Gwangju District Court 2007Guu4681 (Law No. 19, 2008)

National High Court Decision 2007 Mine2452 ( October 17, 2007)

The burden of proof of property acquisition fund

If it is deemed that there is no sufficient means to acquire real estate acquisition funds, the tax authorities may presume that the donor or the specific gift does not have any means to prove the acquisition funds of the property, and impose gift tax on the taxpayer to be donated to him/her, and in order to subsequent such presumption, the taxpayer must prove

The contents of the decision shall be the same as attached.

Article 45 (Presumption of Donation of Funds, etc. for Acquiring Property)

Article 34 (Presumption of Donation of Funds, etc. for Acquisition of Property)

1. The plaintiff's appeal is dismissed.

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

The judgment of the first instance shall be revoked. The defendant shall revoke each disposition of imposition of gift tax of KRW 7,930,010 on April 4, 2007 against the plaintiff on May 21, 2004, KRW 10,911,920 on May 31, 2004, KRW 5,694,540 on the gift tax of August 26, 2005, KRW 71,038,020 on the gift tax of KRW 71,038,020 on October 5, 205 (the plaintiff at the first instance court to revoke the disposition of imposition of KRW 138,319,020 on gift tax of KRW 138,00 on the gift tax of KRW 71,038,00 on the gift tax of KRW 20 on May 31, 2004).

1. Details of the disposition;

A. The Plaintiff operated the automobile maintenance business from July 20, 1996 to 00,000 won per annum. The amount of income from around July 20, 2001 to 2005 is about KRW 10 million per annum.

B. From September 1, 2001 to October 2005, the Plaintiff acquired (total acquisition value of 2,953,534,000 won) a total of 27 parcels of land, such as each of the following land (hereinafter “each of the instant land”). The Defendant: (a) conducted an investigation on the Plaintiff’s gift tax on the Plaintiff from December 18, 2006 to January 31, 207, based on the review decision on the Plaintiff’s pre-assessment review on October 21, 206; (b) conducted an investigation on the Plaintiff’s transfer value, loan, deposit money, etc. of the Plaintiff’s existing real estate from around October 2001 to around 205 (i.e., the Plaintiff’s business income from the operation of automobile maintenance business entities was found to have not been used as acquisition funds); (c) recognized the Plaintiff’s acquisition amount of the gift tax as KRW 312,140,000 as acquisition funds of each of the instant land; and (d) 30140.1.40

C. On July 3, 2007, the Plaintiff appealed to the National Tax Tribunal. On October 17, 2007, the National Tax Tribunal borrowed KRW 28 million from Nonparty Park Young-deok on August 27, 2005 and used the same as the acquisition fund for each land listed in the sequence 5 through 8 of the above table among each land of this case, and subsequently corrected the tax base and tax amount thereof, and decided to dismiss all the remaining claims. Accordingly, the Defendant reduced the taxable value of the gift on October 5, 2005 to KRW 287 million (i.e., KRW 495 million - KRW 28 million) and then reduced the gift tax amount from KRW 138,319,020 to KRW 6781,6081, 2008.

[Ground of Recognition] Unsatisfy, Gap evidence 3 to 9, Eul evidence 1, 2 and 5 (including each number)

2. Whether the instant disposition is lawful

A. The issues of the instant case

(1) In order to apply Article 45(1) of the Inheritance Tax and Gift Tax Act to the Plaintiff, whether it is necessary to satisfy the requirement that “the Plaintiff has a lineal ascendant or descendant, etc. who has financial capacity to donate property acquisition funds to the Plaintiff,” other than the requirement that “it is difficult for the Plaintiff to acquire property with financial capacity in view of occupation, age, income, property status, etc

(2) Furthermore, what is the source of financing KRW 433,393,00 among the Plaintiff’s income (=641,393,000-208,000)

The Plaintiff asserts that from around 191 to 2005, the Plaintiff leased a farmland of 50,579 square meters in Gwangju ○○-dong and Gwangju ○○-dong, Gwangju ○○-dong, and that from around 1991 to around 2005, the Plaintiff obtained revenue of KRW 684,435,000,00 by installing a vinyl house in part of the said farmland and cultivating special purpose crops (tomatoma, tea, path, pathal, pathal) by selling rice harvested and processed rice (2398Ga) (2398Ga) to Nonparty ○-dong, etc.

