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1. The Defendant’s gift tax of KRW 12,685,359,020 on October 1, 2013; and KRW 293,721,520 on Plaintiff B, respectively.
Reasons
1. Details of the disposition;
A. On December 5, 2005, C Co., Ltd. (formerly: D: hereinafter “C”) which is a KOSDAQ-listed corporation entered into an all-inclusive share swap agreement with E Co., Ltd. (hereinafter “E”) that was an unlisted corporation, and C, upon acquiring the entire shares of E, issued C’s new shares to E’s shareholders (hereinafter “instant exchange agreement”).
B. According to the result of the appraisal by the new accounting corporation, the value of shares E per share shall be 71,985 won, and the value of shares C per share shall be 4,053 won, and the share swap shall be conducted at the rate of 17.7609178 shares per share of E, and C shall accept 730,087 shares all shares of E on February 21, 2006, and C shall deliver C’s new shares to the shareholders of E.
C. The shareholders of E, Plaintiff A acquired 2,904,904 shares of C in exchange for 163,556 shares of E, and Plaintiff B acquired 204,605 shares of C in exchange for 11,520 shares of E.
The director of the Central Regional Tax Office of China conducted an investigation of stock change from September 29, 2010 to December 31, 2010, and then notified the Defendant of the result of the tax investigation, such as the value of donated property calculated by evaluating the value of E’s stock per share as 20,000 won (the purchase price) on the ground that the exchange contract of this case was conducted by an excessive assessment of the value of E’s stocks.
E. On October 7, 2011, based on Article 42(1)3 of the Inheritance Tax and Gift Tax Act, the Defendant deemed the profits that the Plaintiffs acquired from the instant exchange contract as the value of donated property, and determined and notified the Plaintiff A of the gift tax of KRW 11,719,589,940, and KRW 411,742,790, respectively, to the Plaintiff B.
(f) Plaintiff B filed an appeal with each Tax Tribunal on December 13, 201, and Plaintiff A filed an appeal on December 28, 201, and on December 27, 2012, the Tax Tribunal determines Article 35 of the Inheritance Tax and Gift Tax Act as to the comprehensive exchange of shares, such as the instant exchange contract.