If the issuance of shares has the nature of compensation or agreement, it shall not be deemed a donation.

The shares of this case can be deemed to have been issued in relation to the temporary process of affairs, such as the exercise of voting rights at a general meeting of shareholders, while the existing disputes related to inheritance and the purpose of cooperation in the operation of the company is also included.

Article 2 (Gift Tax Taxables) of Inheritance Tax and Gift Tax Act

2014Nu62380 Revocation of Disposition of Imposing gift tax

MaOO et al.

O Head of tax office

Suwon District Court Decision 2013Guhap21336 Decided August 22, 2014

April 21, 2015

May 7, 2015

1. The defendant's appeal is dismissed.

2. The costs of appeal shall be borne by the Defendant.

1. Purport of claim

The defendant's disposition of imposition of each gift tax of KRW 3,422,403,490 (including additional tax) against the plaintiffs on May 27, 2013 is revoked.

2. Purport of appeal

The judgment of the first instance is revoked, and all of the plaintiffs' claims are dismissed.

1. Details of the disposition;

이 법원이 이 부분에 관하여 설시할 이유는, 제1심 판결 이유 중 제8쪽 제4행의 '2006가합XXXX'을 '2007나XXXXXX'로, 제9쪽 제12행의 '김OO'을 '김△△'으로 각 고치고, 제3쪽 마지막 행 '조정에 갈음하는 결정' 다음에 '(이하 '이 사건 조정결정'이라 한다)를, 제4쪽 제6행과 제7행 사이에 '서울고등법원 2001나XXXXX, 2001나XXXXX(병합)에서의 원고 윤AA, 석OO, 윤BB의 나머지 청구 및 김OO의 청구를 각 포기하고, 서울고등법원 2001나XXXXX에서의 □□□의 나머지 청구를 각 포기한다'를 각 추가하는 외에는 제1심 판결 이유의 해당 부분 기재와 같으므로, 행정소송법 제8조 제2항 민사소송법 제420조 본문에 의하여 이를 그대로 인용한다.

2. Related statutes;

It is as shown in the attached Table related statutes.

3. Whether the instant disposition is lawful

A. The parties' assertion

1) The plaintiffs' assertion

The plaintiffs asserted that the shares of this case are "other income (e.g., rewards) under Article 21 (1) 13 of the Income Tax Act because they were received as consideration for maintaining the right to manage a leCC's non-party company in a shareholders' general meeting of shareholders, KimO directors, and OO auditors' reappointment and approval of financial statements." Thus, the plaintiffs asserted that the disposition of this case, which was deemed to be gift, is unlawful."

2) The defendant's assertion

On the following grounds, the Defendant asserts that the instant disposition imposing gift tax on the transfer of the instant shares is lawful.

A) Since leCC transferred the instant shares without receiving any property consideration from the Plaintiffs, the transfer of the instant shares constitutes “donation within the original meaning under the Inheritance Tax and Gift Tax Act,” it paid to the Plaintiffs on the condition that “the intent of closing disputes regarding inheritance and cooperating in the operation of the Non-Party Company,” and even if it constitutes a non-property donation under the Civil Act, such non-property obligation cannot be deducted from the donation amount.

B) Even if the transfer of shares does not constitute a gift of ordinary concept, it is reasonable to deem that co-inheritors have received property equivalent to the share value of this case pursuant to Article 31(3) of the Inheritance Tax and Gift Tax Act, since the transfer of shares of this case can be deemed to have re-divided inherited property by co-inheritors. ② As alleged by the Plaintiffs, even if the Plaintiffs provided services at a general meeting of shareholders upon request of leCC and received the shares of this case as consideration for such provision, the share value of this case exceeds the ordinary service price calculated by analogy of the legal doctrine based on a share lending transaction whose nature is similar to the service provided by the Plaintiff, etc., so it is reasonable to deem that the Plaintiffs donated property equivalent to the excess portion pursuant to Article 4

