Seoul Administrative Court 2010Guhap30581 ( October 03, 2011)

Cho High Court Decision 2009west3654 (Law No. 28, 2010)

The disposition imposing gift tax by supplementary evaluation methods without recognizing the value of stock transaction as the market price is legitimate.

In light of the fact that the cash flow method, which is the method of evaluating stocks by an accounting firm, is inappropriate to view the current value of assets as the method of assessing the company's value through the future profit-making ability, the market price of stocks cannot be seen as the market price.

2011Nu13424 Revocation of disposition of imposing gift tax, etc.

XX

The Director of Gangnam District Office

Seoul Administrative Court Decision 2010Guhap30581 Decided March 3, 2011

August 24, 2011

October 19, 2011

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 imposition of gift tax of KRW 5,838,456,00 on May 6, 2009 and penalty tax of KRW 1,435,676,330 shall be revoked.

1. cite the judgment of the first instance;

The reasons why this Court is used in relation to this case are as follows. The reasons for this Court's decision are as follows: Article 8 (2) of the Administrative Litigation Act and the main sentence of Article 420 of the Civil Procedure Act.

○ 4 above 6th and below 6th and below 8th, the following relevant laws and regulations shall be added.

○ 7 Beginningly (2) in Section 3, the following shall be added in the preceding place:

② On July 21, 2008, XX deposited KRW 4 billion into the said new bank account under the Plaintiff’s name. The said money was used to repay the debt to the COMA, an existing major shareholder of the OOS-om.

○ 7 5) part of paragraph 5 (10-3) (10-3) below are as follows:

① On July 18, 2008, the first instance court (Seoul Central District Court 2008Gahap128186) held that “the Plaintiff’s sales price for △△△△△△△△△△△△, etc., purchased KRW 6 billion shares at KRW 3,000,000,000 from the Plaintiff and became the largest shareholder (7.67%).” The first instance court (Seoul Central District Court 2008Gahap128186), upon filing a civil suit against △△, filed a lawsuit to return the said money to △△, etc., and held that “the Plaintiff” purchased the business rights of ○ shares and △△△△△△△△△ (the automatic site on the website operated by △△△△△△△△△△△△△) as part of the price.” The appellate court (Seoul High Court 2010Na40781) held that “the Plaintiff leased the said money to △△△△△, not the sales price for △△△.

② On July 28, 2008, the rightA acquired 4 billion won from the Plaintiff (2) (2) / [4] 1.6 million won per share of 2,500 won per share and became 2,500 won per share of 200,000 won and became 2 p 2 major shareholders (5.78%) (5.78%).

③ On July 23, 2008, the Plaintiff purchased shares 1,333,333 shares (name 1 million + 333,333 shares) in KRW 3,00 per share of the remaining transfer proceeds.

On September 23, 2008, the Plaintiff was selected and appointed as a director and a representative director and managed XX. On November 3, 2008, the Plaintiff drafted a pledge agreement with the △- youth creation investment association under the name of ChoB and KimCC, a creditor for the OOS Patom, on November 3, 2008, and entered the said shares into the said agreement with 3 million shares in the name of ChoB and KimCC.

○ 7 pages (based on recognition) add “Ap. 9, 21” to the column.

○ 8 1) part of paragraph (1) (the 8th th st st st st st st st st st st st st st st st) is as follows:

A) The Plaintiff was the largest shareholder of the Osom. Since the instant contract was not only the instant shares but also the Osom transfer to the management right, the instant transaction amount should be deemed to include a special value that can exercise management rights or control rights in addition to the value of the instant shares per se (hereinafter referred to as “net stock value”). A large number of shares were acquired in 1 week as part of the transfer price, and thereafter, the Plaintiff was able to continue to exercise management rights for Osom whose shares are held in 10% by taking office in x representative director and hold office in x. Thus, it is difficult to view that the instant transaction value is limited to pure share value that does not include management rights-based share value.

The Defendant: (a) deemed that the transfer of shares falls under a high-priced transfer under Article 35(2) of the Inheritance Tax and Gift Tax Act (hereinafter “Inheritance Tax and Gift Tax Act”); and (b) imposed gift tax on the Plaintiff, the transferor, who is the Plaintiff on the amount corresponding to the difference between the transaction amount and the market price recognized by the Defendant. The same holds true that the transfer of management right also should be subject to legitimate taxation (Article 31(1) of the Inheritance Tax and Gift Tax Act provides that the donated property includes all the articles having economic value that can be realized in money and all the de facto or de facto rights having property value that can be realized in money, and Article 35 provides that “property subject to transfer at high-value and low-price” is subject to transfer). Accordingly, the issue of the instant case is whether and to the extent

B) The Plaintiff asserts that the market value of pure stock value reaches KRW 35,110,00, based on the previous transaction cases, the accounting firm’s evaluation results, etc., and that KRW 35,107,00,000,000,000,000,000,000,000,000,000,000,000,000,00

The court's reasons for this part are as stated in the 7th line-10th below below among the judgment of the first island. However, the 6-4th line portion below the 10th line was made before about 1 year and 3 months from the contract of this case, and there is a considerable interval of time. DoD acquired 31,31 share shares from the 00mom and transferred 19,938 shares among them to GaE on September 28, 2007, and GaE transferred all of the above shares to the plaintiff on April 1, 2008, and all of the above transaction values were the same 35,110 won per share. OE has continuously deteriorated since 2005, anti-D is deemed to have been freely established in view of the fact that anti-OD shares were acquired by a large number of shareholders, and that it is difficult to view it as the price applied to the above ▽-13th class company in light of the fact that the above trading is no longer applied to a large number of shareholders.

C) Article 60(1) of the Inheritance Tax and Gift Tax Act provides that the value of donated property shall be calculated based on the market price as of the date of donation, and Article 60(3) provides that where it is difficult to calculate the market price, it shall be calculated based on the value appraised by the method prescribed in Articles 61 through 65. Article 63(1)1(c) of the Inheritance Tax and Gift Tax Act provides that an unlisted share shall be appraised by the method prescribed by the Presidential Decree in consideration of the relevant corporation’s assets and profits, etc., and Article 63(3) provides that the amount of shares owned by the largest shareholder shall be added to the value assessed by the method prescribed in Article 54(4)1 of the Enforcement Decree of the Inheritance Tax and Gift Tax Act. However, Article 54(3) of the Inheritance Tax and Gift Tax Act and Article 63(3) of the Inheritance Tax and Gift Tax Act provides that the provision on appraisal of the largest shareholder shall not apply to the value of shares held by a corporation that has losses continuously from the business year before the evaluation date.

The instant shares are unlisted stocks owned by the largest shareholder and are difficult to calculate the market price, and the Osom recorded the enemy continuously in the year 2005-2007 corresponding to the three business years prior to the base date of appraisal for the business year 2008. The pure share value assessed according to the net asset value of the instant shares is KRW 4,830, and there is no room for application of the provision on the assessment of the largest shareholder’s discount (0 won in the operating price). The market price calculated according to the supplementary assessment method under the Inheritance Tax and Gift Tax Act (the Inheritance Tax and Gift Tax Act) is KRW 4,830. The Plaintiff transferred the instant shares at a price significantly higher than the market price, and there is no special circumstance to justify this in light of transaction practices. The Plaintiff’s assertion on this part is

2. Conclusion

The appeal is dismissed.