In the absence of the register of shareholders when deemed donation of title trust, the filing date of the detailed statement of the change of stocks can be deemed corresponding to the transfer date.

If the date of acquisition of shares on the register of shareholders and the date of transfer of shares are different, the date of transfer of shares shall be deemed the date of deemed donation pursuant to Article 45-2(1) of the former Inheritance Tax and Gift Tax Act. Since the date of confirmation of transfer of shares does not appear separately, it is reasonable to view that the date of submission of the above statement corresponds to the date of transfer of shares.

Article 45-2 (Presumption of Donation of Title Trust Property)

2015Guhap62453 Revocation of Disposition of Imposing capital gains tax, etc.

Plaintiff GangseoA et al.

AA Head of tax office and five others

March 18, 2016

April 1, 2016

1. Each disposition taken by the Defendants against Plaintiff KimA, 00, 00, 00, 00, 00, 00, 00, and KimB shall be revoked, respectively.

2. Each claim against the defendant 00 director of the Gangwon-A and each claim against the defendant 00 director of the Gangwon-B against the defendant 00 director of the tax office is dismissed.

3. Of the costs of lawsuit, the part arising between the Plaintiff KimA and six others and the Defendants shall be borne by the Defendants, and the part arising between the Plaintiff Kang and the Defendant 00 chief of the tax office shall be borne by the Plaintiff Kang, and the part arising between the Plaintiff Gangwon and the Defendant 00 chief of the tax office shall be borne by the Plaintiff Gangwon

Cheong-gu Office

Each disposition taken by the Defendants against the Plaintiffs listed in the separate sheet No. 1 shall be revoked.

1. Details of the disposition;

A. On June 1, 1998, the Plaintiff Gangseo-gu established 000, Seoul 00 Dong 00, 46-17, the purpose of which is the manufacturing, selling, etc. of clothes (the company of this case prior to the alteration, the company of this case; hereinafter referred to as the "company of this case").

B. From March 13, 2014 to May 16, 2014, the Director of the Regional Tax Office: (a) conducted an integrated investigation into the instant company’s shares and conducted an investigation into shares change; (b) the actual owner of the shares issued by the instant company held title trust with the Plaintiff Gangwon-do or 4, including Nonparty KimCC at the time of establishment in 1998; (c) followed the title trust under the name of 19 officers, employees, etc. while undergoing the process of sale and capital increase; and (d) around December 2006, the title trust has been repeated under the name of 190,000 shares among the shares held in title trust in the name of the said company; and (b) the Defendants confirmed that the Plaintiff’s shares were held in title trust with the Plaintiff’s name of 100,000 shares, 200, 300, 400, 400, 300 shares shares in the name of the Plaintiff (hereinafter referred to as “Plaintiff, etc.”).

C. Accordingly, the Defendants imposed the total amount of KRW 356,541,540, and the total amount of KRW 247,391,950, respectively pursuant to Article 101(1) of the Income Tax Act on the Plaintiff Gangwon-B under Article 35(1) of the Inheritance Tax and Gift Tax Act (hereinafter “Inheritance Tax and Gift Tax Act”) on the Plaintiff Gangwon-B, on the grounds that the said shares were acquired at a lower price than the market price from the Plaintiff Gangwon-B, the father, and on the Plaintiff Gangwon-A, etc., the gift tax under Article 45-2 of the Inheritance Tax and Gift Tax Act was imposed on the Plaintiff, etc.

D. The Plaintiffs appealed and filed a request for examination with the Commissioner of the National Tax Service on November 3, 2014. However, the Commissioner of the National Tax Service dismissed all the Plaintiffs’ claims on February 10, 2015.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1 through 11, Eul evidence Nos. 1 and 2 (including each number), the purport of the whole pleadings

2. The plaintiffs' assertion

A. On December 2006, Plaintiff KimA et al. acquired the shares of the instant company for the purpose of gaining profits from the listing of the KOSDAQ market following the recommendation of Plaintiff Gangnam-gu, the representative director of the instant company, and thereafter, it is difficult to list the shares of the instant company, and thus, Plaintiff KimA et al.’s acquisition of shares from 2010 to 2012 does not constitute a title trust, since Plaintiff KimA et al.’s acquisition of shares is sold to Plaintiff Gangwon-do et al. upon Plaintiff’s request, from 2010 to 2012. Furthermore, the acquisition of shares by Plaintiff KimA et al. does not constitute a title trust. In addition, even if Plaintiff KimA et al

B. The acquisition of the instant shares by Plaintiff JA, etc. is based on the legitimate practice among the unrelated parties, and cannot be deemed as a donation of profits arising from the wrongful calculation under the Income Tax Act or the transfer of low-price under the Inheritance Tax and Gift Tax Act. Therefore, the imposition of capital gains tax on Plaintiff JA and the imposition of gift tax on Plaintiff JB is unlawful.

