The assessment method of unlisted stocks

The main business among the businesses operated by a corporation shall not be determined by formal standards, such as target business or business registration in the corporate register, business authorization or registration, legal authorization or registration, etc., but by the proportion of the relevant business in the actual business operated by the relevant corporation.

The contents of the judgment are the same as the attachment.

2017Guhap2265 Disposition of revocation of Disposition of Gift Tax Imposition

*

AA Head of the Tax Office

on 06 October 07, 2018

on July 018 05, 201

1. The plaintiff's claim is dismissed.

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

Cheong-gu Office

The Defendant imposed a gift tax of KRW 109,616,790 on the Plaintiff on October 10, 2016.

The part exceeding 8,518,431 won shall be revoked.

1. Details of the disposition;

A. AAAAAA (hereinafter referred to as “instant corporation”) on June 11, 2009 for the purpose of management consulting business, financial service business, etc. (50,000 won (5,000 won for shares issued)) but distributed 90,000 shares for shares issued on September 30, 2016 (5,00 won for shares issued on March 27, 2013) to the head* a sole shareholder * 15,00 shares for shares issued on March 27, 2013 (5,00 won for shares issued on one stock) and each 25,000 shares for each person, including the Plaintiff, etc.

(B) From April 25, 2016 to August 23, 2016, the director of the Central District Tax Office: (a) calculated the Plaintiff’s direct acquisition of KRW 25,000 per share by the method of new shares allotment to a third party (hereinafter “instant shares”) on March 27, 2013; (b) on the basis that the transaction directly acquired KRW 5,000 per share from the Plaintiff constitutes donation gains stipulated in subparagraph 1 (c) of Article 39 of the former Inheritance Tax and Gift Tax Act (amended by Act No. 11845, May 28, 2013; hereinafter “former Inheritance Tax and Gift Tax Act”); (c) calculated the net value of shares x 30 won per share x 1050 won per share (amended by Presidential Decree No. 25195, Feb. 21, 2014; hereinafter “former Enforcement Decree”). (i) calculated the net value of shares x 3010 won per share x 401050

The imposition and notification(hereinafter referred to as the "disposition of this case") was made.

D. The Plaintiff dissatisfied with the instant disposition and filed an objection on December 14, 2016, and the Defendant, on July 17, 2017, corrected the assessment value per share from 24,320 to 21,077 won after the capital increase in the instant shares, thereby reducing the amount imposed on the instant disposition to KRW 109,616,790.

E. After that, the Plaintiff filed an appeal with the Tax Tribunal on August 8, 2017, but the Tax Tribunal rendered a decision to dismiss the Plaintiff’s appeal on November 8, 2017.

[Reasons for Recognition] Facts without dispute, Gap evidence Nos. 1, 2, 4, 5, 6, Eul evidence Nos. 1 and 2 (including branch numbers; hereinafter the same shall apply), the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

1) For the following reasons, the shares at issue of this case should be evaluated as "the method according to the net asset value under Article 54(2) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act". Thus, the part exceeding KRW 8,518,431, calculated in accordance with the "the method according to the net asset value" among the disposition of this case where the shares at issue of this case are assessed as "the method according to the weighted average of net asset value and net asset value" under Article 54(1) of the same Act should be revoked.

A) Even if the instant corporation registered a financial investment business as a secondary type of business in 2009, there is no fact that it has been engaged in financial investment business under the former Financial Investment Services and Capital Markets Act (amended by Act No. 11845, May 28, 2013; hereinafter “former Financial Investment Services and Capital Markets Act”), it cannot be viewed as the supply of goods. The starting point for the first supply of goods or services is 2012 when sales related to management consulting, which are the main type of business, first occurred. Accordingly, the instant corporation constitutes “a corporation less than three years after the start of business” as of March 27, 2013, which is the date of acquisition of the Plaintiff’s shares at issue, and thus, the instant corporation should evaluate the instant shares as “the method according to the net asset value rather than the weighted average of net asset value and net asset value” under Article 54(4) of the former Enforcement Decree of the Inheritance Tax and Capital Markets Act.

