The donation of this case does not constitute "business acquisition", "business exchange" and "corporate restructuring, etc."

The instant donation does not fall under the transfer of business or business exchange under Article 42(1)3 of the Inheritance Tax and Gift Tax Act, and further, it cannot be deemed as the type of transaction or act corresponding thereto.

Article 42 (1) 3 of the Inheritance Tax and Gift Tax Act

2014Guhap6560 Revocation of Disposition of Imposing gift tax, etc.

AA

○ Head of tax office

November 20, 2014

January 5, 2015

1. On March 15, 2013, the Defendant revoked the disposition imposing gift tax of KRW 000,000,000 against the Plaintiff.

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

Cheong-gu Office

The same shall apply to the order.

1. Details of the disposition;

A. The Plaintiff’s father B donated 00,000 shares (which correspond to 00.00% of shares; hereinafter referred to as “instant shares”) of DDR (hereinafter referred to as “DDR”) owned by the Plaintiff to CC (hereinafter referred to as “CC”) where the Plaintiff owns 00% of shares (hereinafter referred to as “instant donation”), and the Plaintiff reported and paid 00,000 won as donated shares under Article 41(1)1 of the former Inheritance Tax and Gift Tax Act (amended by Act No. 9916, Jan. 1, 2010; hereinafter referred to as “the Inheritance Tax and Gift Tax Act”).

B. From April 3, 2012 to June 1, 2012, the Seoul Regional Tax Office conducted an investigation into changes in stocks of DD and deemed that the instant donation falls under Article 42(1)3 of the Inheritance Tax and Gift Tax Act, not Article 41(1)1 of the Inheritance Tax and Gift Tax Act reported by the Plaintiff, and notified the Defendant of taxation data by identifying the donated value of the instant donation as KRW 0,000,000,000, which is the share value increase in the CCC’s shares (hereinafter “instant disposition”). On March 15, 2013, the Defendant decided and notified the Plaintiff of KRW 00,000,000 (hereinafter “instant disposition”).

C. The Plaintiff filed an objection on January 5, 2013, but was dismissed on July 11, 2013. The Plaintiff filed an appeal with the Tax Tribunal on October 14, 2013, but was dismissed on May 21, 2014, and filed the instant lawsuit on August 20, 2014.

[Ground for Recognition: Facts without dispute, Gap evidence 1 to 3, Eul evidence 1, whole pleadings

[Purpose]

2. The assertion and judgment

A. The plaintiff's assertion

In the disposition of this case, the defendant deemed that the donation of this case constitutes "business acquisition/business exchange/business exchange" and "corporate restructuring, etc." under Article 42 (1) 3 of the Inheritance Tax and Gift Tax Act. However, the donation of this case does not constitute "business acquisition/business exchange" and "corporate restructuring, etc." under the above provision. Therefore, the disposition of this case is unlawful.

(b) Related statutes;

Attached Form is as shown in the attached Form.

C. Determination

We examine whether the gift of this case falls under Article 42 (1) 3 of the Inheritance Tax and Gift Tax Act.

(1) Article 42(1)3 of the Inheritance Tax and Gift Tax Act provides that the value of donated property shall be the profit derived from the transaction of increasing or decreasing the capital of a corporation, such as capital increase or decrease, merger or division of shares with convertible bonds, etc. The gift of this case is not a capital transaction but a profit and loss transaction that generates assets increase, and thus does not fall under the type of transaction stipulated in the former part of Article 42(1)3 of the Inheritance Tax and Gift Tax Act. (2) The latter part of Article 42(1)3 of the Inheritance Tax and Gift Tax Act provides that the ownership share or its value change shall not be limited to the acquisition by transfer, business exchange, and corporate restructuring. However, it does not mean that the transfer of shares or its price change is not a legal entity's own share or shares, and it does not mean that the transfer of shares or shares of a corporation can not be deemed that the transfer of shares or shares of a corporation constitutes an exchange of shares with the company as alleged by the defendant, and therefore, it does not mean that there is an organizational change or exchange of shares with the company.

3) Therefore, the instant disposition, which was effected on the premise that the instant gift falls under Article 42(1)3 of the Inheritance Tax and Gift Tax Act, ought to be revoked as it is unlawful.

3. Conclusion

Therefore, the plaintiff's claim is reasonable, and it is decided as per Disposition.

Judges Kim Jong-tae

Judges Cho Young-chul

Judges Ansan-jin