National High Court Decision 2007Du4657 (Ob. 21, 2008)

Whether the shares which have been provided as security for the implementation of the agreement have been acquired in accordance with the failure to reach agreement

Where stocks provided for the purpose of securing the fulfillment of the agreement are acquired as a result of the failure to reach the agreement, the stocks shall not be acquired without compensation, but the penalty and compensation received due to the breach or termination of the contract shall be deemed to constitute the receipt of the stocks

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

Article 2 (Gift Tax Taxables)

Article 4 (Gift Tax Liability)

1. The Defendant’s imposition of gift tax of KRW 781,320,060 against the Plaintiff on July 12, 2007 shall be revoked.

2. The costs of the lawsuit are assessed against the defendant.

The same shall apply to the order.

1. Details of the disposition;

The following facts are not disputed between the parties, or may be acknowledged by comprehensively taking into account the overall purport of the arguments in each of the statements in Gap evidence 1-1-2, Gap evidence 2-2, Gap evidence 3, and Eul evidence 1-2, Gap evidence 7, 9-1, Eul evidence 1-2, Eul evidence 2-3, Eul evidence 5-1, Eul evidence 3, Eul evidence 5-2, Eul evidence 6, 7-1, 2, and 3, respectively:

A. On November 10, 1998, 200,000 capital was invested in 50% of each of the 50% shares of 1998, Kim Jong-han and his wife, and the 00,000 capital was changed to 10,00,000 capital (Issuance shares 2,00,000,000 per share value 5,000 won per share value) ○○ Start-up Investment Co.,, Ltd. (○○○○○○○○, Inc., Ltd., on August 18, 1999; 2003. 3. ○○○○, Inc., 2003; 2006. 9. 9. 9. 24. 2007. 1. 2007. 207. 3. 3. 3. 2. 3. 3. 2. 2. 3. 3. 2007.

B. On July 15, 1999, the Plaintiff acquired 1,000,000 shares of Nonparty Company’s 5,000,000,000 shares, and 1,446,000 shares on August 20, 199 through new shares subscription respectively. On October 15, 1999, the Plaintiff acquired 3,00,000,000 shares of Nonparty Company’s shares at the request of Nonparty Company to call the above convertible shares with shares (this increase from 10,00,000 to 23,230,000,000 shares at the time of incorporation, and the total number of shares to 4,64,00 shares to 46,00 shares, respectively).

C. Meanwhile, on June 15, 200, the Plaintiff transferred 535,503 shares of the non-party company's shares to ○○○○○ Co., Ltd. (hereinafter "○○○ Government") 214,201 shares from 321,30 shares to ○○○ Government Co., Ltd. (hereinafter "○○ Government") without receiving any separate payment. Then, on February 18, 2002, the Plaintiff received 748,006 shares of the non-party company (hereinafter "the shares of this case") from ○○○ Government from ○○○ Co., Ltd. (hereinafter "○ Government") and received 748,006 shares of the non-party company (hereinafter "the shares of this case"). The Director of the Seoul Regional Tax Office assessed the non-party company's tax investigation on the non-party company from 1 November 2006 to 12, 2006, and considered that the Plaintiff received 201 share shares from 2016.

D. However, on January 2007, the plaintiff filed an objection with the director of the Seoul Regional Tax Office, and on June 27, 2007, the director of the Seoul Regional Tax Office rendered a partial decision of acceptance to the effect that the application of the premium rate (30%) against the largest shareholder, which was the premise of the above disposition, was excluded

E. Accordingly, on June 17, 2008, the defendant decided to exclude the application of the premium rate for each share to the largest shareholder, which is the premise of the above disposition, from the original 3,120 won to the 2,400 won, and to ex officio reduce the amount of KRW 1,082,916,082 as gift tax for the year 2002 to KRW 781,320,060 (the above disposition of this case was taken).

F. On October 5, 2007, the Plaintiff appealed to the National Tax Tribunal, but was dismissed on February 21, 2008.

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The reason why the Plaintiff acquired the shares of this case from the Kim ○ on February 18, 2002 without compensation is that the non-party company's shares 1,071,006 shares owned by the Plaintiff were transferred to Kim ○ on June 15, 200, the non-party company Kim ○, Lee ○, and ○○ Government, known to the fact that the transfer without compensation was caused by fraud, and subsequently offered to Kim ○○ that he would withdraw various legal measures against this, and that he returned the shares of this case to the Plaintiff to this end. This is merely a reinstatement due to the cancellation of the contract of donation as declared by fraud on June 15, 200, which is not a subject of inheritance tax and gift tax under Article 2 (1) of the Inheritance Tax and Gift Tax Act, but the disposition otherwise reported is unlawful.

