209u1880 ( April 10, 2009)

beginning food business with the same trade name at the same place shall have been transferred

In light of the fact that it is widely known as a restaurant specialized in a triol to Koreans and foreigners and that anyone could have expected to enjoy a considerable profit if he/she accepts it, it is reasonable to view that the mother was transferred from his/her mother without compensation the goodwill having intangible property value by closing his/her restaurant and commencing food business in the same trade name as the Plaintiff began at the same place.

2010Guhap28816 Revocation of Disposition of Imposition of Gift Tax

XX

Head of the tax office;

April 7, 2011

May 12, 2011

1. The plaintiff's claim is dismissed.

2. The costs of lawsuit shall be borne by the Plaintiff.

The Defendant’s disposition of imposition of KRW 712,349,100 on January 15, 2009 against the Plaintiff was revoked.

1. Details of the disposition;

A. From April 1, 1994, Park Jong-B, the mother of the Plaintiff, operated a restaurant specialized in sugar (hereinafter “instant restaurant”) with the trade name of “△△△△△” in the Seoul Jongno-gu Seoul Metropolitan Government Building 00-0 and 224.82m2 (hereinafter “instant building”) on three lots of land, including the Plaintiff’s husband and the Plaintiff’s father, from around April 1, 1994, and closed down around January 5, 2006.

B. On January 6, 2006, the Plaintiff registered the business in the name of “△△△△△,” which is the same as the previous trade name in the instant building, and operated a restaurant specialized in sugar.

C. On January 15, 2009, the Defendant considered that the Plaintiff received all the rights to the instant restaurant business (hereinafter referred to as “business rights”) from the ParkA without compensation and assessed the value of business rights pursuant to Article 59(2) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act (amended by Presidential Decree No. 20720, Feb. 29, 2008; hereinafter referred to as “former Enforcement Decree of the Act”), and imposed KRW 712,349,100 on the Plaintiff (hereinafter referred to as “instant disposition”).

D. On April 10, 2009, the Plaintiff appealed to the Tax Tribunal for the instant disposition, but was dismissed on April 15, 2010.

[Ground of recognition] Facts without dispute, Gap evidence 1, 16 evidence, Eul evidence 1, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

When the plaintiff's mother becomes unable to operate a restaurant no longer than annually, the plaintiff only started to operate the restaurant with the same trade name at the same place, and the restaurant of this case exceeds the profit of this case compared with the restaurant of the same type and the same type due to special food manufacturing techniques, etc.

Grounds for recognition, entry of Gap evidence 2 through 15, Eul evidence 2 through 7 (including each number), the purport of the whole pleadings

D. Determination

According to Article 2 (3) of the former Inheritance Tax and Gift Tax Act (amended by Act No. 8828 of Dec. 31, 2007, hereinafter the "former Act"), where a tangible or intangible property that can calculate economic values is gratuitously transferred to another person by direct or indirect means, regardless of the name, form, purpose, etc. of the act or transaction, the amount equivalent to such profits shall be subject to gift tax.

In addition, a goodwill refers to an intangible property value, such as the traditional social credibility, location conditions, existence of a special manufacturing technology or transactional relationship, which makes it possible to make profits higher than the ordinary profits of other companies engaged in the same kind of business due to the business functions or characteristics of the company (see Supreme Court Decision 95Nu18697, May 28, 1997). Thus, the goodwill is also deemed to be included in the subject of gift tax as an intangible property value.

However, the following facts found in the facts as above, i.e., (i) the Plaintiff’s mother (parent) closed the restaurant of this case, immediately after the Plaintiff’s closure of the restaurant of this case, (ii) the restaurant of this case was widely known as a restaurant specialized in the public bath at the same place as its employees, and (iii) the actual amount of income generated from the restaurant of this case in 2005, immediately before the closure of the restaurant of this case, was 70,437,620 won; (iv) the Plaintiff would have received a reasonable amount of money from a third party, other than the Plaintiff, for a long time, for the acquisition of the restaurant of this case from the same location; and (v) the Plaintiff could have received a reasonable amount of money from the mother of this case as the purchase price for the house of this case without any specific restriction, and (v) the Plaintiff could have received a comprehensive property value of the same restaurant of this case from the mother of this case, as the Plaintiff’s owner of the building of this case, without any specific restriction.

Therefore, the plaintiff's above assertion on a different premise is without merit.

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and it is so decided as per Disposition.