Changwon District Court 2013Guhap466

It can not be deemed as a title trust of shares because it unilaterally uses the name.

It shall not be deemed that the consent was impliedly given to the title trust of shares, and it shall not be deemed that the title of shares was unilaterally used to prevent accidents, such as shareholders.

Donation of trust property under Article 42-2 of the Inheritance Tax and Gift Tax Act

2013Nu10451 Revocation of Disposition of Imposition of Gift Tax

Jung-○ et al.

○ Head of tax office

Changwon District Court Decision 2013Guhap466 Decided November 12, 2013

oly 2015.13

oly 2015.10

1. Revocation of a judgment of the first instance;

2. The imposition of each gift tax stated in [Attachment 1] gift tax column, which the defendant on January 6, 201x against the plaintiffs, and the imposition of each additional tax stated in [Attachment 1] column as of September 4, 201x shall be revoked.

3. All costs of the lawsuit shall be borne by the defendant.

The same shall apply to the order.

1. Details of the disposition;

A. Kim ○ is an actual operator of ○○○ Development Co., Ltd. (hereinafter referred to as “○○○ Development”), ○○ Heavy Industries Co., Ltd. (hereinafter referred to as “○○ Heavy Industries”), and ○○ Construction Co., Ltd. (hereinafter referred to as “○○ Construction,” and hereinafter referred to as “each of the above companies”).

B. The plaintiff Kim △△△△ (referring to the Ma○○○○), from December 11, 200x to March 31, 200x, and from March 31, 200x to March 31, 200x, and had been working as the representative director of the same company until January 25, 200x, and the plaintiff Kim ○○ was working as the auditor of the same company from August 29, 200x to March 31, 200x, from August 29, 200 to March 31, 200x, the plaintiff Kim ○ was currently working as the executive officer of the same company, and the plaintiff Kim ○○ was currently working as the executive officer of the same company, from August 29, 200 to March 31, 20x, or was registered as the executive officer of the same company in the corporate register of the plaintiff (the plaintiff Hong○○○).

C. Each of the changes in stocks, etc. submitted by each of the instant companies to the Defendant was registered as holding each of the shares of each of the instant companies in the name of the Plaintiffs (hereinafter “each of the shares in this case”) owned by Kim○-○ as shown in attached Table 2 by the Plaintiffs.

D. As a result of the general aggregate investigation of corporate tax from 200x to 200x business year, Kim ○○ deemed that the shares of each company of this case were trusted to the Plaintiffs, and notified the Defendant of taxation data thereon. The Defendant applied the provision on the constructive gift of title trust property under Article 45-2 of the Inheritance Tax and Gift Tax Act (see attached Table 3; hereinafter the same shall apply) to the transfer of each of the shares of this case to the Plaintiffs, as stated in [Attachment 1] gift tax item (including additional tax] on January 6, 2012, and then dismissed each of the above additional taxes on September 4, 201x1 as stated in [Attachment 1] item 3] to specify the type of each additional tax and the basis for calculation thereof, and upon the request of the Plaintiffs for a trial, the Plaintiffs were subject to the disposition of imposition of penalty tax on January 6, 201x1 (hereinafter referred to as “the Plaintiffs’ respective main tax and additional tax on January 6, 201).

[Ground of Recognition] Facts without dispute, Gap evidence 1, Eul evidence 3-1 through 6, Gap evidence 9, Eul evidence 11-1 through 18, Eul evidence 1, Eul evidence 17, 19-1 through 19, Eul evidence 20, Eul evidence 24-1, 24-3, Eul evidence 23-1 through 5, and the purport of the whole pleadings

2. Whether each of the dispositions of this case is legitimate

A. Summary of the plaintiffs' assertion

1) Each of the instant companies was prepared a list of shareholders, and the Plaintiffs did not transfer to the future regarding each of the instant shares. As such, the provision on deemed donation of title trust property under Article 45-2 of the Inheritance Tax and Gift Tax Act cannot be applied to the instant case.

2) Inasmuch as Kim○-○ entered the Plaintiff as a shareholder of each of the instant companies as indicated in the separate sheet No. 2, which would be known to the Plaintiffs, in light of the fact that the Plaintiff received the certificate of seal imprint and the certificate of seal imprint as an executive officer, and was punished for forgery and use of the certificate of transfer and takeover of shares in the Plaintiffs’ names, it cannot be deemed that there was an agreement on title trust between the Plaintiffs and Kim○-○. Even if the title trust is recognized, it cannot be deemed that there was an intention of tax avoidance. Thus, the provision on deemed donation of the property under title trust

3) Nevertheless, each of the dispositions of this case where gift tax and additional tax are imposed on the Plaintiffs on different premise is unlawful.

