Seocho 2013west 3259 ( October 04, 2013)

The title trustee’s global income tax return constitutes a fraudulent or other unlawful act.

Since it is reasonable to view that the transaction of title trust shares under the name of the title trustee and the reporting of global income tax on such shares has made it impossible or considerably difficult to impose and collect taxes, referring to the passive maintaining the title trust relationship, it is reasonable to view that the exclusion period of imposition of capital gains tax and global income tax is 10 years.

2013Guhap64943 Revocation of Disposition of Imposing global income tax, etc.

1. The AA 2. Chapter B; 3. The HeadCC

The director of the tax office of Luxembourg

October 1, 2014

October 24, 2014

1. The plaintiffs' claims are dismissed.

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

Cheong-gu Office

"The imposition of each transfer income tax and global income tax stated in "the details of the attached imposition disposition imposed by the defendant against the plaintiffs" shall be revoked."

1. Details of the disposition;

"A. The plaintiff Seo-A is the wife of the E (hereinafter referred to as "the deceased"), who is the chairperson of the Diplomatic Effects Co., Ltd. (hereinafter referred to as "DD"), and the plaintiff headB, and the headCC is the children of the plaintiff head and E. (b) The deceased died on June 19, 201, and the plaintiffs reported and paid the OOOOOOOO as inherited property on December 29, 201.

C. On July 2012, the Director of the Regional Tax Office of Mandong (the Director of the Regional Tax Office) conducted an inheritance tax investigation on the deceased on or around July 2012 at the request of the plaintiffs, and determined and notified the amount of interest, dividend, and capital gains from the deceased's income in 2007 to 2010 on the title trust (hereinafter referred to as "title trust shares") and from 1992 to 2008, the deceased sold the shares under title trust (hereinafter referred to as "title trust shares") and managed the dividends and sales funds as a borrowed account." (d) Accordingly, on September 17, 2012, the defendant found the interest, dividend and capital gains from the possession and sale of the shares held in title trust to the plaintiffs as the actual owner' income.

(2) On March 12, 2013, the Director of the Regional Tax Office of Manil notified the Defendant of the additional determination and notification of global income tax, etc. by applying 10 years to the exclusion period of imposition. Accordingly, the Defendant decided and notified the Plaintiffs of the global income tax in 2002 or 2007, or in 2002 or 2004, as indicated in the attached imposition disposition details, and received a request for a decision of dismissal on May 31, 2013 from the borrowed account under the name of KimF, EH, EH, or HaG whose place of use is unclear among the withdrawals within 2 years from the date of commencing the inheritance. After the commencement of the inheritance, the Plaintiff controlled and managed the account under the name of the title trustee, and after the commencement of the inheritance, the Defendant applied additional tax on underreporting (40%) on the ground that the Plaintiffs did not intentionally file a report (hereinafter “instant disposition”).

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1 through 4 (including natural disasters), Eul evidence Nos. 1, 2, and 3 (including additional numbers), the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiffs' assertion

(1) The deceased, as the largest shareholder of DD in around 1993, formed a title trust with part of DD shares to meet the requirements for share distribution under the Fair Trade Act, prior to the separation of DD’s affiliation and the registration of an out-of-the-counter market. The second liability for tax payment was not intended. If the shares were returned after the company was made public, the deceased violated the duty to disclose the shares and did not have to maintain the title trust. The dividends or sales proceeds of the shares in the title trust were managed under the name of the title trustee. The income earned in the name of the title trustee can not be reported under the name of the title trustee. The deceased cannot be deemed to fall under the name of the title trustee, and it cannot be deemed that the title trust of the deceased applied the gift tax or the comprehensive income tax under the name of the title trustee, and thus, the period of exclusion was 5 years, regardless of the fact that the title trust of the deceased’s shares was made under the name of the title trustee or the acquisition and sale of shares under the name of the title trustee, and the title trust account.

(b) Related statutes;

It is as shown in the attached Table related statutes.

(c) Fact of recognition;

(1) Title trust, etc.

(A) DD was listed on the KOSDAQ market on December 26, 1993. Around 1992, the deceased held the title trust of DD shares to five persons, other than KimF, and held that D shares were 61.54% of its shares while listing D shares.

(B) The Deceased trusted 50,000 shares issued DD to KimF. Around 1993, the shares were divided into the par value at a par value per share and became 69,231 shares due to capital reduction, which became 30,769 shares. DD distributed 64,90 shares to the earned surplus OO on April 17, 2007, and paid 6,500 shares free of charge by capitalizing other capital surplus OOOOOF on June 29, 2007. Accordingly, the stock dividends of 12,00 shares, free capital increase, 121,121,33,098 shares increase.

(C) Except for the shares in the name of KimF, the shares issued in trust in five names, such as HG, were sold by all until 2005.

