Cho High Court Decision 2012 Deputy 3797 ( November 13, 2012)

Dispositions imposing gift tax pursuant to the provisions on deemed donation of title trust shall be justifiable.

In light of the fact that the Plaintiff had been registered as a shareholder while working in F even before the instant case, and that the Plaintiff entrusted the certificate of personal seal impression, etc., the Plaintiff can be seen as impliedly consenting to the title trust of shares, and it is insufficient to recognize that there was no purpose of tax avoidance. Thus, the imposition of gift tax is legitimate.

Donation of title trust property under Article 45-2 of the Inheritance Tax and Gift Tax Act

2013Guhap575 Revocation of Disposition of Imposition of Gift Tax

Section AA

○○ Head of tax office

October 18, 2013

November 22, 2013

1. The plaintiff's claim is dismissed.

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

Cheong-gu Office

The Defendant’s imposition of the gift tax for 2007 as of January 3, 2012 against the Plaintiff and the imposition of the additional tax for OOO on July 1, 2013, the imposition of the additional tax for 2009 as of January 3, 2012, and the imposition of the additional tax for OOOO on July 1, 2013, respectively revoked.

1. Details of the disposition;

A. KimB is an actual operator ofCC Heavy Industries Co., Ltd., DD Construction Co., Ltd., DDD Development Co., Ltd., DDD Development Co., Ltd., and the Plaintiff was employed as an employee of DD maritime development from June 13, 2007.

B. On August 14, 2007, the Plaintiff acquired 15,000 shares ofCC Heavy Industries at the time of establishing the register of shareholders, and on November 24, 2009, acquired 21,000 shares of DD maritime development from E and registered in the register of shareholders.

C. From September 1, 201 to October 12, 201, the director of Busan Regional Tax Office: (a) conducted a general corporate tax investigation on the said corporations operated by KimB from September 1, 201 to October 12, 201; and (b) as a result, the Plaintiff deemed the shares of the aboveCC Heavy Industries and D Marine Development to have been nominal by KimB; and (c) notified the Defendant of the taxation data subject to the provision on deemed donation of title trust property under Article 45-2 of the Inheritance Tax and Gift Tax Act.

D. Accordingly, on January 3, 2012, the Defendant imposed an OO of the gift tax on the Plaintiff on August 14, 2007 (including additional taxes) and the OO of the gift tax on the gift of November 24, 2009 (including additional taxes) on the Plaintiff.

E. On July 18, 2012, the Plaintiff filed an objection against the instant disposition, and filed an appeal with the Tax Tribunal on July 18, 2012, but was dismissed on November 13, 2012.

F. The Defendant revoked ex officio the additional tax portion on July 1, 2013 during the instant lawsuit, and became an OOOO for the gift tax on the donation of August 14, 2007, and the OOO for the gift of November 24, 2009. On the same day, the Defendant again imposed additional tax on the gift of August 14, 2007, and additional tax on the gift of November 24, 2009.

[Reasons for Recognition] Facts without dispute, Gap evidence 2, Eul evidence 3-1, 2, Eul evidence 1 through 4, 6, 16, 18, 19, Eul evidence 29, 30 each 1, and 2

2. Whether the disposition is lawful;

A. The plaintiff's assertion

The provision on constructive gift of title trust property under Article 45-2 of the Inheritance Tax and Gift Tax Act is premised on the premise that there exists an agreement on title trust between the actual owner and the nominal owner. Since KimB entered the Plaintiff as a shareholder of theCC Heavy Industries and DD Marine Development, the Plaintiff was subject to criminal punishment due to forgery and use of the Plaintiff’s certificate of stock transfer and receipt under the Plaintiff’s name, it cannot be deemed that there was an agreement on title trust between the Plaintiff and KimB, and even if the title trust is recognized, it cannot be deemed that KimB had the objective of tax avoidance. Accordingly, the prior disposition of this case on the opposite premise should be revoked illegally.