3. Relevant statutes;

Attached Form 3 shall be as listed in attached Table 3.

4. Determination

(a) Facts of recognition;

1) From the time of incorporation of the instant company to 2012, the details of changes in the nominal owner of the instant company are as shown in attached Table 2.

2) During the period from December 21, 2006 to December 27, 2006, 68,000 shares of Nonparty 1 were transferred to Plaintiff KimA, etc. (each of 7,000 shares), Nonparty DD (7,000 shares), 00 shares (7,000 shares), and 00 shares (5,00 shares) per share, during the period from December 21, 2006 to December 27, 2006, the Defendants assessed the value per share of KRW 30,394 [based on the net asset calculation and net profit and loss value of the immediately preceding 3 business years (from December 27, 2006 to December 27, 2006), and imposed gift tax as set forth in the attached list 1 to 30,394 [the net asset calculation and net profit and loss value of the immediately preceding 3 business years (from December 203 to 205)].

3) Of the above shares, 63,000 shares in the nine remaining nine shares, excluding Nonparty 5,000 shares, were transferred to Plaintiff GangwonB in total at KRW 5,000 per share on December 7, 2010, May 23, 2011, and June 27, 2012. The shares acquired in the name of 00 shares in the name of 56,000 shares were also transferred to Plaintiff GangwonB in total at KRW 5,000 per share on December 7, 2010.

4) As to the transfer under paragraph (3) above, the head of the tax office and the director of the tax office of the tax office of the Party A and the director of the tax office of the Party B shall terminate the title trust of the instant shares and impose capital gains tax and gift tax on the Plaintiff Gangwon-B, who is an ASEAN, on the ground that the instant shares were transferred at low price (the market price is calculated as KRW 14,020 on December 14, 2010, KRW 19,407, May 13, 2011, KRW 19,761 on June 27, 2012, based on the supplementary assessment method under the Inheritance Tax and Gift Tax Act) on the transfer under the said paragraph.

[Ground of recognition] Facts without dispute, entry of Eul evidence No. 7-5, purport of the whole pleadings

B. Whether the disposition imposing gift tax on Plaintiff KimA, etc. is legitimate

1) Whether the title trust constitutes a title trust and whether the purpose of tax avoidance is recognized

A) First, in light of the following circumstances, as to whether the acquisition of the shares of the company of this case by Plaintiff KimA, etc. around December 2006 constitutes a title trust, it is reasonable to view that Plaintiff Kang A, etc., a title trust of 68,00 shares of the company of this case, which was held in title trust with Plaintiff KimA, etc. from around 2002 to Plaintiff KimA, etc. on December 2006, was held in title trust of 49,00 shares out of the shares of this case in the form of transfer to Plaintiff KimA, etc. in the form of Plaintiff KimA, etc., JDD, 00, and Table 00.

① Around February 2002, according to the written answer prepared by the investigator of the Seoul Regional Tax Office regarding Non-Party 00 who acquired 68,000 shares of the instant company and transferred all of the Plaintiff KimA, etc. around December 2, 2006, the head of the Seoul Regional Tax Office stated that “At the time of the acquisition of the said shares, he lent his name at the request of the Plaintiff Gangwon-si at the time of the acquisition of the said shares, and thus, he did not know detailed matters, such as acquisition price and payment method. As such, at the time of the transfer of the said shares, he created a passbook in his name at the Industrial Bank of Korea at the time of the transfer of the said shares, and sent it to the Plaintiff Kang-A, and all of the subscription money for the transfer was processed by the Plaintiff

② From around December 2006 upon the request of the Plaintiff Kim A, 200 to acquire 7,00 shares of the company of this case 7,00 shares among the above 00 shares of the company of this case, Daehan, which was an employee of the Seoul Regional Tax Office, as of December 2, 2006, was also an employee of the company of this case, and deposited 00 won from the company's company's bank's bank's account of this case's 35,000 won from the company's company's company's company's account of this case's 5th day, and it is thought that it constitutes an oligopolistic shareholder at the time of 2006 to acquire shares of this case's company's 10th day after the above 20th day of acquisition, it is also believed that the 20th day after the 20th day of acquisition of shares of this case's company's name and 200th day after the 20th day of transfer of shares of this case.

