Revocation of Disposition Imposing Gift Tax

Since the plaintiffs cannot be deemed to have received direct donation from the plaintiffs with the exercise interest acquired by the subsidiaries as shareholders of a separate subsidiary, the disposition of this case is not subject to the imposition of gift tax.

Article 40 of the Inheritance Tax and Gift Tax Act

Daejeon High Court 2017-Nu-14579 ( May 24, 2018)

QQQ

a) the Director of the Tax Office

March 29, 2018

May 24, 2018

1. Quotation of judgment of the first instance;

The reasons why this Court has stated in this case shall not include any addition or addition as follows:

Since the reasoning of the judgment of the court of first instance is the same as that of the judgment of the court of first instance, it shall be quoted in accordance with Article 8(2) of the Administrative Litigation Act and Article 420 of

The ○ 6th parallel 4 to 7th parallel 14 are as follows.

Article 40(1) of the Inheritance Tax and Gift Tax Act is first considered as the basis for the disposition of the instant case.

Article 40 (1) of the Inheritance Tax and Gift Tax Act provides that "where profits falling under any of the following subparagraphs are acquired by converting into or exchanging convertible bonds, bonds with warrant (referring to warrant certificates if they are separated) or other stocks, or by accepting, acquiring or transferring bonds entitled to take over stocks (convertible bonds, etc.), or by converting into or exchanging stocks or accepting stocks with convertible bonds, etc., the amount equivalent to such profits shall be deemed the value of property donated to the person who has acquired such profits." Article 42 (1) of the Inheritance Tax and Gift Tax Act provides that "in cases where profits falling under any of the following subparagraphs, other than donations under Articles 33 through 39, 39-2, 39-3, 40, 41, 41-3 through 41-5, 44 and 45, such profits shall be deemed the value of property donated to the person who has acquired such profits:

Article 40 (1) 2 of the Inheritance Tax and Gift Tax Act applies to cases where the largest shareholder of a corporation that issued convertible bonds, etc. or his/her specially related person, who is a shareholder, has accepted them in excess of a certain number of shares from the corporation. PP is the largest shareholder of BB or his/her specially related person, who is not a shareholder, and Article 40 (1) 2 of the Inheritance Tax and Gift Tax Act

The term "gains accruing from conversion into or exchange with stocks or from the acquisition of stocks through exchange bonds, etc." subparagraph 3, and the term "gains accruing from the trading of convertible bonds, etc. or from conversion of convertible bonds, etc. into stocks" is similar to the methods and profits referred to in subparagraph 1 or 2, and the term "gains acquired directly or indirectly from a person with a special interest" shall be deemed as the value of property donated to the person who acquired such profits. However, the person who acquired profits from the exercise of the preemptive right of this case is merely the PP which

Comprehensively taking account of the fact that the shareholder, as a shareholder, obtained a benefit from the exercise of the instant preemptive right, or that it cannot be deemed that he/she obtained a benefit directly or indirectly from a specially related person by converting the shares with convertible bonds, etc., Article 40(1)2 and 3 of the Inheritance Tax and Gift Tax Act cannot be deemed as the grounds for the instant disposition.

(2) Next, Article 42(1) of the Inheritance Tax and Gift Tax Act can be the basis for the instant disposition.

subsection (3) of this section.

Articles 33 through 39, 39-2, 39-3, and 40 of the Inheritance Tax and Gift Tax Act;

In addition to donations under Articles 41, 41-3 through 41-5, 44, and 45, where profits falling under any of the following subparagraphs and above the standard prescribed by Presidential Decree have been acquired, such profits shall be deemed the value of donated property to the person who has acquired such profits, and subparagraph 3 of Article 41 provides that "the profits shall be the value of donated property to the person who has acquired such profits," and subparagraph 3 of Article 40 provides that "the profits acquired from the transactions which increase or decrease the capital (including the amount of investment) of a corporation, such as investment, reduction, merger (including a division and merger), merger (including a division and merger), and conversion, acquisition, and exchange of stocks in convertible bonds, etc. under Article 40 (1), or profits acquired from the change in the ownership shares or the value of the assets due to the change in the organization, etc. In such cases, such profits shall be the value calculated by subtracting the value of stocks, etc. from the value of

Pursuant to Article 42 (1) 3 of the Inheritance Tax and Gift Tax Act, bonds, etc. under Article 40 (1) of the same Act

The aforementioned provisions stipulate that the profits from the transaction of increasing or reducing the capital of a corporation, such as conversion, acquisition, and exchange of shares, shall be deemed as the value of the property donated to the person who acquired the profits from the transaction of increasing or decreasing the value of the shares. The person who acquired profits from the exercise of the preemptive right of this case can be deemed as the Plaintiffs.