B) In cases where it cannot be calculated by the method stipulated in Article 56(1)1 of the former Enforcement Rule of the Inheritance Tax and Gift Tax Act (amended by Ordinance of the Ministry of Strategy and Finance No. 412, Mar. 14, 2014; hereinafter referred to as the “former Enforcement Rule of the Inheritance Tax and Gift Tax”), the weighted average amount of net profit and loss per share for the latest three years can not be calculated by the method stipulated in Article 56(1)1 of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act, as the weighted average amount of profit and loss per share for the latest three years since the date of the latest three years since the date of the commencement of the business as stipulated in Article 17-3(1) of the former Enforcement Rule of the Inheritance Tax and Gift Tax Act (amended by Ordinance of the Ministry of Strategy and Finance as of March 14, 2014; hereinafter referred to as the “former Enforcement Rule of the Inheritance Tax and Gift Tax Act”). However, in cases of the corporation of this case, it constitutes the weighted average amount of profit and loss per share in the business type of 20 years thereafter.

2) In light of the fact that the Plaintiff did not receive dividends from the instant corporation after acquiring the instant shares, did not sell and purchase the said shares, and that the instant corporation discontinued its business in 2016, the Plaintiff did not obtain any economic and financial benefits by acquiring the instant shares, and thus, the instant disposition taken on the premise that the Plaintiff obtained the gift benefits is unlawful.

B. Relevant statutes

Attached Form 2 shall be as shown in attached Table 2.

C. Determination

1) Issues of the instant case

The Plaintiff’s assertion that the Plaintiff did not obtain any economic and proprietary benefits by acquiring the shares at issue of this case is that the value of the property subject to gift tax should be determined on the basis of the standard date for appraisal (Article 60(1) of the former Inheritance Tax and Gift Tax Act). Even according to the purport of the claim of this case, the Plaintiff’s assertion that the value of the property subject to gift tax should be calculated on the basis of “the method based on net asset value” under the premise that the gains from gift accrued by acquiring the shares at issue of this case, and sought partial revocation

The Plaintiff’s remaining arguments are premised on the premise that the sale and purchase of securities by the instant corporation after the commencement of the business constitutes an act unrelated to the business activity, not a part of the financial business, but a temporary commencement of the business activity. In other words, if the instant corporation’s securities sale and purchase business of the instant corporation is unrelated to the business activity, the instant corporation constitutes “a corporation with less than three years after the commencement of the business,” and “a corporation with less than three years after the commencement of the business,” and “a corporation with less than three years after the commencement of the business,” and it constitutes “a corporation with less than three years,” and it constitutes “a corporation with less than three years, after the commencement of the business,” a temporary average of 50 percent of the weighted average of the profits and losses from the sale and purchase of securities during the latest three years prior to the deduction of corporate tax for the profits and losses from the sale and purchase of securities, which constitutes a case of temporary average of 3 years prior to the commencement of the business activity.”

Therefore, the key issue of the instant case is whether the instant corporation engaged in financial business, such as purchase and sale of securities, from the commencement of business to the evaluation base date of the instant case.

2) An overview of relevant laws and regulations and legal principles

A) Article 63(1)1 (c) of the former Inheritance Tax and Gift Tax Act and Article 54 of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act, which provides for the supplementary evaluation method of unlisted stocks, stipulate that the net profit and loss per share (the weighted average amount of net profit and loss per share for the last three years years per share ± the rate determined and publicly notified by the Commissioner of the National Tax Service in consideration of the distribution rate of corporate bonds with three years maturity maturity guaranteed by the financial institution ± the net asset value per share (the net asset value of the relevant corporation ± the total number of issued stocks ± the weighted average value per share) and the net asset value per share ± the weighted average value per share / 2 after the commencement

In addition, Article 56 (1) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act provides that "the weighted average amount of net profit and loss per share for the preceding three years when calculating the value of net profit and loss per share of unlisted stocks for the preceding three years" [the weighted average amount of net profit and loss per share for the business year that has become one year before the base date of appraisal x 3) ＋ (2) ＋ (the net amount of net profit and loss per share for the business year that has become two years before the base date of appraisal x 1) 】 1/6 x 1 'the value calculated by the formula (hereinafter referred to as "value under subparagraph 1") . Where the relevant corporation is deemed unreasonable in accordance with Ordinance of the Ministry of Strategy and Finance, it shall be limited to the values under subparagraph 1 for the reasons such as an abnormal increase in the value of net profit and loss per share for the preceding three years, it shall be limited to the average value of net profit and loss per share calculated by an accounting corporation or tax accounting corporation in the same year (hereinafter referred to as "value of net profit and loss per share") 2.

