The legal principles on market price calculation method related to the issuance of new shares by a third party;

In a case where new shares are issued at a price lower than the market price for new shares issued by a third party, the existing shareholder renounces the economic benefits as much as the discounted value by giving up his/her participation in the capital increase for new shares, and the preemptive rights to new shares are considered to be economic benefits. As such, Article 39 of the former Inheritance Tax and Gift Tax Act,

Articles 39 and 60 of the former Inheritance Tax and Gift Tax Act

2013Guhap658 Disposition of Revocation of Gift Tax Imposition

○○ 1 other

O Head of tax office

November 13, 2014

November 17, 2014

1. All of the plaintiffs' claims are dismissed.

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

On October 1, 201, 201, the imposition of the gift tax on the Plaintiff ○○○○ and the imposition of the KRW OO on the Plaintiff OO shall be revoked.

1. Details of the disposition;

A. Reasons for issuing new shares

1) AAAA (AAA changed its trade name on May 23, 2007 to BB, and changed its trade name to CCC on April 22, 2010, hereinafter collectively referred to as "non-party company") conducted capital increase with the third party allocation method on May 11, 2007 after undergoing the resolution of the board of directors on April 9, 2007 (hereinafter referred to as "instant capital increase with the third party allocation method"). The following table (hereinafter referred to as "the list of third party allocation of capital increase with the third party allocation method of this case") was allocated the OO, the PlaintiffO, and the PlaintiffO received the OO shares (the average class 4,485 won per month + average class 14,619 won per week + average class 4,419 won per class 4,400 won per class 40,530/410 per class 430).

(2) The latest closing price = 4,400 won

MIN [1, 2] X 90% = 4,400 X 0.9 = 3,960 won

2) In accordance with Article 57 of the former Regulations on Issuance and Public Disclosure of Securities (amended by the Financial Supervisory Commission No. 2007-153 of Dec. 28, 2007, hereinafter referred to as the “former Securities Regulations”), the non-party company decided the price per share for capital increase to KRW 3,960 per share as follows, on the date preceding the date of the resolution of the board of directors ( April 9, 2007) set forth in paragraph (1) above (amended by the Financial Supervisory Commission No. 2007-153 of Apr. 9, 2007). 3) In lieu of the above capital increase for capital increase, the plaintiffs paid 300,600 shares for the above capital increase to the non-party company under their own ownership, and the non-party company paid 1,861,860 shares for capital increase by investing in kind.

4) Meanwhile, the non-party company listed the stocks issued to the KOSDAQ market as described in the above paragraph (a) above, and took measures to safeguard the stocks issued to the plaintiffs from May 25, 2007 to May 24, 2008 for one year. (b) The circumstances of the instant disposition

1) On March 201, 201, the commissioner of the regional tax office having jurisdiction over the issuance of new shares to the Defendant pursuant to Article 29(3)1 of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act (amended by Presidential Decree No. 0000, Feb. 22, 2008; hereinafter “former Enforcement Decree of the Inheritance Tax and Gift Tax Act”).

(1) (The appraised value per share before the capital increase of 5,829 won or more) + (the total number of outstanding stocks before the capital increase of 5,500,000 won or more) + (14,33,859 shares or more due to the capital increase of 3,960 won or more per new shares)/ (the total number of outstanding stocks before the capital increase + the number of 14,333,859 shares or more due to the capital increase of 5,500 won or more per share) = 4,478 won or more per share after the capital increase of 4,857 won or more

(3) Value per share after capital increase = MIN [i, ii] = 4,478 won.

(4) The acceptance price per new stock = 3,960 won.

④ The value of donated property = ( ① 4,478 won - 3,960 won) X evaluated 4,478 won per share according to the stock value of the non-party company according to the calculation formula below, and was allocated at a low price of KRW 558 won per share, which is the difference with the 3,960 won paid by the plaintiffs, at a low price of KRW 558 won, and thus, the defendant notified the non-party company of the taxation data under Article 39(1) of the former Inheritance Tax and Gift Tax Act (amended by Act No. 8828, Dec. 31, 2007; hereinafter referred to as the "former Inheritance Tax and Gift Tax and Gift Tax Act"). The defendant dismissed the plaintiff Lee O on October 10, 201.

[Ground of recognition] Unsatisfy, entry of evidence Nos. 3 and 4, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiffs' assertion

The plaintiffs asserts that the disposition of this case should be revoked on the following grounds of illegality:

1) The Plaintiffs received allocation of securities that cannot be traded due to safeguard measures for one year at the time of the instant capital increase offering. The assessment by applying the same method as the securities that are not restricted from trading goes against the principle of no taxation without law.

