This disposition is illegal to apply the applicable laws and regulations erroneously.

The Plaintiff’s shares allocated are merely nominal trust by the representative of the non-party corporation to the Plaintiff, and thus, the instant disposition imposing tax on the Plaintiff by deeming the non-party corporation as an unequal shall be unlawful in the disposition that did not meet the taxation requirements or applied

2012Guhap3486 Revocation of Disposition of Imposition of Gift Tax

DoAA

The director of the tax office

May 28, 2014

July 16, 2014

1. The Defendant’s disposition of imposition of gift tax OOO on February 9, 2012 is revoked.

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's status

“The Plaintiff, on March 30, 2009, was appointed as an internal director of the Incorporated Agricultural Company BB Co., Ltd. (hereinafter “B”), but resigned on January 11, 201,” and BB’s capital increase with respect to capital increase.

1) A shareholder of BB as of December 31, 2008 and its shareholding ratio as of December 31, 2008 are as follows:

Name of shareholders

RedCC

MaximumD

E

FF

LGG

guidance.

Number of Stocks

4,000 Shares

3,500 Shares

1,000 Shares

1,000 Shares

500 Shares

10,000 Shares

Ratio

40%

35%

10%

10%

5%

100%

"2) BB entered the capital increase in the manner of three times in 2009 (hereinafter each of the first capital increase in the instant case, collectively referred to as "the capital increase in each of the instant case"), and its details are as follows:

The number of capital increase shares

Issuance price of shares

Amount of increase in capital;

April 27, 2009 (Ij)

40,000

OOO

OOO

April 29, 2009 (Secondary)

60,000

OOO

OOO

August 27, 2009 (No. 3j)

40,000

OOO

OOO

Total

140,000

OOO

OOO

3) The number of shares subscribed in excess of the number and shareholding ratio allocated to the Plaintiff at the time of each of the instant capital increase is as follows.

Paid-up Date

The Plaintiff’s equity ratio (%) prior to the Plaintiff’s capital increase

The number of acquired shares by the plaintiff

The number of shares acquired in excess of the plaintiff

April 27, 2009 (Ij)

0

16,000

16,000

April 29, 2009 (Secondary)

32.00

24,000

4,800

August 27, 2009 (No. 3j)

36.36

20,000

5,455

Total

54,000

26,255

(c) Imposition of gift tax;

"The defendant, out of 64,00 shares allotted by the plaintiff, ① 16,00 shares issued at a price lower than the market price of the first capital increase of this case was allocated to a person who is not a shareholder of a corporation. ② Under the premise that the new shares issued at a price lower than the market price of 4,800 shares out of the shares allocated at the time of the second capital increase of this case and 5,455 shares out of the shares allocated at the time of the third capital increase of this case were allocated by the relevant shareholder in excess of the number entitled to be allocated under equal conditions in proportion to the number of the shares held by the previous shareholders, on the ground that the plaintiff received a donation from the existing shareholders of OOO in the aggregate of the gift value of the shares acquired by the plaintiff by multiplying the difference between the value of the shares issued and the value of the shares issued by the previous shareholders, it was decided on February 9, 2012 as follows:

1. Initial capital increase

Value per share assessment:OO

Second, Paid-in capital increase

Value per share assessment:OO

3rd Paid-in capital increase

Value per share assessment:OO

Total

Number of Stocks

Amount of donation;

Number of Stocks

Amount of donation;

Number of Stocks

Amount of donation;

FF

OOO

OOO

OOO

OOO

LGG

OOO

OOO

OOO

OOO

RedCC

OOO

OOO

OOO

MaximumD

OOO

OOO

E

OOO

OOO

Total

16,000

OOO

OOO

OOO

OOO

(d) Procedures of the previous trial; and

The Plaintiff dissatisfied with the instant disposition and filed an objection on March 19, 2012, but received a decision of dismissal on April 10, 2012, and again filed a request for examination with the Commissioner of the National Tax Service on April 25, 2012, and received a decision of dismissal on July 20, 2012.

Facts that there is no dispute over recognition, Gap's 1 through 3, 6, Eul's 1 through 4, and 7, and the purport of the whole pleadings.

