2013Nu6130 Revocation of Disposition of Imposition of Gift Tax

A person shall be appointed.

Law Firm (former) ○○

Attorney 000

port of origin

Law Firm ○○, Counsel for the defendant-appellant

[Defendant-Appellant]

Suwon District Court Decision 2012Guhap10100 Decided January 18, 2013

June 26, 2013

July 24, 2013

1. Revocation of a judgment of the first instance;

2. The plaintiff's claim is dismissed.

3. All costs of the lawsuit shall be borne by the Plaintiff.

1. Purport of claim

The Defendant imposed a gift tax of KRW 427, 794, 410 on the Plaintiff on July 18, 201, as the gift tax of KRW 427, 794, 410 on the Plaintiff.

such action.

2. Purport of appeal

The order is as set forth in the text.

1. Details of disposition;

가. 원고의 아버지 ☆☆☆은 1992년 12월경 ★★★★이라는 상호로 사업자등록을 마치고 사업체를 운영하다가 1995년 5월경 사업체를 법인으로 전환하여 주식회사 ●●●●●● ( 이하 ' 소외 회사 ' 라고 한다 ) 를 설립한 후 15년간 대표이사로 재직하면서 소외 회사를 경영하였다 .

B. On December 24, 2009, the △△△△△ donated all the shares of the non-party company owned by himself (hereinafter “the shares of this case”) to the Plaintiff. On January 4, 2010, the Plaintiff reported and paid KRW 114,153,920 by deducting KRW 50 million from the taxable value of the gift tax and applying the tax rate of KRW 10% to the Defendant for the purpose of succeeding to the family business under Article 30-6(1) of the former Restriction of Special Taxation Act (amended by Act No. 9921, Jan. 1, 2010; hereinafter “former Special Provision Act”).

C. For ten years prior to the Plaintiff’s donation of the instant shares, the details of the change in the ownership of a person having a special relationship as stipulated in Article 18(2)1 of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act (amended by Act No. 9916, Jan. 1, 2010; hereinafter “former Inheritance Tax Act”) and Article 15(3) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act (amended by Presidential Decree No. 22042, Feb. 18, 2010; hereinafter “specially related person”) are as follows.

D. The Defendant did not hold more than 50% of the total number of the shares issued by the non-party company in addition to the shares issued by the non-party company at the time of donation, for not less than 10 consecutive years. Thus, the donation of the shares in this case does not constitute “donation for the purpose of succeeding to the family business” under Article 30-6(1) of the former Act, and does not constitute “the donation for the purpose of succeeding to the family business” on July 18, 201,” and does not constitute “the gift tax amounting to 427, 794,

B. A correction and notification was made (hereinafter referred to as “instant disposition”).

E. On May 9, 2012, the Plaintiff filed an appeal against the instant disposition with the Tax Tribunal. However, the said claim was dismissed on May 9, 2012.

【Ground for Recognition: Facts without dispute, entry of evidence Nos. 1 and 2, and purport of the whole pleadings】

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

Article 30-6 (1) of the former Special Provision on Taxation for the purpose of succeeding to a family business provides that where a resident receives a donation of stocks, etc. for the purpose of succeeding to the pertinent family business from his parents who have engaged in a family business under Article 18 (2) 1 of the former Inheritance Tax Act for at least 10 years, gift tax shall be reduced or exempted, and Article 18 (2) 1 of the former Inheritance Tax Act provides that "a small and medium enterprise prescribed by Presidential Decree" shall be defined as "a company that continuously operates for at least 10 years for the purpose of succeeding to the pertinent family business," and that is "a company that continuously operates the relevant family business for at least 10 years. △△△△△ is the largest shareholder of a non-party company and the representative director of the instant company, the donation of stocks of this case shall be deemed to fall under "a donation for the purpose of succeeding to the family business" under Article 30-6 (1) of the former Special Provision on Taxation, even if the donation of this case does not constitute a donation for the purpose of succession to the Plaintiff.

B. Relevant statutes

As shown in the attached Form.

C. Key issue of the instant case

Article 30-6 (Special Taxation for Gift Tax on Succession to Family Business) (1) of the former Special Act provides that "where a resident has received a donation of stocks or equity shares (the ceiling of the taxable value of donated stocks, etc. shall be three billion won; hereinafter referred to as "stocks, etc.") from the parents who have engaged in the family business under Article 18 (2) 1 of the Inheritance Tax and Gift Tax Act for the purpose of succeeding to the relevant family business for ten consecutive years, no later than December 31, 2010, and succeeds to the family business as prescribed by Presidential Decree, gift tax shall be imposed at 10/10 after deducting 50 million won from the taxable value of donated property." In addition, Article 18 (2) 1 of the former Special Act provides that "the definition of "family business" shall be defined as "a small or medium enterprise prescribed by Presidential Decree, which has been continuously operated by an ancestor for ten years or more" and Article 18 (2) 4 of the former Special Act provides that "the largest shareholder of the relevant corporation shall be determined by Presidential Decree as 10/3/1/1/5 of the former Special Act.

