Whether the transaction price of stocks is the market price reflecting objective exchange price.

Transfer shares are prohibited by contract between shareholders and third parties. The transfer of shares is enforced to determine the stock value per share determined in advance, the transfer of shares is executed by the deceased's death, the agreed value is determined based on the profits, and the objective exchange value is reflected in the market value reflecting the objective exchange value.

The contents of the decision shall be the same as attached.

1. The Defendant’s imposition disposition of KRW 898,359,020 against the Plaintiffs on August 13, 2007 is revoked.

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

The same shall apply to the order.

1. Details of the disposition;

A. The plaintiffs are co-inheritorss of Park Jong-A, who died on March 4, 2003, and the plaintiff KimF is the wife of the deceased Park Jong-F, and the plaintiff ParkCC, ParkD and ParkE are their children.

B. When filing a return on the taxable value and tax base of the inheritance tax due to the death of ParkA, the Plaintiffs assessed the value of the shares 253,500 shares of BBS Green Co., Ltd. (former 'GGGGG'; hereinafter 'BS Green') owned by the deceased ParkA (hereinafter 'the shares of this case') as 3.5 billion won,960,580 won (hereinafter 'AFT'), the value of which the Plaintiff transferred to the Canadian, a Canadian national corporation, a shareholder of the BBS Green, Canadian, a Canadian, the shareholders of the BBS Green, (hereinafter 'AFT', 'the shares of this case', as 'the trading price of this case').

C. On September 2004, the director of the Central District Tax Office: (a) assessed the value of the instant shares among the inherited property of the deceased Park Jong-A, and (b) determined the Plaintiffs’ inheritance tax by calculating the value of the instant shares as the amount of the instant shares assessed by the Plaintiffs at the time of reporting the inheritance tax return, following deliberation by the member of the Tax Dispute Review Committee of the Central Tax Office with the content that it is reasonable to deem the market value as the amount of the instant shares

D. Since the Board of Audit and Inspection conducted a regional tax office on April 2007 with regard to the above determination of inheritance tax, it pointed out that the transaction price of this case cannot be deemed the market price of this case as a transaction price arising from the transaction with a person with a special relationship. Accordingly, on August 15, 2007, the defendant assessed the price of this case as a supplementary assessment method under the Inheritance Tax and Gift Tax Act (amended by Act No. 8828, Dec. 31, 2007; hereinafter referred to as the "Act"), Articles 60(3) and 63(1)(c) of the Inheritance Tax and Gift Tax Act (amended by Presidential Decree No. 19177, Dec. 30, 2003; hereinafter the same shall apply) and included the difference between the amount of stocks of this case as 19,93 won, and then the amount of the inheritance tax of this case as a supplementary assessment method under Article 54 of the Enforcement Decree of the Act (amended by Presidential Decree No. 1919068,985,97,9850,98).

E. The Plaintiffs were dissatisfied with the instant disposition and filed an appeal with the Tax Tribunal on November 5, 2007, but the Tax Tribunal dismissed the Plaintiffs’ claim on November 4, 2008.

[Reasons for Recognition] Facts without dispute, Gap evidence 1, 2, Eul evidence 1 to 4, and Eul evidence 6 (including each number), the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiffs' assertion

The plaintiffs transferred the shares of this case to AFT on April 15, 2003, within six months from the inheritance date (as of March 4, 2003), and such sale is a normal transaction that adequately reflects the objective value of the shares of this case. Thus, although the sale price (the sale price of this case) is determined by considering the sale price of this case as the market price of inherited property, the disposition of this case made by the defendant evaluation of the value of the shares of this case according to the supplementary evaluation method under the Inheritance Tax and Gift Tax Act is unlawful, since it is difficult to view that the sale price of this case is a proper reflection of the exchange value through a normal transaction. ② Even if it is not so, the disposition of this case was made based on the inheritance tax determination based on the original taxation point deliberation, but it was judged that the defendant was mistakenly taxed after four years from the date of the initial taxation point deliberation, and thus, the disposition of this case was made. Therefore, it cannot be deemed that the supplementary assessment method of this case is unlawful for the plaintiffs to report and pay the inheritance tax of this case.