2. Whether the disposition is lawful;

A. The plaintiff's assertion

(1) In the first place, the Plaintiff’s shares allocated at the time of each of the instant capital increase (hereinafter “instant shares”) asserted that HongCC’s representative director should hold absolute shares in order for HongCC to meet the requirements of agricultural corporation, and did not actually have been allocated to the Plaintiff, and thus, the instant gift tax disposition issued by the Plaintiff, not the actual owner of the shares, was unlawful in light of the substance over form principle in light of the substance over form principle.” (ii) The instant gift tax disposition issued by the Plaintiff, not the actual owner of the shares, should be deemed unlawful, and (iii) the said shares should be deemed to have been held temporarily by the Plaintiff as a security for the land price sold by the Plaintiff to B, and the disposition against the Plaintiff was unlawful.

3) In addition, at the time of the Plaintiff’s allocation of the instant shares, BB was in a state where the total amount of capital was impaired. Since the said shares were not real value and there was no gift interest therefrom, there was an error in calculating the value of the said shares in the instant disposition.

(b) Related statutes;

The "Inheritance Tax and Gift Tax Act" (hereinafter referred to as the "Inheritance Tax and Gift Tax Act") and Article 39 (Gift of Benefits Following Capital Increase)

① 법인이 자본(출자액을 포함한다. 이하 이 조 및 제39조의2에서 같다)을 증가시키기 위하여 새로운 주석 또는 지분[이하 이 조에서 신주 (新妹)라 한다]을 발행함에 따라 다음 각 호의 어느 하나에 해당하는 이익을 얻은 경우에는 그 이익에 상당하는 금액을 그 이익을 얻은 자의 증여재산가액으로 한다.

1. In cases where new stocks are issued at a price lower than the market price (referring to the price assessed under Articles 60 and 63; hereafter the same shall apply in this paragraph), any of the following profits:

(c) Profits acquired by a person who is not a stockholder of the relevant corporation by directly obtaining an allocation of new stocks from the relevant corporation (including cases where he/she directly acquires and acquires the relevant new stocks from an underwriter under Article 9 (12) of the International Financial Investment Services and Capital Markets Act; hereafter the same shall apply in this paragraph), or profits acquired by the stockholders of the relevant corporation by obtaining an allocation of new stocks in excess of the number entitled to receive an allocation

(3) In applying paragraphs (1) and (2), the scope of minority shareholders, method of calculating profits, and other necessary matters shall be prescribed by Presidential Decree.

Article 45-2 (Legal Fiction as Donation of Title Trust Property)

(1) Where the actual owner or the nominal owner of any property (excluding land and buildings; hereafter the same shall apply in this Article) required to be registered, etc. for the transfer or exercise of rights is different, the value of such property shall be deemed donated to the actual owner by the nominal owner on the date when it is registered, etc. to the nominal owner (where such property is subject to the change of ownership, referring to the date following the end of the year following the year in which the date of acquisition of ownership falls), notwithstanding Article 14 of the Framework Act on National Taxes

1. Where any property is registered in another person's name without any purpose of tax evasion, or transfer is not made in the name of the actual owner who has acquired the ownership;

(2) Where property is registered, etc. under the name of another person, where a change of ownership is not made under the name of the actual owner, or where the name of stocks, etc. is not converted under the name of the actual owner during the grace period, it shall be presumed that there exists a purpose of tax avoidance: Provided, That this shall not apply where an applicant files a report on the change of ownership, along with a report on the tax base of religion-do income under Articles 105 and 110

C. Determination

1) The legitimacy of the primary argument

The tax authorities shall, in principle, bear the burden of proving the existence and the tax base of the facts requiring taxation. Furthermore, the fact that the Defendant made the instant disposition pursuant to Article 39(1) Subparagraph (a) of the Inheritance Tax and Gift Tax Act by taking the allocation of a third party to the new shares issued at low price at the time of the first capital increase, and the allocation of a low price and low price shares issued at the time of the second and third capital increase as the grounds for the disposition of the second and third new shares, is as seen earlier. In the event a corporation issues new shares at a price lower than the market price to increase its capital, the allocated person obtains profits equivalent to the difference between the market price and the market price, and thus, the provision purport to impose gift tax by including the amount equivalent to the above profits in the value of donated property. In light of the language and legislative intent of the above provision, the disposition based on the above provision

However, comprehensively taking account of the evidence adopted earlier, Gap evidence Nos. 4, 5, and Eul evidence No. 5, and the following facts acknowledged through witness HongCC’s testimony, each of the instant shares allocated to the plaintiff during capital increase with new stocks is merely a title trust with the plaintiff, but does not have been actually allocated to the plaintiff. Therefore, the instant disposition is illegal as it is a disposition that did not meet the taxation requirements, or was erroneously applied with the applicable law, and the plaintiff’s primary assertion pointing this out is with merit.