B. Relevant statutes

Attached Form 3 shall be as listed in attached Table 3.

(c) Fact of recognition;

1) Both ○○○○ Development, ○○○ Heavy Industries, and ○○ Construction are the same as ○○○○○○○○○○○○○-X at the time of through-house, and the Plaintiffs were registered or registered as executive officers of each of the instant companies as seen in the basic facts, but actually worked as an employee, and Kim○ was practically operating each of the instant companies.

2) ○○ Tax Investigation by the National Tax Service

A) On September 28, 201, in relation to the consolidated investigation of corporate tax of each company of this case, ○○○ was investigated by the public official of ○○ National Tax Service on the title trust of shares, and (i) he/she took over all shares of ○○ Construction from the existing shareholders on January 19, 200x, but he/she was in title trust to the Plaintiff Red○○, ○○, ○○, ○○, ○○, and ○○, and ○○, a staff member of Makdong interest. (ii) on August 29, 200x, established ○○○○○ Development and owns all shares, but he/she was in title trust to the employees of ○○○○○, an employee of △△△△, who is a Mak and an employee of △△△, and (iii) was well aware of the details of the company’s title trust, but he/she was in title trust to the effect that he/she was in title trust to the employees of ○○.

B) On October 4, 201, the Plaintiff Hong○○, Han○, Kim ○, Kim △△, Kim △△△, Kim ○○, and Lee ○○○ on October 4, 201, prepared and submitted a written confirmation that “self-reliance was not a real shareholder, and that the Kim○ was only lent his name upon the request of Kim○○, from the point of view of the company’s employees.” The Plaintiff Jeong○, Kim ○, and Kim○ did not prepare a written confirmation.

6) Complaints against Kim○-○ and final judgment

A) On October 10, 201, the Plaintiffs, ○○, ○○○, ○○○, and ○○○○ filed a complaint with the ○○ Police Station on the charge of “The ○○○○○ arbitrarily forged documents on shares and water supply, using seals, certificates of personal seal impression, etc. kept by ○○○ without his/her consent.”

B) On November 15, 201x. 17, 17, 201x. 11, 201, Kim○-○ confirmed all the facts of suspicion that “In establishing ○○ Construction, etc. at around 200x, he requested the complainants who are the neighbors to obtain the certificate of personal seal impression and seal, etc., and forged the stock and water supply contract without obtaining consent from the complainants as shareholders of the above company.”

C) On December 20, 201, Kim○-○ was prosecuted on the charge of forging the above private document, and the judgment of conviction was rendered on December 20, 201 at the Changwon District Court’s Tong branch (201x, 32, 35, 41, and 72) and on September 6, 201, at the Busan High Court (Seoul High Court) which was the appellate court, the above criminal facts were recognized as they are, and was sentenced to a suspended sentence of five years and a fine of one billion won (201xxxxxx) (201xxxxxx). On November 8, 201, the appeal was dismissed (201xxxxxxxxxx) (201xxxxxxxxx).

D) Meanwhile, in a criminal trial on the fabrication, etc. of the above private document by Kim○-○, Plaintiff Hong○, Han-○, Kim Il-young, Kim Jong-young, Kim Il-○, and the outer ○○○○○, and the last ○○○, submitted a written agreement that the Defendant would not want the punishment of Kim○-○. However, the Plaintiff Jong○, △△△, ○○, and Kimx did not submit such a written agreement.

[Ground of recognition] Facts without dispute, Gap evidence 1, 4, 9, 13 evidence, Eul evidence 2 through 8, Eul evidence 14-1 to 7, Eul evidence 15, 16, and 18, the purport of the whole pleadings

C. Determination

1) Determination as to the argument described in the above A.1.

