In the case of the acquisition of new shares with capital increase increase, even if the shareholder list is not kept and the acquisition of new shares is not stated, it falls under the requirements for deemed donation.

In the case of the acquisition of new shares with capital increase increase, even if the shareholder list is not kept and the acquisition of new shares is not stated, it falls under the requirements for deemed donation.

Donation of title trust property under Article 41-2 of the Inheritance Tax and Gift Tax Act

2017-Gu Partnership-87432 Revocation of a disposition imposing gift tax

A

@@세무서장

December 2, 2016

on October 1, 2018 09

1. The plaintiff's claim is dismissed.

2. The costs of lawsuit shall be borne by the Plaintiff.

Cheong-gu Office

The Defendant’s disposition of imposing gift tax of KRW 311,278,380 (including additional tax) on June 8, 201 to the Plaintiff on July 8, 2016 shall be revoked.

1. Details of the disposition;

A. On February 1, 199, AA (hereinafter referred to as "A") was established for the purpose of wedding business, etc., the Plaintiff acquired the total of 9,000 shares of AA in the name of ○○○, ○○, and ○○○ on January 18, 200 (each of 3,00 shares), and AA acquired 81,00 shares of new shares issued by capital increase with a capital increase from June 1, 2001 to June 9, 2001, and held 90,000 shares issued by A as of December 1, 201.

나. 피고는 2016. 4. 18.부터 2016. 6. 1.까지 원고에 대한 증여세 세무조사를 실시하여, 위 AA의 발행주식 90,000주는 원고의 누나 서★★(2012. 3. 14. 사망, 이하 '망인'이라 한다)가 원고에게 이를 명의신탁한 것으로 판단한 뒤, 원고가 2000. 1. 18. 양수한 9,000주에 대해서는 부과제척기간 도과로 제외하고, 2001. 6. 9. 인수한 81,000주(이하 '이 사건 주식'이라 한다)에 대하여 2016. 7. 8. 구 상속세 및 증여세법(2003. 12.30. 법률 제7010호로 개정되기 전의 것, 이하 '구 상속세및증여세법'이라 한다) 제41조의2에 따라 원고에게 증여세 311,278,380원(가산세 포함)을 결정・고지하였다(이하 '이 사건 처분'이라 한다).

C. The Plaintiff dissatisfied with the instant disposition and filed an appeal with the Tax Tribunal, but was dismissed on November 14, 2017.

[Ground of recognition] Facts without dispute, Gap evidence 1, 7 evidence, Eul evidence 1, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

1) The Plaintiff is the beneficial shareholder of the instant shares. ① On August 4, 1998, the Plaintiff took out a loan of KRW 80 million from Nonghyup, and made it available for the deceased KimB’s business fund, the husband of the deceased, and KimB established AA on February 1, 1999, and considering the Plaintiff’s contribution, on January 18, 200, KimB transferred to the Plaintiff KRW 3,000 (36% of the total issued shares) total of KRW 9,000 (36% of the issued shares) shares, which were previously held in title trust to ○○○, New○, and ○○○○○○, and ○○○, which were held in title trust. ② The Defendant presumed that the Plaintiff’s first acquired shares of KRW 900,00,00 as shares first acquired on January 18, 200, was presumed to have reverted to the Plaintiff’s first acquired shares under title trust, and thus, was presumed to have reverted to the Plaintiff’s first acquired shares.

2) Even if the deceased’s title trust was made on the Plaintiff, the instant disposition did not satisfy the requirements for deemed donation on the following grounds. In other words, in order to impose gift tax pursuant to the provisions on deemed donation of title trust under Article 41-2(1) of the former Inheritance Tax and Gift Tax Act, the actual owner and the shareholders on the register of shareholders should be different. However, AA does not have any record of the shareholder registry stating the name and address of the shareholder required pursuant to Article 352 of the Commercial Act, the type and number of shares held by the shareholder, and the date of acquisition of each share. Meanwhile, Article 45-2(3) of the Inheritance Tax and Gift Tax Act amended by Act No. 7010, Dec. 30, 2003, which was amended by Act No. 7010, has to determine whether to transfer a title based on the statement on the change of shares, but the instant taxable matter was derived from capital increase in June 200, and thus

Therefore, the instant disposition was erroneous in the taxation requirement. (2) In addition, the Plaintiff’s acquisition of 9,000 shares on January 18, 200 was due to the fact that the payment date of intermediate payment and gold 2.4 billion won on a wedding site by AA was imminent, and it was necessary for a joint and several surety by the actual manager and the largest shareholder to obtain a loan of KRW 2 billion from the bank. Thus, there was no tax avoidance purpose in acquiring the instant shares in the Plaintiff’s name.

