Early High Court Decision 201J 2821 ( October 12, 2011)

It cannot be deemed that the non-taxable practice has been established in issuing new shares through the third party allocation method.

However, there is no evidence to prove that the tax authority did not impose gift tax over a considerable period of time on the profits equivalent to the difference between the appraised value per share and the acceptance value per share in the capital increase with capital increase by a third party, although it is alleged that the non-taxable practice has been established because of no intention to impose gift tax in policy consideration.

2012Guhap431 Revocation of Disposition of Imposing gift tax

GangwonAA 4 others

2 others than the Head of Leecheon Tax Office

May 9, 2013

May 23, 2013

1. All of the plaintiffs' claims are dismissed.

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

On May 14, 201, the head of Leecheon Tax Office revoked the imposition of gift tax of KRW 000, gift tax of KRW 000, and KRW 000, gift tax of KRW 100,000 on May 14, 201, which was imposed on Plaintiff KimCC by the head of Dongcheon Tax Office with respect to Plaintiff Kang Nam on May 14, 201, and KRW 000, gift tax of KRW 100 on Plaintiff Kim Nam on July 14, 201, by the head of Sung Nam Tax Office, respectively.

1. Details of the disposition;

A. The FF Holdings Co., Ltd. (hereinafter referred to as “FF Holdings”) was established on July 5, 197 for the purpose of manufacturing and selling electronic measuring instruments, and various machinery, instruments and parts, and the trade name was changed as follows:

(2) The following changes are omitted:

B. On June 2, 2008, the FF Holdings declared and announced major management matters to the Financial Services Commission in accordance with Article 186 of the Securities and Exchange Act while carrying out the interest increase as follows.

- Class and number of new shares: 67,984.704 shares per common share.

- Face value per share: 000 won

- The total number of outstanding shares before the increase: 47.437.206 shares in common, and 24,00 shares in priority.

-the method of capital increase, third party allocation;

- New shares: Issue value of 000 won

- Payment Date: July 8, 2008

- 제3자 배정 대상자 : 주석호|사 로고스리소시스 등 37인

C. On July 8, 2008, the plaintiffs participated in the capital increase by the third party allotment method of the OOOOS Holdings (the trade name at the time of the capital increase, corporation GGG), which is a listed company, and did not report and pay gift tax on the ground that the capital increase exceeds KRW 000 per share, as of May 8, 2008, the amount of KRW 2,276,000, the amount of KRW 550,460, the amount of the plaintiff KimCC, the amount of KRW 60,00, and the amount of KRW 366,980 per share, and the amount of the plaintiff ChoD shall be KRW 20,00 per share, and the amount of KRW 20,00 per share shall be 20,00 per share (hereinafter referred to as the "the shares in this case").

D. From February 7, 2011 to March 23, 201 of the same year, the head of the Seoul Regional Tax Office notified the Defendants to the effect that, by applying Article 39(1)1(c) of the former Inheritance Tax and Gift Tax Act (amended by Act No. 9916, Jan. 1, 2010; hereinafter “former Inheritance Tax and Gift Tax Act”) and Article 29 of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act (amended by Presidential Decree No. 23591, Feb. 2, 2012), the value per share of 00 won should be assessed as 00 won (the date of appraisal before the date of payment of shares payment, July 8, 2008) for taxation of gift tax on the instant shares allocated by the third party.

E. The Defendants, based on the aforementioned taxation data, received the allocation of new shares of FFF Holdings at a low price from the existing shareholders, deemed that the difference between KRW 960 per share value and KRW 000 per share value was donated to the existing shareholders, and determined and notified the Plaintiffs of gift tax on May 14, 201 and July 14 of the same year.