(b) Fact of recognition;

1) Quotation of the first instance judgment

The court's explanation on this part is consistent with the reasoning of the judgment of the court of first instance, except for the addition of the following parts between the 7th and 16th among the grounds of the judgment of the court of first instance, the 7th 16th '(3)' to the 7th '(5)', and the 9th '(4)' to the 16th '(5)' to the 16th '(6), and the 9th '(3) and (4) to the 2nd '(6)' to the 19th '(6). Thus, it is consistent with Article 8(2) of the Administrative Litigation Act and Article 420 of the Civil Procedure Act

2) Additional parts

(3) On April 27, 2004, after receiving the instant share certificates from leCC, the Plaintiff et al. requested the transfer of the instant share certificates to the non-party company. However, at the time, the representative director of the non-party company, who was the representative director of the non-party company, filed a complaint with the Plaintiff et al. for the transfer of the instant shares after his death to leA et al. to the effect that the Plaintiff et al. would transfer the instant shares to the non-party et al. to the effect that it would keep the instant share certificates as security, by asserting that the non-party company's transfer of the instant shares to the non-party et al. in order to settle the dispute without any choice during the continuous and high risk of threat, such as the criminal complaint by the Plaintiff leA, etc., which attempted to take the management right of the non-party company.

(4) After that, at the temporary general meeting of the non-party company held on July 29, 2005, the plaintiff et al. rejected the proposal of the director of the leCC whose term of office expires on July 30, 2005 by exercising voting rights of their shares (total 52.5%) including the shares in this case. The plaintiff et al. appointed O (the plaintiff leapA's wife), O (the plaintiff leapA's wife) as a new representative director, and then appointed the plaintiff leA as a new representative director at the board of directors held on the same day. After that, leCC and gramOOO were held against the plaintiffs, OOO, and BOO on the grounds of defects in the above provisional general meeting of shareholders and the resolution of the board of directors, but the court rejected the above application for provisional disposition on the grounds that the above provisional disposition and provisional disposition were not held at the general meeting of shareholders, but the above provisional disposition were not held at the above general meeting of shareholders.

C. Determination

1) The nature of the transfer of the instant shares

In full view of the following circumstances that are acknowledged in addition to the above facts and the purport of the entire pleadings, the shares of this case can be deemed to have been issued with regard to the temporary process of business, such as the exercise of voting rights at the general meeting of shareholders, while the existing inheritance-related disputes are closed and the purport of cooperation is also included in the operation of the non-party company. Therefore, it is reasonable to deem that the dispute has the nature of compensation or agreement

① The Plaintiff et al. asserted that 48,000 shares, the title of which was changed to one’s name prior to the network leap death, were inherited property. Ultimately, the instant mediation decision was rendered with respect to the said 48,000 shares among the heirs of the network leap, including Plaintiff et al., but the Plaintiff et al. subsequently demanded that leapCC continue to provide the said 48,00 shares in an additional amount equal to the amount calculated by dividing the said 48,00 shares by the statutory shares of inheritance, and the leapCC continued to dispute over inheritance between the Plaintiff et al. and the leapCC.

② Accordingly, in order to pressure leCC, the Plaintiff et al. filed various civil lawsuits against leCC and filed a criminal complaint. On March 30, 2004, immediately before the regular general meeting of shareholders held on March 30, 2004, the Plaintiff et al. expressed his/her intention of opposing the reappointment of directors of leapCC and KimO. However, the shares of leapCC are limited to 36.5%, but the total sum of the shares of the Plaintiff et al. was 43% (=14.5% + 14.5% + 14.5% + 5% + 6.2% + 0.3%) of the Plaintiff et al. al., the Plaintiff et al.’s family members, Kim O or leapF, who were the members of the Japanese government of leapE, expressed a favorable managerial attitude against 30% of the Plaintiff et al., thus, it was difficult for the Plaintiff et al. to cooperate with 2, 300.