B. Relevant statutes

It is as shown in the attached Form.

(c) Fact of recognition;

(1) On September 3, 1999, ParkA, who had engaged in the business of producing screen diskettess, etc., which are parts of paper manufacturing machinery, established BBP, an unlisted corporation, through investment in kind. At the time, ParkA, 390,000 common shares issued by BBP, respectively, held 388,900 common shares issued by BBP, Plaintiffs 1,100 common shares (Plaintiff KimF, ParkF, ParkCC, ParkD, and 200 shares issued by Plaintiff ParkE).

(2) However, on January 18, 2001, the CAE International Holdings Limited (hereinafter “CAE”) as a Canadian national, entered into a contract between CAE and 135,400 shares out of the shares of CAE and 1,100 shares of CAE which are held by the Plaintiffs [the shares ratio of CAE was 65% (253,50 shares), CAE’s shares ratio was 35% (136,50 shares) as a result of the acquisition by CAE as above, and the shares ratio of CAE was 35% (136,50 shares) with CAE as well as between CAA and BBS C, which includes the following (hereinafter “ weekly contract”).

(1) Definition (1.1)

"(n)EBIT" means the amount obtained by adding the reduced interest and the corporate tax portion in calculating the net profit of the company (BS Green) listed in the consolidated financial statements of the fiscal year concerned and such net profit. "(z)(i) case(g) case means the occurrence of any of the following subparagraphs:

(i) A shareholder's bankruptcy or insolvency (unpaid condition)

(ii) Death of a shareholder (if the shareholder is an individual)

(z) (i) (h) The value per share means the value per share of a company (BBS Green) calculated by the following methods:

(i) EBIT (business profit) of a company in the immediately preceding fiscal year at the time to calculate the per share value.

(ii) the above amount multiplied by 6.

(iii) is divided by the number of shares issued by the company.

(2) Prohibition against transfer (4.1)

Except as permitted in this Agreement, the shareholder may not, directly or indirectly, transfer all or part of the shares or rights related to the shares in his possession.

(3) Preferential purchase right (4.3)

- The shareholder(s) who intends to sell all of its stock holdings shall require that the stock(s) intended to be sold be purchased shall be given priority to other shareholders(s) of the stock(s) intended to be sold.

- When the person subject to a sale and purchase subscription has accepted an offer, the person subject to the sale and purchase subscription shall sell to the person subject to the sale subscription stocks, as prescribed in this contract, and the person subject to the sale subscription shall buy such stocks.

-Where the subject of a trade offer refuses or is deemed to refuse an offer to sell or purchase, the subject of the trade offer may sell to a third party all the shares held by that third party for a period of thirty (30) days after the termination of the subscription period, but shall not be sold under more favorable terms than the terms set out in the trade offer. In addition, the right of the third party to sell the shares held by that third party shall be subject to prior terms that the third party becomes a party to this Agreement

(4) An offer to trade by a third party (4.4) at any time;

(a) accept a trade offer (third party offer) in which the shareholder(s) purchases all shares owned by a third party in a fair transaction relationship from a third party, and is not able to cancel such offer on the date when the transaction is completed;

(b) If the buyer wishes to accept such an offer to sell or purchase by a third party, the buyer shall give priority to the other stockholders (the subject of the subscription to sell or purchase) in accordance with this section.

(5) A case (Triger EV. 4.5)

- If the occurrence of the matter set forth in this Agreement (such as bankruptcy, insolvency, death) relates to a shareholder, the shareholder or his heir, will executor, or his legal representative (trade subscriber) shall be deemed to have requested the Company (BS) to purchase all shares (stocks subject to a trade subscription) held by the shareholder immediately before the occurrence of the matter, and the Company shall have the authority to purchase and retire at the price in accordance with the value of shares calculated.