B. Relevant statutes

It is as shown in the attached Form.

(c) Fact of recognition;

1) The Plaintiff is the birth of the deceased, and KimB is the husband of the deceased, and new ○○ is a child born between the husband of the deceased and the husband of the deceased before her divorce, and is a ushel of KimB.

2) At the time of the establishment of AA, ○○○, ○○ (management manager), ○○○ (the deceased’s misconduct), west ○○ (the deceased’s colon), Ma○○ (Real Estate Broker), and Gab○ (Real Estate Broker), held 25,00 shares issued by AA in its name.

3) On January 18, 200, the Plaintiff acquired 3,000 shares from ○○, ○○, and ○○○○○○, respectively, and simultaneously assumed office as an internal director of AA. On February 25, 2000, the Plaintiff guaranteed the obligation to lend KRW 2 billion to ○○ Bank Co., Ltd. on February 25, 2000. Thereafter, on June 200, the Plaintiff acquired 81,00 shares of this case through the fictitious payment, and on September 26, 2001, retired on July 14, 201 when the Plaintiff was on duty as a representative director of AA and was on duty as a representative director of AA.

4) The details of AA’s stock changes confirmed by a statement of stock changes are as listed below.

5) On the other hand, on July 28, 2003, between the Plaintiff and the Deceased, a statement of confirmation that “A” (No. 5 (No. 2; hereinafter the same shall apply) was written as follows, and ○○ and sexual ○○ signed and sealed the above contract as a observer. After that, ○○ and sexual ○○ signed and sealed it as a observer on May 27, 2015, ○○○ signed and sealed it on January 18, 2000, “○○○, ○○, ○, ○, and ○○○○○○, and ○○○○○” was also prepared to confirm that the name was changed without the investment money when the title holder of the Plaintiff’s shares is changed in the future.

6) As the Deceased died on March 14, 2012, on March 6, 2013, the Plaintiff and KimB, on March 6, 2013, prepared and authenticated “share free donation agreement, etc.” with the new○○○, wherein part of the shares of AA, which they held, are donated free of charge to the new○○○○ as follows:

On the same day, the plaintiff and KimB prepared a "agreement on free donation" with the contents that the plaintiff receives KRW 1 billion from KimB in return for the donation of KRW 40,000 of the shares AA to the new ○○○, and notarized it (hereinafter referred to as "the agreement on free donation of this case, including "stock free donation contract, etc." and "the agreement on free donation"). (7) The plaintiff again prepared and notarized "a confirmation of facts and agreement on August 21, 2014" with the KimB as follows.

8) 한편 신○○는 2012년경 원고로부터 AA의 설립・운영 등과 관련한 김BB의 비리 혐의에 대하여 듣고 2014년 하반기 무렵부터 김BB을 형사고소하거나 김BB을 상대로 민사소송을 제기하였다. 이에 김BB도 신○○ 등을 상대로 김BB이 AA의 실질적 단독주주임을 전제로 하는 여러 민사소송을 제기하였으나, 위 주장은 받아들여 지지 않았고, 오히려 이 사건 명의대여계약서와 각 무상증여약정서 등을 이유로 이 사건 주식은 망인이 원고에게 명의신탁한 것으로 보인다는 취지의 판단이 이루어졌다(대구지방법원 2016. 5. 12. 선고 2015가합ㅇㅇㅇ 판결, 대구고등법원 2017. 1. 26. 선고2015나ㅇㅇㅇ 판결, 대구지방법원 2018. 2. 8. 선고 2017가합ㅇㅇㅇ 판결 등 참조).

