Suwon District Court-2014-Gu Partnership-60178 ( November 10, 2015)

Cho Jae-2015 middle 1377 (Law No. 14, 2014)

It is difficult to see that there was no purpose of evading tax on stock trust.

In the title trust, it seems that there is no clear purpose in relation to the tax avoidance to the extent that the title trust has no objective of tax avoidance, and there is a possibility of avoiding the progressive tax rate due to the cumulative taxation of income, etc.

Article 45-2 (Presumption of Donation of Title Trust Property)

2015Nu69142 Revocation of Disposition of Imposition of Gift Tax

IsaA

The Director of the Z Tax Office

Suwon District Court Decision 2014Guhap60178 Decided November 10, 2015

July 19, 2016

August 30, 2016

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 all imposition of KRW 72,831,240 on the gift tax of May 12, 2010 against the plaintiff on July 4, 2013 and KRW 147,250,120 on the gift tax of September 2, 2010.

1. Quotation of judgment of the first instance;

The reasoning for this Court’s explanation is as stated in the reasoning of the judgment of the court of first instance, except for the addition of the following judgments. Thus, this Court’s explanation is based on Article 8(2) of the Administrative Litigation Act and the main text of Article 420 of the Civil Procedure

2. The addition;

A. The plaintiff's assertion

1) In the case of shares, it cannot be said that the actual owner and the nominal owner are different without any change in the register of shareholders, and the fact that the change in the register of shareholders is made is insufficient to prove that the Defendant, who is the tax authority, should prove the fact. Therefore, since the transfer of the shares in this case was not made, it cannot be deemed that it constitutes a title trust under Article 45-2

2) The Plaintiff transferred all the instant shares to KimD, etc. on November 1, 2010, according to the direction of the KimCC, which is the wife of thisB. As such, 32,433 percent of the instant shares, which was acquired on September 2, 2010, shall be deemed to have been returned to LeeB within three months after receiving the donation. As such, it shall be deemed that there was no donation from the beginning pursuant to the main sentence of Article 31(4) of the former Inheritance Tax and Gift Tax Act. Thus, the instant disposition imposing gift tax on 32,43 shares of the instant shares is unlawful.

B. Determination

1) As to the first argument

A) The transfer of registered shares cannot be effective against the company unless the acquisitor’s name and address are indicated in the register of shareholders. Therefore, it constitutes a case where the actual owner and the nominal owner are different in the property requiring a transfer or exercise of the right, which is the requirement for deemed donation under Article 45-2(1) of the former Inheritance Tax and Gift Tax Act, which is the requirement for the transfer of shares in the register of shareholders, to a person who is not an actual owner in the register of shareholders (see Supreme Court Decision 2005Du102

Article 45-2(3) of the former Inheritance Tax and Gift Tax Act provides that where the register of shareholders, etc. is not prepared, a transfer of ownership shall be determined based on the statement on changes in stocks, etc. submitted to the head of the competent district tax office having jurisdiction over the place of tax payment. Even if the list of shareholders is prepared and the name of the owner is different from the actual owner, if the name of the owner is not entered in the statement on changes in stocks, etc., the gift tax may not be imposed on the nominal owner by applying Article 45-2(3) of the Inheritance Tax and Gift Tax Act (see Supreme Court Decision 2011Du109

B) In light of the following circumstances, it is reasonable to view that the entry of the above evidence, Gap evidence Nos. 7, Eul evidence Nos. 6, Eul evidence Nos. 7, 7, and 12 is changed in the name of the plaintiff with regard to the instant shares, in light of the overall purport of the pleadings. The plaintiff's above

① The Plaintiff prepared and submitted a written objection to the instant disposition to the Defendant, stating that “B accepted the instant shares under the name of the Plaintiff; on May 12, 2010, 23,067 shares; and on September 2, 201, 32,433 shares under the name of the Plaintiff; and that “The Plaintiff held 5,000 shares under the name of the Plaintiff, such as transfer of shares in the name of the Plaintiff.”

② While receiving an investigation related to the instant disposition, the Plaintiff stated that “B was missing and Kim DD was aware of the fact that 5,00 shares of thisB were held in the name of 5,00 shares of this B,” and that “B was registered as a shareholder rather than this BB, the actual nominal owner in the register of shareholders.” The Plaintiff also made a statement to the effect that “B was registered as a shareholder rather than this BB, the actual owner in the register of shareholders.”

③ In addition, on October 29, 2010, the Plaintiff, as the former representative director of the instant company, entered into an agreement on transfer of management rights with the instant company’s stocks and the instant company, but was not paid 200 million won from KimD, and was sentenced to winning judgment by filing a lawsuit against KimD seeking payment of share transfer price (see Supreme Court Decision 2013Na000, April 3, 2014). The Plaintiff also entered into a written agreement on performance with KimD with the content that the agreement was reached between the Plaintiff and the former representative director of the instant company and the 180 million won.

2) As to the second argument

The main text of Article 31(4) of the former Inheritance Tax and Gift Tax Act provides that where the donated property is returned by the deadline for filing a return under Article 68 pursuant to an agreement between the parties after receiving the donation, the donation shall be deemed not to have existed from the beginning. However, even if the Plaintiff agreed to transfer the instant shares to KimD under the direction of the wife KimCC, the Plaintiff cannot be deemed to have returned the instant shares to KimD pursuant to an agreement with the original title truster. Thus, the first Plaintiff’s assertion on a different premise is without merit.

3. Conclusion

Therefore, the judgment of the first instance court is justifiable, and the plaintiff's appeal is dismissed as it is without merit.