- The company may exercise such power by notifying the buyer within 15 business days from the date of occurrence of the matter. The buyer must notify the company of the occurrence of the matter.

- If the company does not exercise its authority under this paragraph, another shareholder shall purchase the shares, and the purchaser shall sell the shares at a price calculated in accordance with the value of the shares.

(6) Successor to the right (6.4)

This contract and the contents of the contract shall be effective for each of the parties, their successors, successors, testament executors and authorized successors, and shall be legally binding.

(3) Since then, CAE transferred 136,50 shares of BBS Green (35% equity ratio) to AFT, and accordingly, ParkA, BBS Green, CAE, and AFT entered into a contract to modify the contract between shareholders (hereinafter “revision contract”) on March 21, 2002.

The purpose of this Act is to determine the weak points between the parties to this Act, and to this end, ParkA, CAE, BBS Green and AFT agree as follows:

2. A modified contract;

The entire Parties agree to substitute the status of CAE under the contract between shareholders on the date of the completion of the transaction as provided for in this contract, and thereafter to acquire all rights based on the contract between shareholders of CAE.

- In addition, the entire Party agrees to receive the terms and conditions of a purchase proposal (purchase) from a third party through a fair transaction to sell all of the shares of the Company (BS Green) and to make an offer for purchase of shares from a third party in accordance with the Preferred Purchase Rights pursuant to Articles 4.3 and 4.4 of the Agreement between Shareholders (hereinafter referred to as "Preferred Price 1") and 15,385 won per share (hereinafter referred to as "Preferred Price 1") and (b) calculated by the following methods:

(4) After the death of ParkA on March 4, 2003, AFT exercised the preferential right to purchase the shares of this case against the plaintiffs, who are the successors of ParkA, as stipulated in the agreement between shareholders. The BBS held a board of directors on April 14, 2003 and made a resolution on the condition that the heir of ParkA’s financial statements of 253,500 shares (65% of the total number of shares issued) transfer a total of KRW 2.17,623,00 to the shareholders of the financial statements of 202 fiscal year (65%, to the shareholders of Korea (hereinafter referred to as the plaintiffs), and that the heir of ParkA’s financial statements of 202 fiscal year would transfer a total of KRW 2.17,623,00 to AFT of shares (65% of the total number of shares issued).

(5) After April 15, 2003, the Plaintiffs sold the instant shares to AFT at KRW 3.570,960,580 ( approximately KRW 14,086 per share, and the transaction value of the instant shares). Meanwhile, as stipulated in the modified contract, the value of the second arrangement determined based on the operating income for the fiscal year 2002 as prescribed in the amended contract was KRW 13,890 per share, and the Plaintiffs reported and paid KRW 1.369,954,950 as dividend income (including resident tax) for KRW 345,50,000 as dividend income.

(6) At the time of the transfer of the instant shares, the BBS Green’s articles of incorporation had a provision that prohibits transfer of shares without the approval of the board of directors. The prohibition provision was repealed on April 15, 2003, when the registration was made on January 26, 2001.

(7) Meanwhile, at the time of the establishment of BBS Green, Plaintiff ParkCC, ParkD was selected and appointed as the director of BBS Green, and Plaintiff KimF was dismissed on April 15, 2003, which is the date of the transfer of the instant shares. BBS was paid KRW 1 million as allowances for directors and auditors other than the above Plaintiffs from April 19, 2001 (the first board of directors) to the board of directors at each of the above Plaintiffs, and the Plaintiffs participated in the board of directors of BBS Green three times in 201 and four times in 202, and were paid KRW 1 million each time as allowances.