[Ground of recognition] Facts without dispute, Gap's statements, Gap's 1, 3, 4, 5 (the same as Eul's evidence 2), 6, 8, 9, Eul's evidence Nos. 2 through 7 (including each number), and the purport of the whole pleadings

D. Determination

(i) regulations relating to deemed donation;

Article 41-2 (1) of the former Inheritance Tax and Gift Tax Act provides that, in case where the actual owner and the nominal owner are different from each other, the value of the property shall be deemed to have been donated to the actual owner on the date when the actual owner are registered as the nominal owner on the date when the actual owner and the nominal owner are registered as the nominal owner, the value of the property shall be deemed to have been donated to the actual owner, except in case where the property is registered under another person's name without any purpose of tax avoidance in Article 41-2 (2) of the former Inheritance Tax and Gift Tax Act.

2) Whether the title trust agreement exists

In full view of the following circumstances revealed by the above facts of recognition, it can be recognized that there was an agreement between the Plaintiff and the Deceased on title trust on the shares of this case, so this part of the Plaintiff’s assertion is without merit.

A) In a case where the authenticity of a dispositive document is recognized, the existence of a juristic act in its content ought to be recognized, barring special circumstances where the existence and content of an expression of intent indicated in the document is evident and acceptable (see, e.g., Supreme Court Decisions 2004Da60065, May 27, 2005; 2015Da256732, Jun. 9, 2016).

On July 28, 2003, the Plaintiff prepared the instant title trust agreement between the deceased and the actual owner of AA’s shares of 90,000 shares (36%) held by the Plaintiff at the time as the ○○ and sexual ○○ as the observer. The Plaintiff was the deceased, and the Plaintiff was the title trustee of the deceased.

B) The Plaintiff asserts that the Plaintiff received KRW 9,000 shares of AA from KimB as a contribution to the business fund. According to the evidence No. 2, the Plaintiff’s loan amounting to KRW 50 million on August 4, 1998, and KRW 29,301,30 on August 4, 1998 is each deposited in the Agricultural Cooperative Account in the name of the Plaintiff.

However, the following circumstances revealed by Gap evidence Nos. 1, 2, and 4 (including the virtual number) and the purport of the entire pleadings, i.e., ① at the time of the establishment of AA, the deceased and KimB appears to have been in bad credit standing, and the plaintiff also stated that the above NA account was a passbook created to KimB, a credit bad credit holder at the time of the investigation, and ② the above NA account was in the name of ○○○○ prepared a confirmation document that only lent the name to the ○○○○○, a member of the instant loan agreement and the KimB, the cash amount of KRW 150 million on Jan. 19, 200; ③ around Jan. 18, 200, the plaintiff acquired the shares of AB and was in the position of 200,000 won, and the possibility that the plaintiff was in the name of 100,000 won, and was in the name of 200,000 won, 4.25,200.

C) Each of the instant gratuitous donation agreements or the Plaintiff and KimB’s agreement on August 21, 2014, “the confirmation of facts and agreement” were all made after the deceased died. At the time, the Plaintiff and KimB appears to have been highly likely to additionally impose inheritance tax according to the tax investigation. Since there was a dispute over the ownership of shares arising between ○○○ and the new KimB, there was a difficulty in payment of inheritance tax, tax investigation, etc., it is highly likely that they agreed as above in order to resolve these issues ultimately at once. Therefore, it is difficult to deny the content of the instant title trust agreement solely on the basis of the said documents written after the deceased’s death.

D) The Plaintiff asserted that, at the request of KimB in order to repair the deceased suffering from severe depression after the operation of ○○ Cancer in early 2002, the Plaintiff prepared the instant title trust agreement with the content of the process. However, it is difficult to accept that the Plaintiff simply prepares an agreement to recognize the status of the title trustee rather than transferring shares to the deceased for the above purpose. Nevertheless, there is no special circumstance to accept the above assertion.

E) In light of this point, the circumstances alleged by the Plaintiff cannot be deemed as having any special circumstances that clearly and acceptable to deny the existence and content of the expression of intent indicated in the instant loan agreement.

3) Fictitious payment of shares and ownership of the shares of this case

A) As seen earlier, the instant shares were held in title trust.

B) In a case where the first title trust shares are presumed to be a donation, the preemptive right to the shares issued with a capital increase is deemed to be vested in the actual owner of the first title trust shares, and the actual owner paid the subscription price under the name of the title trustee by exercising the preemptive right (see, e.g., Supreme Court Decisions 2004Du11220, Sept. 22, 2006). Furthermore, in a case where the capital increase was made with a temporary loan and immediately withdrawn the subscription price after the establishment of a company or capital increase and repaid the borrowed money, the actual payment of the capital increase was made. Thus, even if the capital increase was actually used as the most method for the payment of the capital increase, the effect of the payment of the capital increase, which constitutes a collective exchange of the shares issued with the company’s incorporation or capital increase, cannot be determined based on such circumstances (see, e.g., Supreme Court Decisions 9Du8039, Mar. 27, 2001; 95Da5790, May 23, 1990).