B. Relevant statutes

Inheritance Tax and Gift Tax Act

Article 45-2 (Legal Fiction as Donation of Title Trust Property)

(1) Notwithstanding Article 14 of the Framework Act on National Taxes, where the actual owner or title holder of a property (excluding land and buildings; hereafter the same shall apply in this Article) necessary for the transfer of rights or the registration thereof is different, the value of such property shall be deemed to have been donated from the actual owner by the title holder on the date when the property is registered, etc. under the title holder (where the property is subject to the transfer of title, referring to the date following the end of the year following the year in which the date of acquisition of ownership falls),

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

2. Where the name of the actual owner is converted to the period until December 31, 1998 (hereafter in this Article, referred to as the "period") with respect to the stocks, etc. entered in the register of shareholders or the register of members in the name of a third party or the transfer of a third party is made pursuant to a trust or agreement before January 1, 1997 from among the stocks or equity shares (hereafter in this Article, referred to as "stocks, etc."): Provided, That the same shall not apply where the name is converted to the name of the specially related person prescribed by Presidential Decree of the stockholders or investors of the corporation which issued the stocks, etc. (hereafter in this Article, referred to as the "shareholders

(2) Where property is registered, etc. under another person's name, or a transfer of ownership is not made under the name of the actual owner, or where the title of stocks, etc. is not converted under the name of the actual owner during the grace period, it shall be presumed that there exists a purpose of tax evasion: Provided, That this shall not apply where the transferor files a report on the change of ownership, along with a tax base return on capital gains under Articles 105

(c) Fact of recognition;

1) Before working for DDR development, the Plaintiff had been registered as holding 1,800 shares in the detailed statement of changes in stocks, etc. of the company from around 1996 to around 2000. From around April 30, 2012, the Plaintiff was registered as holding 1,800 shares in the said detailed statement of changes in stocks, etc. of the company.

2) On March 31, 2009, the Plaintiff was registered as outside directors of theCC Heavy Industries, and the Plaintiff’s seal imprint affixed to the regular shareholders’ meeting and the minutes of the board of directors’ meeting in the name of the Plaintiff.

3) A company operated by KimB was operated as a single company, and the tax settlement statement entered in the register of shareholders in the company’s office was kept and accessible by anyone.

4) On June 24, 201, 201, prior to the date when the title trust of this case was revealed, the Defendant issued the Plaintiff a prior notice of gift tax imposition on the Plaintiff on the ground that the Plaintiff’s acquisition of D maritime development stocks 21,000 shares from E on November 24, 2009 constituted low-price acquisition, and subsequently, imposed the gift tax on the Plaintiff on August 1, 201. The Plaintiff paid the OOO on August 30, 201 and received approval for the deferment of collection on the remainder, and paid the remaining OOO on October 25, 201. The said payment was made through the Internet page using the Plaintiff’s authorized certificate.

5) On September 28, 201, KimB stated to the effect that, upon receiving an investigation by the Busan Regional Tax Office on September 28, 2011, the reason why the title trust was held in the shares was “a company and its employees cooperated with the company without any separate problem.”

6) On October 4, 2011, employees HanG and HaH stated in each written confirmation that “only lent only the name of the company employee upon request of KimB, the president, from the position of the company employee,” as to the process of acquiring the shares ofCC Heavy Industries or DD marine development. The employees Kim II, and the CourtJ stated that “GJ knows that, in the written response of the Busan Regional Tax Office on March 18, 201 and March 21, 201, the circumstances of acquiring the shares of DD development, GB knew that “G was the bad credit holder due to its business division, and thus, the shares of DD development was registered in its own name.”

7) On October 14, 2011, the Plaintiff filed an accusation against KimB with the chief of the Tong-young Police Station for a share transaction by stealing the Plaintiff’s name.

8) Accordingly, KimB, on November 15, 201 and January 11, 2012, he/she received a suspect investigation at the Tong Young Police Station. Unlike the time he/she was investigated at the previous Busan Regional Tax Office, he/she stated that he/she arbitrarily prepared documents as if the Plaintiff acquired shares after obtaining a seal imprint certificate and a certificate of seal impression from the Plaintiff for the replacement of executive officers, etc.