D. Determination

In order to be subject to special taxation of gift tax under the provisions of Article 30-6 (Special Taxation for Gift Tax on Succession to Family Business) of the former Special Act, in cases of a corporation pursuant to Article 18(2)1 of the former Inheritance Tax and Gift Tax Act and Article 15(3) of the former Enforcement Decree of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act, where the largest shareholder or largest investor of a corporation operating a small or medium enterprise is the largest shareholder or largest investor of the corporation, and where the aggregate of stocks, etc. of the person in special relationship with the corporation holds at least 50/100 of the total number of outstanding stocks or total investment amount of the corporation

However, as the period applicable to the provisional business pursuant to Article 18(2)1 of the former Inheritance and Gift Tax Act does not reach ten years, the gift of the instant shares does not constitute a case where the instant shares are donated for the purpose of succeeding to the family business. The instant disposition is lawful. The reasons are as follows.

1) The purport of the donation through family business succession or family business succession system is to support the economic activities of small and medium enterprises falling under the family business on the premise that the family business is continuing, while to protect the enterprises falling under the family business which are the physical foundation of employment. The family business referred to in the family business succession or family business succession refers to the family business referred to in the "family business within the house taken place in advance". Accordingly, family business succession and ownership are naturally accompanied by family business succession (in the case of family business succession, ownership succession is more important than the succession to the representative director's own position without ownership.

(2).

Meanwhile, in the case of a family business subject to the Income Tax Act, the term "family business property" means the property for business, such as land, buildings, and machinery and equipment used directly for the family business (Article 15(5)1 of the former Enforcement Decree of the Inheritance Tax Act), and the family business subject to the Corporate Tax Act refers to the stocks, etc. of a corporation falling under the family business among inherited property (Article 15(5)2 of the former Enforcement Decree of the Inheritance Tax Act). In the case of a private business subject to the Income Tax Act, a private business entity is subject to the family business, such as land, buildings, and machinery and equipment used directly for the family business, and its assets are subject to the family business, and there is no need to set a certain limit on shares, but there is a need to set the limit on shares owned by the corporation at the level that the corporation may succeed to the family business or succession to the family business. Accordingly, it is reasonable to view the provisions of this case to set the limit on shares owned by the family business in relation to the family business succession or succession to the family business.

31. Articles newly established by Act No. 8827 and newly established at the time of the establishment requires ① tax support to enable the founder to succeed to his child before his birth in order to maintain the continuity of the small and medium enterprise. ② Where a parent aged 60 or older donates shares to a child aged 18 or older for the purpose of succeeding to a small and medium enterprise that has been engaged in 60 or more years of age, a gift tax shall be imposed at the rate of 10/100 after deducting 3 billion won from the taxable value of the gift tax up to 3 billion won. ③ The prior inheritance of a small and medium enterprise is activated and contribute to the recovery of the vitality of our economy. The title of the above provision is a special case of gift tax on the "family succession", and the purport of the new provision is also required to maintain the integrity of a small and medium enterprise, so it is necessary for a small and medium enterprise to provide a prior tax support to its child in order to enable the child to succeed to his or her shares through a prior taxation.

3) Article 15(4) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act provides that succession to a family business under Article 18(2)1 of the Act shall apply only where an ancestor and his/her heir are appointed as a representative director, etc. for a certain period of time under Article 18(2)1 of the Act. Article 15(2)1 of the former Enforcement Decree of the same Act provides that where an ancestor has been employed as a representative director, etc. for a certain period of time under subparagraph 1 of the same Article; subparagraph 2 of the same Article provides that the heir is at least 18 years old as of the commencement date of inheritance; (a) one heir who has been directly engaged in the family business since 2 years ago; and (b) one heir who meets all the requirements under items (a) and (b) shall be appointed as an executive officer by the deadline for filing a tax base of inheritance; and (c) where an ancestor is appointed as a representative director, etc. within 2 years after the deadline for filing inheritance tax, the provision on succession to the entire number of shares issued by the relevant corporation or 10%.

Also, it should be seen that there is no reason to view.

4) The instant provision provides that "the family business under Article 18 (2) 1 of the Act is the largest shareholder or largest investor of a corporation that operates a small or medium enterprise falling under paragraph (1) and "the total number of stocks issued or total amount invested by the relevant corporation (hereinafter referred to as "total number of stocks issued or total amount invested by the relevant corporation")" and "a person who has a special relationship with the former (referring to a person falling under any of the subparagraphs of Article 19

50/10 (or 40/100 if a corporation listed on the Korea Exchange is a corporation listed on the Korea Exchange) or more of the Act is divided into parts of “.” However, in cases where deeming the instant provision as an example, there is no ground to deem that the donor or the decedent, who falls under the front part of the instant provision, is the largest shareholder or largest investor of the corporation, and unreasonable (in such cases, it leads to an unreasonable conclusion that at least two representative directors are entitled to a deduction).