A) Relevant legal principles

Even if Article 45-2(3) of the Inheritance Tax and Gift Tax Act intends to evade taxes by entering the name of the owner of stocks, etc. differently from the actual owner in the specification, etc. of changes in stocks, etc., the legislative intent of the said Act is to supplement the problems that could not be applied to the application of the main sentence of Article 45-2(1) of the Inheritance Tax and Gift Tax Act in cases where the change of ownership is not made due to the lack of the register of shareholders or the register of members. In full view of such legislative intent and the fact that Article 45-2(3) of the Inheritance Tax and Gift Tax Act explicitly limits the scope of “where the register of shareholders or the register of members is not prepared” to “where the name of the owner is entered differently from the actual owner, even if the list of shareholders is entered in the specification, etc. of changes in stocks, etc., if the name of the owner is not entered in the name of the nominal owner, gift tax may not be levied by applying Article 45-2(3) of the Inheritance Tax

B) Determination

(1) Determination on ○○ Construction Stocks

The fact that ○○○○, ○○, ○○, ○○, ○○, ○○○, and ○○○○, in the statement of changes in each of the stocks, etc. of ○○ Construction submitted to the Defendant, are registered as holding each of the shares of ○○○ in the name of the said Plaintiffs, as shown in attached Table 2.

However, if the purport of the entire pleadings is added to the statement of evidence No. 19 and the testimony of part of the witness at the trial of the party in question, ○○ Construction prepared a register of shareholders, and on December 31, 200, the list of shareholders was submitted to the defendant on December 31, 200, and the statement of changes in stocks, etc. submitted to the defendant is registered as holding each of the shares listed in attached Tables 2, 5, and 17 in the name of the plaintiff Hong○○, Kim Young-si, and the defendant on the statement of changes in stocks, etc. submitted to the defendant. However, according to the above statement of changes in stocks, etc., it can be acknowledged that there was no entry of change in the register of shareholders in

According to the above facts of recognition, even though the plaintiff Hong○, Kim○, and ○○○ was registered as the owner of ○ Construction's shares as shown in Nos. 2, 5, and 17 in the statement of changes in stocks, etc. of ○○ Construction submitted to the defendant, the above plaintiffs cannot be subject to gift tax by applying Article 45-2 (1) or (3) of the Inheritance Tax and Gift Tax Act unless the transfer of ownership is made in the name of the above plaintiffs on the register of shareholders prepared by ○○ Construction, unless the transfer of ownership is made in the name of the above plaintiffs. On a different premise, the imposition of gift tax and additional tax on the attached Table 1 No. 2, and No. 1, No. 5, and No. 17 on the attached Table No. 1, which the defendant made against ○○○○○, and the plaintiff ○○, etc.,

[On the other hand, Article 45-2(1) of the Inheritance Tax and Gift Tax Act applies in cases where a real owner or a nominal owner makes a registration in the name of the nominal owner by agreement or communication with respect to the property that is required to transfer or exercise the right (see Supreme Court Decision 2007Du15780, Feb. 14, 2008). Therefore, in the case of shares, the tax authority must prove that a change in the name of the nominal owner was made in the name of the nominal owner differently from the actual owner. As seen earlier, the above provision may not apply unless a change in the name of the said Plaintiffs prepared by a stable construction in

Furthermore, the imposition of gift tax and additional tax against the above plaintiffs cannot be seen as having given implied consent to Kim○-○ with respect to the title trust of each of the above plaintiffs, and it is unlawful in that Kim○-○ unilaterally uses the above plaintiffs' names and thus, it is reasonable to view that the above plaintiffs are in accidents, such as shareholders with respect to each of the above shares.

Meanwhile, in addition to the purport of the entire argument of the evidence mentioned above, it can be acknowledged that ○○○○, which was submitted to the Defendant on December 31, 200, pursuant to the above statement of changes in stocks, entered the shares of ○○ Construction as at December 200x in the register of shareholders of ○○○○ as at December 31, 200, the Plaintiff 77,760 shares, 50, 400 shares, and 15,840 shares in the register of shareholders of ○○○○○○○, and 15,840 shares, respectively. Thus, the above Plaintiffs’ assertion, which is based on the premise that the above Plaintiffs’ name prepared by ○○○○ Construction in the register of shareholders, did not transfer ownership of shares

(2) Determination on ○○○ Development, ○○ Heavy Industries’s shares

There is no evidence to acknowledge that ○○○○ Development, ○○○○ Development, and ○○ Heavy Industries completed the register of shareholders. Accordingly, the above assertion on the shares of ○○○○○ Development, ○○○○○○ Industries among the shares listed in the attached Table 2 premised on this premise is without merit.

