Whether the provisions of Articles 54(1) and 54(2) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act concerning the method of evaluating unlisted stocks are invalid in violation of the scope of delegation under Article 63(1)1(c) of the Inheritance Tax and Gift Tax Act, a parent corporation, or against the principle of substantial taxation, market principle, and the principle of fair taxation (negative)

Article 63(1)1(c) of the Inheritance Tax and Gift Tax Act; Article 54(1)2 of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act (Amended by Presidential Decree No. 18177, Dec. 30, 2003);

Supreme Court Decision 2002Du9667 Decided October 10, 2003 (2003Ha, 2192) Supreme Court Decision 2004Du12193 Decided January 28, 2005, Supreme Court Decision 2005Du2063 Decided January 25, 2007 (Gong2007Sang, 373)

Plaintiff 1 and nine others (Attorney Choi Jong-soo, Counsel for the plaintiff-appellant)

Head of the Jeonju Tax Office

Gwangju High Court Decision 2005Nu448 decided August 25, 2005

All appeals are dismissed. The costs of appeal are assessed against the plaintiffs.

The grounds of appeal are examined.

1. Regarding ground of appeal No. 1

The court below held that it is difficult to see that there was a stock transaction alleged by the plaintiffs, and even if there was such stock transaction, it is difficult to find that the transaction price was a reasonable market price reflecting the objective exchange value of the stock of this case as a single transaction between related parties of concrete (trade name omitted). The above judgment of the court below is just in light of the records, and it is not unlawful in violation of the rules of evidence, such as

2. As to the grounds of appeal Nos. 2 through 4

Article 63(1)1 (c) of the Inheritance Tax and Gift Tax Act provides that unlisted stocks shall be assessed by the method prescribed by the Presidential Decree in consideration of the assets, earnings, etc. of the relevant corporation. According to the delegation, Article 54 of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act (amended by Presidential Decree No. 18177, Dec. 30, 2003) provides that the method of assessing unlisted stocks shall be net value (the weighted average amount of net profits and losses per share for the last three years ± average interest rate formed in financial markets) under paragraph (1). Paragraph (2) provides that where the net value of profits and losses falls short of the appraised value under net asset value (net asset value of the relevant corporation ± total number of issued stocks of the relevant corporation). Article 63(1)1 (c) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act (amended by Presidential Decree No. 18177, Dec. 30, 2003) provides that the market value of the relevant corporation shall not be reflected in the market value of the relevant corporation in principle.

Therefore, the judgment below to the same purport is just, and there is no error in the misapprehension of legal principles as to Article 63 (1) 1 (c) of the Inheritance Tax and Gift Tax Act and Article 54 (1) and (2) of the Enforcement Decree of the above Act, as otherwise alleged in the ground of appeal.

3. Conclusion

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.

Justices Ahn Dai-hee (Presiding Justice)