4) Whether there is a lack of taxation requirements due to failure to prepare the register of shareholders

A) The transfer of registered shares cannot be asserted against the company unless the name and address of the acquisitor are entered in the register of shareholders. Thus, insofar as the transfer of shares is not made in the name of another person who is not an actual owner in the register of shareholders, it cannot be deemed that the actual owner and the nominal owner of the property requiring a transfer of rights or an exercise of rights as stipulated in Article 41-2(1) of the former Inheritance Tax and Gift Tax Act, in principle, falls under the case where the actual owner and the nominal owner are different (see, e.g., Supreme Court Decision 2003Du13762, Feb. 27, 2004). However, unlike the transfer of the registered shares pursuant to Article 337(1) of the former Commercial Act (amended by Act No. 12591, May 20, 2014). Therefore, in the case of the acquisition of new shares, even if the underwriter of new shares did not have issued shares and did not require a transfer of rights within the company, it constitutes the requirement of 993 shareholders.

B) At the time of issuing new shares in June 2001, AA had not prepared the register of shareholders, and there is no dispute between the parties as to the facts that the Plaintiff had not been registered as a shareholder in the register of shareholders with respect to the instant shares held under the name of the Plaintiff pursuant to the title trust agreement.

However, in light of the legal principles as seen earlier, even if the shareholder registry was not kept in the case of the acquisition of new shares due to capital increase with consideration, and the acquisition of new shares was not stated, it constitutes the requirements of deemed donation under Article 41-2(1) of the former Inheritance Tax and Gift Tax Act. Therefore, the title trust of the instant shares can be deemed to meet the taxation requirements pursuant

Therefore, the plaintiff's assertion on this part is without merit.

5) Whether the purpose of tax avoidance exists

A) If it is recognized that the title trust was made on the grounds other than the purpose of tax avoidance, and only a minor reduction of tax incidental to the title trust occurs, it cannot be readily concluded that such title trust had an objective of tax avoidance (see, e.g., Supreme Court Decision 2004Du7733, May 12, 2006). In such a case, the burden of proving that there was no objective of tax avoidance may be proven by means of proving that there was a nominal owner who asserts it, and that there was no objective of tax avoidance, other than the purpose of tax avoidance. However, as the nominal owner of the burden of proof, there was an obvious purpose irrelevant to the tax avoidance, to the extent that it is recognized that there was no objective of tax avoidance, and that there was no tax avoidance at the time of the title trust or tax avoidance at the time of the future, and it should be proved to the extent that it did not have an ordinary doubt, based on objective and supporting evidence (see, e.g., Supreme Court Decision 2017Du39419, Dec. 204, 2002).

B) According to the facts acknowledged earlier, the deceased issued and acquired shares under the name of ○○, ○○, ○○, ○○○, and ○○○○, etc. while establishing and operating AA as a major shareholder of the deceased. As such, it can be deemed that the deceased acquired shares of AA in the process of establishing a company with the intent to avoid not only transaction restrictions between financial institutions that may arise when the deceased establishes and operates AA as a major shareholder of the financial institutions and business partners, etc., but also to avoid the payment of delinquent tax obligations. The transfer of shares to the title trustee after maintaining the title trust for this purpose was attributable to the purpose of obtaining a loan from a financial institution, such as the Plaintiff’s assertion, even if the transfer was attributable to the purpose of obtaining a loan from a financial institution, such transfer was merely an additional circumstance, and thus, it cannot be deemed that there was no purpose of tax avoidance on the title trust that was made on the ground that there was no reason to deem that the Plaintiff again acquired new shares in the name of the deceased under the name of the first trust.

6) Sub-decisions

Therefore, the disposition of this case made pursuant to Article 41-2 of the former Inheritance Tax and Gift Tax Act on the premise that the Plaintiff was entrusted with the shares in this case by the deceased.

3. Conclusion

Therefore, the plaintiff's claim is dismissed as it is without merit. It is so decided as per Disposition.