① The Plaintiff remitted OOE to BB at the time of the first capital increase with consideration, but the said amount was actually remitted in the name of the Plaintiff by HongCC to the bond company, and RedCC was punished for a violation of the Commercial Act due to the facts charged that it increased the BB’s capital by pretending the payment of the stock price in connection with this, and there was no amount actually borne by the Plaintiff at the time of each of the capital increase with consideration for capital increase.

② The witness RedCC testified that, in this Court, since it did not actually pay the price at the time of the first capital increase with respect to the capital increase, it did not match the shares ratio of the existing shareholders of BB, and that the other shareholders of BB gave implied consent thereto.

In addition, in this court, the witness HongCC testified that the stocks allocated in the name of the plaintiff were put in the name of the plaintiff in the name of the plaintiff in order that BB satisfies the requirements of the agricultural company and as a collateral for the land price to be paid to the plaintiff. Since the RedCC again decided to acquire stocks, it did not grant the right to dispose of to the plaintiff because the HongCC did not grant the right to dispose of to the plaintiff.

(3) The Plaintiff is not entitled to exercise voting rights or to receive dividends at a general meeting of shareholders of BB as a shareholder with allocated shares.

④ The BB was established on April 9, 2001, and became an agricultural company upon changing the purpose business on March 30, 2009. Meanwhile, according to Article 19 of the Act on Fostering and Supporting Agricultural and Fisheries Enterprises and Article 18 of the Enforcement Decree of the same Act, the limit to which a person, other than a farmer or an agricultural producers’ organization, may invest in an agricultural company shall not exceed 90/100 of the total amount of investment in the agricultural company. At the same time, the Plaintiff was registered in the farmland ledger as a farmer, while the RedCC or other shareholders were not farmers, there was a need for the Plaintiff and the same farmer to own at least 10/100 of the share of BB.

⑤ On March 30, 2009, the Plaintiff assumed office as the intra-company director of BB, and received shares through the first capital increase with respect to the shares. On January 11, 2011, the Plaintiff retired from office as a director and returned all shares acquired through each of the instant capital increase with respect to the shares to RedCC without compensation.

In the document of "Cooperation on the business of January 4, 201, dispatched by the Plaintiff at the time of resignation", the defendant's assertion that the listed director in BB should be excluded from office until January 10, 201, and the principal time is changed and the 40% portion portion of the 40% portion shall be signed and sealed at the time of the withdrawal, and the signature and seal shall be affixed to the waiver form."

"The defendant asserts that the disposition of this case is legitimate, since the plaintiff is charged more tax than the tax amount imposed on the disposition of this case in accordance with the "Presumption of Donation of Title Trust Property" under the provisions of Article 45-2 of the Inheritance Tax and Gift Tax Act, even if there are errors or errors in part of the facts recognized at the time of the initial disposition, if the facts recognized thereafter vary within the scope of the same fact as the original disposition, it cannot be seen as maintaining the identity of the disposition (see Supreme Court Decision 96Nu3272 delivered on February 11, 1997). However, since the tax rate of each donor is established by donation of property from several persons, each donor's gift tax amount is calculated by applying the gift tax rate to each donor. Thus, if there is a difference between the fact that the tax authority imposed as one donor and the actual donor or the first donor, it cannot be deemed that there is a difference between the two or more facts.

In this case, the instant disposition is a disposition imposing gift tax pursuant to Article 39 of the Inheritance Tax and Gift Tax Act on the ground that the Plaintiff received a donation of capital increase from several existing shareholders at the time of capital increase due to the Plaintiff’s donation of capital increase from the number of existing shareholders at the time of capital increase. However, the said fact alleged by the Defendant in this court is that gift tax may be imposed pursuant to Article 45-2 of the Inheritance Tax and Gift Tax Act on the ground that the Plaintiff received a title trust of shares from one redCC and received a donation of the amount equivalent to the shares entrusted. Therefore, the identity of the disposition is not recognized because the relevant taxable unit

Therefore, the defendant cannot add the above argument as a new ground to justify the disposition of this case. Thus, the defendant's argument cannot be accepted.

3. Conclusion

Therefore, without further review as to the remaining arguments of the plaintiff, the plaintiff's primary argument is with merit, so it is decided as per Disposition by accepting the claim of this case.