Cheongju District Court-2015-Gu Partnership-1627 ( October 21, 2016)

It is unreasonable to assess the value of shares by applying the weighted average value of net profit and loss per share for the last three years.

Although it does not fall under the exception of each subparagraph of Article 17-3(1) of the former Enforcement Rule of the Inheritance Tax and Gift Tax Act, the net profit and loss per share shall be calculated as the "presumptive profit under Article 56(1)2 of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act". The disposition of this case calculated the appraised value per share of the stocks of this case by the "average average amount of net profit and loss for the last three

Article 60 of the former Inheritance Tax and Gift Tax Act; Articles 54 and 56 of the Enforcement Decree thereof

Daejeon High Court (Cheongju)-2016-Nu-10245 ( November 09, 2016)

The circumstances after the evaluation date also coincide with the expected future profit of this company.

2011 201 2013 2013

Sales 5,610 6,038 6,410 5,342 2,908

Operating income 1,068 1,132 1,730 570 -179

Head office farm** farm** Ri farm

Area

Site 28,409 square meters

Building 7,830 square meters

16,457 square meters of a building site

Building 4,192С

Site 28,409 square meters

Building 3,150 square meters

2,500 Mad Mad Mad 200 Mad Mad Mad 200 Mad Mad Mad Mad Mad 1

'The weighted average amount of net profit and loss for the last three years' that appears to be unable to properly reflect such amount.

It is unreasonable to assess the value of the shares of this case.

(A) The instant company’s accident compensation amounting to KRW 2,380,971,820 due to the outbreak of the 201 remedy station.

Benefits, around July 201, 201 ** Liven farm, each acquisition of KRW 2,623,383,300 for the adjudication compensation, respectively.

(67.1%) of the profits prior to sales (67.1%) in 2011 due to the rapid increase of net profits and losses, such as the amount of net profits and losses.

The rapid increase of more than four times compared to the year 2009(16.7%) and year 2010(14.3%).

(1) The ratio of profits and losses that occurred temporarily is higher, and the nature of such profits and losses may continue to occur.

It is judged that it is not.

(B) In the meantime, the instant company also sold the Dogsan farm around April 2012 and thereafter:

[Ban 1] As seen in Table 1, the total size of the farm has decreased substantially to half, and the head of the farm industry experts.

As a result, the husband of the Plaintiff, who operated the instant company, died on July 15, 2012.

(C) Each of the instant companies in 2012 and 2013 under the actual influence of such circumstances.

The "amount of withdrawal" and "business profits" have been reduced significantly compared to the year 201 as shown below.

[Attachment 1] The area and size of each farm of the instant company

[Attachment 2] The sales and operating profits (unit: KRW 00,000) of the Company for each business year

(3) Therefore, even though the shares of this case were shares, Article 17-3 (1) of the former Enforcement Rule of the Inheritance Tax and Gift Tax Act

Although it does not constitute an exception under the following subparagraphs, Article 56 (1) 2 of the Enforcement Decree of the Inheritance Tax and Gift Tax Act

The net profit and loss per share shall be calculated as "presumed profit and loss," and the net profit and loss per share for the last three years.

The appraisal value per share of the shares of this case shall be calculated on an weighted average of 139,370 won (139,370 won).

Dispositions are illegal.

4) Whether a reasonable inheritance tax amount to be imposed on the Plaintiff is calculated

Under the premise of the above determination, the Health Board on the legitimate amount of inheritance tax against the plaintiff;

In other words, the Plaintiff’s request is based on the overall evidence and the purport of the entire pleadings.

with respect to "The estimated interest per share (37,770 won) of the stock of this case" assessed by two accounting firms:

Comprehensively considering all the high-priced evidence submitted, it is difficult to determine the appropriateness thereof.

* According to the stock value assessment report (Evidence A 5) by accounting firm, as to the estimated interest per share above:

*** an accounting firm 3,953 won,** an accounting firm 3,601 won, respectively, and 3,777, the average amount thereof.

It can be known that the source was determined as KRW 37,770 by dividing it by net value exchange rate of profit and loss (10%) and each account;

(2) The net asset value per share of the shares of this case

The amount calculated by the Plaintiff (42,067 won) and the Defendant (59,256 won) is not in accord (the Plaintiff is the State in this case).

Article 54 (4) 1 of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act (Continuance of business due to the death of the businessman)

In the calculation of the net asset value pursuant to Article 55 (3) 1 while falling under the shares of a corporation difficult to do so.

In this case, "the appraised value of business rights" was not added to the value of assets, but as seen earlier, the shares of this case.

Considering that the above case falls under Article 54 (4) 1 of the Act, this case is ultimately subject to consideration.

