It is assumed that the lease deposit, etc. is donated with economic benefits equivalent to the interest by borrowing the lease deposit, etc. without compensation.

Although it shall not be deemed that the construction cost has been donated from his father, it shall be deemed that he received economic benefits equivalent to the reasonable interest by borrowing lease deposit, etc. free of charge.

The donation of profits from money free loans under Article 41-4 of the Inheritance Tax and Gift Tax Act.

2014Guhap50859 Revocation of Disposition of Imposition of Gift Tax

AA

a) the Director of the Tax Office

September 5, 2014

October 24, 2014

1. Each disposition imposing gift tax (including additional tax) on the Plaintiff on January 11, 2013 by the Defendant.

A. Disposition of imposing gift tax of 000 won on January 31, 2008;

B. The portion exceeding KRW 000 of the disposition imposing gift tax on February 20, 2008, which exceeds KRW 000,000;

C. Disposition imposing gift tax of 000 won on August 5, 2008;

D. Disposition of imposing gift tax of 000 won on February 13, 2009;

E. The portion exceeding KRW 000 of the imposition disposition of gift tax of September 21, 2009, which exceeds KRW 000,000;

F. Disposition of imposing gift tax of 000 won on September 17, 2010;

G. On September 21, 2010, the part that exceeds KRW 000 of the imposition disposition of gift tax on gift on September 21, 201 shall be revoked.

2. On September 21, 2011, the Defendant’s imposition of gift tax on the Plaintiff on June 1, 2013, exceeding KRW 000,00,000, shall be revoked.

3. The plaintiff's remaining claims are dismissed.

4. One-fourth of the costs of lawsuit shall be borne by the Plaintiff, and the remainder by the Defendant, respectively.

Cheong-gu Office

The disposition of KRW 00,00,00,00,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,00,00,000,00,000,00,000,00,000,00,000,000,000,000,000,000,000,000,00,000,000,00,000,00,00,000,00

1. Details of the disposition;

A. The plaintiff on August 20, 2007 from his father BBB on August 20, 2007 to 1004-1, Gangnam-gu, Seoul.

00 square meters and five lots of land (total area of 000 square meters, hereinafter referred to as "project site") are leased, and a new building (hereinafter referred to as "lease building") is built on the ground, and a real estate rental business is operated from September 30, 2008.

B. Based on the tax investigation conducted from August 30, 2012 to November 27, 2012, the Defendant: (a) donated cash of KRW 00 million from BB to the construction cost of the leased building in the process of constructing the leased building (hereinafter “instant construction cost”); and (b) unpaid lease deposit amount of KRW 00 million to the project site and monthly rent of KRW 00 million (hereinafter “the instant lease deposit, etc.”) and received a free lease of money equivalent to the same amount; and (c) determined and notified each gift tax (including additional tax) with respect to the Plaintiff on January 11, 2013 and June 1 of the same year as follows (hereinafter “instant disposition”).

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1, 2, 3, Eul evidence Nos. 1 and 2 (including each number), the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The instant disposition should be revoked because it is unlawful as follows.

1) The Plaintiff used the instant construction cost to construct a leased building upon receipt of payment from BB, but it was not a donation, but a loan. The Plaintiff agreed to repay the instant construction cost with the profits from the leased building and drafted up up to every loan certificate at a time. The other party to the transaction was the other party to the transaction.

The contract is not properly performed, and only the BB fails to pay the contract.

The substance of such transactions cannot be denied solely on the ground that he/she is his/her father’s intention.

2) Article 41-4 of the former Inheritance Tax and Gift Tax Act (amended by Act No. 11130, Dec. 31, 201; hereinafter “Inheritance Tax and Gift Tax Act”) and Article 41-4 of the former Inheritance Tax and Gift Tax Act (amended by Act No. 9916, Jan. 1, 201; hereinafter “former Inheritance Tax and Gift Tax Act”) apply to all cases of borrowing money free of charge or at a low interest. However, the Plaintiff is not liable to apply the said provisions to the said money, since the Plaintiff did not pay the deposit for the lease of this case on the business site and did not borrow the said money from BB.

B. Relevant statutes

Attached Table 1 "Related Acts and subordinate statutes" shall be as stated in the attached Table 1.

C. Determination

1) As to the instant construction cost

In general, in a lawsuit seeking revocation of a tax imposition disposition, the burden of proof on the facts of taxation requirements is the imposing authority (see, e.g., Supreme Court Decision 2010Du23378, Aug. 17, 2012).

With respect to the instant case, the Defendant received KRW 00 million of the construction cost of the instant case from BB on four occasions in the course of constructing the leased building, and during the course of the Plaintiff’s tax investigation.

On November 27, 2012, recognizing that the tax authority was paid the construction cost of this case by BB.

The fact that the plaintiff prepared and submitted a written confirmation to the effect that the plaintiff did not fully repay the principal and interest of the construction cost of this case to the BB, or that the plaintiff did not dispute between the parties, or that the statement in the evidence No. 3 contains the whole purport of the pleading.

However, the entry of the evidence No. 4-1 to No. 4, and the expert witness KimO of the Korean court (hereinafter referred to as "the appraiser").