2) Determination as to the allegation in the above A.2)

A) Relevant legal principles

Article 45-2 (1) of the Inheritance Tax and Gift Tax Act shall apply to property, the transfer or exercise of rights of which requires registration, etc. in the name of the actual owner and the nominal owner by agreement or communication, and where registration, etc. is made unilaterally by using the name of the nominal owner regardless of the intent of the nominal owner, in which case the tax authority can only prove that the actual owner and the nominal owner are different, and where the unilateral act of the actual owner, the burden of proving that the use of the name was made by the unilateral act of the actual owner shall be the nominal owner (see Supreme Court Decision 2007Du15780, Feb. 14, 2008): Provided, That the title trust relationship is not necessarily established by an express agreement between the truster and the trustee, but may also be established by an implied agreement (see Supreme Court Decision 2000Da49091, Jan. 5, 2001).

On the other hand, even if a civil trial is not bound by the finding of facts in a criminal trial, the facts that have already been recognized as the reason for the criminal trial which became final and conclusive on the same factual basis are significant evidence, and thus, it cannot be recognized that the facts opposed to the finding of facts in a criminal trial in light of other evidence submitted in the civil trial, unless there are special circumstances where it is deemed difficult to adopt the factual judgment in a criminal trial (see Supreme Court Decision 94Da39215 delivered on January 12, 1995). Such a legal principle is the same in a criminal litigation (see Supreme Court Decision 98Du10424 delivered on November 26, 199)

In addition, barring any special circumstance, such as where a tax authority receives a written confirmation from a taxpayer to a certain taxable fact in the course of conducting a tax investigation, it may not readily deny the value of such written confirmation unless there is a compelling signature, sealing, or it is difficult to use it as supporting materials for specific facts due to lack of the content thereof, etc. (see, e.g., Supreme Court Decision 2001Du2560, Dec. 6, 2002). A written confirmation, etc. written by a person other than a taxpayer is merely a unilateral statement made by the person other than the taxpayer, unless there is any evidentiary material corresponding to the written statement or there is no complementary investigation such as confirmation of the fact about the taxpayer, etc., unless there is any other special circumstance (see, e.g., Supreme Court Decision 2009Du5022, Jul. 9, 2009).

B) In light of the aforementioned legal principles, comprehensively taking account of the following circumstances, the developments leading up to each disposition of the instant case, the evidence revealed prior to the recognition, and the evidence stated in Gap evidence Nos. 21, 26, 27, and Eul evidence Nos. 21, 27, and 28, and the overall purport of the pleadings, the Plaintiffs cannot be deemed to have given implied consent to the title trust of each of the instant shares to Kim○, and it is reasonable to deem that Kim○ unilaterally used the Plaintiffs’ names by unilaterally using the Plaintiffs’ names to be a shareholder, etc. of each of the instant shares.

① In a related criminal trial, ○○○○ was convicted of having established a certificate of transfer and receipt of shares, etc. and recorded the above plaintiffs as shareholders of ○○ Construction on the shares listed in [Attachment 2] Nos. 2, 2, 5, and 14 in the relevant criminal trial by stealing the name of ○○○, Kim Jong-young, and by arbitrarily using the name of ○○○○○○, Kim Jong-young, and on the other hand, it became final and conclusive (On the other hand, with respect to the suspected facts against each share listed in [Attachment 2] Nos. 1, 3, 4, 6, 7, 8, 10 through 13, and 15 through 19, on the ground that the statute of limitations, such as the charge of forging a private document, has expired. As to the suspected facts against each share listed in Attached 2, 2, 3, 4, 7, 8, 10 through 19, this criminal judgment was not prosecuted on the ground that

② In the course of the tax investigation, ○○ Kim○ stated that the Plaintiffs were registered as shareholders of each of the above shares with the consent of the Plaintiffs. However, there was no fact that the tax authority prepared a confirmation document that there was a timely consent to the title trust of shares in the course of the tax investigation from the Plaintiff Jeong○, ○○, and Kimx, who is the taxpayer. Therefore, the said statement cannot be deemed as taxation data for the above Plaintiffs without any special reason.