③ The Plaintiffs, through the preparatory brief dated June 26, 2015, acknowledged the fact that the Plaintiff, Gangwon-do and Plaintiff Kim Dong-dong, etc. received the shares of the instant company first on or around December 2006, and received the shares of the instant company, and paid the transfer price to the Plaintiff Kim Dong-sung, etc., after which they had been prepared for listing, and thereafter, the Plaintiff Gangseo requested the Plaintiff Kim Dong-B to transfer the said shares again, and the Plaintiff Kim Dong-A et al. failed to pay the shares acquired in its name on the ground that they did not pay the shares acquired at a par value at the Plaintiff Kang-B upon the Plaintiff’s request, because they were in a situation where the shares were not paid. Accordingly, the Plaintiff asserted that the Plaintiff’s purchase price was not in accord with the Plaintiff’s assertion as seen earlier, but did not enter into the agreement on the loan of the Plaintiff, etc. or deposited the shares in the account of the Plaintiff’s funds at a face value separately from the loan of the said company.

④ In addition, there is no evidence to deem that the nominal owner of the instant company’s shares as indicated in the Attachment 2 constitutes a relative or relative relationship with the Plaintiff, or an officer or employee of the instant company, or a transaction partner, and that said owner received dividends or exercised substantial rights as a shareholder. In addition, the Plaintiff Gangseo filed a lawsuit seeking confirmation of ownership by asserting that each of the shares of the instant company was held in title by 80,000 shares with the Plaintiff, the Seoul East Eastern District Court 201Gahap000. Nonparty 00, who acquired 56,000 shares of the instant company in 202 and transferred them in 203, also transferred 56,00 shares of the instant company in 202, and that all Nonparty 1, who transferred them to the Plaintiff Nonparty 2 in 2010, did not actually have made a statement on the ownership of the instant company’s shares, including the purchase price, as a shareholder of the instant company. In light of the fact that the Plaintiff and Nonparty 1 did not actually made a statement to the Plaintiff’s shares.

B) Next, 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 that the act of tax avoidance by using the title trust system is effectively prevented, thereby 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 the tax prescribed in the proviso cannot be limited to the gift tax, and the burden of proving that there was no purpose of the tax avoidance in the title trust is against the person asserting it (see, e.g., Supreme Court Decision 2003Du4300, Jan. 27, 2005). Therefore, the burden of proving that there was no purpose of the tax avoidance, other than the purpose of the tax avoidance, can be proven by means of proving that there was another purpose of the tax avoidance (see, e.g., Supreme Court Decisions 2004Du733, May 12, 2006; 2004Du13946, May 25, etc.).

In this case, the following circumstances, which are acknowledged based on the overall purport of the arguments and evidence revealed earlier, (1) the shares of the Plaintiff and its specially related persons were 41% of the shares of the Plaintiff, and no such shares were owned by the Plaintiff under the title trust agreement with the Plaintiff Kim Yong-A et al., and (2) the secondary tax liability of the oligopolistic shareholder under the former Framework Act on National Taxes (amended by Act No. 8139, Dec. 30, 2006) was determined based on the ratio of shares owned by the Plaintiff’s stock owner, and the second tax liability of the oligopolistic shareholder was determined based on the ratio of shares owned by the Plaintiff’s stock owner, and the second tax liability of the oligopolistic shareholder under the title trust agreement was determined based on the annual rate of shares owned by the Plaintiff, which were not yet established under the title trust agreement of the Plaintiff, even if the Plaintiff Kim Jong-A was established due to partial change in the title of shares (Article 39 of the above Act).

