Examination Donation 2009-0091 (Law No. 27, 2010.04)

Whether a person is a specially related person at the time of a contract for stock transfer and acquisition.

The Plaintiff asserted that the Plaintiff was not an employee at the time of the transfer of shares, and thus, was not an employee, but the employment relationship was established since the Plaintiff agreed upon the terms and conditions of acquiring the annual salary after entering the Plaintiff.

The contents of the decision shall be the same as attached.

1. The plaintiff's claim is dismissed.

2. The plaintiff shall bear the litigation costs.

The disposition that the Defendant imposed gift tax of KRW 174,590,630 on the Plaintiff on October 1, 2009 shall be revoked.

1. Details of the disposition;

A. The plaintiff's status

(1) On November 10, 200, the Plaintiff decided to take over 50,000 shares issued by the said company (hereinafter referred to as “instant shares”) owned by KimA from the largest shareholder, the representative director, KimA (the spouseB and the non-party company owned 58.27% of the total outstanding shares of the non-party company), as the largest shareholder and the representative director of △△△ Branch Co., Ltd. (hereinafter referred to as “non-party company”). On November 11, 2003, the Plaintiff completed the transfer of ownership of the said shares on November 11, 200 (hereinafter referred to as “instant share transfer agreement”).

(2) On December 1, 2003, the Plaintiff was appointed as an executive director of the non-party company.

B. The director of the Seoul Regional Tax Office, as a result of an investigation of stock change with respect to the non-party company, deemed that the Plaintiff’s acquisition of property at a price lower than the market price from a person with a special relationship under Article 35(1) of the Inheritance Tax and Gift Tax Act (amended by Act No. 7010, Dec. 30, 2003; hereinafter the same shall apply) and Article 26(1) of the Enforcement Decree of the same Act (amended by Presidential Decree No. 18177, Dec. 30, 2003; hereinafter the same shall apply) constitutes “the case of acquiring property at a price lower than the market price”, and notified the Defendant to impose gift tax by evaluating the market price of the shares as 645,750,000 won (12,915 won per share) pursuant to the supplementary assessment method under the Inheritance Tax and Gift Tax Act

C. Accordingly, on September 29, 2009, the Defendant imposed KRW 520,750,630,000 on the Plaintiff on the taxable value of donated property for 2003 (hereinafter “the instant disposition”). 520,750,000 calculated by subtracting KRW 100,000 from the market value of the instant shares (645,750,000) and the transfer price (25,00,000) (hereinafter “the instant disposition”).

[Ground of recognition] Facts without dispute, Gap 1, 2 evidence, Eul 1 to 3 evidence, Eul 5 to 7 each

Second, the purport of the whole pleading

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

Although the Plaintiff did not work for the non-party company at the time of the instant share acquisition agreement, it is unlawful for the Defendant to regard the instant share acquisition agreement as a transaction between related parties and make the instant disposition.

B. Relevant statutes

The entries in the attached Table-related statutes are as follows.

(c) Fact of recognition;

(1) Plaintiff’s career

원고는 1989. 12.경부터 2000. 5.경까지 ♧♧상사에서, 2002. 12. 1.부터 2003. 11. 11.까지 □□텍 주식회사에서 근무하였고, 2003. 12. 1. 소외 회사의 상무이사로 취임하였다.

(2) The reason why the plaintiff entered the non-party company

O The plaintiff was aware of the representative director KimA of the non-party company with the introduction of the employment penalty, and was recommended by KimA around September 2003.

O The plaintiff, at the time of entry from KimA, proposed the right to acquire the shares of the non-party company at par value. Ultimately, around October 2003, between the plaintiff and KimA, the plaintiff will be in charge of the general management as the head of the planning and management team of the non-party company, but finally agreed to acquire 50,000 shares of the non-party company at par value per share.

O) After that, the Plaintiff received a request from KimA to leave △ Tech Co., Ltd. and to leave Nonparty Co., Ltd. to enter the company. On November 10, 2003, the Plaintiff entered into the instant share acquisition agreement and agreed to work from December 1, 2003.

O. On the other hand, on November 11, 2003, immediately after the conclusion of the stock acquisition agreement of this case, the Plaintiff submitted a resignation notice to △ Tech Co., Ltd.

(3) According to the share acquisition agreement made between the Plaintiff and KimA as of November 10, 2003, the said agreement states that KRW 2,500,000 for down payment shall be the contract, and the intermediate payment of KRW 12,500,00 for the intermediate payment of KRW 10,000 shall be paid on December 10, 2003, and the balance of KRW 10,000 for the stock exchange shall be paid on January 10, 2004, and as a special engineer, “the title transfer on the register of shareholders and the transfer of shareholders’ rights shall proceed simultaneously with the contract.” The Plaintiff paid KRW 2,50,000 to KimA on the day of the instant share transfer agreement in cash.