According to delegation, each subparagraph of Article 17-3(1) of the former Enforcement Rule of the Inheritance Tax and Gift Tax Act (amended by Presidential Decree No. 2010, Jan. 1, 2011) provides that "Where the average weighted average amount of profits and losses from the disposal of securities and tangible assets, and profits from the receipt of assets, etc. under the corporate accounting standards exceeds 50 percent of the average weighted average amount of profits and losses for the last three years prior to the deduction of corporate tax for the last three years," and subparagraph 7 of Article 17-3(1) of the former Enforcement Rule of the Inheritance Tax and Gift Tax Act (referring to the business type which

B) Article 17-3(1) of the former Enforcement Rule of the Inheritance Tax and Gift Tax Act provides for the grounds that it is deemed unreasonable to calculate the net profit and loss per share for the preceding three years because the net profit and loss per share for the preceding three years is not calculated or the net profit and loss per share for the preceding three years is abnormal. Thus, barring any special circumstance, barring any special circumstance, the net profit and loss per share cannot be calculated on the basis of the value per share under subparagraph 1, and such legal principle is unreasonable to apply the value under subparagraph 2 even if the "average value per share," which is the value under subparagraph 2, is not calculated or the value per share cannot be applied under subparagraph 2, because it does not meet the requirements under subparagraph 2 (see, e.g., Supreme Court Decision 2011Du31253, Nov. 14, 2013).

(iii) the facts of recognition

The following facts may be acknowledged according to the purport of Gap evidence Nos. 8 through 15, Eul evidence No. 3 and the whole pleadings:

A) The instant corporation was registered as a management consulting business on June 11, 2009, and was changed to a financial service business on August 12, 2010 and changed to a management consulting business again on October 11, 2012 (the instant corporation did not look at the change of business type after the assessment base date of the instant case where it is difficult to recognize the relevance with the issues of the instant case).

B) On the other hand, the instant corporation filed a report on short-term loans to those other than shareholders, executives, and affiliated companies among the current assets in the process of filing a corporate tax report for each business year, at KRW 603,00,000, KRW 762,050,000 in 2010, KRW 139,834,440 in 201, and reported the following: “Sales”, “non-business earnings, and non-business expenses; and “net profit”.

The following votes omitted

4) In light of the following circumstances, the facts acknowledged prior to the commencement of the instant corporation from its opening to the appraisal base date of the instant case, and the overall purport of the pleadings, it is determined that the instant corporation has been engaged in the financial business, such as securities trading, etc. from its opening to the appraisal base date of the instant case, and thus, the Plaintiff’s assertion on different electric systems is not accepted (On the other hand, even if the instant corporation was engaged in the financial business, the Plaintiff asserted that the instant corporation started its business from April 2010 to its opening from its opening, but there is insufficient evidence to acknowledge the said assertion solely on the evidence No. 7, and there is no other evidence to acknowledge it).

A) The main business among the businesses run by the pertinent corporation should not be determined by the formal criteria, such as the purpose business, business registration, legal authorization or registration business, etc. under the corporate registry, but by the proportion of the relevant business among the businesses actually run by the pertinent corporation. Therefore, it cannot be readily concluded that the pertinent corporation did not engage in the financial business as its main business solely on the grounds that the pertinent corporation did not undergo the authorization or registration procedures for financial investment business under the former Capital Markets Act or that the financial business was not registered as its main business in its

B) Since the opening of the instant business, the scope of net income has been determined depending on any losses or profits related to the disposal of securities and investment assets, other than sales expenses and management expenses, such as benefits, which are inevitable for fixed expenditure, and any interest and dividend income. In addition, even in the year 2012 in which management consulting-related sales amounting to KRW 90,000,000 have occurred, KRW 52,789,000,000, as profits from the disposal of securities and investment assets, was generated.

C) On the other hand, as seen earlier, the instant corporation held short-term loans in excess of the sales amount for each business year from the commencement of the pertinent business to the current business year as current assets. In light of the amount and holding period of the short-term loans claims, the instant corporation appears to have occurred in the course of conducting financial business in light of its amount and holding period.

3. Conclusion

Thus, the plaintiff's claim is dismissed as it is without merit.

1) The Plaintiff and the Defendant appears to claim the cessation of business of the instant legal entity on June 30, 2016 on the basis of the details stated in Gap evidence 15 (Notice of Decision of Tax Tribunal). However, in light of the fact that Eul evidence 2 (Business Information Inquiry Committee), September 30, 2016, the cessation of business listed in Gap evidence 15 is deemed to be a clerical error.

2) In 2012, there was no short-term reporting on the claim for short-term loans, but reported 252,974,380 won among current assets and other outstanding amounts.