxable practices, in tax and legal relations, are exceptional legal principles applicable only to cases where there are special circumstances deemed that the protection of taxpayer’s trust is consistent with the justice even if the principle of legality is sacrificeed. Therefore, in order to apply the principle of trust and good faith or the principle of protection of trust to a tax authority’s act, the average taxpayer’s trust given by the tax authority through the public opinion list, etc. should be able to have a reasonable and justifiable expectation. Even if the tax authority expressed a certain opinion through inquiry, if it is a result of questioning without revealing the important facts and legal issues properly, it cannot be said that there is a trust that can have a legitimate expectation by the public opinion list. Furthermore, the principle of respect for non-taxable practices can be applied to the interpretation of the tax law generally accepted by the taxpayers regarding non-taxation or the practice of national tax administration, which is not a specific taxpayer, and thus, it is unreasonable to accept the general taxpayer as just, and it does not constitute an interpretation or practice of the tax law (see 2016).

In light of the above legal principles, the issue of how to evaluate the value of the donated property by any method when changing the name of the policyholder or beneficiary is in the nature of determining by examining the terms and conditions of the relevant insurance product, the details and timing of the change of the policyholder, etc.

It is insufficient to view that the general taxpayer has formed sufficient trust or practice to expect that it will be based on the method of appraisal of the right to receive a fixed amount of money for life in this case only by the content, etc. of the questioning presented by the plaintiffs (Evidence A to Nos. 8 and 12), and there is no other evidence to support this. Therefore, this part of the plaintiffs' assertion is without merit.

(iii) the existence of “justifiable cause” as a ground for exemption from an erroneous payment for unfaithful payment

Under the tax law, penalty taxes are administrative sanctions imposed in accordance with the law in cases where a taxpayer violates a duty to report and pay taxes without justifiable grounds in order to facilitate the exercise of the right to impose taxes and the realization of a tax claim, and the taxpayer’s intention and 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 the above legal principles, the content of the individual inquiry presented by the plaintiffs alone is insufficient to deem that the plaintiffs formed sufficient trust and practices to expect that the methods of evaluating the rights to receive a fixed amount of money for life are applied to the instant case. Therefore, the plaintiffs' assertion that the contents of the above inquiry were applied to the instant case, and that the plaintiffs' obligation to report and pay gift tax was fulfilled, cannot be deemed as a justifiable ground that constitutes a ground for exemption from penalty, since it is nothing more than the legal site or mistake. Accordingly, this part of the plaintiffs' assertion is without merit.

4) Partial revocation of each of the dispositions of this case

In a litigation seeking revocation of a taxation, even where it is deemed that a taxation disposition is unlawful because it was erroneous in the process of calculating the amount of tax, when the amount of tax to be imposed lawfully is calculated based on the data submitted by the time the argument in the fact-finding trial is concluded, the court shall not revoke the entire amount of the taxation disposition as unlawful, but shall regard only the portion exceeding the reasonable amount of tax assessment as unlawful (see, e.g., Supreme Court Decision 97Nu19496, Sept.

In light of the above legal principles, the amount of the gift tax, which was determined based on the amount of termination refund as of January 10, 201, is as follows. Therefore, each of the dispositions of this case shall be revoked only for the portion exceeding the following “justifiable amount of tax”.

The legitimate amount of tax originally notified;

AA 000,000,000 Won 00,000,000

CCC 000,000,000 Won 000,000,00

GGG 00,000,000 Won 000,000,000

FF00,000,000,000 Won 000,000,00

3. Conclusion

Therefore, each of the claims against the plaintiffs against the defendants of this case is justified within the scope of the above recognition, and each of the remaining claims is dismissed as it is without merit. It is so decided as per Disposition.