③ Based on such critical circumstances, the Plaintiff et al. continued to demand the Plaintiff et al. to deliver 48,000 shares equivalent to the above 48,000 shares to the Plaintiff et al. In conclusion, the leCC did not prepare a proper agreement and provided the Plaintiff et al. with the instant shares equivalent to the statutory inheritance shares of the Plaintiff et al. at least 2 hours before the general meeting of shareholders was held. Accordingly, the leCC continued to dispute over the inherited property with the Plaintiff et al.

④ After receiving the instant shares from leCC, the Plaintiff et al. changed the original position and agreed to the agenda of the general meeting of shareholders desired by leCC. As a result, even though leGs opposed to leGs that exercised their voting rights by proxy, the Plaintiff et al. decided to be able to maintain the management right upon the leCC’s intention.

⑤ However, while denying the validity of the transfer of the instant shares to the Plaintiff, etc., the leCC rejected the transfer of the instant shares, and thereafter filed a lawsuit against the Plaintiff, etc. for the return of share certificates. On July 29, 2005, 2005, the leCC made it clear that the Plaintiff, etc. would no longer cooperate with the management of the leCC by rejecting the reappointment of the director of the leCC at the general meeting of shareholders in forest land of the non-party company, thereby allowing the leCC to leave the place of representative director. However, this is only an ex post facto circumstance resulting from the non-cooperation of the transfer of the leCC’s transfer of ownership, and from the beginning, the leCC did not transfer the instant shares on the premise that the leCC lost its right

2) Whether the shares of this case constitute a "donation within the original meaning" under the Inheritance Tax and Gift Tax Act

A) The concept of "donation" within the original meaning under the Inheritance Tax and Gift Tax Act

Article 2 (1) of the Inheritance Tax and Gift Tax Act provides that donated property from another person's donation is subject to gift tax. Article 2 (3) of the Inheritance Tax and Gift Tax Act provides that "The term "donation" includes any tangible or intangible property (including a case of transferring it at a remarkably low price) which can calculate economic values without relation to the name, form, purpose, etc. of the act or transaction, or an increase in the value of another person's property by the contribution." Article 31 (1) of the Inheritance Tax and Gift Tax Act provides that "The donated property under Article 2 includes any property belonging to the donee and all things having economic value that can be realized into money and all de facto or de facto rights having property value."

The concept of the above donation was introduced by the amendment of the Inheritance Tax and Gift Tax Act on December 30, 2003, and the scope of taxation of the gift tax was expanded. Since such donation is the essence of the donation without compensation, it cannot be viewed as a donation unless it is proved that the other party's act of making a contribution in a mutual exchange condition or a quid pro quo relationship corresponding thereto is significantly low. Whether the donation was made in a quid pro quo relationship shall be observed and determined by observing the whole process from the formation of the contract to the realization of the content of the claim relationship arising from the effect of the contract, and there is no need for a quid pro quo relationship.

B) Whether the transfer of shares in this case constitutes a "donation within the original meaning" under the Inheritance Tax and Gift Tax Act

The shares of this case can be deemed to have been issued with respect to the temporary administration of business affairs, and the purport of promoting the operation of the non-party company is to conclude that the existing inheritance disputes are closed and cooperates with the non-party company. Thus, the above facts acknowledged as above and the following circumstances, which are acknowledged as comprehensively considering the characteristics of the shares of this case, i.e., (i) ultimately pursuing the transfer of the shares of this case without interference with the management rights of the non-party company, should assess its value and calculate an appropriate value of shares if the non-party company has a so-called management interest for exercising its management rights (see, e.g., Supreme Court Decision 2008Do11036, Oct. 29, 2009). Considering that the defendant's right to manage shares of this case can not be seen as having been transferred with the plaintiff's right to cooperate with the plaintiff's general meeting of shareholders, etc., which could not be seen as having been able to have been transferred with the plaintiff's right to cooperate with the plaintiff's company.

