Seocho 2012west 1243 ( December 12, 2012)

Unless otherwise provided, net asset value shall not be assessed as zero won, even if it is calculated as incidental (-).

Article 56 (1) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act was amended to add the provision that "if the net asset value is not more than zero won on February 4, 2009, it shall be zero won." However, the above provision applies only when the base date for appraisal is after the enforcement of the Enforcement Decree of the amended Act," and [Contents of the judgment]

Article 63 of the Inheritance Tax and Gift Tax Act, Article 56 of the Enforcement Decree thereof

2013Guhap7117 Revocation of Disposition of Imposition of Gift Tax

1. The GuA 2. the GuB 3. the HuCC

1. The director of the Gangnam-gu Tax Office;

October 25, 2013

January 10, 2014

1. On January 2, 2012, the head of Gangnam-gu Tax Office’s imposition of the gift tax by the Plaintiff on the Gu, the part exceeding the OOOO(including the additional tax) among the imposition of the gift tax by the Plaintiff, the part exceeding the OOO(including the additional tax OOO) among the imposition of the gift tax by the Plaintiff’s GuB, and the part exceeding the OOO(including the additional tax OOO) among the imposition of the gift tax by the head of Sungbuk-gu Tax Office on January 2, 2012.

2. The plaintiffs' remaining claims are all dismissed.

3. Of the costs of lawsuit, 4/5 are assessed against the Plaintiffs, and the remainder is assessed against the Defendants.

Cheong-gu Office

On January 2, 2012, the head of Gangnam-gu Tax Office revoked the respective imposition of gift tax on the Plaintiff, the head of Gangwon-do Tax Office, and the head of Seongbuk-do Tax Office on January 2, 2012 on the gift tax imposed on the Plaintiff, the head of Gangwon-do Tax Office, and the head of Sungbuk-do Tax Office, respectively.

1. Details of the disposition;

A. DDA Life Insurance Co., Ltd. (hereinafter "the company of this case") was established on February 22, 198 and changed its trade name to EE Life Insurance Co., Ltd. on January 4, 1993, and transferred its trade name to EF fire insurance Co., Ltd. (hereinafter "FF fire") on May 27, 200 and changed to HH life insurance Co., Ltd. on April 1, 2006.

B. On March 31, 2005, “this case’s shares (hereinafter referred to as “instant shares”) were transferred to the Plaintiffs as OOE on March 31, 2005.

transferor

A transferee

Shares (States)

Price (cost)

II

GuAA

515,491

OOO

GuJ

412,393

OOO

GuK

613,623

OOO

old L

412,393

OOO

GumM

108,066

OOO

GuB

871,367

OOO

GuN

128,873

OOO

GuP

546,235

OOO

HuCC

1,953,900

OOO

C. According to Article 63 of the former Inheritance Tax and Gift Tax Act (amended by Act No. 7580, Jul. 13, 2005; hereinafter referred to as the “Act”), the Defendants assessed the value of the instant shares as an OOO (the Plaintiff and the GuB shall be KRW 30/100 per share) and determined that the Plaintiffs acquired the instant shares from the transferor at a price considerably lower than the market price without any justifiable reason in light of transactional practices. The head of the Gangnam-gu Tax Office imposed the KRW OO on the Plaintiff, the Plaintiff, and the former B, respectively, on January 2, 2012, the head of the tax office imposed the KRW OOO on the Plaintiff, and the KRW OOO on the Plaintiff, the head of the tax office imposed the KRW OOO on the Plaintiff on the Plaintiff on January 2, 2012 as shown in the separate sheet No. 1.

D. The Plaintiffs were dissatisfied with the request for a trial to the Tax Tribunal on February 28, 2012, but the said request was dismissed on December 12, 2012.