2) Article 39(1)1(a) and (c) of the former Inheritance Tax and Gift Tax Act provides that if a corporation issues new shares to increase its capital at a price lower than the market price of new shares to a person other than its shareholders, the amount equivalent to such profits shall be deemed the value of the donated property of the person who acquired such profits, and that the gift tax shall be levied on such person. However, where a stock-listed corporation or Association-registered corporation under the Securities and Exchange Act allocates new shares by means of a public offering of new shares under Article

Article 2(3) of the former Securities and Exchange Act (amended by Act No. 8315 of Mar. 29, 2007; hereinafter referred to as the "former Securities and Exchange Act") and Article 2-4(1) and (2) of the former Enforcement Decree of the Securities and Exchange Act (amended by Presidential Decree No. 20452 of Dec. 20, 2007; hereinafter referred to as the "former Enforcement Decree of the Securities and Exchange Act") recommend 50 or more persons to make an offer, and it is subject to the exclusion of the gift tax under Article 39(1)1 of the former Inheritance Tax and Gift Tax Act.

3) Even if the number of persons to whom the subscription was solicited is not 50 persons, the issue price of this case can be transferred to 50 persons or more within one year from the date of issuance, and the issue price of the securities can be transferred to 50 persons or more as stipulated in Article 2-4 (4) of the former Enforcement Decree of the Securities and Exchange Act, which constitutes a “inter-party offering” meeting the criteria for resale as stipulated by the Financial Supervisory Commission, and the capital increase through deemed offering constitutes an object excluded from the gift tax stipulated in Article 39 (1) 1 of the former Inheritance Tax and Gift Tax Act. 4) The issue price of the non-party company is determined as 3,960 won in accordance with the former Securities and Exchange Act and the relevant statutes

5) In the event that a listed corporation is merged with another corporation under the former Inheritance Tax and Gift Tax Act, gift tax is not imposed by deeming the value of stocks calculated pursuant to the Securities and Exchange Act as the market price. The issue price calculated by the non-party company is also the same as that of the merger.

6) The imposition of gift tax is contrary to the basic principle of tax imposed when the capacity to pay taxes arises, even though there is no profit earned by the Plaintiffs from the capital increase in the instant case.

B. Relevant statutes

Attached Form 3 is as listed in the "relevant Acts and subordinate statutes".

C. Legal principles on market price calculation method related to capital increase increase with the third party’s allocation

1) Article 39(1)1 (c) of the former Inheritance Tax and Gift Tax Act provides that in case where a corporation issues new stocks in order to increase its capital at a price lower than the market price, a person who is not a shareholder of the relevant corporation shall be deemed to have received the donation of an amount equivalent to the benefits obtained by directly obtaining the new stocks from the relevant corporation. Paragraph (3) of the same Article provides that the method of calculating the benefits under paragraph (1) and other necessary matters shall be prescribed by the Presidential Decree. According to the delegation, Article 29(3)1 of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act provides that the method of calculating the benefits received by the underwriter of new stocks under subparagraph 1 of Article 39(3) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act shall be determined by the Presidential Decree. Article 29(3) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act provides that the method of calculating the benefits received by the underwriter of new stocks shall be calculated by multiplying the value of forfeited stocks or new stocks to be allocated (in case where a person receives the allocated stocks in excess of new stocks under equal conditions, the number).

2) Article 60(1) of the former Inheritance Tax and Gift Tax Act provides that the value of the property on which the inheritance tax or gift tax is levied shall be based on the market price as of the date of commencing the inheritance or the date of donation (the "date of appraisal"), and the value assessed by the method of appraisal as provided in Article 63(1)1(a) and(b) shall be considered as the market price. In other words, the method of appraisal of shares of an Association-registered corporation as provided in the Presidential Decree shall apply mutatis mutandis to the method of appraisal of shares traded at the Korea Stock Exchange for two months before and after the base date of appraisal, respectively. Meanwhile, the "date of appraisal of shares before increase" shall be deemed as the "date of donation" as provided in Article 60(1) of the former Inheritance Tax and Gift Tax Act, and "date of acquisition of shares before the issuance of shares" as provided in Article 63(1)1(a) and (b) of the former Inheritance Tax and Gift Tax Act shall be deemed as the "date of acquisition of shares before the issuance of shares," as provided in 20.