C) Therefore, the acquisition of the shares of the instant company by Plaintiff KimA, etc. on or around December 2006 constitutes a title trust under an agreement with Plaintiff Kang, and it cannot be deemed that there was no purpose of tax avoidance. Thus, the title trust with Plaintiff KimA, etc. is deemed as a gift pursuant to Article 45-2 of the former Inheritance Tax and Gift Tax Act (amended by Act No. 8828, Dec. 31, 2007; hereinafter referred to as the “former Inheritance Tax and Gift Tax Act”) and thus subject to gift tax.

2. Whether evaluation methods of stock value are illegal

A) Article 63(1)1 (c) of the former Inheritance Tax and Gift Tax Act and Article 54(1) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act stipulate that the value per share of non-listed stocks shall be assessed by averaging the net asset value per share (net asset value of the relevant corporation ± total number of issued stocks ± the weighted average amount of net profit and loss per share for the preceding three years ± the rate determined and publicly notified by the Minister of Strategy and Finance in consideration of the rate of circulation rates of bonds with the maturity of three years ± the net asset value of the relevant corporation ± the net asset value of the relevant corporation ± the amount obtained by subtracting liabilities from the value appraised by the relevant corporation as of the base date of appraisal). Article 56(1) of the Enforcement Decree of the same Act provides that “The weighted average amount of net profit and loss per share for the latest three years 】 (net amount of net profit and loss per share for the business year before the base date of appraisal 】 (2) per share before the base date of appraisal 】 11/6)”.

B) Therefore, on the premise of assessing the value per stock of the instant company’s stocks, the health team first claims that the Plaintiff should be the evaluation base date on March 31, 2007, which was submitted a detailed statement of changes in stocks, etc. of the instant company, on the premise of assessing the value per share of the instant company’s stocks. On the other hand, the Defendant asserts that, on the tax base of capital gains submitted by Nonparty 00 on February 7, 2007, the tax base of capital gains should be the evaluation base date on December 27, 2006, which was written as the date

C) There is no dispute between the parties that the list of shareholders was not prepared in the instant company, and according to each of the evidence Nos. 17 and Nos. 15 and 16 (including each number), the instant company submitted to the head of the competent tax office on March 31, 2007 a report of corporate tax base, along with a detailed statement of changes in stocks, etc. stating the details of the transfer of the shares of the Plaintiff KimA, etc., upon submitting the report of corporate tax base to the head of the competent tax office on February 7, 2007, and the head of Gangnam-gu filed a tax base return of transfer income stating the transfer of shares of the instant company 68,000 shares, and it is recognized that the date of transfer was stated on December 27, 2006.

Meanwhile, in the case of shares under Article 45-2 of the former Inheritance Tax and Gift Tax Act, the title trustee shall be deemed to have received a donation from the title truster in the case of shares under paragraph (1), and Article 45-2 of the former Inheritance Tax and Gift Tax Act provides that "in the application of paragraph (1), where the list of shareholders or the list of members is not prepared, the registration of transfer shall be determined based on the documents related to the shareholders, etc. submitted to the head of the tax office having jurisdiction over the place of tax payment

(3) Unless otherwise expressly provided, it is reasonable to view that the transfer date of shares is 20 days before the date of transfer of shares as the concept element of the title trust for the purpose of applying Article 45-2 of the former Inheritance Tax and Gift Tax Act. The transfer date of shares is 10 days before the date of transfer of shares and 20 days before the date of transfer of shares, and the transfer date of shares is 20 days before the date of transfer of shares is 20 days before the date of transfer of shares. The transfer date of shares is 10 days before the date of transfer of shares and 20 days after the date of transfer of shares is 20 days before the date of transfer of shares, and the transfer date is 20 days after the date of transfer of shares is 20 days before the date of transfer of shares and the transfer date is 20 days after the date of transfer of shares is 20 days before the date of transfer of shares and the transfer date is 3 days after the date of transfer of shares is 10 days before the date of transfer of shares (see Supreme Court Decision 2000Du120, etc.

D) If so, in assessing the value per share of the shares of the instant company held in title by the Plaintiff KimA, etc., the assessment shall be based on the net asset value of the instant company as of March 31, 2007 as of March 31, 2007 and the net profit and loss value of the immediately preceding three business years (2004-2006), and as seen earlier in imposing gift tax on Plaintiff KimA, etc., the calculation of the value per share based on the net asset value and net profit and loss value of the immediately preceding three business years (2003-205) shall not be made lawful.

