It is not sufficient to recognize that the transfer was at a price significantly higher than the market price without justifiable reasons in the practice of transaction.

Since business example reflects the objective exchange values of the shares at the time of transfer of the shares in this case, it constitutes the market price of the shares in this case. However, the evidence submitted by the defendant alone is insufficient to recognize that the plaintiff transferred the shares in this case at a price significantly higher than the market price without justifiable reasons in light of

Article 35 of the Inheritance Tax and Gift Tax Act

2014Guhap51487 Revocation of Disposition of Imposition of Gift Tax

NewA

Head of the Do Tax Office

June 13, 2014

July 4, 2014

1. The Defendant’s disposition of imposition of the gift tax on the gift of July 1, 2010 against the Plaintiff on September 1, 2012 is revoked entirely by either OOO or OOOO or OOOO, or OO or OO on November 29, 2010.

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

Cheong-gu Office

The same shall apply to the order.

1. Details of the disposition;

"A. The plaintiff is a shareholder of BB (hereinafter referred to as "the company in this case") and the representative director, and is a shareholder of CCC (hereinafter referred to as "CC").", "B. The plaintiff, as listed below, assigned 78,400 shares of the company in this case (hereinafter referred to as "the shares in this case") excluding 35,000 shares that were transferred toCC among the 113,400 shares of the company in this case (hereinafter referred to as "the shares in this case"), "The plaintiff transferred 78,400 shares, excluding 35,00 shares that were transferred toCC among the above 113,40 shares, to the company in this case."

transferor

Date and

A transferee

Quantity

Amount

on 07 01 October 201

DD

20,000

OOO

EE

10,000

OOO

November 27, 2010

CC

35,000

OOO

November 29, 2010

EE

48,400

OOO

Consolidateds

113,400

OOO

C. The Defendant determined that the Plaintiff transferred the instant shares at a price substantially higher than the market price without justifiable grounds in light of the transactional practice by deeming the market price of the instant shares as an OOOOO, and determined and notified the Plaintiff on September 1, 2012 pursuant to Article 35 of the former Inheritance Tax and Gift Tax Act (amended by Act No. 10411, Dec. 27, 2010; hereinafter the same shall apply) of the former Inheritance Tax and Gift Tax Act (amended by Act No. 10411, Sept. 1, 2012), “OOOO and OOOOO of the gift tax donated on Nov. 29, 2010 (hereinafter “instant disposition”).” (d) The Plaintiff dissatisfied with the request to the Tax Tribunal for the adjudication on October 4, 2012, but was dismissed on October 30, 2013.

[Reasons for Recognition] Unsatisfy, Gap evidence 1 to 3 (including each number, hereinafter the same shall apply), Eul evidence 1, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

“1) On June 21, 2010, GG accounting corporation (hereinafter “GG”) assessed the value of the instant shares as OOOO or an accounting corporation HH (hereinafter “H”) on June 29, 2010, based on the estimated sales amount, etc. of the instant shares. The minority shareholders assessed the value of the instant shares as OOO per share, but they did not properly reflect the objective exchange value of the instant shares. In light of the fact that the market value of the instant shares is an OOOO per share, the market value of the instant shares should be deemed to be KRW 2), even if the Plaintiff did not exercise management rights over the instant shares at the time of transfer of the instant shares, taking into account that there is no possibility that the Plaintiff would exercise management rights over the instant shares, rather than that of the instant shares when GG and HH were transferred, the Plaintiff could not exercise management rights over the instant shares at a relatively higher price than that of the instant shares.

B. Relevant statutes

It is as shown in the attached Form.

C. Facts of recognition

1) The current status of shareholders of DDR with the instant company (as of December 31, 2009) is as follows:

[Attachment] - Plaintiffs 113,400 (53.16%) and DD 373,699 note (2.39%)

2) Kim II, etc. transferred the aggregate of 9,000 shares of the instant company to KimJ, etc. per share to OO or OOO.