[Reasons for Recognition] Facts without dispute, Gap evidence 2, 10, 14 through 17 (including each number; hereinafter the same shall apply), Eul evidence 8 to 11, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiffs' assertion

1) In light of the fact that the instant company had been in capital erosion from 2001 to 2004; that as of March 31, 2005, the carried-over deficits were at least OOOO members; that the Financial Supervisory Service continued to demand the transferor to participate in the capital increase; and that the Plaintiff HuCC did not have any special relationship with the transferor; thus, the value of the instant shares that the Plaintiff HuCC acquired can be seen as a transaction example, it should be deemed that the instant shares constitute a legitimate market price.

2) In the case of an adopted person, the question of whether the adopted person has a special relationship should be determined on the basis of both prices. Since the Plaintiff’s Gu and GuB are in a relationship between the transferor and the transferor, they cannot be viewed as having a special relationship.

3) Plaintiff HuCC did not have a special relationship with the transferor. Considering the fact that the instant company had been in capital impaired status from 2001 to 2004, as of March 31, 2005, the deficit brought forward as of March 31, 2005, the Financial Supervisory Service continuously demanded the transferor to participate in the capital increase, and that there was no transaction example at the time when Plaintiff HuCC acquired the instant stocks, it should be deemed that there existed justifiable grounds for Plaintiff HuCC’s acquisition of the instant stocks in the capital increase.

4) Since new contract costs do not constitute deferred assets or intangible fixed assets under the Corporate Tax Act as expenses incurred in obtaining new contracts, the new contract costs should be fully included in deductible expenses when they occur under Article 40(1) of the Corporate Tax Act.

5) The plaintiffs acquired the shares of this case on March 31, 2005, which was the end of the business year of 2004, and the "business year before the base date of appraisal" under Article 56 (1) 1 of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act (amended by Presidential Decree No. 18989, Aug. 5, 2005; hereinafter the "Enforcement Decree") refers to the business year of 2003. Thus, the net value of the shares of this case shall be calculated on the basis of the net value of the shares from 2001 to 2003 business years. Therefore, the disposition of this case is unlawful on the premise that the net value of the shares of this case is calculated on the basis of the net value of the shares of this case from 2002 to 2004 business years.

6) Article 56(1) of the Enforcement Decree provides for the calculation method of net profits and losses and provides that "if the value is below the amount of OOO won, it shall be OO won." However, Article 55(1) of the Enforcement Decree provides for the calculation method of net asset value and does not provide such provision, it shall be assessed as incidental (-) even in cases where the net asset value is calculated as an incidental (-). Therefore, the instant disposition based on the premise that the net asset value is calculated as an incidental (-) is evaluated as an OO if it is calculated as an incidental (-).

7) The insurance money, the extinctive prescription of which has expired, or the instant company is practically obligated to pay the dormant insurance money to the customer. Therefore, the dormant insurance money should be appropriated as the liability.

B. Relevant statutes

Attached Form 2 shall be as listed in attached Table 2.

C. Facts of recognition

1) 아래 '친족 관계도'에서 보듯이, '구QQ, 구RR, 구SS'는 구TT의 아들이고, 원고 구AA은 구RR의, 원고 구BB은 구SS의 아들이다. 구QQ는 구TT의 사촌인 구UU의 아들로 입양되었는데, '구VV, 구NN, 구PP'은 구QQ의 아들이고, 이II는 구VV의 처이며, '구JJ, 구KK, 구LL, 구MM'은 구VV의 자녀이다.

in relation to relatives, see Supreme Court Decision 6

2) On November 19, 2004, the instant company issued 861,671 new shares to OOO per share, and 13,247,176 new shares to OOOO per share on June 22, 2005.

3) WW on December 8, 2004, transferred 342 shares of the company of this case to Korea, to OOE per share, KimY, KimY, on December 15, 2004, 201 shares of the company of this case to OOE per share.

4) The shareholders of the instant company prior to the transfer of the instant shares are as follows.

Note 6-7 see Decision 6-7

5) The status of shareholders of the instant company following the transfer of the instant shares is as follows.

See Table 7 pages of the Court Decision

6) On April 1, 2008, the Plaintiffs transferred all of the instant shares to △△△ Financial Co., Ltd. (hereinafter referred to as “△△△”) and transferred them to OO members per share.