(4) In the course of the tax investigation, the Plaintiff stated that, at the time of the instant stock acquisition agreement, the Plaintiff was aware that the market price per share of the instant shares was within 10,000 won and had a firm intent to join the Nonparty Company.

【Reasons for Recognition】 Each entry in the evidence Nos. 4 and 5, the purport of the whole pleadings

D. Determination

(1) Legal principles

Article 35 (1) 1 of the Inheritance Tax and Gift Tax Act provides that where a person having a special relationship takes over an asset at a price lower than the market price, the transferee of the asset shall be deemed the donee and shall be deemed to have received a donation equivalent to a certain amount of profit. Article 26 (4) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act provides that "a person having a special relationship under Article 35 (1) 1 of the same Act refers to a transferor and a person having a relationship under any of the following subparagraphs," and subparagraph 1 of Article 19 (2) provides that "one person, such as a shareholder, etc., shall be deemed a transferor, etc."

Furthermore, Article 19(2) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act provides that "the largest shareholder or an investor as prescribed by the Presidential Decree" shall mean a shareholder or an investor (hereinafter referred to as "shareholders, etc.") and a person in any of the following relationship with one shareholder, etc. shall be the shareholder, etc. in the case where the total number of shares held is the largest." Article 19(2)2 and Article 13(6)2 of the Enforcement Decree of the Inheritance Tax and Gift Tax Act lists "an employee as prescribed by the Ordinance of the Ministry of Finance and Economy (including an employee of a corporation under control by investment; hereinafter the same shall apply)" and Article 4 of the Enforcement Rule of the Inheritance Tax and Gift Tax Act (amended by Ordinance of the Ministry of Strategy and Finance No. 20 of Apr. 30, 2008) provides that "an employee as prescribed by the Ordinance of the Ministry of Finance and Economy of the above" shall be an executive, a commercial employee, and a person in

On the other hand, an employment relationship becomes effective when one of the parties agrees to provide labor to the other party and the other party agrees to pay remuneration therefor (Article 655 of the Civil Act). Whether a stock acquisition is in an employment contract relationship at the time of employment should be determined by comprehensively taking into account the actual contents of the contract, such as the intention of the party or the payment of the purchase price, in light of the principle of taxation, such as substantial taxation

(2) Determination

In full view of the aforementioned legal principles and facts acknowledged earlier, and the following circumstances revealed in the argument of this case, it is reasonable to view that the Plaintiff is an employee of the non-party company, the largest shareholder of which was controlled by KimA through investments, at the time of the instant share acquisition agreement, and who has a special relationship under Article 35(1) of the Inheritance Tax and Gift Tax Act. Therefore, the instant disposition based on this premise is justifiable. Accordingly, the Plaintiff’

(O) On October 2003, before the conclusion of the instant agreement on the acquisition of shares, the Plaintiff and KimA reached a final agreement on the Plaintiff’s class, duties, annual salary, conditions of acquiring shares, etc., and thus, the Plaintiff may be deemed to have established an employment contract relationship with KimA at this time.

O The Plaintiff was an employee of △T Co., Ltd., and at the same time, submitted a resignation statement to the company.

O Furthermore, the share acquisition agreement of this case was already scheduled since the conclusion of the employment contract around October 2003, and was implemented with the conditions of entry of the plaintiff into the non-party company (The GinA cannot pay a high amount of annual salary to the plaintiff under the annual salary system of the non-party company. In addition, it proposed that the shares will be transferred at par value to the plaintiff).

Article 35 (1) 1 of the Inheritance Tax and Gift Tax Act provides that "where the property is acquired by transfer from a person in a special relationship at a price lower than the market price, the transfer or transfer of the property concerned shall be deemed to have received the donation of an amount equivalent to the difference between the price and the market price, which is equivalent to the profits prescribed by Presidential Decree," and does not require that the amount be clearly shown by the statement in the public account book, etc. In addition, if the person in a special relationship is deemed to have been appointed, it shall be reasonable to view that such relationship is substantially the same as at the time of the occurrence of

O The Plaintiff’s acquisition of the shares of this case from KimA at par value reflects the employment contract, that is, the Plaintiff’s work as an employee from the company of this case, and it is reasonable to deem that the share acquisition agreement of this case was concluded with the meaning that the Plaintiff would pay in advance the labor cost provided to the company of this case.

3. Conclusion

The plaintiff's claim is dismissed on the ground that it is without merit.