[Attachment] Omission

3) On June 21, 2010, GG assessed the value of the instant shares as KRW OO per share, and HH assessed the value of the instant shares as KRW OO per share on June 29, 2010. The sales and net income (201 years, 201) of the instant company presumed by GG and HH, as well as the actual sales and net income (2007 to 2011) of the instant company, are as follows.

[Attachment] Omission

4) On June 29, 2010, the instant company entered into an agreement with DDR for the implementation of partnership linkage projects, and the main contents thereof are as follows.

Article 1 (Purpose)

The purpose of this Agreement is to contribute to mutual development by strengthening the strategic cooperation system for the common interest in connection with the promotion of new projects for power expansion projects, special category telecommunications projects and smartphone infrastructure.

Article 2 (Scope of Affairs to be Implemented)

(a) The scope of the promotional work is as follows:

- cooperation in the operation and marketing of electric power generators;

- Development of infrastructure and solution for special category telecommunications business, joint business and development of new projects;

- Development of new services projects based on smartphones

(b) the Parties may develop further projects consistent with the objectives of this Agreement;

5) On July 1, 2010, the Plaintiff acquired 2,300,000 new shares of DD to OO per share, and acquired 3,181,818 shares of DD to OO on December 7, 2010.

6) The shareholders status of DDR with the instant company (as of December 31, 2010) are as follows.

[Attachment] omitted - The Company of this case: DD 24,000 (11.25%) and EE 103,400 (48.47%)

DD: Plaintiffs 5,481,818 Shares (18.42%)

7) On January 4, 2012, the Plaintiff was appointed as the representative director of DDR.

[Reasons for Recognition] Unsatisfy, Gap evidence Nos. 4 through 8, 11, 12, 17 through 21, Eul evidence Nos. 2 and 4 through 7, the purport of the whole pleadings

D. Determination

1) Determination on the first argument

Article 60 (1) of the former Inheritance Tax and Gift Tax Act provides that "The market price under paragraph (2) of the same Article shall be determined by the market price as of the date of donation." Since the market price of the above paragraph (1) of the same Article shall be determined by the prices generally recognized as being established when transactions are freely conducted between many and unspecified persons, and shall include those recognized as the market price as prescribed by Presidential Decree, such as the expropriation price, public auction price, appraisal price, etc.," and Article 49 (1) of the Enforcement Decree of the same Act (amended by Presidential Decree No. 22516, Dec. 7, 2010; hereinafter referred to as the "former Enforcement Decree of the Inheritance Tax and Gift Tax Act") provides that "it shall be determined as the market price that is recognized as the market price of the above 20-month shares that are transferred to the transferor, etc., within 3 months before and after the date of donation." Since the above provision provides that the plaintiff's sale of the shares at issue shall be determined as the market price of the above 20-mentioned shares.

2) Determination on the second argument

Article 35(2) of the former Inheritance Tax and Gift Tax Act provides that “If an entity that is not a party with a special relationship transfers property at a price significantly higher than the market price of the company’s new shares, the amount equivalent to the profits prescribed by the Presidential Decree shall be deemed as the value of donated property to the entity that acquired the profits.” Article 26(6) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act provides that “The value at which the price is lower than 30/100 of the market price of the acquired property is considerably different” (Article 35(2) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act provides that “The legislative purport of Article 35(2) of the former Inheritance Tax and Gift Tax Act is that: (a) the acquisition of the pertinent property is 00,000 won and 20,000,000 won and 30,000,000 won and 20,000 won and 2,000,000 won and 2,00.

However, the following circumstances revealed in addition to the above evidence and the purport of the oral argument, i.e., ① the Plaintiff appears to have not been in a position to exercise influence over the above company because it did not hold the shares of DDR and EE before July 1, 2010. ② The sales amount of the instant company is merely approximately KRW 000,000 as non-listed corporations, whereas DD does not appear to have any imbalance in the negotiation power of the parties to the instant shares because its sales amount for 2010 reaches approximately KRW 0,000,000,000,000 KRW 30,000,000,000,000,000,000 per share, and KRW 1,000,000,000,000,000,000,000,000,000,000,000,000,000.

3. Conclusion

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