(b) Related statutes;

Article 2 (Gift Tax Taxables)

Article 4 (Gift Tax Liability)

(c) Fact of recognition;

The following facts are not disputed between the parties or may be acknowledged by comprehensively taking into account the following facts: Gap evidence 1-2, Gap evidence 2-2, Eul evidence 3-1, 2-2, Gap evidence 4-1, 7, 8, 10, Gap evidence 11-1, 2, 3, Gap evidence 12-1, 8, 13, 14, 15, 2-1 through 5, Eul evidence 2-1, 3, 4, 5-1, 5-1, 6, 7-1, 2, 3-2, and 3-1, 4, and 5-1, 6, and 7-1, 2, and 3-1, 3-2, and 4-2, and 4-1, 2, 8, and 11-1, 8-1, 12-3, and 15-2

(1) On November 10, 1998, Kim ○-han and Lee ○-Dup established a non-party company of KRW 10,000,000 in capital (Issuance Shares 2,00,000,000, and KRW 5,000 in face value per share) by investing 50% of each of the 50% equity shares.

(2) Kim Jong-soo borrowed 5,00,000 won of his share in a lump sum and deposited as a capital and received a share capital payment certificate, and repaid it. Under the financial status of the non-party company, the account was managed in installments as if it acquired securities, etc. or lent money to another person.

(3) On the other hand, the plaintiff was recommended to invest in the non-party company from the non-party company, and the non-party company's shares were acquired at KRW 5,00 per share with a face value of 1,00,000 per share, and the shares of the non-party company were assessed at the last value of 1,000 won or more per share, the plaintiff made an oral agreement to transfer part of the shares acquired by the plaintiff to the non-party company Kim ○, Lee ○, and ○○ Government (hereinafter the agreement in this case) without compensation. On July 15, 1999, the non-party company's shares were acquired at KRW 1,446,000 on August 20, 199 through the non-party company's share acquisition at KRW 7,230,000,000 per share with a face value of 1,000 or more per share, and the ratio was 5,000,000 shares acquired at the non-party company's shares (the non-party company's shares acquired at KRW 2005,2000.

(4) On June 15, 200, Kim Jong-han, in fact, requested the Plaintiff to implement the instant agreement by deceiving the Plaintiff that the value per share of the non-party company’s stocks exceeds 10,000 won under the financial structure of the non-party company, despite the fact that the value per share does not reach 10,000 won due to the fictitious payment and window dressing accounting as stated in paragraph (2) above. Accordingly, on June 15, 2000, the Plaintiff transferred 535,503 shares out of the non-party company’s shares owned by himself, 321,302 shares to the ○○○○○○○, and 214,201 shares to the ○○○○○○○○, 33,05 percent on the side of the ○○○○, 33,05 percent on the side of this point, and 33,33,90 percent on the part of this case’s shares (this share ratio was changed).

(5) After that, the number of directors in charge of accounting of the non-party company was ordered by the plaintiff to report the financial status of the non-party company in the second half of 2000, and reported to the plaintiff the fact of the best payment and the window dressing accounting in the second half of 2000.

(6) Accordingly, the plaintiff argued that he would have lowered the value of the shares of the non-party company owned by himself due to the fictitious payment and the window dressing accounting of Kim ○, and that he would withdraw various legal measures. The Kim ○ promised that the plaintiff would pay KRW 5,000,000,000, which was the most paid to the non-party company.

(7) However, the Plaintiff and Kim Jong-han et al. (hereinafter “○○, et al.”) failed to observe the commitments set forth in the above Paragraph (6), and the following agreements were reached around February 12, 2001 (hereinafter “the first agreement”) around 12, 2001 on the following (hereinafter “the first agreement”), and held 921,302 shares, which were held by Kim Il-○ et al. as collateral.