As such, Article 42(1)3 of the Inheritance Tax and Gift Tax Act cannot be the basis for the instant disposition.

(3) Lastly, Article 2(3) of the Inheritance Tax and Gift Tax Act can be the basis for the instant disposition.

subsection (3) of this section.

Article 2(3) of the Inheritance Tax and Gift Tax Act was introduced in order to solve problems that could not be dealt with in advance with a new type of gift tax. As seen earlier, the acquisition of profits from the exercise of preemptive rights cannot be deemed a new type of illegal gift that could not be predicted by the type of transaction under Articles 40(1) and 42(1) of the Inheritance Tax and Gift Tax Act. In other words, Articles 40(1) and 42(1) of the Inheritance Tax and Gift Tax Act provide that the separate provision on the assessment of values limits only a certain transaction or act to be subject to gift tax, and set the scope and limit of taxation of gift tax by stipulating that the scope of taxation was limited by limiting the scope of taxation of gift tax by applying Article 2(3) of the Inheritance Tax and Gift Tax Act.

No gift tax may be imposed on the plaintiffs.

○ The 10th page 9 is as follows.

“The evidence mentioned above, as well as Gap’s evidence Nos. 5, 8, 13 through 24, as well as Eul’s evidence No. 3, 4, 11 through 15

○ The following shall be added to the pages 10, 12:

The Defendant asserts that, at the time of issuing the instant bonds, the cumulative earned surplus of bb reaches KRW 11,151,133,191 at the time of bb’s issuance of the instant bonds, and that the government received KRW 2,025,00,000 on June 3, 2009 from the Government, and KRW 1,000,000 on July 1, 2009 from the Government, there was no need for financing.

However, the earned surplus means that the accumulated amount of profits generated after the incorporation of the enterprise has not been disposed of as capital or dividends, etc., bbb shall make a new facility investment.

(b) is not related to the funds that may be used by the State, and b. is determined to be received from the Government;

Since the principal was specified as "development of semiconductor waferer Transport Containers" at a 300-meter radius, it was not possible at the time to convert it into business funds in excess. Furthermore, bbb at the end of 2010.

If cash and cash assets have not been financed by KRW 6,00,00,000 through the bonds of this case as KRW 1,264,085,986, not by the bonds of this case, the cash and cash assets would have been significantly deficient in around 2010. Therefore, it cannot be readily concluded that BB issued the bonds of this case without the necessity of financing solely on the basis of the circumstance asserted by the Defendant.

○ 12 pages 8 to 13 are as follows.

[6] Plaintiff Cc and e are put up by Plaintiff DD before the date of establishment of PP.

From the date of donation of KRW 120,000, each of which was received from Plaintiff D and set up jjj as its capital contribution, and PP recognizes that there was no tax base and output tax amount at all during the first quarter of March 201 after its establishment on March 2010. The Defendant asserts that PP was a company established for the purpose of donation of property to Plaintiff CC, etc., for which Plaintiff DD is an entity, based on the foregoing facts, etc.

However, PP, after its establishment on March 11, 2010, has proceeded with local projects in the Philippines.

In fact, on July 9, 2010, the Board of Directors approved local investments in the Philippines, and on August 2010, PP (kk) COMPOTRATON, a local subsidiary of the Philippines, was established.

Then, around September 9, 2010, a land lease agreement was concluded with the Mm Development Corporation (CoC). On October 13, 2010, the registration of the business entity of the Philippines was completed, and the sales of KRW 1,004,683,340, 410,57,57,859, and KRW 1,448,945,302 were made for domestic and overseas goods. As such, since the PP has a business entity, the Defendant’s assertion was made.

It cannot be readily concluded that the PP is a company established for the purpose of donation of property.

2. Conclusion

Therefore, the judgment of the court of first instance is justifiable, and the defendant's appeal is dismissed, and it is so decided as per Disposition.

section 3.