On the other hand, the determination of legality of a disposition in a lawsuit seeking revocation of a tax disposition is based on whether it exceeds a legitimate amount of tax. The parties can submit objective tax bases and materials supporting the tax amount until the closing of argument in the fact-finding court. In the calculation of a legitimate amount of tax to be lawfully imposed by such materials, only the portion exceeding the legitimate amount of tax should be revoked. However, even if the tax authority did not assert or prove it, the tax authority does not have a duty to calculate the amount of tax to be lawfully imposed by actively examining evidence or urging the tax authority to prove it, and if the legitimate amount of tax to be imposed is not calculated, the entire amount of the tax disposition should be revoked (see, e.g., Supreme Court Decisions 2005Du5666, Sept. 7, 2007; 2013Du3641, Jun. 27, 2013). The materials submitted by the Defendants in this case are not enough to calculate the legitimate amount of tax to be imposed lawfully by the Plaintiff KimA, etc.

C. Whether the imposition of capital gains tax on Plaintiff Kang and the imposition of gift tax on Plaintiff KangB is legitimate

As seen earlier, the title trust of the instant company’s shares 63,00 shares in relation to Plaintiff KimA et al. and Nonparty DD and Y00 is recognized, and according to the evidence Nos. 3 and 7-5 of the evidence Nos. 5, it is reasonable to deem that the total amount of shares 119,000 shares of this case was transferred from Plaintiff Gangwon-do to Plaintiff KangB over the period of 2010 to 2012.

In addition, in full view of the former Inheritance Tax and Gift Tax Act (amended by Act No. 11845, May 28, 2013); Article 60 of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act (amended by Presidential Decree No. 25195, Feb. 21, 2014); and Article 49 of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act (amended by Presidential Decree No. 25195, Feb. 21, 2014), the market price stipulated in the above provision of the Act refers to an objective exchange price formed through a general and normal transaction. Thus, even if there is a transaction example, if the transaction price cannot be deemed to be formed through a normal transaction that properly reflects the objective exchange value of donated property, it is difficult to calculate the market price if the gift is non-listed stocks, and the value of shares is calculated based on the supplementary valuation method stipulated in Article 63 (1) 1 (c) of the above Act (see Supreme Court Decision 2003Du5723, Oct. 15, 2016, etc.).

Therefore, under the premise that the instant shares were not trusted to Plaintiff KimA, etc., the allegation by Plaintiff Gangnam-gu and KangB that the transfer of shares to Plaintiff Gangnam-gu constitutes a transaction according to a legitimate practice or a low-price transfer between persons who are not related parties, is without merit. The imposition of each transfer income tax and gift tax on the said Plaintiffs by Defendant Gangnam-gu Tax Office and the head of Sungdong Tax Office is legitimate.

5. Conclusion

Among the claims of this case, the claims against the defendants by plaintiffs KimA et al. are justified, each of them is accepted, and each of the claims against the defendant Gangnam-gu Tax Office by plaintiffs Gangnam-gu Tax Office and each of the claims against the defendant Sung Dong Tax Office by plaintiffs Gangnam-gu Tax Office is dismissed as it is without merit. It is so decided as per Disposition.

3

Relevant statutes

former Inheritance Tax and Gift Tax Act (amended by Act No. 8828 of Dec. 31, 2007)

Article 45-2 (Presumption of Donation of Title Trust Property)

(1) Where the actual owner and the nominal owner are different from the property which requires a registration, etc. for the transfer or exercise of rights (excluding land and buildings; hereafter the same shall apply in this Article), the value of such property shall be deemed to have been donated by the actual owner on the date (where the property is subject to a change of ownership, referring to the date following the last day of the year following the year in which the date of acquisition of ownership falls), notwithstanding the provisions of Article 14 of the Framework Act on National Taxes, by the nominal owner:

1. Where any property is registered, etc. in another person's name without the purpose of tax avoidance, or transfer is not made in the name of the actual owner who acquired the ownership;

2. Where converting the name of the actual owner from among the stocks or equity shares (hereafter in this Article, referred to as “stocks, etc.”) that have been entered in the register of stockholders or the register of members with another person or whose transfer has been made under a trust or agreement made before January 1, 1997, to the name of the actual owner during the period not later than December 31, 1998 (hereafter in this Article, referred to as the “period of grace”): Provided, That the same shall not apply to the case where converting the name of the person having a special relationship with the stockholders or investors of the corporation which issued the relevant stocks, etc. (hereafter in this Article, referred to as the “shareholders, etc.”)

