Seoul High Court 2017Nu45294 ( December 05, 2017)

The Plaintiffs actually acquired capital gains from the acquisition and transfer of new shares of this case as the subject of investment and calculation of the instant new shares.

The Plaintiffs, as the subject of investment and calculation with respect to the instant new shares, shall be deemed to have acquired capital gains from the acquisition and transfer of the instant new shares on the sole basis, rather than merely acquired capital gains from the acquisition and transfer of the instant new shares on the pretext, and thus, cannot be said

Article 14 of the Framework Act on National Taxes

2017Du75859 Revocation of Disposition of Imposing capital gains tax

○○ Kim et al.

○○ Tax Office et al.

Seoul High Court Decision 2017Nu45294 Decided December 5, 2017

May 15, 2018

All appeals are dismissed.

The costs of appeal are assessed against the plaintiffs.

The grounds of appeal are examined.

1. Article 14(1) of the Framework Act on National Taxes provides, “If the ownership of income, profit, property, act, or transaction subject to taxation is merely nominal, and there is another person to whom such income, profit, property, act, or transaction belongs, and there is another person to whom such income, profit, or transaction belongs, the person to whom such income, profit, property, or transaction belongs shall be liable to pay taxes.” The substance over form principle stipulated under Article 14(1) of the Framework Act on National Taxes, if there is a separate person to whom such income, profit, property, or transaction belongs, unlike the nominal person to whom such income, belongs, is not the nominal person to whom such income, but the person to whom such income, etc., belongs is not the nominal person to whom such income, etc., belongs. If the nominal person is not capable of controlling and managing the property, and the nominal person is separate from the nominal person to whom such income, the income from the property belongs shall be deemed to have been reverted to the person who actually controls and manages the property, and if there is no disparity between such title and substance, it shall be deemed the nominal (see, etc.

2. Based on the evidence duly admitted, the lower court rejected the Plaintiffs’ assertion that each of the dispositions of this case violates the substance over form principle on the premise that the person to whom the capital gains from the new shares of this case belongs Kim ○○ and Ma○○○, as the subject of investment and calculation with respect to the new shares of this case, did not acquire capital gains from the acquisition and transfer of the new shares of this case merely nominally, but actually acquired capital gains from the acquisition and transfer of the new shares of this case. As such, there is no gap between the name and substance. In light of the aforementioned legal principles and records, the lower court did not err in its judgment by misapprehending the legal doctrine on

3. Therefore, all appeals are dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.