F. On July 29, 2011, the Plaintiffs filed an appeal with the Tax Tribunal on the grounds that they were dissatisfied with the disposition of gift tax as stated in the above paragraph (e) above, and on October 12, 201, the Tax Tribunal calculated the profits acquired by the Plaintiffs by dividing them into each shareholder who did not receive new stocks, and calculated the tax base and tax amount by deeming them as the value of donated property, and corrected the tax base and tax amount, and dismissed the return and payment non-payment, and dismissed the remainder of the claims. On November 201, 2011, the Defendants corrected the first disposition of gift tax as follows upon the decision of the Tax Tribunal (hereinafter referred to as the “instant disposition in which the imposition of gift tax was finally reduced as follows, in the disposition of gift tax as of the date of the disposition as indicated below, and the remaining imposition of gift tax was added to the disposition of gift tax remaining after reduction as follows).

G. The Plaintiffs were dissatisfied with the instant disposition and filed the instant lawsuit on January 10, 2012.

[Reasons for Recognition] The types of household materials and the whole purport of the pleading in the absence of dispute, Gap evidence 1 to 3, and Eul evidence 1 to 5 (including each number in the case of natural disaster)

2. Whether the instant disposition is lawful

A. The plaintiffs' assertion

(1) Violation of the principle of trust protection.

In the case where a third party received new shares for the last five years and received benefits equivalent to the difference between the appraisal price per share and the acceptance price per share, the tax authority intentionally did not impose gift tax in the policy consideration of promoting the business investment environment, and thus, it can be deemed that this constitutes a non-taxation practice. The instant disposition is contrary to the above non-taxation practice, and thus is unlawful, it violates the principle of protecting trust under Article 18(3) of the Framework Act on National Taxes.

(2) To allocate subscriptions by way of a public offering of new securities

Article 39(1)1 (a) and (c) of the former Inheritance Tax and Gift Tax Act provides that in case where a person who is not a shareholder of the relevant corporation has received a direct allocation from the relevant corporation at a price lower than the market price, the gift tax shall be imposed by deeming the amount equivalent to the relevant profits as the value of the property donated to the person who has obtained such profits. In case where a stock-listed corporation or KOSDAQ-listed corporation issues new stocks and allocates them by means of a public offering of new stocks pursuant to Article 2(3) of the former Securities and Exchange Act (amended by Act No. 8635 of Aug. 3, 2007, hereinafter referred to as the “former Securities and Exchange Act”), it shall be excluded from the gift tax assessment. In this case, in the case, the FF Holdings Holdings would allocate the stocks to the Plaintiffs through the third party allocation method, and even if less than 50 persons, the aforementioned offering is likely to resell, and even if so, it constitutes “Article 2(3) of the Securities and Exchange Act that excludes the Plaintiffs from the securities subject to taxation.”

(3) Violation of the substance over form principle (Plaintiff Kang AAA)

As such, the actual owner of the OOO Holdings stocks acquired by the Plaintiff Gangwon-A through capital increase with capital increase issued by a third party in accordance with the third party allocation method is H, and thus, Plaintiff Gangwon-A cannot impose gift tax under the principle of substantial taxation, and under the principle of substantial taxation.

(b) Related statutes;

It is as shown in the attached Table related statutes.

C. Determination

(1) Determination on the assertion of violation of the principle of trust protection

In order to establish a non-taxable practice under Article 18(3) of the Framework Act on National Taxes, there should be an objective fact that the tax office has not imposed taxes over a considerable period of time, and there should be an intention that the tax office would not impose taxes due to any special circumstance despite its knowledge that it is able to impose taxes on the said matter, and public opinion or intention such as the above should be expressed explicitly or implicitly, but in order to ensure that there is an implied indication, there should be circumstances that the tax office has expressed its intent not to impose taxes on the current status of taxation (see, e.g., Supreme Court Decision 2001Du4849, Nov. 8, 202). In this case, the first requirement for recognizing the non-taxable practice, namely, the first requirement for recognizing the difference between the value of assessment per share and the value of non-taxable shares issued by the third party, and there is no evidence that the tax office did not impose gift taxes over the interests equivalent to the difference between the value of the tax office and the value of the new shares issued by the Seoul Administrative Court, as well-founded 2012714.

