Examination Donation 2014-0044 (Law No. 27, 2014)

As long as a donee has paid all gift tax, the donor's joint and several tax liability is extinguished finally.

As long as a donee fully pays gift tax based on stock title trust, the Plaintiff’s joint and several tax liability, which is a donor, is extinguished definitely, so there is no legal interest to seek cancellation of the disposition of notice of joint and several tax liability

Article 4 of the Inheritance Tax and Gift Tax Act [Liability for Gift Tax]

2014Guhap20798 Revocation of Disposition of Imposition of Gift Tax

00AA

BB Director of the Tax Office

December 5, 2014

January 16, 2015

1. The instant lawsuit shall be dismissed.

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

Cheong-gu Office

The Defendant’s disposition imposing gift tax of KRW 2,731,89 on the Plaintiff on March 11, 2014, KRW 21,954,940 on the gift tax of KRW 2002, and KRW 136,827,910 on the gift tax of KRW 161,514,740 on the Plaintiff in 2004 is revoked.

1. Details of the disposition;

The Plaintiff participated in DD Integrated Construction Co., Ltd. (hereinafter referred to as EE Development Co., Ltd. on October 27, 2010; hereinafter referred to as the “instant company”)’s capital increase with new stocks on September 29, 199; 200 shares; 10,920 shares on August 22, 2002; 16,80 shares on December 16, 2004.

In March 11, 2014, the Defendant notified the FF Director of the FF Tax Office who conducted an investigation into changes in stocks of the instant company in 2013 of the above title trust contents, and notified leCC of the gift tax amounting to KRW 0,000,000 on the shares acquired in 1999, KRW 00,000 on the shares acquired in 2002, and KRW 00,000,000 on the gift tax on the shares acquired in 204, and on the same day, notified the Plaintiff, the title truster, of the joint and several tax liability on the gift tax (hereinafter “instant disposition”).

Accordingly, the Plaintiff filed a request for examination of the instant disposition with the Commissioner of the National Tax Service on April 18, 2014, but the Commissioner of the National Tax Service dismissed the request on June 27, 2014.

On the other hand, leCC paid all gift tax on the shares acquired in March 21, 2014, 1999, 2002, and gift tax on shares acquired in March 26, 2004.

On May 12, 2014, the Plaintiff filed the instant lawsuit.

[Ground of recognition] Unsatisfy, Gap evidence 1, 2 (including paper numbers; hereinafter the same shall apply), Eul evidence 1, 2, and 5, the purport of the whole pleadings

2. Whether the instant disposition is lawful

As long as leCC, the principal obligor of the gift tax on the acquisition of each of the above shares, the Plaintiff’s joint and several tax liability has already ceased to exist, and even if leCC won won in a lawsuit seeking the revocation of the above gift tax brought by leCC separately, the Plaintiff’s joint and several tax liability still exists, and its refund is only an issue with leCC. Thus, the Plaintiff’s defense that there is no legal interest to seek the revocation of the instant disposition.

I look at this.

In this case, the Plaintiff sought revocation of the instant disposition by asserting that the acquisition of the shares of the instant company in the name of leCC did not meet the Plaintiff’s joint and several tax liability requirements, or that the procedure for imposing joint and several tax liability is illegal.

However, a person liable to pay the gift tax is a donee, and the donor’s obligation to pay the gift tax is a subordinate obligation to the donee’s obligation to pay the gift tax (see Supreme Court Decision 97Nu7493, Sept. 5, 1997). Therefore, the donor is not liable to pay the gift tax if the donee, who is a principal taxpayer, is not liable to pay the gift tax or the duty to pay tax is finally revoked (see Supreme Court Decision 71Nu10, Feb. 29, 1972).

As seen earlier, since a donee, a donee, paid gift tax on the acquisition of each of the above stocks, and the principal tax liability becomes extinct, the Plaintiff’s joint and several tax liability becomes extinct. Since then, in a lawsuit seeking revocation of the said gift tax that a leCC separately raised, where a leCC loses, the legal status following the above payment will be maintained, and when a leCC won in favor of the leCC, the Plaintiff’s joint and several tax liability becomes extinct due to the extinguishment of the principal tax liability. The refund of the gift tax already paid by leCC is a matter of relationship with the leCC, not the Plaintiff.

Therefore, as long as leCC, which is a donee, paid gift tax on the acquisition of each of the above stocks, the Plaintiff’s joint and several tax liability becomes final and conclusive, so there is no legal interest to seek revocation of the instant disposition that notifies a joint and several tax liability.

3. Conclusion

Thus, the lawsuit of this case is unlawful and dismissed.