(2) Where any property is registered, etc. under another person's name, and a transfer of ownership is not made under the name of the actual owner, and where the title of stocks, etc. is not converted under the name of the actual owner, it shall be presumed that there exists an object of tax avoidance: Provided, That this shall not apply to cases where the transferor files a report on the change of ownership along with a report under Articles 105 and 110 of the Income Tax Act

(3) In the application of the provisions of paragraph (1), where a register of stockholders or an employee has not been prepared, the decision of transfer shall be made in accordance with the documents concerning stockholders, etc. submitted to the head of tax office having jurisdiction over the place of tax payment and the detailed statement on the state of changes in stocks, etc.

(6) The term "taxs under paragraphs (1) 1 and (2) means the national tax and local tax under subparagraphs 1 and 7 of Article 2 of the Framework Act on National Taxes and the customs under the Customs Act.

former Inheritance Tax and Gift Tax Act (Amended by Act No. 11845, May 28, 2013)

Article 35 (Donation, etc. of Profits from Transfer at Low or High Price)

① 다음 각 호의 어느 하나에 해당하는 자에대해서는 해당 재산을 양수하거나 양도하였을 때에 그 대가와 시가(��價)의 차액에 상당하는금액으로서 대통령령으로 정하는 이익에 상당하는 금액을 증여재산가액으로 한다.

1. 타인으로부터 시가보다 낮은 가액으로 재산을 양수하는 경우에는 그 재산의 양수자 제60조(평가의 원칙 등) ① 이 법에 따라 상속세나 증여세가 부과되는 재산의 가액은 상속개시일 또는 증여일(이하 평가기준일 이라 한다) 현재의 시가(��價)에 따른다. 이 경우 제63조 제1항 제1호 가목 및 나목에 규정된 평가방법으로 평가한 가액(제63조 제2항에 해당하는 경우는 제외한다)을 시가로 본다.

(2) The market price referred to in paragraph (1) shall be the price generally recognized as a transaction between many and unspecified persons, including the expropriation price, public sale price, appraisal price, and others recognized as the market price, as prescribed by Presidential Decree.

(3) Where it is difficult to compute the market price in applying paragraph (1), the value appraised by the methods prescribed in Articles 61 through 65 in consideration of the type, scale, transaction status, etc. of the relevant property shall be deemed the market

Article 63 (Evaluation of Securities, etc.)

(1) Securities, etc. shall be appraised by any of the following methods:

1. Appraisal of stocks and investment shares:

(a) The average amount of stocks and equity shares of a stock-listed corporation traded in the securities market under the Financial Investment Services and Capital Markets Act, which are prescribed by Presidential Decree, shall be the average amount of the last daily exchange prices (not based upon whether there is a transaction record) published two months before and after the evaluation base date: Provided, That in the calculation of the average amount, if it is inappropriate to make the average amount at the same time for two months before and after the evaluation base date due to causes such as capital increase or merger, etc., the average amount of the periods calculated, as prescribed by Presidential Decree, between the two months before and after the evaluation base date

(b) The stocks and equity shares prescribed by Presidential Decree among the stocks and equity shares of a listed-stock corporation prescribed by Presidential Decree, which are listed-listed corporations under the Financial Investment Services and Capital Markets Act:

The provisions of paragraph (1) shall apply mutatis mutandis.

(c) Stocks and equity shares other than those under item (b), which are not listed in the Exchange, shall be appraised by the methods prescribed by Presidential Decree, in consideration of the assets, profits, etc.