[Reasons for Recognition] Facts without dispute, Gap evidence Nos. 2, 3, 4, 5, Eul evidence No. 5 (including each number), each fact inquiry result of this court's AFT, the purport of the whole pleadings

D. Determination ( directly made in calculating the market price by supplementary evaluation methods)

(1) Contents and issues of the relevant laws and regulations

(A) Contents, etc. of the relevant statutes

Article 60 (1) of the Act provides that the value of the property on which inheritance tax is levied shall be deemed to be the market price as of the date on which the inheritance commences. Paragraph (2) provides that the company under the provisions of paragraph (1) shall have the value which is normally deemed to be constituted in the event of free trade between many and unspecified persons and shall include the appraisal value which is recognized to be the company under the conditions as prescribed by Presidential Decree, such as the expropriation and public sale price and the appraisal value. In applying the provisions of paragraph (1), if it is difficult to compute the market price in accordance with the provisions of paragraph (3), it shall be deemed that the appraised value is based on the methods prescribed in Articles 61 through 65 in consideration of the type, scale, transaction circumstances, etc. of the relevant property. Article 49 (1) of the Enforcement Decree of the Act provides that "any property recognized as the market price under the conditions as prescribed by Presidential Decree, such as the expropriation, public sale price and appraisal price, etc." means six months before and after the date of appraisal (three months in the case of donated property).

Therefore, the assessment of the value of inherited property is based on the market value as of the commencement date of the inheritance (Article 60 (1) of the Act), and the calculation of the value of inherited property according to the supplementary evaluation methods prescribed by Articles 61 through 65 of the Act is limited to the case where it is difficult to calculate the market value as of the commencement date of the inheritance, and the burden of proof on the fact that there was no choice of supplementary evaluation methods because it is difficult to calculate the market value.

As seen earlier, the sale and purchase (the instant transaction) of the instant shares between the Plaintiffs and AFT was made within six months from March 4, 2003, the base date of appraisal (the commencement date of inheritance). Therefore, the transaction value of the instant shares can be deemed as the market value of the instant shares under Article 60(1) and (2) of the Act and Article 49(1) of the Enforcement Decree of the Act, barring any special circumstance.

However, at the time of the transfer of the instant shares (the instant transaction), the Defendant is a corporation that had been engaged in as an auditor, and the decedent KimF was a de facto manager of BBS. The decedents (the deceased) made an investment of at least 30% of the shares of BBS, and the Plaintiffs or ParkbS and AFT constitute not only a person having a special relationship as stipulated in Articles 26(4)1 and 19(2)2 of the Enforcement Decree of the Act, but also a person who had a special relationship as stipulated in Articles 26(4)1 and 19(2)2 of the Enforcement Decree of the Act, and (2) as of April 14, 2003, the board of directors of BBS, immediately before the transfer of the instant shares, was 3.570,960,000 won of the instant shares, and thus, the amount of the Plaintiff’s retained earnings at the time of the instant transaction and the amount of the Plaintiff’s 1,395,000,000 won of the instant shares can be deemed to be objectively.

Therefore, the legitimacy of the disposition of this case, which evaluated the value of the stocks of this case according to the supplementary evaluation method, by deeming that the transaction value in this case is a transaction with a related party under Article 26 (4) of the Enforcement Decree of the Act as being objectively unfair, is a key issue. The following is whether the transaction value in this case constitutes a related party under Articles 26 (4) 1 and 19 (2) 2 of the Enforcement Decree, and even if it is recognized as a transaction between a related party and the plaintiffs, it shall be considered in order as to whether the transaction value in this case is objectively unreasonable

(2) Whether the plaintiffs and AFT have a special relationship

Article 26 (4) of the Enforcement Decree of the Act provides that "a person in a special relationship with a transferor or transferee (hereinafter referred to as "transferor, etc.") shall be a person in a relationship falling under any of the following subparagraphs. In such cases, "one stockholder, etc." shall be deemed "transferor, etc." and Article 19 (2) 1 of the Enforcement Decree of the Act provides that "a stockholder, etc. shall be deemed "a person under Article 19 (2) 1, 2, and 4 through 8" and Article 19 (2) of the Enforcement Decree of the Act provides that "the largest stockholder, etc. or an investor as prescribed by Presidential Decree" shall include 1 stockholder, or one investor (hereinafter referred to as "shareholders, etc.") and an employee, etc. under Article 26 (2) of the Act shall include 0 of the Enforcement Decree of the Act and employees under Article 19 (2) 2 of the Act and 30 of the Enforcement Decree of the Act shall include employees and other persons under Article 20 (2) 4 (the same shall apply to the above provisions):