3) Whether the transfer of the instant shares constitutes “redivision after the determination of the share inheritance”

A) the significance of the re-division after the determination of the share of inheritance

Article 31 (3) of the Inheritance Tax and Gift Tax Act, which provides that even though some of co-inheritors acquire property exceeding their own share of inherited property by mutual agreement as to inherited property, it shall be deemed that it had been succeeded to by the inheritee retroactively at the time of the commencement of inheritance, and shall not be deemed to have been donated by other co-inheritors. The inherited property after the commencement of inheritance becomes final and conclusive by registration, registration, transfer of title, etc. (hereinafter referred to as "registration, etc.") and the value of the inherited property acquired by a specific inheritor in excess of the original share of inherited property by mutual agreement among co-inheritors, shall include the property donated to the inheritor whose share of inherited property has been reduced by the division, and then the property acquired by a specific inheritor in excess of the original share of inherited property by mutual agreement among co-inheritors, shall be applicable only to cases where the inherited property is re-divided by mutual agreement among the inheritors after each inheritor becomes final and conclusive (see, e.g., Supreme Court Decision 2001Du441, Jul. 12, 2002)

피고는 이 사건 조정결정에 의하여 상속분 확정이 이루어졌다고 주장하므로 살피건대, 이 사건 주식의 양도가 상속관련 분쟁을 종식하기 위한 보상금 또는 합의금 교부의 성격도 일부 갖고 있다고 하더라도, 앞서 인정한 사실에 변론 전체의 취지를 더하여 인정되는 다음과 같은 사정, 즉, ① 이 사건 조정결정은 □□□이 소외 회사를 상대로 대여금의 반환을 구하는 소(서울고등법원 2001나XXXXX 사건)에 관하여, 또 원고 윤AA 및 석OO, 윤BB, 김OO가 윤CC을 상대로 증여계약서 등을 위조하는 방법으로 윤CC 앞으로 명의개서된 소외 회사의 주식 48,000주가 망 윤EE이 남긴 상속재산의 일부일 뿐 윤CC의 개인 소유가 아님을 확인함과 아울러 위 원고들이 각각의 상속지분의 비율로 이를 상속받아 소유함을 전제로 소외 회사를 상대로 위 주식에 대한 명의개서절차의 이행을 구하는 소[서울고등법원 2001나XXXXX, XXXXX(병합)]에 관하여 이루어진 것이지만, 그로 인한 결정사항 어디에도 피상속재산인 48,000주를 상속인들 사이에서 분할한다는 취지의 내용은 찾아볼 수 없고 단지 그 중 일부를 윤CC이 원고 등에게 양도하는 것으로 기재되어 있는 점, ② 더욱이 이 사건 조정결정에서 서울고등법원 2001나XXXXX 사건의 원고인 □□□의 나머지 청구를 포기하고, 서울고등법원 2001나XXXXX, XXXXX(병합) 사건의 원고인 원고 윤AA, 석OO, 윤BB의 나머지 청구 및 김OO의 청구를 포기한다는 항목이 포함되어 있는바, 이러한 조정조항 자체만으로는 이 사건 조정결정이 윤CC 앞으로 이루어진 위 48,000주에 관한 명의개서가 위조된 증여계약서 등에 의한 것으로서 그 사전취득이 무효라는 전제 위에 선 것으로 보기 어렵고, 오히려 일단 윤CC의 소유라는 외형을 존중하는 차원에서 그 중 일부를 윤CC이 원고 등에게 양도하는 형식을 취하고 있는 점 등을 감안하면, 이 사건 조정결정이 상속재산분할협의의 일환으로 이루어진 것으로서 그로 인하여 원고 등과 윤CC 등을 포함한 망 윤EE의 전체 상속인들 사이에서 상속분의 확정이 이루어졌다고 인정하기 어려우므로, 이와 다른 전제에 선 피고의 이 부분 주장은 더 나아가 살펴볼 필요 없이 이유 없다.