(2) Determination as to the assertion that the issuance of new shares constitutes a public offering of new shares

(A) Interpretation of "public offering of new securities"

Article 39 (1) 1 (a) and (c) of the former Inheritance Tax and Gift Tax Act provides that when a corporation issues new stocks at a price lower than the market price to increase its capital, a person to whom such stocks are allocated shall be deemed to have earned profits equivalent to the difference between the market price and to include the amount equivalent to the profits in the value of the donated property, and shall be excluded from the allocation of new stocks through the method of securities offering under the Securities and Exchange Act, and in the case of public offering even though a person takes advantage of the profits due to the issuance of discount, gift tax shall be exempted. In addition, when a stock-listed corporation or KOSDAQ-listed corporation issues new stocks through the procedure of public offering under the Securities and Exchange Act and other relevant Acts and subordinate statutes, it shall be exempted from the imposition of gift tax.

It is reasonable to view that the issuance price of shares is lower than the market price, but it is intended to exclude the difference from the taxation subject to gift tax because it is deemed that a listed corporation and KOSDAQ-listed corporation donated shares to a third party. In addition, it is necessary to interpret that the category of benefit that is issued at a low price under Article 39 (1) 1 (a) and (c) of the former Inheritance Tax and Gift Tax Act falls under the category of "distribution by the method of public offering of new securities" under Article 2-4 (5) of the former Enforcement Decree of the Securities and Exchange Act, and that it is not limited to the distribution of printed matters such as newspapers, broadcasting and magazines, and the distribution of new securities through the method of public offering, and that it is necessary to inform or inform the purchaser of the acquisition of the new securities at least 10 years from the 20th anniversary of the issuance date of the former Enforcement Decree of the Securities and Exchange Act (see, e.g., Supreme Court Decision 200Do7548, Feb. 13, 2004).

(B) Determination

In light of the above legal principles, Gap evidence No. 7 (Statement) which seems consistent with the plaintiffs' assertion as to whether there was a procedure for soliciting subscription in this case is hard to believe it as it is in light of the fact that the so-called "stock offering" did not submit objective data to prove that the so-called "investment public offering" was made to inform the third party of the fact that the so-called "stock offering" was made prior to the issuance of the so-called "third party," and that the evidence No. 3 was not sufficient to acknowledge that the FF Holdings was issued to 37 persons on June 2, 2008 under the 13rd party allocation method, and that the above evidence was not sufficient to acknowledge that the above evidence was not sufficient to acknowledge that the plaintiffs' 3rd party's shares were issued and announced to the Financial Services Commission in accordance with Article 186 of the Securities and Exchange Act, and that the plaintiffs did not know that the securities were issued through newspapers, broadcasting and magazines, and electronic communication, etc., or that the plaintiffs were ordered to acquire the securities by 50 or more investors' shares offering.

(3) Judgment on the assertion of violation of substantial taxation

Article 14(1) of the Framework Act on National Taxes provides that "if the ownership of income, profit, property, act, or transaction subject to taxation is merely nominal and there is another person to whom such income actually belongs, the person to whom such income actually belongs shall be liable for tax payment." This is true and there is a person to whom such income actually accrues (see Supreme Court Decision 84Nu505, Dec. 11, 1984). In addition, the fact of ownership of shares is proved by the Ministry of Customs and Customs, such as the list of shareholders, the statement of stock movement, or the certified register of shareholders, etc., and even if it appears to be a single shareholder in light of the above data, if there are circumstances such as that the actual owner is registered in the name other than the name of the actual owner, but it cannot be deemed that the nominal owner who is not the shareholder is the actual owner, and there is no evidence to prove that the Plaintiff’s acquisition of the shares is the real owner of the shares (see Supreme Court Decision 2003Du1615, Jul. 9, 2004).

3. Conclusion

Therefore, the plaintiffs' claims of this case are all dismissed as it is without merit, and it is so decided as per Disposition.