Cho High Court Decision 2015Du3298 ( December 28, 2016)

Plaintiff cannot be deemed as the actual shareholder of the instant shares.

It is difficult to find out special reasons to give the Plaintiff as a shareholder of the instant company, and it is difficult to deem that the Plaintiff exercised certain rights as shareholder of the instant company.

Article 2 (Tax Liability)

Seoul Administrative Court 2016Guhap5404

○ ○

○ Head of tax office

November 8, 2016

November 25, 2016

1. The Defendant’s disposition of imposing capital gains tax of KRW 119,873,030 (including penalty tax of KRW 8,434,042, additional tax for underreporting, KRW 27,098,576), securities transaction tax of KRW 6,010,460 (including penalty tax of KRW 425,580, additional tax for underreporting, KRW 1,329,086) attributed to the Plaintiff on April 7, 2015, is revoked.

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

Cheong-gu Office

The same shall apply to the order.

1. Details of the disposition;

Around March 2012, the Plaintiff: (a) participated in the capital increase increase with 40,000 shares (hereinafter referred to as “instant shares”) issued by ○○○○ Environment Co., Ltd. (hereinafter referred to as “○○○○○○○ Development”) and transferred 5,000 won per share to ○○○○○○○○ (hereinafter referred to as “instant shares”) without distinction between the two changes; and (b) obtained 5,000 won per share; and (c) subsequently granted a preliminary return of capital gains tax to the effect that the Plaintiff transferred ○○○○○○○ (hereinafter referred to as “instant shares”).

"The defendant, on January 20, 2015, regarded the transfer of shares of this case as a transfer at a low price for a related party and assessed the supplementary assessment per share as 26,279 won, and decided and notified the plaintiff on January 20, 2015 as capital gains tax of 119,873,030 won (including under-reported additional tax of 8,434,042 won, additional tax of 27,098,576 won) and securities transaction tax of 6,010,460 won (including under-reported additional tax of 425,580 won, additional tax of 1,329,086 won, additional tax of 425,580 won, additional tax of 1,329,086 won)" (hereinafter referred to as the "disposition of this case"), "The grounds for recognition")," without any dispute, the each entry in Gap evidence No.

2. Whether the instant disposition is lawful

In full view of the following facts and circumstances, Gap evidence Nos. 5 through 29, Eul evidence Nos. 2 through 12, and Eul evidence Nos. 2 through 12, and witness witness’s testimony that can be acknowledged by adding the whole purport of the pleadings, the disposition of this case based on a different premise is unlawful.

① After having agreed to jointly manage the instant company around January 2010 (○○○○○○ and ○○○○○○) and having agreed to deposit KRW 150 million with the instant company as collateral, ○○○○○○○○○○○○○ and transferred its name to the Plaintiff at KRW 28,000 out of 30,00 shares in its name. From around 2011, 201, ○○○ and ○○○○ transferred KRW 40 million to the Plaintiff’s passbook and KRW 100 million on April 29, 201. The Plaintiff received KRW 20 million from the instant company to return the instant shares by directly paying KRW 30,000 to the Plaintiff the Plaintiff’s shares (hereinafter “○○○”). On April 6, 2011, 200 and received KRW 300,000 from the Plaintiff to return the instant shares (hereinafter “○○”).

However, ○○○ and ○○○ have owned 50% of the shares of the instant company and decided to jointly manage the instant company. It is difficult to find any special reason to grant the Plaintiff’s status as the shareholder of the instant company, and the Plaintiff also cannot be deemed to have exercised any right as the shareholder of the instant company (such as ○○ and ○○○○ may raise funds necessary for the instant company through capital increase through capital increase, and at the same time make a tender favorable to the Plaintiff). However, even though the Plaintiff paid the instant company the price for the instant shares, it appears that the existing shares were included in the name of the Plaintiff, and as seen thereafter, ○○ was deemed to have changed 28,000 shares offered as security to the Plaintiff, and the Defendant did not impose capital gains tax on the instant company on the Plaintiff (see e.g., Supreme Court Decision 200Du1000, Apr. 1, 200, 200).

② On February 2012, ○○○ changed 40,000 shares of the instant company under the Plaintiff’s name (i.e., 28,000 shares offered as security from ○○○○○○) from among 28,000 shares + 40,000 shares allocated as security from ○○○○○, and 28,000 shares under its own name.

○○○ and ○○○ agreed to manage the instant company together with ○○○ and the instant company. However, around August 2012, ○○○ and ○○○ agreed to own and manage the instant company, and ○○ and ○○○ agreed to own and manage the instant company. According to the above agreement, ○○ and ○○○ agreed to exchange 46,66 shares of the instant company held by ○○○○ Development Co., Ltd. and ○○○○○ 466 shares in the Plaintiff’s name.

○○○ paid KRW 100 million to ○○○ on December 2012, and thereafter changed KRW 20,000 out of KRW 40,00 of the shares of the instant company in the name of ○○○○○○○. The Plaintiff (52,620 shares), ○○○ (20,00 shares), and ○○○○ (30,620 shares), all of the shares of the instant company held in the name of the Plaintiff (52,620 shares), sold KRW 26,00 per share to ○○○, etc., and paid KRW 100,000 out of the shares acquired by ○○, etc. (the Defendant did not impose capital gains tax on the Plaintiff by deeming that the title trust was terminated with respect to the shares of the instant company in the name of the Plaintiff 52,620 shares).

The name of the instant shares was changed from ○○○ to ○○○, respectively. Such change was made according to the intention of ○○○○○○○○, and it is difficult to find circumstances to deem that the Plaintiff and ○○○○○○○○ exercised its right as the actual owner of the instant shares. Moreover, even if ○○○○○ sold the instant shares to ○○○○○○○, it is deemed that only KRW 200 million (5,00 per share), an amount necessary for allocating the instant shares, was paid to ○○○○○, which was an amount necessary for allocating the instant shares (5,00 won per share). In light of the fact that ○○○○○, a share transfer certificate prepared under ○○○○’s name, contains KRW 5,00 per share, but ○○○○, etc., received more than an amount calculated as KRW 5,00 per share from ○○○○, etc., based on the fact that the Plaintiff and ○○○ had actually transferred the instant shares under the name of the Plaintiff○○○○.

③ The Plaintiff filed a preliminary return on the transfer income tax to the effect that the Plaintiff transferred the instant shares to ○○○○, and argued that the Plaintiff transferred the instant shares to ○○○○○○○ in order to repay KRW 200 million in loaned from ○○○○ at the time of the investigation by the tax authorities (the Plaintiff and ○○○ also submitted explanatory materials to the effect that the instant shares were transferred to ○○○○○○○. The Plaintiff and ○○○ was in the name of the Plaintiff at the time of the instant shares, and it was anticipated that the transfer income tax would not be imposed on the said shares because the acquisition value and transfer value are the same (the Plaintiff’s preliminary return and the statement made at the tax authorities). However, as seen earlier, it is insufficient to view that ○○○○ appears to have participated in the Plaintiff’s preliminary return and the Plaintiff’s preliminary return and the statement made at the tax

3. Conclusion

Thus, the plaintiff's claim of this case is accepted on the ground of the reasons.