B. Relevant statutes

Article 45 (Presumption of Donation of Funds, etc. for Acquiring Property)

Article 34 (Presumption of Donation of Funds, etc. for Acquisition of Property)

C. Determination

(1) Determination as to the issue (1)

A) Interpretation of Article 45(1) of the former Inheritance Tax and Gift Tax Act (amended by Act No. 7010, Dec. 30, 2003; hereinafter the same)

① Article 45(1) of the former Inheritance Tax and Gift Tax Act provides that “Where it is difficult to recognize that a person having no economic ability has acquired the property by taking account of his occupation, age, income, property status, etc., as prescribed by the Presidential Decree, the purchaser of the property shall be presumed to have received a donation from another person at the time of the acquisition of the property.” The above provision was newly established as Article 34-6 when the Inheritance Tax Act was amended by Act No. 4283 on December 31, 1990, and later was later amended into Act No. 5193, Dec. 30, 1996, and some phrases were transferred as Article 45 and revised. In examining the source of the fund for acquiring the property before the said provision was newly established, where a person having no economic capacity acquires the property with a fund whose source is unclear, it shall be presumed that there is a donation from the same person.”

② Before the enactment of the above provision, the Supreme Court held that the gift of property, which is a requirement for gift tax imposition, is reasonable to presume that a person without a special occupation or property, receives a gift from his/her spouse or lineal ascendant on the ground that there is no proof of the source of part of the fund in the course of the transaction, such as purchase of real estate by a person with a certain occupation and considerable financial capacity, which is a requirement for gift tax imposition (see, e.g., Supreme Court Decision 86Nu340, Jul. 22, 1986). However, if a person without a special occupation or property fails to prove that he/she received a gift from his/her spouse or lineal ascendant, it is presumed that he/she received a gift from the person with a financial capacity thereof (see, e.g., Supreme Court Decision 83Nu710, Mar. 27, 1984). This legal doctrine, even though there is a certain occupation, is no objective application of the said provision, as in cases where it is extremely 90Nu16, even if it has no other property value.

③ The purport of the above provision is to consider the reality of the transactional system in which it is difficult to impose taxes by proving the fact of donation, despite the existence of the fact of donation that falls under the taxation requirements, in general, where a donation takes place closely among persons having a special relationship, such as lineal descendants or families, and where the property is commercialized and donated to persons having a special relationship, etc. such as lineal descendants or families, etc., the meaning of "the other person" under Article 45 of the former Inheritance Tax and Gift Tax Act is limited to "spouse or lineal ascendants or descendants" like the previous precedents in order to restrict reckless taxation due to excessive interpretation of the above provision. Therefore, in order to apply the above presumption provision under the former Inheritance Tax and Gift Tax Act, the first case should be applicable in cases where it is difficult for the property acquisitor to recognize that he acquired the property with his own ability in view of his occupation, age, income, property status, etc., and the second case alone is difficult to deem that the property acquisitor acquired the property with his own ability.

④ Accordingly, the Supreme Court consistently held that, inasmuch as the fact that the requirements for imposing gift tax are as a matter of principle proved by the tax authority, the portion of the funds needed to acquire the property cannot be deemed as having been donated to another person, barring any special circumstance, even if the funds needed to acquire the property are not presented daily, barring any special circumstance. However, in a case where a person without a certain occupation or income does not have any source of funds sufficient to clearly obtain contributions to the property and his/her lineal ascendant or spouse, etc. have any ability to obtain a gift, it is reasonable to presume that the funds were donated from the person having financial capacity (see, e.g., Supreme Court Decisions 9874, Sept. 26, 1997; 97Nu9239, Nov. 14, 1997). Thus, in order to estimate the donation, the tax authority should prove that there is no certain occupation or income with respect to the donee as well as the donation to the donee (see, e.g., Supreme Court Decision 2004Da30614.

B) Interpretation of Article 45(1) of the Inheritance Tax and Gift Tax Act after amendment

① Article 45(1) of the Inheritance Tax and Gift Tax Act (wholly amended by Act No. 7010, Dec. 30, 2003) which was effective January 1, 2004; Article 45(1) of the Inheritance Tax and Gift Tax Act (wholly amended by Act No. 7010, Dec. 30, 2003) provides that where it is difficult to recognize that the property was acquired with financial resources considering its occupation, age, income, property status, etc., as prescribed by the Presidential Decree, the acquisition fund of the property shall be presumed to have been donated to the purchaser of the property at the time of the acquisition of the property, and deleted the phrase "other person" than the former Act by stipulating that "the reason for amendment of the Inheritance Tax and Gift Tax Act" is different from that of the former Act. Meanwhile, the reason for the amendment of the Inheritance Tax and Gift Tax Act is similar to the donation in the form of a donation under the premise of a contract between the parties, but it is difficult to impose gift tax on the new type of property without consideration."