[Reasons for Recognition] Facts without dispute, Gap evidence 1 through 8, 10 through 13, Eul evidence 1 through 4, 6 through 14, and the purport of the whole pleadings

D. Determination

1) Determination on the first argument

Article 60 (1) of the Act provides that "the value of property on which gift tax is levied under this Act shall be based on the market price as of the date of donation, and Article 60 (2) of the Act provides that "the market price under paragraph (1) of the same Article shall be the value which is generally accepted in cases of free transactions between many and unspecified persons and which is recognized as the market price under the conditions as prescribed by the Presidential Decree, such as the expropriation, public sale price, appraisal price, etc." and Article 49 (1) 1 of the Enforcement Decree provides that "the market price is recognized as the market price under the conditions as prescribed by the Presidential Decree" in Article 60 (2) of the Act refers to the transaction price

In light of the following circumstances: ① the transfer date of the shares was before and after March 31, 2005; ② the transfer date of the shares was KRW 00,000,000, KRW 810,000,000,000,000,000,0000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,00,000,00,00,00,00.

2) Determination on the second argument

Article 35(3) of the Act provides that "a person in a special relationship, who is remarkably low in value, or who is remarkably high in value, shall be determined by the Presidential Decree." Article 26(4)1 of the Enforcement Decree provides that "a person in a special relationship" refers to a person in a special relationship with the transferee" under Article 35(2) of the Act, and Article 13(6)1 of the Enforcement Decree provides that "the relative refers to a person who falls under any of subparagraphs 1 through 8 of Article 20 of the Enforcement Decree of the Framework Act on National Taxes and the spouse of a lineal descendant and his/her spouse." Meanwhile, Article 20(1) of the former Enforcement Decree of the Framework Act on National Taxes (amended by the Presidential Decree No. 18849 of May 31, 2005) provides that "a person in a special relationship refers to a person who is a relative or a person in a special relationship with the transferee and a person falling under a wife of a paternal relative within

살피건대, 친양자로 입양되지 않는 이상 양자로 입양되었다고 하더라도 입양 전의 친족관계는 그대로 존속하므로, 입양자의 경우에도 양가뿐만 아니라 생가를 기준으로 특수관계에 있는지 여부를 판단하여야 하는바(대법원 1988. 10. 11. 선고 87누619 판결 참조), 구QQ의 생가를 기준으로 '구NN, 구PP'은 원고 구AA과 구BB의 4촌의 부계혈족, '이II'는 원고 구AA과 구BB의 4촌의 부계혈족의 처, '구JJ, 구KK, 구LL, 구MM'은 원고 구AA과 구BB의 5촌의 부계혈족 관계에 있으므로, 원고 구AA과 구BB은 양도인들과 특수관계에 있다고 할 것이다. 따라서 원고들의 이 부분 주장은 이유 없다.

3) Judgment on the third argument

Article 35 (1) 1 of the Act provides that "where a property is acquired from another person at a price lower than the market price, for the transferee of the property, an amount equivalent to the difference between the price and the market price and equivalent to profits prescribed by the Presidential Decree shall be deemed to be the value of donated property." In applying the provisions of paragraph (1) of the same Article, where a property is acquired between persons, other than persons having a special relationship, the amount equivalent to the difference between the price and the market price, shall be presumed to have been donated, and the amount equivalent to the profits prescribed by the Presidential Decree shall be deemed to be the value of donated property of the person who has acquired such profits, only if the property

6. The above facts are as follows: ① the company of this case records net income of approximately KRW 00, KRW 671 in the business year 2004; ② the company of this case issued KRW 13,247,176 per share of new shares on June 22, 2005; ② the company of this case issued KRW 80,000 per share of KRW 13,000,000 per share of KRW 80,000,000,000 per share of KRW 13,000,000,000,000 per share of KRW 8,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,00,000,00.