Enforcement Decree of the former Inheritance Tax and Gift Tax Act (Amended by Presidential Decree No. 25195, Feb. 21, 2014)

Article 54 (Appraisal of Non-listed Stocks) (1) The value of stocks and investment shares not listed on the Korea Exchange under Article 63 (1) 1 (c) of the Act (hereafter in this Article and Article 56-2, referred to as "non-listed stocks") shall be the average of the net asset value per share of the value appraised (hereinafter referred to as "net profit and loss value") according to the following formula, and the net asset value per share of 3 and 2: Provided, That in cases of a corporation with multi-owned real estate (referring to a corporation falling under Article 158 (1) 1 (a) of the Enforcement Decree of the Income Tax Act), the ratio of the net profit

- 2 and 3 each.

Value per share = The weighted average amount of net profits and losses for the latest three years per share ¡À a company with maturity of three years which is guaranteed by the financial institutions.

The Minister of Strategy and Finance may determine and publicly notify the interest rate determined and publicly notified by the Minister of Strategy and Finance in consideration of the circulation rate

The rate of interest)

(2) The net asset value per share under paragraph (1) shall be the value appraised by the following formula:

The value per share = the net asset value of the corporation ± the net asset value of the corporation ± (hereinafter referred to as the “net asset value”).

Article 55 (Method of Calculating Value of Net Assets)

(1) The net asset value under Article 54 (2) shall be the value obtained by subtracting liabilities from the value appraised under Articles 60 through 66 of the Act as of the standard date of appraisal, and when the net asset value is not more than zero won, it shall be zero won. In such cases, if the value appraised under Articles 60 (3) and 66 of the Act of the relevant corporation's assets is less than the book value (referring to the value obtained by subtracting the depreciation costs from the acquisition value; hereafter the same shall apply in this paragraph), it shall be the book value, but this shall not apply where justifiable reasons exist that

§ 56. Calculation method of net profit and loss per share for the latest three years

(1) The latest three years per share under Article 54 (1).

The weighted average amount of net profit and loss of the corporation shall be the value referred to in subparagraph 1, and it shall not be the value referred to in subparagraph 1, such as the abnormal increase of net profit and loss of the corporation in the last three years due to a temporary contingency of the corporation.

In cases prescribed by Ordinance of the Ministry of Strategy and Finance as interest, the value under subparagraph 2 may be the value:

If the amount is not more than 0 won, it shall be 0 won.

1. The amount calculated by the following formula:

The weighted average amount of net profit and loss per share for the preceding three years =

(The net profit or loss per share in the business year before the evaluation base date x 3) + (2 years before the evaluation base date)

the net profit and loss per share in the business year x (2) + (the net profit and loss per share in the business year before the base date of appraisal)

Amount 】 (1) [】 】 (1/6];

2. Institutions specializing in credit assessment prescribed by Ordinance of the Ministry of Strategy and Finance, accounting corporations under the Certified Public Accountant Act or taxes.

Two or more specialized credit assessment institutions, accounting corporations, or tax accounting corporations among tax accounting corporations under the Private Act;

Average value of estimated interest per share calculated in accordance with the criteria determined by Ordinance of the Ministry of Information and Communication.

Income Tax Act

§ 101. Wrongful calculation of transfer income

(1) Where the head of a regional tax office or the head of a regional tax office having jurisdiction over the place of tax payment deems that any act or calculation of a resident having capital gains has reduced unreasonably the tax burden on such income through transactions with his/her specially related persons, he/she may calculate the amount of income in the relevant taxable period

Enforcement Decree of the former Income Tax Act (Amended by Act No. 11845, May 28, 2013)

Article 167 (Unfair Act and Calculation of Transfer Income)

(3) If it is deemed that any tax burden has been reduced unreasonably in Article 101 (1) of the Act means cases falling under any of the following subparagraphs: Provided, That it shall be limited to cases where the difference between the market price and the transaction price is 300 million won or more or the amount equivalent to 5/100 or more

1. When it purchases assets from a specially related person at a price higher than the market price or transfers assets to a specially related person at a price lower than the market price;

(5) In the application of the provisions of paragraphs (3) and (4), the market price shall be the value appraised by applying mutatis mutandis the provisions of Articles 60 through 64 of the Inheritance Tax and Gift Tax Act, Articles 49 through 59 of the Enforcement Decree of the same Act, and Article 101 of the Restriction of Special Taxation Act. In such cases, the period of not more than six months before and after the base date of appraisal (three months for donated property) in the main sentence of Article 49 (1) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act shall be deemed the period of three months before and after the date of transfer or acquisition respectively, and the case of inheritance or donation