② The burden of proof for the original fulfillment of the taxation requirement shall be imposed on the tax authority, but where it is difficult for the property acquisitor to recognize that the property was acquired by his own means in accordance with the above new provision, the tax authority is legally presumed to have been donated the acquisition fund of the property, and the gift tax may be imposed thereon. Accordingly, the burden of proof for objection to the presumption shall be imposed on the taxpayer.

C) As seen earlier, the Plaintiff deemed that the annual amount of income from around 2001 to around 2005 exceeds KRW 10 million, and there is no other means to acquire real estate acquisition funds. As such, the Defendant is legally presumed to have donated the acquisition fund of the property without the need to prove the donor or specific donation, and the gift tax may be imposed thereon, and the Plaintiff must prove the objection to such presumption.

(2) Determination on the issues (2)

First, as to the assertion that the Plaintiff earned approximately KRW 1.3 billion from the Plaintiff’s work at rice shed, there is no objective data, such as a receipt for giving and receiving rice at the time of rice sale between the Plaintiff and the Plaintiff’s grandchildren, and the account book prepared by the Plaintiff, the purchaser, and no data on the purchaser and the purchaser of rice 2,398 Gao, and according to the evidence No. 3-1 through No. 6, the Plaintiff applied for direct payment of rice income preservation to farmers under the Rice Income Preservation Act (the Act on the Establishment and Operation of the Rice Income Preservation Fund at the time of its enactment) enacted on December 11, 2002, and there is no evidence to acknowledge that the amount of direct payment of rice income preservation to farmers under the Rice Income Preservation Act (the Act on the Establishment and Operation of the Rice Income Preservation Fund at the time of its enactment) prior to its filing, and there is no evidence to acknowledge it differently.

Next, as to the assertion that the Plaintiff obtained KRW 684,435,00 by cultivating and selling the special purpose crops, there is no evidence about the purchaser or the price for the sale of such special purpose crops. Moreover, according to the evidence No. 4, as long as the Plaintiff’s details of the purchase of farming materials for the installation of vinyl houses, etc., or the details of the purchase of tax-free petroleum for the maintenance of the facilities, and as long as there is no evidence about the fact that the cultivation itself is doubtful, the above amount cannot be acknowledged as the acquisition fund of each land of this case.

(3) 따라서, 이 사건 처분은 적법�.

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and the judgment of the court of first instance with the same conclusion is just, and the plaintiff's appeal is dismissed as it is without merit. It is so decided as per Disposition.

[Maju District Court 2007Guhap4681 (Law No. 19, 2008)]

1. The plaintiff's claim is dismissed.

2. The costs of lawsuit shall be borne by the Plaintiff.

1. Details of the disposition;

A. The Plaintiff operated the automobile maintenance business from July 20, 1996 to 377-1 of ○○○○○-dong 377-1 with the trade name "○○○○○-dong 377-1". The amount of income from around 2001 to around 2005 is within KRW 10 million per annum.

B. From September 1, 2001 to October 2005, the Plaintiff acquired a total of 27 lots of land including each of the following land (hereinafter “each of the instant land”). The Defendant: (a) conducted a gift tax investigation on the Plaintiff from December 18, 2006 to January 31, 2007 on the basis of the review on the legality of the taxation prior to the Plaintiff’s assessment; (b) conducted a tax investigation on the Plaintiff’s transfer price, loan, lease money, etc. (the amount used as acquisition funds for the Plaintiff’s automobile maintenance business entity’s operation) with the total amount of KRW 2,953,534,534,00; and (c) recognized the Plaintiff’s acquisition price of each of the instant land as KRW 305,40,300,300,300,300,300, 400, 2005, 304, 2005, 301,304,04,00.

Schedule

No.