(D) DD was divided on August 3, 2005 and established NNE Co., Ltd., an unlisted corporation (hereinafter “NNE”). Accordingly, the deceased, under the name of KimF, owned 400,000 shares, 136,000 shares in the name of H, and 62,00 shares in the name of H, and 62,00 shares in the name of H. The NE shares were transferred on June 2, 2006, and the NNE shares issued in the name of KimFF and HG were reduced at a cost on September 26, 2008.” (2) The deceased opened an account in the name of the title trustee to manage the entrusted shares in the name of the deceased, received shares sales proceeds, dividends, etc. through the account, and paid taxes on global income, etc. in the name of the title trustee.

(3) In relation to the title trust shares, the deceased did not report the transfer income tax when transferring shares under the name of H, and reported the transfer income tax only in 2005 when transferring shares under the name of KimF. The details of the income tax return under the name of the title trustee and the amount of the transfer income tax attributed to the deceased are as follows.

(unit: million won)

Income;

Classification

Reversion

Individual reports by trustee

The person who shall be subject to cumulative taxation of the deceased.

Difference (tax avoidance amount)

① Income amount

calculated tax amount ②

Amount of income Ⅲ

No.D.

Amount of income (3-1)

calculated tax amount

(No.B.)

Distribution

202

OOO

OOO

OOO

OOO

OOO

OOO

2003

OOO

OOO

OOO

OOO

OOO

OOO

204

OOO

OOO

OOO

OOO

OOO

OOO

205

OOO

OOO

OOO

OOO

OOO

OOO

206

OOO

OOO

OOO

OOO

OOO

OOO

Total

OOO

OOO

OOO

OOO

OOO

OOO

Transfer

202

without Filing a report

without Filing a report

OOO

OOO

OOO

OOO

2003

OOO

OOO

OOO

OOO

204

OOO

OOO

OOO

OOO

Total

OOO

OOO

OOO

OOO

(4) On November 14, 2008, an OOOE transferred D’s PP securities account under the name of KimF to D’s account. DOOOE issued on November 20, 2008. Meanwhile, among the OOO members of the checks declared by the Plaintiffs as inherited property, the OOOE was issued on November 15, 201 (the 2,521,908 shares of national housing bonds deposited in the PP securities account under the name of GimF), which were sold on October 31, 201, and the 2,952,804 shares of the Incheon Urban Corporation’s compensation bonds were sold on November 15, 201, and the OOE was issued on November 20, 2008, and the OOE was wholly sold from the PP securities account under the name of the GG, and the 15th 1301,615 shares of national housing bonds were purchased on November 15, 20148.

(6) From June 15, 2012 to June 18, 2012, KimF, Lee HH, Kim II, Kim J, and Lee K lent its name in relation to the issuance of DD shares at the request of the deceased. However, the submission of a vindication to the effect that the purchase and sale of DD shares, the receipt of dividends, etc. was never denied.

(7) The details of global income tax imposed on the trustee are as follows.

(unit: Won)

title trustee

Global Income Tax Amount

Jinay

Reversion Year

Tax Base

Tax Rate

calculated tax amount

H

202

OOO

27%

OOO

- No. 7

203

OOO

27%

OOO

- No. 8

204

OOO

27%

OOO

- No. 9

HaGG

203

OOO

18%

OOO

the certificate of title 10

FF Kim

202

OOO

27%

OOO

the certificate of title 11

203

OOO

36%

OOO

§ 12-1 of this title

204

OOO

36%

OOO

§ 13-2.

205

OOO

35%

OOO

§ 14-2.

206

OOO

35%

OOO

§ 15-1.

2007

OOO

35%

OOO

§ 16-1 of this title

[Reasons for Recognition] Gap evidence 5-1 to 6, Eul evidence 1, 5-1 to 5, 7-11, 12-1, 13-2, 14-1, 15-1 and 16-1, and the purport of the whole pleadings

D. Determination

(1) According to Article 26-2(1)1 of the Act on the Punishment, etc. of Tax Evaders (amended by Act No. 911, Jan. 30, 2009) regarding “Fraud and other unlawful acts”, it is reasonable to view that the transfer of shares under the name of the title trustee 2 was no longer than 10,000,000, and that such transfer of shares was no longer than 20,000,000,000 won under the name of the title trustee 20,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,00,00,00,00.) were no more than 20.

(2) As to the application of an unjustly underreported additional tax rate

(A) According to Article 47-3(1) of the Framework Act on National Taxes (amended by Act No. 830, Dec. 31, 2007; hereinafter the same), where a taxpayer’s tax base reported falls short of the tax base that should be reported under the tax laws, the amount calculated by multiplying the tax base by the calculated tax amount shall be added or deducted from the amount to be refunded, and under paragraph (2) 1, the amount equivalent to the under-reported tax base shall be either 40/10 of the amount calculated by multiplying the calculated tax amount by the ratio of the amount to the under-reported tax base to the under-reported tax amount or the under-reported tax amount to the under-reported tax amount, such as the under-reported and under-reported tax base’s illegal method or under-reported tax evasion method under Article 47-2(2) of the Enforcement Decree of the Framework Act on National Taxes (amended by Presidential Decree No. 22038, Feb. 18, 2010).

3. Conclusion

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