In addition, if the provision of this case is merely an exemplary one as alleged by the plaintiff, it is unnecessary to use the expression "if the corporation holds at least 50/10 (40/10 if the corporation listed on the Korea Exchange) of the total number of issued stocks or total amount of investment (hereinafter "total number of issued stocks, etc.") of the relevant corporation" in Article 15 (3) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act (hereinafter "the total number of issued stocks, etc."). If the provision of this case is an exemplary one, it may not be deemed that the upper limit of shares stipulated in the above provision constitutes a virtual business even if the provision of this case does not correspond to 50/10 (40/10 if the corporation listed on the Korea Exchange is a corporation) of the total number of issued stocks or total amount of investment (hereinafter "total number of issued stocks, etc.") of the relevant corporation. In this regard, it cannot be deemed that the provision of this case is an exemplary one.

5) If the instant provision is merely an exemplary provision as alleged in the Plaintiff’s assertion, it would result in deducting KRW 500 million from the taxable value of donated property even in a case where the ownership of the corporation owned by the representative director is not related to the family business succession, such as the case where the ownership of the corporation that meets certain requirements for management succession is within 1%. This interpretation is inconsistent with the literal meaning and legislative intent of the family business, and it is unreasonable to result in a donation of the shares owned by the representative director without any tax burden within 500 million won, regardless of the succession to the family business.

6) Article 15(11) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act provides that "any person who intends to obtain a deduction pursuant to Article 18(2)1 of the Act shall submit a detailed statement of the property of the family business and documents evidencing the facts of the inheritance business prescribed by Ordinance of the Ministry of Strategy and Finance to the head of the tax office having jurisdiction over the place of tax payment along with a report on the tax base of the inheritance tax under Article 64 (hereinafter referred to as "report on the tax base of the inheritance tax"). In such cases, the head of the tax office having jurisdiction over the place of tax payment shall manage whether the deduction for inheritance of a family business is appropriate, and shall include the amount initially deducted in the taxable amount of inheritance tax at the time of the commencement of the inheritance, and shall impose inheritance tax by including the amount of the deduction from the beginning when the violation occurs." Article 6-2 of the Enforcement Rule of the Inheritance Tax and Gift Tax Act delegated to him/her in accordance with Article 15(11) of the Decree, together with documents evidencing that the person is the largest shareholder or largest investor under Article 15(3).

In addition, Article 6-2 of the Enforcement Rule of the Inheritance Tax and Gift Tax Act, which provides that a person who is the largest shareholder or largest investor under Article 15(3) of the Decree shall submit documents proving that he/she is the largest shareholder or largest investor under Article 15(3) of the Enforcement Rule of the Inheritance Tax and Gift Tax Act, shall continue to provide similar contents except for some phrases since the first enactment of the Enforcement Rule of the Inheritance Tax and Gift Tax Act, amended by Ordinance No. 195 of April 3, 2001, which was amended by Ordinance of the Ministry of Finance and Economy, was first established on April 3, 2001, and thus, it appears that the provision of this case, as alleged by the Plaintiff, may be known that the person who wishes to be subject to family business succession or family business succession, falls under the requirements for family business succession or family business succession. If the provision of this case is an exemplary provision as alleged by the Plaintiff, there is no reason to have the provisions of Article 6-2 subparag.

7) Article 15(3) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act (amended by Presidential Decree No. 22579, Dec. 30, 2010) provides that family business under Article 18(2)1 of the Act is limited to cases where the decedent is the largest shareholder, etc. of the company and where the decedent continues to hold more than 50% of the total number of shares issued by the relevant company, including shares, etc. of the specially related persons. The purport of the provision was to clarify the requirements of the decedent for family business inheritance deduction.

8) The National Tax Service may ask questions relating to the special provisions on gift tax on family business succession.

8. 22. Property Tax and - In order to constitute a family business as heading 2390, the provisions of this case must apply.

The amendment theory of the tax law, published by the National Tax Service, made it clear through answers, etc., and explained the intent thereof. Therefore, it is difficult to deem that such interpretation causes unexpected damages to the person who wishes to be subject to the special provisions on gift tax.

9) In light of the language and text meaning of the family business as seen earlier, its legislative purport, content of Article 6-2 of the Enforcement Rule of the Inheritance Tax and Gift Tax Act, and that the provision of this case is embodying the meaning of the family business under Article 18(2)1 of the former Inheritance Tax and Gift Tax Act, it is difficult to deem that the provision of this case exceeded the delegation scope under Article 18(2)1 of the former Inheritance Tax and Gift Tax Act or Article 18(4) of the former Inheritance Tax and Gift Tax Act.

3. Conclusion

The judgment of the first instance is revoked. The plaintiff's claim is dismissed.

Judge Maximum Hong-man

Judges Kim Jae-ho

Judges Lee Jong-tae