With respect to whether there is a special relationship between the plaintiffs and AFT as prescribed in Article 19 (2) 2 of the Enforcement Decree of the Act, a corporation where AFT invests more than 30/10 (35%) of the total number of outstanding shares of BBS Green at the time of transferring the shares of this case, and the fact that the plaintiff KimF served as the auditor of BBS Green, the plaintiff LbCC, and YD as a director and the plaintiff ParkF participated in the board of directors while serving as a director, etc. Thus, the plaintiff ParkF constitutes the employees of BBS, which controlled AFT by investing more than 30% of the shares of this case. Accordingly, at the time of transferring the shares of this case, there is a special relationship provided for in Article 19 (2) 2 of the Enforcement Decree of the Act with AFT and the AFFF.

Therefore, this part of the plaintiffs' assertion that the plaintiffs are merely officers of BBS Green and cannot be viewed as having a special relationship with AFT is without merit.

(3) Whether the transaction value of the instant case is objectively deemed unfair

In order to assess the value of the instant shares based on the supplementary assessment method because the transaction value of the instant shares cannot be deemed as the market price, it is not sufficient to say that there is a special relationship between the Plaintiffs, the parties to the instant shares, and AFT. Furthermore, it should be deemed that the transaction value of the instant shares is inappropriate to the extent that it cannot be deemed as an objective exchange price formed through a normal transaction. As such, whether the transaction value of the instant shares is objectively

However, the following circumstances revealed through the above facts, i.e., (i) the shares of BBS Green at the time of the transfer of the shares are non-listed shares the transfer of which is restricted; (ii) the transfer of shares to a third party by means of a contract or a modified contract between BBS Green and a shareholder between CAE or AFT is prohibited in principle; and (iii) the transfer price of shares is forced to be determined by the predetermined per share value; (iv) the transfer price of shares is one of the shareholders' causes of “the death of the shareholders” (Trig EV), and the sale price of shares at the time of the transfer of the shares is determined by the objective sale price of the shares at the time of the transfer of the shares at the time of the exchange agreement, (iv) the value of the shares at the time of the transfer of the shares at the time of the transfer of the shares at the time of the transfer of the shares at the time of the transfer of the shares at the time of the transfer of the shares at the time of the transfer of the shares at the time of 10th.

In addition, even if the plaintiffs received dividends of KRW 1.39,954,950 on the condition that the shares were transferred to AFT, considering that the method of determining the transfer value of the shares of this case (the transaction value of this case) was already stipulated in the revised contract prior to that determination, it is difficult to view that the transaction value of this case was objectively unfair solely on the ground that the transaction value of this case was received such dividends. Even if the transaction value of this case was lower than the objective exchange value as at the commencement date of the inheritance of the shares, as alleged by the defendant, even if the transaction value of this case was lower than the objective exchange value as at the commencement date of the inheritance of the shares, as seen earlier, the transfer value of the shares of this case was made by the plaintiffs under special circumstances as seen earlier, so long as the transaction value of this case was not inevitable. In this regard, it does not seem to be unfair to regard the market

(4) Sub-determination

Therefore, the disposition of this case, which imposes inheritance tax on the value assessed by supplementary evaluation method, shall be deemed to be unlawful, considering that the transaction value of this case with a related party cannot be deemed to properly reflect the objective exchange value of the stocks of this case.

3. Conclusion

Therefore, the plaintiffs' claims are reasonable, and it is so decided as per Disposition.