On April 9, 2007, the major management report(A) on the major management issues (A1) were issued by the offering of new shares to a third party, and the corrective report(A1) on April 11, 2007, which was acquired by the investment in kind, on April 11, 2007, the common shares of the non-party company were issued by the offering of new shares to a third party. - The change of the scheduled date of acquisition - the scheduled date of acquisition - the corrective report(a) May 3, 2007

- Change of the date of payment and the scheduled date of issuance of new stocks

- The shares allocated to the plaintiffs shall be deposited for one year, and the shares allocated to the National Pension 05-2 shall be deposited for one month.

The investment prospectus on May 11, 2007 / [stocks] (A) the prospectus for capital increase with respect to the securities of this case, the confirmation, signature, main text, etc. of the representative director

On May 11, 2007, it is reasonable to view that only the average of the standard price for the securities business association every two months before and after the transfer date calculated in accordance with the method of appraisal under Article 63(1)1(a) and (b) as a result of the post-issuance of the KOSDAQ Headquarters on May 25, 2007 (see, e.g., Supreme Court Decision 2008Du4770, Jan. 13, 201) is deemed to be the market price (see, e.g., Supreme Court Decision 2008Du470, Jan. 13, 201). D.

1) On April 9, 2007, the non-party company issued 14,33,859 common shares of the non-party company as shown in the list of third party shares issued by the non-party company using the third party shares issued by issuing the non-party company with the third party shares issued. The non-party company made a resolution of the board of directors to acquire the non-party shares 3,131,620 registered common shares of the non-party shares and the registered 242,440 shares by the method of investment in kind. 2) The details publicly announced by the non-party company in the electronic publication system of the Financial Supervisory Service (htp://d.s.or.D) for the purpose of the

3) According to the investment prospectus related to the issue of subscription of this case / [stocks] 1. A. (sale) of the summary of the 3th subscription of this case / (3) the list of third party subscription of this case is included in the list of third party subscription of this case. (4) The purpose of allocation of third party subscription of subscription of this case, relationship between the person other than shareholders and the issuer, and the selection process of the 4th subscription of this case were to determine and promote the 4th subscription of this case in order to secure the management right of the Obiopic in the new growth engine in order to promote new business in order to promote the Obiopic in order to secure the management right of the Obiopic in the 4th subscription of this case. (4) As a result of the allocation of subscription and allocation method, the 7th subscription of the 4th subscription of this case was stated in the list of the third party subscription of this case. (4) The 7th subscription of this case's 'the 4th subscription of this case'public subscription' and the 4th subscription.

[Ground of recognition] Unsatisfy, entry of Gap evidence 1 to 4, purport of whole pleadings

E. Each determination on the first argument

In light of the legislative intent and text of Article 39 of the former Inheritance Tax and Gift Tax Act and Article 29 of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act, and the above provision are the basic date for calculating the value per share before the capital increase as the payment date for share capital in order to prevent unlawful donation. ② Compulsory deposit is the purpose of protecting minority shareholders due to a decline in the value of shares, and the plaintiff himself accepts it at the time of acquisition of the shares in this case. ③ If the date of expiration of the period of protection deposit is the evaluation date, the value of donated property may vary depending on the intention of the parties. ③ If new shares are allocated for capital increase with consideration of the third party allocation method, it is reasonable to calculate the "value for evaluation per share before the capital increase" as the payment date for share capital in order to calculate the value of donated property received by the plaintiff pursuant to Article 39(1)1 (c) of the former Inheritance Tax and Gift Tax Act. Thus, the plaintiff’s assertion that the disposition in this case violates the principle of no taxation without law is without merit.

F. Judgment on the second argument

1) In applying Article 39(1)1(a) of the former Inheritance Tax and Gift Tax Act (hereinafter referred to as the "general provision"), where a stock-listed corporation or Association-registered corporation under the former Securities and Exchange Act allocates forfeited stocks to the public offering of new securities under Article 2(3) of the same Act, the gift tax shall not be levied. In this context, Article 2(3) of the former Securities and Exchange Act provides that "the public offering of new securities shall be recommended under the conditions as prescribed by the Presidential Decree," and Article 2-4(1) of the Enforcement Decree of the same Act provides that "in offering of new securities under Article 2(3) of the same Act, the person who is solicited to acquire new securities shall be 50 persons or more."

In order for an issuer to be seen as a “public offering under the former Securities Transaction Act”, first of all, a securities issuer’s new issue price; (1) distribution of printed matters, such as newspapers, broadcasting, magazines, etc.; (2) holding a presentation session for investment; or providing information on the process of issuing or selling securities through electronic communication or other similar means; or (2) providing information on the process of acquiring securities; (2) the following circumstances revealed through the process of the above disposition and the facts acknowledged, i.e., ① the increase in the capital for consideration of the above company’s possession in order to secure the management right of the OOOF, and thus allocated new stocks to a third party in return for the contribution in kind; and (2) the non-party-party-party-party-party-party-party-party-party-party-party-party share offering was allocated new stocks in return for the contribution in kind held by the above company’s large shareholders.