Since the amount of inheritance tax to be imposed on the Plaintiff cannot be calculated, the disposition of this case

The Defendant is bound to cancel the entire disposition of this case when the revocation of the disposition of this case becomes final and conclusive.

‘presumive interest per share' in accordance with the judgment above for the accurate valuation of

Based on the plaintiff's legitimate amount of inheritance tax, the amount of inheritance tax should be determined.

3. Conclusion

If so, the plaintiff's claim is reasonable, and the court of first instance which has concluded otherwise.

Since the judgment is improper, the plaintiff's appeal is accepted and the judgment of the first instance is revoked and the plaintiff's appeal is dismissed

It is so decided as per Disposition.

KimA

Head of Dong District Office

National Rotations

oly 12, 2016

November 09, 2016

1. Revocation of a judgment of the first instance;

2. The Defendant’s disposition of imposition of KRW 2,863,697,160 against the Plaintiff on March 10, 2014 is revoked.

3. All costs of the lawsuit shall be borne by the defendant.

The same shall apply to the order.

1. Details of the disposition;

The court's explanation on this part is consistent with the corresponding part of the reasoning of the judgment of the first instance, except where "O. 30, 2013" in the second and sixth 6th - of the judgment of the first instance is "O. 30, 2013", and therefore, it is identical to the corresponding part of the reasoning of the judgment of the first instance. Thus, it is acceptable in accordance with Article 8 (2) of the Administrative Litigation Act and the main sentence of Article 42

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

For the following reasons, the instant disposition that the Defendant calculated the value per share on the basis of the weighted average amount of net profit and loss per share for the last three years under Article 56(1)1 of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act shall be revoked as it is unlawful.

1) Since there is a "business example" for the shares of this case, it cannot be applied to the supplementary evaluation method of unlisted shares under the Inheritance Tax and Gift Tax Act in the value valuation per share of the shares of this case, and it shall be in accordance with the above value.

2) Even in cases where the supplementary evaluation method of unlisted stocks under the Inheritance Tax and Gift Tax Act is applied by deeming that no objective business example exists with respect to the instant shares, the Plaintiff’s husband, who had been operating the instant company as an expert in the breeding money industry, died on July 15, 2012, was entrusted to the instant company. In light of such circumstances, the instant shares fall under the “stocks of a corporation deemed difficult to continue business due to the death of the business owner, etc. within the inheritance tax return deadline” under Article 54(4) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act, and thus, the instant shares fall under the “stocks of a corporation that are deemed difficult to continue business due to the business’s death, etc.” (Article 1)

3) Even if the value of net profit and loss is reflected in the application of the supplementary evaluation method of non-listed stocks under the Inheritance Tax and Gift Tax Act, the company of this case shall apply the presumption profit and loss under Article 56(1)2 of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act, which constitutes "Article 17-3(1)2, 3, and 7 of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act, as it constitutes "Article 17-3(1)2, 3, and 56(1)2 of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act, which is an exceptional reason for which the "net profit and loss for the preceding three years" cannot be applied, and thus, the presumption profit and loss under Article 56(1)2 of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act should be applied.

4) Even if the above provision does not constitute an exception under any subparagraph of Article 17-3(1) of the former Enforcement Rule of the Inheritance Tax and Gift Tax Act, it is unreasonable for the company of this case to make the value under Article 56(1)1 of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act, such as an abnormal increase of the net profit and loss for the last three years due to the temporary and incidental circumstances that occurred before the base date of appraisal. As such, the "presumed profit" under Article 56(1)2 should be applied as the above exceptional reasons.

(b) Related statutes;

The court's explanation on this part is the same as the corresponding part of the reasoning of the judgment of the court of first instance. Thus, this part of the reasoning is cited in accordance with Article 8 (2) of the Administrative Litigation Act and Article 420 of the Civil Procedure Act.

C. Determination

1) Whether there exists any objective transaction example with respect to the instant shares

A) Relevant legal principles

Article 60 (1) of the Inheritance Tax and Gift Tax Act provides that "the value of the property on which the inheritance tax is levied shall be based on the market value as of the date on which the inheritance commences, and Article 60 (2) provides that "the market value under the provisions of Article 60 (1) of the Inheritance Tax and Gift Tax Act shall be the value generally recognized to be established in cases where a transaction is made freely between many and unspecified persons and shall include the amount recognized to be the market value under the conditions as prescribed by the Presidential Decree, such as the expropriation price, public sale price, appraisal price, etc.," and the main sentence of Article 49 (1) 1 of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act provides that "if the transaction value of the property is recognized to be unfair objectively, such transaction value shall be excluded from the case where the transaction value is recognized to be unfair objectively, such as the transaction value with a person with a special relationship." Meanwhile, Article 60 (3) of the Inheritance Tax and Gift Tax Act provides that "if it is difficult to calculate