4) Whether the transfer of the instant shares constitutes a “tender offering” of services

A) Concept of provision of services and the meaning of provision of services

Article 42(1)2 of the Inheritance Tax and Gift Tax Act provides that "the gains from the provision of service received a price higher than the market price from a third party (limited to a price at least 10 million won which is ordinarily paid among many and unspecified persons) and the profits from the provision of service shall be the value of donated property of the person who has acquired such profits, and the profits shall be the difference between the market price and the actual paid or the actual paid price." Article 42(2) provides that "the period of use of property to a third party or the period of provision of service shall be one year if not determined, and if the period is at least one year, the period shall be deemed to have been newly used or the service shall be deemed to have been provided every year on the following day of the first year if the period is at least one year." The provision on the high-priced supply, etc. of such service shall be converted to the previous provision on the calculation of donated and donated property, and it shall be clear

On the other hand, the concept of "service" is not clearly defined in the Inheritance Tax and Gift Tax Act. Article 2 subparagraph 2 of the Value-Added Tax Act defines "service" as "all other service and other act having property value" and examples of the scope of service under Article 3 (1) of the Enforcement Decree of the Value-Added Tax Act, and Article 11 of the Value-Added Tax Act provides that "the supply of service" falls under any of the items of service provided by contract or any other legal cause (Article 11 of the Value-Added Tax Act), and provides that "the provision of service" falls under any of the items of service provided by contract or any other legal cause (Article 25 of the Enforcement Decree of the Value-Added Tax Act) and Article 25 of the Enforcement Decree of the Value-Added Tax Act provides that "the provision

B) The nature of the transfer of the instant shares

As to the instant case, the Plaintiff et al. exercised voting rights in favor of leCC at the general meeting of shareholders in return for the transfer of the instant shares, and agreed to cooperate in the operation of leCC’s non-party company as seen earlier. However, the Plaintiff et al. merely intended to exercise the right in a way that leCC can exercise management rights in cooperation with the leCC as much as possible in the process of exercising its rights as a shareholder holding a share right, and the Plaintiff et al. did not provide the leCC with a service related to exercising voting rights, etc., or allow the leleCC to actually use a right associated with some share certificates, such as voting rights, and not receive the price. Therefore, it is difficult to view that the Plaintiff provided a service and received the price for the provision of the service.

Even if the Plaintiff’s exercise of voting rights and cooperation in the operation of the non-party company constitute provision of services, this case’s stock lending contract is established when the lender transferred the ownership of the shares to the borrower during the lending period and let the borrower use them, and the borrower agreed to return the shares of the same kind and quantity to the lender at the end of the lending period (see, e.g., Supreme Court Decision 2007Du11092, Apr. 29, 2010). In this case, the Plaintiff et al. exercised his/her voting rights on the shares held by him/her and agreed to cooperate with leCC as much as possible in the process of exercising his/her rights, but it cannot be deemed that he/she actually transferred the ownership of the shares to leCC. Rather, given that the transfer of shares in this case has the nature of compensation for inheritance-related disputes and cooperation in the management of the non-party company, the Plaintiff et al. did not have any reason to deem that the market price of the shares in this case’s loan transaction is reasonable.

5) Sub-committee

Ultimately, the transfer of the instant shares cannot be deemed as falling under either a "donation within the original meaning of the Inheritance Tax and Gift Tax Act" or a "redivision or an offer of services at a higher level after confirmation of the inheritance amount," and otherwise, insofar as there is no assertion or proof by the defendant that the transfer of the instant shares constitutes the subject of the gift tax under the Inheritance Tax and Gift Tax Act, the disposition of the instant shares based on the premise that the transfer of the instant shares constitutes the subject of the gift

4. Conclusion

Therefore, the plaintiffs' claims seeking the cancellation of the disposition of this case are justified, and the judgment of the court of first instance is just, and the defendant's appeal is dismissed, and it is so decided as per Disposition.