The ○○, etc. shall sell to a third party the shares of the non-party company 3,071,006, which they hold, until February 12, 2002, and pay to the non-party company the amount equivalent to KRW 5,00,000,000, which was calculated by the Kim○ as the proceeds from the sale of the shares in a separate account.

If the contents of the above agreement are not fulfilled, the shares of the non-party company offered as security for the implementation of the above agreement shall be transferred to the plaintiff free of charge.

(8) However, the time limit for the implementation of the first agreement of this case ( February 12, 2002) was imminent and there was a high possibility that all shares 921,302 shares kept for the purpose of security will be transferred to the Plaintiff, and the management right of the non-party company would be exceeded together with the non-party company. This ○○ is the Plaintiff around January 2002, 748,006 shares out of 921,302 shares held for the purpose of security (the shares of this case) held by the Plaintiff and the remaining 173,296 shares owned by the Plaintiff and the non-party company jointly run the non-party company with 50% shares in this case. The Plaintiff believed that the investment funds would be recovered if normalized.

In accordance with the agreement on the same content as the above proposal (hereinafter referred to as the second agreement of this case), the shares of this case were transferred without compensation from the 921,302 shares in custody for the security purpose on February 18, 2002.

(9) Meanwhile, at the time of the Plaintiff’s transfer of the instant shares under the second agreement, the Plaintiff entered into a sales contract of the shares in which the Plaintiff entered as the buyer, and as the buyer, the Plaintiff entered as the seller Kim○.

D. Determination

(1) First of all, the plaintiff argued to the effect that the contract of donation of June 15, 200 was cancelled by fraudulent declaration of intention, and that it was returned to the original state. However, according to the above facts, the plaintiff was aware of the fact that the contract of donation of June 15, 200, and then caused the decrease in the value of the shares, and it is difficult to acknowledge that the contract of donation of this case was cancelled, and there was no other evidence to acknowledge that the plaintiff was transferred the shares of the non-party to the non-party to recover the actual value of the shares of the non-party company by allowing the non-party to pay the capital of KRW 5,00,000,000, which was the most paid to the non-party company, to compensate for damages by recovering the actual value of the shares of the non-party company. The plaintiff demanded the Kim ○ et al. to provide the non-party company's shares as a collateral to secure the implementation of the agreement, since the contract was not implemented, it is difficult to recognize that the shares were returned to the original state.

(2) In addition, there is no room to view that the Plaintiff’s transfer of the instant shares from the part of the shares originally donated by the Plaintiff on June 15, 2000 upon the rescission of a partial agreement on the donation contract on February 18, 2002 by the second agreement of this case.

According to Article 31(5) of the Inheritance Tax and Gift Tax Act, the gift tax shall not be imposed on the donation of the property (excluding money) donated to the donee within three months after the expiration of the time limit for report under Article 68. Article 68 of the same Act provides that the time limit for report shall be three months from the donation date. On the other hand, according to the above facts acknowledged, the Plaintiff donated the shares 1,071,006 of the non-party company to the non-party company to the non-party company Kim ○, Lee ○, and ○○, and the non-party company's shares 1,071,006 shares to the non-party company to the non-party company on June 15, 200, and only on February 18, 2002 after the expiration of the time limit for report (see, e.g., Supreme Court Decision 97Nu19879, Feb. 18, 2002).

(3) As seen earlier, it is reasonable to view that the Plaintiff was not a transfer of the instant shares from the part of Kim○ through the cancellation or cancellation of the donation contract. However, as seen earlier, the Plaintiff agreed to transfer 921,302 shares of the non-party company as the liquidated damages amount in the event that Kim○ et al. failed to perform the obligation under the above agreement with Kim○, etc. for the purpose of securing the performance of the agreement (it is unclear whether such agreement is a penalty for breach of contract or a liquidated damages amount, but whether such agreement is a penalty for breach of contract or a liquidated damages amount is presumed to be a liquidated damages amount pursuant to Article 398 (3) of the Civil Act), and the disposal of the instant shares by reducing the amount of damages by the reduction of the amount of damages through the second agreement, and thus, the Plaintiff received the instant shares without compensation, which constitutes a violation of Article 2 (1) of the Inheritance Tax and Gift Tax Act (amended by Act No. 7060, Dec. 30, 2003).

3. Conclusion

Therefore, the plaintiff's claim of this case is reasonable, and it is decided as per Disposition by admitting it.