Evaluation of wrongful calculation of the transfer of low price of stocks to a person with a special relationship

The case holding that although capital gains tax and gift tax are imposed on the transferor for the transfer of stocks at a low price to a person with a special relationship, the transferor is claiming that the transferor is a title trust, and the tax authorities received the final judgment of the court but maintained the original disposition that cannot be deemed as a title trust claimed by the plaintiffs by the judgment

1. The plaintiff's claim is dismissed.

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

The defendant's rejection disposition of correction of transfer income tax against the plaintiff on December 21, 2009 (According to the statement of evidence No. 6 of the complaint, the date of disposition in the complaint seems to be a clerical error).

1. Details of the disposition;

(a) Reporting, payment, correction, notification, etc. of capital gains tax;

(1) On August 26, 2004, the Plaintiff transferred 6,000 shares of BB Steel Co., Ltd. (hereinafter referred to as “BS Co., Ltd.”) to the son KimA (hereinafter referred to as “instant shares”) on November 30, 2004, and reported and paid 48,000,000 capital gains tax calculated as follows with the transfer value of the instant shares as KRW 30,000,000 with the acquisition value of KRW 30,000,000.

(2) On August 18, 2008, the director of the Central District Tax Office conducted a tax investigation with respect to the non-party company, and corrected the Plaintiff’s transfer income tax as calculated as follows by applying the provision regarding the wrongful calculation book between the related parties by deeming the Plaintiff’s transfer of the instant shares to be a low price transfer among the related parties. Accordingly, the Defendant issued an additional disposition imposing KRW 206,556,710 (hereinafter “instant disposition imposing the transfer income tax”) on the remainder after subtracting the Plaintiff’s transfer income tax already paid to the Plaintiff from KRW 1,395,00 (hereinafter “instant disposition”).

(3) On November 4, 2008, the Plaintiff filed an objection against the disposition of imposition of the transfer income tax of this case by asserting that the instant shares were nominally trusted to the Plaintiff. However, the objection was dismissed on December 17, 2008, and the Plaintiff filed an appeal with the Tax Tribunal on the same ground on March 18, 2009, but the appeal was dismissed on June 2, 2009.

(4) On the other hand, on August 18, 2008, the director of the Jungbu Regional Tax Office determined KRW 463,060,590 of the gift tax to KimA on the same ground (the fact that the Gima appears to have donated profits corresponding to the difference between the market price and the low-price acquisition price of the shares in this case). Accordingly, the head of the Dongjak District Tax Office imposed the gift tax on KimA (hereinafter referred to as the "disposition imposing the gift tax in this case").

(b) the establishment of civil judgments and requests for correction;

(1) On January 18, 2009, KimA filed a lawsuit against the Plaintiff seeking confirmation that there was no obligation to pay the Plaintiff the purchase price for the Plaintiff following the transfer of the instant shares by Suwon District Court Decision 20097dan6895. On July 3, 2009, the said court established the non-party company on January 4, 199, and held that the non-party company was held in title trust with the Plaintiff on the ground that the title trust agreement was terminated in 2004 and the title of the instant shares was transferred in the name of KimA. (hereinafter referred to as the “instant confirmation judgment”), and the instant confirmation judgment became final and conclusive at that time.

(2) On August 19, 2009, the Plaintiff asserted that the instant confirmation judgment falls under Article 45-2(2)1 of the Framework Act on National Taxes, and filed a claim for correction of the capital gains tax amount assessed on the Plaintiff due to the transfer of the instant shares to zero won.

(3) On December 21, 2009, the Defendant rendered a disposition rejecting the Plaintiff’s request for correction on the following grounds (hereinafter “instant disposition”).

The request for correction is not allowed with respect to the taxation determined through the lapse of the period for appeal or the litigation.

O The instant confirmation judgment is equivalent to a constructive confession between interested parties, and thus, it is unreasonable to correct capital gains tax on the basis thereof.

[Reasons for Recognition] Facts without dispute, Gap 1 to 6 evidence, Eul 1 and 2 evidence (including paper numbers)

2. The assertion and judgment

A. The plaintiff's assertion

Notwithstanding the fact that the instant judgment constitutes a “judgment” under Article 45-2(2)1 of the former Framework Act on National Taxes (amended by Act No. 9911, Jan. 1, 2010; hereinafter the same), the instant disposition made by the Defendant on the premise that the instant judgment does not constitute a “judgment” under the said provision is unlawful.

(b) Related statutes;

It is as shown in the attached Form.

C. Determination

According to Article 45-2 (2) 1 of the Act, in a case where any transaction or act, etc., which is the basis of calculating the tax base and amount of tax which was initially reported, decided or corrected, becomes final and conclusive as different by a judgment in the relevant lawsuit, a request for correction may be filed within 2 months from the date on which the person liable for duty payment becomes aware of the occurrence of such cause, regardless of the period stipulated in paragraph (1). In a case where the aforementioned judgment is interpreted to include the purport of introducing the system for requesting the subsequent correction, the above provision, and the above judgment through constructive confession or service by public notice, etc., in a civil judgment to which the principle of pleading applies, it is highly likely that the person liable for duty payment may manipulate the outcome of the judgment as intended by him/her, the judgment within the above provision refers only to a judgment by a trial in which the transaction or act, etc.

With respect to the instant case, the following circumstances, which can be seen by comprehensively taking account of the overall purport of arguments in the statement of No. 2 and No. 15 Evidence No. 2 and No. 15 No. 2 and No. 2 and No. 15 (including paper numbers), i.e., KimA., the Plaintiff’s wife, and ii) the Plaintiff transferred the name of the instant shares to KimA and directly reported and paid transfer income tax on the ground that the transfer of the instant shares was low-price transaction between related parties, and began to dispute the instant disposition of imposition of transfer income tax by asserting that the transfer of the instant shares was due to the termination of trust, and KimA also started to dispute the disposition of imposition of gift tax of this case for the same reason, and (iii) thereafter, KimA was merely an action of confirmation of the absence of obligation for the transfer of the instant shares, and the Plaintiff did not present any specific evidence to prove that the instant disposition of imposition of transfer income tax was based on the title trust agreement or the establishment of title trust agreement.

Therefore, the plaintiff's assertion is without merit.

3. Conclusion

Therefore, the plaintiff's claim is dismissed as it is without merit, and it is so decided as per Disposition.