In light of the details publicly announced through the Financial Supervisory Service, the list of third parties to the instant capital increase with respect to the method and list of the allocation is quoted as it is, and the third party to the instant capital increase with respect to the instant capital increase, ③ even if based on the performance report (Evidence A 4) related to the instant capital increase with respect to the issuance of securities, it is difficult to deem that there was a public offering procedure to invite subscription to the instant capital increase with respect to both the starting date, the expiration date, and the public notice of subscription became public space. In light of the above, it cannot be deemed that the instant capital increase with respect to the capital increase is not subject to gift tax under Article 39(1)1 of the former Inheritance Tax and Gift Tax Act, and thus, it cannot be deemed that the instant capital increase with respect to the capital increase is a case where the capital increase is allocated with the securities offering method under Article 2(3) of the former Securities and Exchange Act, and thus, the Plaintiff’s claim

1) Article 2-4 (4) of the former Enforcement Decree of the Securities and Exchange Act provides that even if the number of persons who are solicited to subscribe is less than 50 persons as a result of the calculation under Article 2-4 (3) of the former Enforcement Decree of the Securities and Exchange Act, if the securities can be transferred to not less than 50 persons within one year from the date of issuance and if the securities meet the standards for resale as determined by the Financial Supervisory Commission, it shall be deemed that the securities will be offered. The above deemed public offering does not differ from the general public offering under Article 2-4 (1) of the former Enforcement Decree of the Securities and Exchange Act in that it is subject to various regulations concerning the procedure and issue value of new stocks, and the possibility of the public offering of new stocks can not be considered as one of the "public offering of new stocks" under Article 2-4 (3) of the former Enforcement Decree of the Securities and Exchange Act and Article 2-4 of the former Enforcement Decree of the former Securities and Exchange Act, it can be interpreted that the securities offering of new stocks constitutes the securities offering of new stocks.

H. Judgment on the fourth argument

1) Even though the issue value of new shares allocated to the Plaintiff at the time of issuing new shares is determined pursuant to Article 192(1)1 of the Securities and Exchange Act and Article 84-25(1)1 of the Enforcement Decree of the same Act, the above provision has certain limitations on the issue value of new shares in order to ensure fairness and transparency in issuing new shares, and its legislative purpose differs from that of Article 39(1)1(a) of the Inheritance Tax and Gift Tax Act, it cannot be viewed as “market value under Article 39(1)1(a) of the Inheritance Tax and Gift Tax Act” (see, e.g., Supreme Court Decision 2013Du21670, Mar. 13, 2014). Therefore, the market value of the Association-registered corporation is calculated based on the standard price and standard price under Article 63(1)1(a) of the former Securities and Exchange Act and Article 57(3) of the same Decree. Thus, the above provision is unreasonable for the Defendant to lawfully calculate the market value of the Plaintiff’s shares before and after its evaluation.

1) Article 42(1)3 of the former Inheritance Tax and Gift Tax Act provides that the gains, etc. derived from the transactions that increase or decrease the capital (including the amount invested) of a corporation, such as a merger, in addition to the donations under Articles 33 through 41, 41-3 through 41-5, 44 and 45 of the same Act, shall be deemed the value of donated property, in cases where profits above the standard prescribed by the Presidential Decree have

2) In light of the following, the non-party company's acquisition of 74.37% shares in the Obaco, and thus it is difficult to see the merger. ② In the case of a merger, the approval of the general meeting of shareholders (Article 522) under Articles 522 through 530 of the Commercial Act, the public notice of the merger agreement (Article 522-2), the appraisal right of opposing shareholders (Article 522-3), the creditor protection procedure (Article 527-5) are different from the investment in kind. ③ Article 42 (1) 3 of the former Inheritance Tax and Gift Tax Act is merely a supplementary provision, and it is reasonable to view that Article 39 (1) of the former Inheritance Tax and Gift Tax Act is preferentially applied to the capital increase for consideration. Thus, the plaintiff's assertion that the above provision of Article 39 (1) of the former Inheritance Tax and Gift Tax Act cannot be applied to the capital increase for consideration of the economic profits of the plaintiff's new shares that were acquired after the issuance of new shares.

Therefore, all of the plaintiffs' claims are dismissed as it is without merit. It is so decided as per Disposition.