District Court-2015-Gu Partnership-7420 (No. 10, 2016)

Cho-2014-China-3410 ( November 25, 2014)

Whether the estimated amount of retirement allowances for officers may be added to the liabilities at the time of the evaluation of unlisted stocks;

In the absence of a provision on payment of retirement allowances for executives after a resolution of the general meeting of shareholders, it cannot be deemed that the obligation to pay retirement benefits to the director has been specifically realized.

Inheritance Tax and Gift Tax Act (Legal Fiction as Donation of Title Trust Property)

Seoul High Court 2016Nu47729 Revocation of Disposition of Imposing Gift Tax

IsaA

BB Director of the Tax Office

Suwon District Court Decision 2015Guhap7420 Decided May 10, 2016

October 19, 2016

November 9, 2016

1. The part against the defendant in the judgment of the court of first instance shall be revoked, and the plaintiff's lawsuit corresponding to the revoked part shall be dismissed;

2. The plaintiff's appeal is dismissed.

3. Of the total litigation costs, 50% is borne by the Plaintiff, and the remainder is borne by the Defendant, respectively.

1. Purport of claim

The Defendant’s disposition of imposition of gift tax of KRW 181,922,480 on November 7, 2013, in excess of KRW 124,630,630, which was imposed by the Plaintiff on November 7, 2013, shall be revoked.

2. Purport of appeal

The judgment of the court of first instance is modified as follows. On November 7, 2013, the part that exceeds KRW 149,910,143 among the disposition imposing gift tax of KRW 181,922,480 for the Plaintiff on November 7, 2013 (the Plaintiff sought to revoke the part that exceeds KRW 124,630,630 among the disposition imposing gift tax of KRW 181,92,480 for the Plaintiff (the Plaintiff’s appeal against the Defendant at the court of first instance). The court of first instance revoked the part that exceeds KRW 151,740,559 among the above disposition imposing penalty, and dismissed the remainder of the Plaintiff’s appeal. Accordingly, the Plaintiff did not appeal to the part that exceeds KRW 124,630,630 among the above disposition imposing penalty, and the part that exceeds KRW 149,910,143 shall be subject to the judgment of this court).

: Cancellation of the part of the judgment of the first instance, and the plaintiff's claim corresponding to the cancellation shall be dismissed.

1. Details of the disposition;

This Court's explanation is identical to the corresponding part of the judgment of the first instance except for the addition of the following in the second part of the judgment of the second instance under 18. Thus, this Court's explanation is acceptable as it is in accordance with Article 8 (2) of the Administrative Litigation Act, Article 420 of the Civil Procedure Act, and Article 420 of the Civil Procedure Act.

e. From October 25, 2016, the date of the closing of argument in the instant case, the Defendant rendered a decision to reduce the amount of more than 151,740,559 won of the instant disposition (the portion exceeding the tax amount calculated by applying the rate of general non-reported additional tax on the portion of the non-reported additional tax on the instant disposition) ex officio to ex officio revoke the said disposition (see, e.g., the Defendant’s document of November 1, 2016).

2. Whether the part concerning the claim for revocation of ex officio cancelled tax amount among the lawsuit in this case is legitimate

If an administrative disposition is revoked, such disposition shall lose its effect and shall no longer exist, and shall exist

A lawsuit seeking revocation against an administrative disposition is unlawful as there is no benefit of lawsuit (Supreme Court).

In December 13, 2012, 2012 (see, e.g., Supreme Court Decision 2012Du18202, Dec. 13, 2012). Ex officio, the Defendant rendered a decision of revocation of the ex officio revocation of the part exceeding KRW 151,740,559 (limited to the part against the Defendant among the judgment of the first instance court) of the instant disposition on October 25, 2016, which was after the closing of argument in the instant case. As seen earlier, the Defendant’s claim for revocation of the cancelled part among the instant lawsuit in the instant case is seeking revocation of the disposition due to its extinguishment, and is unlawful as there is no benefit

3. Whether the disposition is lawful;

A. The plaintiff's assertion

1) In assessing the value of the instant shares, the Defendant estimated the amount of retirement allowance for officers to pay the liabilities.

The value was over-assessment because of the absence of such value.

2) The Plaintiff filed a return after the deadline on November 30, 2012, which led to the underreporting of the report, is merely a cause of difference in the appraised value, and thus, imposing an additional tax on non-declaration of the report is unreasonable.

(b) Related statutes;

Contents to be explained by the court on this part are corresponding to the judgment of the court of first instance (not 7th to this part).

8) Since it is the same as the entry, it shall be quoted in accordance with Article 8(2) of the Administrative Litigation Act and the main sentence of Article 420 of the Civil Procedure Act.

C. Determination

1) Whether the estimated amount of retirement allowances for officers should be added to the liability

§ 17 of the Court's 4th decision of the first instance court on this part.

The method is as follows: (a) the corresponding part of the judgment of the court of first instance (from No. 11 to No. 19 of the third party) is the same as the corresponding part of the judgment of the court of first instance, except for the following additions to the 18th party below; (b) the method is cited in accordance with Article 8(2) of the Administrative Litigation Act, Article 420 of the Civil Procedure

Article 50(3) of the CCC’s articles of incorporation provides that a director’s retirement allowance shall be more than the minimum amount stipulated in the Labor Standards Act. As such, the above articles of incorporation specifys the retirement allowance by setting the minimum amount under the Labor Standards Act. Thus, it is unreasonable to recognize a director’s retirement allowance as the lowest amount under the articles of incorporation on the ground that there is no resolution of the general meeting of shareholders to increase a certain amount. However, as seen above, Article 50(2) of the above articles of incorporation provides that “the payment of a director’s retirement allowance shall be governed by the rules on the payment of a director’s retirement allowance.” Thus, Article 50(3) of the above articles of incorporation provides that a director’s retirement allowance shall not be paid to CCC without a resolution of the general meeting of shareholders. Thus, if a general meeting of shareholders provides a provision on the payment of a director’s retirement allowance, it is reasonable to view that the above provisions alone, despite the absence of the provision on the payment of a director’s retirement allowance, the above provision alone does not stipulate the scope of the retirement allowance payment of CCC’s.

2) Whether the imposition of an additional tax on non-declaration is legitimate

The court's statements on this part are the same as the statement from No. 21 to No. 5 of the judgment of the court of first instance. Thus, the court's statements on this part are cited under Article 8 (2) of the Administrative Litigation Act, the main text of Article 420 of the Civil Procedure Act.

3. Conclusion

Therefore, "the part of the lawsuit in this case which exceeds 151,740,559 won among the dispositions in this case shall be dismissed as unlawful, and the remaining claims of the plaintiff shall be dismissed as it is without merit. The part against the defendant in the judgment of the court of first instance shall be revoked, the plaintiff's lawsuit corresponding to the cancellation part shall be dismissed, and the plaintiff's appeal shall be dismissed as it is without merit. It is so decided as per Disposition.