4) Judgment on the fourth argument

Article 20 of the former Framework Act on National Taxes (amended by Act No. 7582, Jul. 13, 2005; hereinafter referred to as the "former Framework Act on National Taxes") provides that when investigating and determining the tax base of national taxes, it shall respect corporate accounting standards or practices which the relevant taxpayer continues to apply and are generally fair and reasonable: Provided, That the same shall not apply to cases where there are special provisions in the tax-related Acts, and Article 40 (1) of the former Corporate Tax Act (amended by Act No. 7838, Dec. 31, 2005; hereinafter referred to as the "former Corporate Tax Act") provides that "the business year in which gross income and deductible expenses accrue for each business year of a domestic corporation shall be the business year which includes the date on which the relevant gross income and deductible expenses are determined." Article 43 of the former Framework Act provides that when the relevant corporation continues to apply corporate accounting standards and practices which are generally recognized as fair and reasonable with respect to the acquisition and evaluation of gross income and deductible expenses, it shall be subject to this case.

Article 40 of the former Corporate Tax Act and Articles 68 through 71 of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 18945, Jul. 15, 2005; hereinafter referred to as the "former Enforcement Decree of the Corporate Tax Act") stipulate the timing of attribution of profit and loss depending on the type of transaction, etc. However, the provisions concerning the timing of attribution of profit and loss under the tax law according to the type of transaction, etc. cannot be deemed to be a provision stipulating the attribution of profit and loss in its own completed conclusion by predicting the various types of transaction in the modern society. Thus, in cases where it is difficult to determine the attribution of profit and loss under the above provisions, the determination of attribution of profit and loss may be made by adopting the standards for the occurrence of profit and loss under the corporate accounting standards generally accepted as fair and reasonable accounting practice unless it is against the principle of confirmation of profit and loss under the Corporate Tax Act (see Supreme Court Decision 92Nu2936, Oct. 23, 192; 293).

Meanwhile, "new contract costs" in insurance business refers to expenses incurred in acquiring new contracts, which are the amount disbursed as expenses for insurance solicitors' expenses and personnel expenses for places of business. Article 70 of the former Enforcement Decree of the Corporate Tax Act does not separately provide for the period of attribution of new contract costs, and Article 70 of the former Enforcement Decree of the Corporate Tax Act provides that "project costs shall be treated as expenses at the time of occurrence of new contract costs: Provided, That this shall not apply to new contract costs corresponding to other assets: Provided, That this shall not apply to new contract costs. However, in the event that new contract costs are imposed as above, the tax authorities imposed taxes on the premise that they include the total amount of expenses at the time of occurrence of new contract costs in deductible expenses. However, if new contract costs are imposed as mentioned above, a large number of civil petitions were not recognized as deductible expenses for the year of deduction (5 years) and accordingly, the new contract costs were collected in excess of the total amount of expenses for insurance contracts (5 years) in order to be included in deductible expenses in the calculation of losses in the future.

In light of the following: ① insurance business is a business that requires public nature, sociality, and ethics and requires strict compliance with the accounting rules in order to protect policyholders, etc.; ④ The accounting rules of insurance business established under these needs should be respected in the field of insurance business as corporate accounting standards in special areas; ② the corporate tax rules of the Corporate Tax Act are amended to include the new contract costs in deductible expenses in accordance with the provisions of the accounting rules of the insurance business in the calculation of deductible expenses in accordance with the above circumstances; ② accordingly, the tax authorities imposed the new contract costs on the basis of the above provisions as mentioned above. ③ Since May 10, 2003, the company of this case also included the new contract costs in deductible expenses in the calculation of deductible expenses in accordance with the above provisions; ③ there is no special objection raised by the insurance companies including the company of this case; ④ since new contract costs were paid in the year when the new contract costs were concluded, and profits corresponding to the new contract costs were generated in the calculation of deductible expenses in accordance with the payment period of the insurance premiums, it cannot be denied that the new contract costs cannot be included in deductible expenses for the whole period of the Plaintiffs’s.