9) 김BB은 특정범죄가중처벌등에관한법률위반(조세) 등 혐의로 창원지방법원 통영지원 2012고합27 등으로 기소되어 2012. 12. 20. 위 법원에서 징역 3년에 집행유예 5년 및 벌금 OOOO원을 선고받았는데, 그 범죄사실에는 "김BB은 2009. 3. 31.경 최EE가 원고에게 주식을 양도하는 내용으로 원고, 최EE 명의의 주식양도양수증을 위조한 다음 이를 행사하였다는 내용을 비롯하여 직원들인 곽KK, 김LL, 한MM, 김NN, 홍PP, 김NN, 김QQ 명의의 주식양도양수증 내지 주식양수도계약서를 위조・행사하였다"는 내용이 포함되어 있고, 김BB은 2013. 9. 6. 위 사건의 항소심 부산고등법원(창원) 2013노25 에서 징역 3년에 집행유예 5년 및 벌금 OOOO원을 선고받았다.

[Ground of Recognition] Facts without dispute, Gap evidence Nos. 1, Eul evidence Nos. 5, 8 through 15, 20, 21, 27, 30, 31, Eul evidence Nos. 7-1, 26-1, Eul evidence Nos. 30-1, 30-1 through 8, and part of Eul evidence Nos. 30-1, 30, and E testimony

D. Determination

1) Whether the agreement on title trust was reached

The provision on deemed donation under Article 45-2 (1) of the Inheritance Tax and Gift Tax Act shall apply in cases where a real owner or a nominal owner makes a registration, etc. in the future of the nominal owner by agreement or communication with respect to property which requires a registration, etc. for the transfer or exercise of rights. Therefore, in cases where the tax authority unilaterally makes a registration, etc. in the name of the nominal owner, regardless of the intent of the nominal owner, regardless of the intent of the nominal owner. In such cases, the tax authority must prove only the fact that the real owner is different from the nominal owner, and the burden of proving that the registration, etc. of the nominal owner was made in the unilateral act of the real owner regardless of the intent of the nominal owner should be borne by

In this case, the following circumstances, i.e., ① the Plaintiff’s entry as a shareholder while working in FF even before the instant case; ② the Plaintiff was registered as an outside director ofCC Heavy Industries on August 14, 2007; approximately one year and seven months thereafter; ③ KimB appears to have obtained the Plaintiff’s seal impression from the beginning for shareholders, ③ Unlisted corporation did not limit the Plaintiff’s use of the Plaintiff’s seal impression to be used only for officers, etc. as the Plaintiff did not appear to have obtained the Plaintiff’s consent, taking into account the fact that the Plaintiff did not appear to have obtained the Plaintiff’s consent, and the Plaintiff did not appear to have obtained the Plaintiff’s consent to use the Plaintiff’s shares under the Plaintiff’s name, based on the fact that the Plaintiff did not appear to have obtained the Plaintiff’s consent to use the Plaintiff’s shares under the Plaintiff’s name, i.e., the Plaintiff did not take any legal measures on the KimB, despite the low price of DD marine development shares before the instant gift tax was imposed.

2) Whether the purpose of tax avoidance exists

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 in the purport of effectively preventing the act of tax avoidance using the title trust system and realizing the tax justice. Therefore, the application of the proviso of the same Article is possible only if the purpose of tax avoidance is not included in the purpose of the title trust, and in such a case, the burden of proving that there was no purpose of tax avoidance can be proved by means of proving that there was a purpose other than the purpose of tax avoidance. Therefore, the nominal owner who bears the burden of proving the existence of the purpose of tax avoidance may be proven by means of proving that there was no purpose other than the purpose of tax avoidance. However, the nominal owner who bears the burden of proving the burden of proof has a clear purpose irrelevant to the tax avoidance to the extent that there was no purpose of tax avoidance in the title trust, and must prove that there was no tax avoidance in the future at the time of the title trust or in the form of evidence by objective and correct that there was no purpose of tax avoidance (see, e.g., Supreme Court Decision 2010Du468, Mar.

In the instant case, no evidence exists to acknowledge that the title trust of the instant shares had a clear purpose irrelevant to the tax avoidance, and KimB appears to have been able to avoid the cumulative taxation of income tax and the secondary tax liability of oligopolistic shareholders due to the occurrence of high-amount dividend income through the stock title trust. In light of the fact that the CCTV industry and DD development did not distribute dividends, it is insufficient to recognize that KimB did not have the purpose of tax avoidance, and there is no other evidence to acknowledge this otherwise, the Plaintiff’s assertion on this part is without merit.

3. Conclusion

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