Therefore, in the case of unlisted stocks with less market value, if there is a transaction example, the value of the stocks shall be evaluated as the market value and the value of the stocks shall not be evaluated by the supplementary evaluation method stipulated in the Inheritance Tax and Gift Tax Act. However, “market price” means the objective exchange price formed by the ordinary and normal transaction. Thus, in order to recognize such transaction value as the market price, the circumstances that can be seen as properly reflecting the objective exchange value at the time the inheritance commences by the ordinary and normal method should be acknowledged (see, e.g., Supreme Court Decision 2010Du26988, Apr. 26, 2012).

Based on the above legal principles, according to the health stand, the evidence and the purport of the entire pleadings as to the instant case, ① the Plaintiff transferred 7,500 shares of the instant company to Nonparty *,500 won per share on January 30, 2013 and January 31, 2013.****** the fact that the Plaintiff received KRW 600 million each of the shares of the instant company to 40,000, and ② the Plaintiff received KRW** and**** each of the above transfer dates.

However, the following circumstances acknowledged by the above evidence are as follows: ① (i) transaction as of January 30, 2013 and January 31, 2013 was conducted on the day ( January 30, 2013) and the following day on which the Plaintiff reported the inheritance tax by itself evaluating the value per share of the instant shares; (ii) it is difficult to eliminate the possibility of a transaction intended to recognize the value per share of the instant shares as the basis of the above inheritance tax return; (iii) more than the trading value per share of the instant shares (40,000 won per share) based on the above inheritance tax return is similar to the value per share of the instant shares (39,488 won), and there is no room to view that the said transaction value was determined by reflecting the above appraised value per share of the instant shares (30,000 won per share); and (iv) it is difficult to recognize that the amount equivalent to the above transaction value was deposited on the Plaintiff’s account as the total amount of non-listed shares as of January 30, 20131.

2) Article 54 of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act, which provides for the supplementary evaluation method of unlisted stocks, where a business is deemed difficult to continue due to the death of a business operator, shall, in principle, be based on the weighted average value of net profit and loss per share and net asset value per share in the ratio of 3 to 2. However, in cases where liquidation procedures of a corporation subject to evaluation are in progress within the deadline for filing the tax base, or where it is deemed difficult to continue business due to the death of the business operator, the net asset value per share can be assessed only.

B) Although the Plaintiff’s husband, who had been actually operating the instant company, died on July 15, 2012 and had been operating the instant company, the Plaintiff was deemed to have been operating the instant company. However, considering the other reasons under each subparagraph of Article 54(4) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act, which stipulates that the net asset value alone should be evaluated as unlisted stocks (the liquidation procedure is being in progress or is less than three years before the commencement of the business, the corporation under suspension or discontinuance of business, the corporation under suspension of business or closure of business, and the corporation under liquidation proceedings as deficit), even though there was a significant change such as the Plaintiff’s husband’s death, it is difficult to recognize that the Plaintiff’s profits and losses were generated through the instant company’s continued operation. The Plaintiff’s assertion is also without merit.

3) Whether Article 56(1)2 of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act applies to the legal principle

The court's explanation on this part is the same as the "paragraph (2)(c)(1) of the reasoning of the judgment of the court of first instance." Thus, it refers to Article 8(2) of the Administrative Litigation Act and the main sentence of Article 420 of the Civil Procedure Act.

B) The reasoning for the court’s explanation on each of the above parts is the same as the entry of each of the reasons for the judgment of the court of first instance, and thus, it can be accepted as it is in accordance with Article 8(2) of the Administrative Litigation Act and the main text of Article 420 of the Civil Procedure Act.

C) Article 17-3(1) of the former Enforcement Rule of the Inheritance Tax and Gift Tax Act provides that even if the company of this case does not fall under the "reasons for exception" under each subparagraph of Article 17-3(1) of the former Enforcement Rule of the Inheritance Tax and Gift Tax Act, it is reasonable to view the above provision as the "presumptive rule" in light of the legislative intent as follows. In other words, it is desirable to estimate the future profit and loss value of non-listed stocks in the method of assessing the current value after estimating the future profit and loss of the stocks. However, it is very difficult to accurately predict future profit and loss, and it is also difficult to calculate the net profit and loss value per share by applying Article 54(1) and Article 56(1)1 of the former Enforcement Rule of the Inheritance Tax and Gift Tax Act, which is the past performance, for the 20-year average profit and loss per share for the 10-year period after the commencement of the inheritance (see, e.g., Supreme Court Decision 201Du131401, May 214).