5) Judgment on the fifth argument

Article 56 (1) 1 of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act (amended by Presidential Decree No. 17459 of Dec. 31, 2001) provides that "the amount of net profit and loss for the preceding three years means the amount of net profit and loss from the three years to the three years before the commencement of the inheritance until the one year before the commencement of the inheritance." However, on December 31, 2001, "the amount of net profit and loss for the preceding three years" was revised to the purport that "the amount of net profit and loss from the three years to the three years before the base date of appraisal" means the amount of net profit and loss from the business year before the base date of appraisal."

On the other hand, the following circumstances revealed in addition to the above evidence and the overall purport of the pleadings, i.e., the amendment of the Enforcement Decree, i.e., (i) the calculation of net profit and loss value without the need to make a settlement of accounts when the evaluation base date is the end of the business year; (ii) the term "transfer" is ordinarily used as the term "before the evaluation base date"; and (iii) the date before the business year including March 31, 2005, which is the last day of the business year 2004 of the company of this case, including the date of the business year 204, the first day of the business year 204, and (iv) the calculation of net profit and loss value based on the net profit and loss value of the company of this case based on the net profit and loss value near the evaluation base date is more consistent with the accuracy of the evaluation of the stocks of this case, and therefore, the plaintiffs' net profit and loss value should not be calculated from the business year 2004.

Based on Article 29(4) of the Enforcement Decree, the Plaintiffs asserted that the Enforcement Decree is used as a concept that does not include the time when the term "transfer" is used. However, the calculation of benefits under Article 29(4) of the Enforcement Decree is based on the date of the payment of stock price (in cases where a person who was allocated forfeited stocks before the payment date of stock price receives a preemptive right, referring to the date of issuance thereof). Thus, even if the term "transfer" is interpreted as a concept that includes the time when the term "transfer" is the basis, any inconsistency does not occur (limited to the date of issuance of preemptive right certificates and the date of payment of stock price). Therefore, it cannot be viewed that the Enforcement Decree is used as a concept that does not include the time when the term "transfer" becomes the basis.

6) Determination on the fifth argument

A) Article 55(1) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act (amended by Presidential Decree No. 21292, Feb. 4, 2009; hereinafter referred to as the "amended Enforcement Decree") provides that "The net asset value under Article 54(2) shall be the value calculated by subtracting liabilities from the value appraised by the assets of the relevant corporation as of the base date of appraisal under Articles 60 through 66 of the Act; where the net asset value is below OO won, it shall be OO won; Article 3 of the Addenda provides that "the amended provisions of Article 5(1) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act shall apply to the first evaluation of unlisted stocks after this Decree enters into force."

On the other hand, Article 3 of the Addenda of the amended Enforcement Decree does not mean "the first evaluation of unlisted stocks after the enforcement of the amended Enforcement Decree," but "the case where the tax authorities should evaluate unlisted stocks for the purpose of calculating the value of donated stocks after the enforcement of the amended Enforcement Decree," and "the case where the evaluation base date is after the enforcement date of the amended Enforcement Decree," and "the case where the acquisition of the stocks of this case on March 31, 2005, which is before the enforcement date of the amended Enforcement Decree, is after the enforcement date of the amended Enforcement Decree," so the amended Enforcement Decree cannot be applied to the evaluation of the stocks of this case.

B) The main sentence of Article 54(1) of the Enforcement Decree provides that “The net value per share of stocks and equity shares not listed on the Korea Stock Exchange under Article 63(1)1(c) of the Act shall be the weighted average value of 3 and 2 of the net asset value per share, respectively.” Article 54(2) of the Enforcement Decree provides that “The net asset value per share under paragraph (1) shall be the net asset value of the corporation concerned ± the value assessed by the total number of issued stocks.” Article 55(1) provides that “The net asset value under Article 54(2) shall be the value calculated by subtracting the liabilities of the corporation as of the evaluation base date under Articles 60 through 66 of the Act.”