Land:

Date of acquisition

(Date of Receipt for Registration)

Acquisition Value

(unit:,000 won)

Financial Investment Service

shortage in certification

(unit:,000 won)

Imposition of Gift Tax

1

00 Si/Gu 00 00 Dong

May 21, 2004

108,000

62,719

7,930,010

2

00 Si/Gu 00 00 Dong

May 31, 2004

60,852

60,852

10,911,920 won

3

00 Si/Gu 00 00 Dong

August 26, 2005

56,271

22,822

5,694,540 won

4

00 Si/Gu 00 00 Dong

5

00 Si/Gu 00 00 Dong

o October 5, 2005

620,000

495,000

138,319,020 won

6

00 Si/Gu 00 00 Dong

7

00 Si/Gu 00 00 Dong

8

00 Si/Gu 00 00 Dong

175,000

Consolidateds

1,020,123

641,393

162,855,490 won

C. On July 3, 2007, the Plaintiff appealed to the National Tax Tribunal. On October 17, 2007, the National Tax Tribunal: (a) borrowed a gold of KRW 28 million from the non-party 1 on August 27, 2005 and September 4, 2005; (b) deemed that the Plaintiff used a gold of KRW 28 million for the acquisition fund of each of the land listed in the title 5 to the above table among each of the land in this case; (c) corrected the tax base and tax amount thereof; and (d) decided to dismiss all of the remaining claims; and (e) accordingly, the Defendant reduced the taxation and tax amount on the donated portion on October 5, 2005 to KRW 287 million (i.e., a gold of KRW 495 million to KRW 28 million); and (d) reduced the gift tax amount from KRW 138,319,207 to KRW 28 million,000.

Facts without dispute over the basis of recognition, Gap evidence 3 through 9, Eul evidence 1, 2, and 5 (including each number)

(1) Of the instant lawsuit, whether the part seeking revocation exceeding KRW 71,038,020 regarding the imposition of gift tax amounting to KRW 138,319,020 on October 5, 2005 is lawful

ex officio, as seen earlier, the part of the Defendant’s claim for revocation of the gift tax exceeding KRW 71,038,020 (i.e., gold KRW 138,319,020- - gold KRW 67,281,000) out of the disposition imposing gift tax on the Plaintiff on October 5, 2005 on April 4, 2007 is extinguished by the decision of revocation of reduction on October 17, 2007 by the National Tax Tribunal and the Defendant’s decision of revocation accordingly. Thus, the Defendant’s claim for revocation of this part is unlawful as it seeks revocation of the non-existent part.

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

원고는 ○○ ○○구 ○○동 및 ○○ ★★구 ★★동 일대의 농지 90,579㎡를 임차하여 1991.경부터 2005.경까지 벼농사에 종사하면서 수확한 벼(대금 9억 4,056만 원 상당)와 가공한 쌀(2398가마)을 소외 ◇◇◇ 등에게 판매하여 금 13억 원의 수입을 얻은 외에도, 2001.경부터 2005.경까지 위 농지의 일부분에 비닐하우스를 설치하고 특용작물(토마토, 고추, 호박, 미나리)을 재배하여 금 684,435,000원의 수입을 얻어 왔는바, 이와 같은 자금으로 이 사건 각 토지를 취득한 것임에도, 피고는 만연히 이 사건 각 토지의 취득에 사용된 자금 일부의 출처가 불분명하다고 보아 그 일부 자금을 원고가 증여받은 것으로 추정하였을 뿐만 아니라, 명백히 증여에 해당하는지 여부가 불분명한 경우에는 증여로 추정할 만한 구체적인 사유와 증여사실을 입증하여야 함에도 그러한 입증에 이르지 않고 증여세를 부과한 이 사건 처분은 과세권을 남용한 것으로서 위법하다.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

According to Article 45 (1) of the Inheritance Tax and Gift Tax Act (wholly amended by Act No. 7010 of Dec. 30, 2003), which was enforced from January 1, 2004, the burden of proof on the fulfillment of the original requirement for taxation can be imposed on the taxpayer on the presumption that the purchaser of the property was donated the acquisition of the property without the need to prove the donor or specific donation. Therefore, the opposing fact to destroy the presumption is that the Plaintiff has no burden of proof on the taxpayer. First, the Plaintiff’s assertion that there was no other evidence on the above 1.3 billion won of rice income from the purchase of rice at the time of the sale of rice at the time of the sale of rice at the time of the purchase of rice at the time of the above 400 million won or above, the Plaintiff’s assertion that there was no other evidence on the establishment of the above 2000 won of rice income from the purchase of rice at the time of the sale of rice at the time of the sale of rice at the time of the purchase of the above 200th.

3. Conclusion

Therefore, among the plaintiff's lawsuit of this case, the part of the plaintiff's claim for revocation exceeding KRW 71,038,020 as to the disposition of gift tax of KRW 138,319,020 on October 5, 2005 is dismissed as it is unlawful. The remaining claims are dismissed as it is without merit. It is so decided as per Disposition.