Comprehensively taking into account the overall purport of the arguments as a result of the commission of document appraisal to the court appraiser, the Plaintiff and BB have lent the funds necessary for the construction and operation of the leased building between October 1, 2007 and BB to the Plaintiff within the limit of KRW 00 million, but the interest rate shall be December 31, 2010 and the due date for repayment shall each year.

The fact that a monetary transaction agreement has been prepared to apply the interest rate on time deposit; thereafter, on January 31, 2008, the date on which the Plaintiff received the construction cost of this case was written; on August 5, 2008, February 13, 2009, and September 17, 2010, four loan certificates have been prepared; each loan certificate contains four loan certificates between the Plaintiff and BB; the Plaintiff borrowed the construction cost of this case from BB to the Plaintiff, and the interest rate shall be applied each year to the interest rate on time deposit, and the principal and interest shall be repaid in installments with the rental deposit deposit and monthly rent; the court appraiser presented the above monetary transaction agreement and the opinion that each loan certificate is presumed to have been actually prepared around the date of preparation.

In full view of the following circumstances as seen earlier, the monetary transaction agreement and each loan certificate prepared between the Plaintiff and BB are specified in the amount, purpose, applicable interest rate, and method of repayment of principal and interest, etc. of the construction cost of this case, and thus, it is difficult for BBB to arbitrarily deny the contents thereof solely on the Plaintiff’s father, and the court appraiser determined that the said agreement and each loan certificate were actually prepared at the time of the date of preparation of the Plaintiff’s father. There is no evidence to suspect that each of the above documents was prepared retroactively in the course of the tax investigation, and there is no evidence to prove that the Plaintiff was paid the construction cost of this case by BB, and further, it is not recognized that the confirmation document prepared by the Plaintiff was received by the Plaintiff. In full view of the above facts and the evidence presented by the Defendant are insufficient to acknowledge that the Plaintiff received the construction cost of this case from BB, not by borrowing it from BB, and there is no other evidence to support this otherwise. Accordingly, the Defendant’s assertion that otherwise

2) As to the instant lease deposit, etc.

Article 41-4 subparag. 1 of the Inheritance Tax and Gift Tax Act and Article 41-4 subparag. 1 of the former Inheritance Tax and Gift Tax Act stipulate that where money exceeding KRW 100 million is given by a person with special interest, an amount calculated by multiplying the amount of loan by the appropriate interest rate shall be considered as the value of donated property to the borrower. Meanwhile, Article 2(3) of the Inheritance Tax and Gift Tax Act and Article 2(3)

The economic value can be calculated regardless of the name, form, purpose, etc. of the act or transaction.

It is intended to transfer tangible and intangible property to another person without compensation in a direct or indirect manner.

Article 31(1) of the Inheritance Tax and Gift Tax Act and Article 31(1) of the former Inheritance Tax and Gift Tax Act also stipulate that the donated property which is subject to the gift tax shall include all the articles having economic value which can be converted into money and all the de facto or de facto rights having property value, which are the property belonging to the donee.

As to the instant case, the Plaintiff’s KRW 00 billion from BB on August 20, 2007;

The fact that the Plaintiff leased a business site at KRW 0 million per month, and the fact that the Plaintiff engaged in real estate rental business by constructing a new building on the business site that the Plaintiff did not pay the lease deposit, etc. of this case is no dispute between the parties. Thus, even if the Plaintiff did not directly borrow the lease deposit, etc. from the BB, it shall be deemed that the Plaintiff did not pay the lease deposit, etc. of this case in a special relationship with the BB and did not actually borrow the lease deposit, etc. of this case. Therefore, in light of the purport of comprehensively stipulating the scope of donated property under Articles 2(3) and 31(1) of the former Inheritance Tax and Gift Tax Act and Articles 2(3) and 31(1) of the Inheritance Tax and Gift Tax Act, the application of Article 41-4 subparag. 1 of the Inheritance Tax and Gift Tax Act and Article 41-4 subparag. 1 of the former Inheritance Tax and Gift Tax Act as to the lease deposit, etc. of this case, or the Plaintiff’s measures calculated by applying the method of calculating the Plaintiff’s property cannot be justified.

(iii)the calculation of a reasonable amount of tax;

Ultimately, although the Plaintiff cannot be deemed to have received a donation of the construction cost of this case from BB, it would be deemed that the Plaintiff received a donation of a reasonable economic benefit from a reasonable interest by borrowing the lease deposit of this case without compensation. Based on this, on the basis of this, the calculation of the reasonable amount of gift tax against the Plaintiff is as follows (specific calculation details are as indicated in attached Table 2, and in particular, this is as follows

The details of calculation of donated property acquired as a result of the failure to pay a lease deposit, etc. are as shown in attached Form 3. Therefore, the imposition of KRW 000 of the gift tax on August 2, 2007 among the dispositions in this case is lawful. However, the imposition of KRW 00 of the gift tax on January 31, 2008, the amount of donation on August 5, 2008, the amount of donation on February 13, 2009, the amount of gift on February 13, 2010, the amount of each gift tax on September 17, 2010, the amount of gift tax on September 20, 208, the amount of gift on September 21, 2008, the amount of gift on September 21, 201, the amount of gift on September 21, 201, and each disposition on gift tax on September 21, 2011 is revoked.

3. Conclusion

The plaintiff's claim is justified within the above scope of recognition, and the remainder is justified.

Therefore, it is dismissed and it is so decided as per Disposition.