On the other hand, the following circumstances revealed by adding the aforementioned evidence and the overall purport of the pleadings. In other words, Article 56 (1) of the Enforcement Decree provides for the calculation method of net profit and loss, and Article 55 (1) of the Enforcement Decree does not provide for the calculation method of net asset value, and Article 55 (1) of the Enforcement Decree does not provide for the above provision, and Article 56 (1) of the Enforcement Decree provides for the calculation method of net asset value, and Article 56 (1) of the Enforcement Decree provides for "if net asset value is not more than zero won, it shall be zero won." However, the above provision applies only after the enforcement date of the Enforcement Decree of the revised Enforcement Decree, and Article 3 (1) of the Enforcement Decree provides for the assessment method of net asset value based on the net asset value calculated by drinking water, so it is difficult to view the above provision as an appropriate assessment method as an assessment method, and it appears that the net asset value would be 0 won if it is 00 won or less. Therefore, the plaintiffs's assertion that the net asset value is 00 won or less.

7) Determination on the third assertion by Japan

According to Gap evidence No. 19, the Financial Supervisory Service notifies customers of the receipt of insurance money three months prior to the expiration of the extinctive prescription, and the obligation to pay insurance money is legal under the law.

It is recognized that it has prepared a plan to improve the management of dormant insurance money by a "insurance company" to the effect that the insurance contractor, etc. will manage the accounts by adjustment of reserves, etc. at a time when it is highly probable that the insurance contractor, etc. will claim insurance money.

However, even if the company of this case, as alleged by the plaintiffs, paid the dormant insurance money to some customers who claimed for the payment of the dormant insurance money, this is a performance of the obligation not to be legally enforced. Thus, the company of this case set the allowance for the payment of the dormant insurance money within reasonable scope in accordance with the corporate accounting standards or practices, notwithstanding setting the allowance for the payment of the dormant insurance, the whole amount of the insurance money for which the period of extinctive prescription expires and the legal obligation not to pay is extinguished cannot be appropriated as the liabilities (if the company of this case prepared the grounds for the payment of the dormant insurance money to the customer who claimed for the payment of the dormant insurance money, it may be included in the calculation

The plaintiffs asserts that the amount of dormant insurance should also be included in deductible expenses, like the dormant deposit, based on the Supreme Court Decision 2009Du14965 Decided August 17, 2012, Supreme Court Decision 2011Du9157 Decided November 29, 2012, Supreme Court Decision 201Du9157 Decided October 25, 2012, Supreme Court Decision 2012Du15340 Decided October 25, 2012. The Supreme Court Decision invoked by the plaintiffs is that the bank's deposit of interest in the customer's deposit account constitutes the approval of the obligation and thus it cannot be deemed that the period of extinctive prescription has expired since it constitutes the suspension of the extinctive prescription of the deposit claim and the deposit after five years have elapsed from the date of the final transaction. Accordingly, the above decisions cannot be viewed as a judgment that can be invoked in this case.

8) Calculation of a reasonable amount of tax

In accordance with the above determination, where the value of the instant shares is recognized as an incidental (-) net asset value, the value of the instant shares shall be an OOOO (in the case of the Plaintiff, the Gu and GuB, the OOOO). Therefore, on January 2, 2012, the head of Gangnam-gu Tax Office’s imposition of the gift tax on the Plaintiff, the part exceeding the OOO(including additional tax) out of the imposition of the gift tax on the Plaintiff, the part exceeding the OOO(including additional tax) out of the imposition of the gift tax on the Plaintiff, the part of the imposition of the gift tax on the Plaintiff, which exceeds the OOO(s)(s)(s)(s)(s)(s)(s)(s)(s)(s)(s)(s)(s)(s)(s)(s)(s)(s)(s)(including additional tax on January 2, 2012)(s)(s)(OOOO.

3. Conclusion

Therefore, the plaintiffs' claims are justified within the scope of the above recognition, and the remaining claims of the plaintiffs are without merit, and all of them are dismissed. It is so decided as per Disposition.