③ The Plaintiff Hong○○, ○○, ○○, Kim △, Kim △△, Kim △△, Kim ○○, and Lee○○○, respectively, prepared and submitted a written confirmation to the Defendant to the effect that the facts of title trust correspond to the facts of title trust. However, this is merely a comprehensive content that only lent the name upon the request of Kim○○○, and that the details of specific transactions, such as stocks and water supply, were managed directly by Kim○ and the company, and thus, it is insufficient to regard each of the above Plaintiffs as the supporting material for the specific facts of title trust, and it is difficult to believe the contents thereof in light of the fact-finding of relevant criminal judgment.

[On the other hand, the above plaintiffs did not prepare each of the above plaintiffs' written confirmations, and did not attach tax evidence, and they were prepared in violation of the regulations on the investigation process, such as the document prepared in a way other than a door answer form, and they signed without properly read the tax official's words that the investigation is completed when the above plaintiffs' names are written, and they cannot be used as evidence to prove tax grounds or facts related to title trust. However, as the above evidence and the testimony of ○○○○ witness at the first instance court and the first instance court were known in addition to the whole purport of the oral argument, it is recognized that the exception to the preparation of a self-written statement is not possible (Article 87 (4) 1 proviso of the National Tax Service Directive). Even if the tax investigation was conducted in violation of the regulations on the investigation process, it is hard to view that the above issue constitutes a case where a written statement of question and answer form is to be received under the regulations on the investigation process, even if the tax investigation was made in violation of the regulations on the investigation process, it cannot be viewed that the above plaintiffs's were forced or forced to prepare the above written confirmation document.

④ The content of the written answer submitted by ○○ Kim○-○ is merely a comprehensive reply to the fact that the ○○ Construction, ○○○ Development, and ○○ Heavy Industries comprehensively came to a title trust with the consent of its employees, and thus, it is difficult to reverse the fact-finding of the criminal judgment solely based on the above Kim○-○’s statement.

⑤ The Plaintiff regular ○○○, Red○○, ○○, ○○, ○○, ○○, ○○○, and ○○○○○○○○, did not have a relative relationship with ○○○○○, and was employed as an employee. Although the Plaintiff Kim △△△, △△△△, and ○x had a relative relationship with ○○○○○, the Plaintiff was employed as an employee in ○○ Development, the said company did not have a position to exercise its influence over the operation of the company, such as the management of the said company. On the other hand, there is no special reason to allow title trust of each of the said shares at the risk of imposing gift tax.

④ In light of the process of the above criminal trial and each type of punishment sentenced to Kim○○○, the above Plaintiffs appears to have no intention to agree with the above Kim○○, and there is no strong intention to punish them solely on the basis that the Plaintiff Hong○, Han○, Kim ○, Kim ○, Kim ○, and Kim ○○, submitted a written agreement by the Plaintiff Hong○, Kim ○○, Kim ○○, and Kim ○○, and the Defendant Hong○, Kim ○, Kim ○, and Kim ○○, were submitted to the Agreement, it is difficult to reverse the fact-finding of the criminal judgment.

7) As a related case, i) a private person identical to this case, which is a private person in the first instance court, filed a lawsuit against the head of ○○○ Tax Office for the revocation of the disposition imposing gift tax, although the judgment of losing the plaintiff was rendered in the appellate court, but the judgment of winning the plaintiff was rendered in the appellate court, and ii) the judgment of losing the plaintiff was rendered in the first instance court, but the appellate court rendered a favorable judgment against the head of ○○ Tax Office, but the case is currently pending in the Supreme Court, and iii) the highest ○○○ became the plaintiff and filed against the head of ○○ Tax Office for the revocation of the disposition imposing gift tax, which was filed against the head of ○○○ Tax Office as the plaintiff, was sentenced in the first instance court, and the case is pending in the appellate court, and iv) only one (i) the case is difficult to draw up in the first instance court and the appellate court's conclusion that the judgment of losing the plaintiff was final and conclusive in the appellate court, and some of the above-related cases are not reasonable among the plaintiffs's judgment.

Therefore, the above plaintiffs' assertion is reasonable, and it is not necessary to further determine whether there was a tax avoidance purpose in each transfer of shares of this case, and each of the dispositions of this case conducted on the premise that the title trust was established between the plaintiffs and Kim ○○.

3. Conclusion

If so, the plaintiffs' claims are justified, and all of them are accepted, and the judgment of the court of first instance is unfair with different conclusions, so it is revoked, and all of the dispositions of this case are revoked, and it is so decided as per Disposition.