Donation of profits following the listing, etc. of stocks or equity shares;

The stock option, which was renounced for the initial acquisition of shares, should have been in a quid pro quo relationship with the acquisition of shares, but did not calculate the registration benefits of shares, including the acquisition value, and the original disposition is revoked due to the lack of reasonable calculation details by the closing of the arguments at

Article 41-3 of the Inheritance Tax and Gift Tax Act / [Presumption of Donation of Benefits from Listing of Stocks or Equity Shares]

Article 63 (Appraisal of Securities, etc.)

1. The Defendant’s disposition of imposition of KRW 1,416,716,310 against the Plaintiff on August 1, 2006 shall be revoked.

2. The costs of the lawsuit are assessed against the defendant.

The same shall apply to the order.

1. Details of the disposition;

The following facts shall not be disputed between the parties, or may be recognized by comprehensively taking into account each entry in Gap evidence 1, 2, 3, 6, Eul evidence 1, 2, Eul evidence 7-1 through 4, and the whole purport of pleadings:

A. ○○○ Co., Ltd. (hereinafter “Nonindicted Company”) is a corporation established on April 2, 1998 for the purpose of designing, manufacturing, and selling semiconductor chips and related products.

B. On November 1, 2002, the number of ○○, the representative director of the non-party company, and the largest shareholder, transferred 10,000 shares (the face value of 5,000 won, hereinafter referred to as the “instant shares”) among the shares held by himself to the Plaintiff, who was in office as a business director of the non-party company, to KRW 1,000 per share. The shares of the non-party company were divided into KRW 5,00 per share from KRW 5,00 to KRW 50 per share on January 21, 2004. The shares of the non-party company were registered with the Korea Securities Dealers Association on August 13, 2004.

C. As of November 13, 2004, when three months have passed from the date of the registration of the shares of the non-party company, the defendant decided and notified the plaintiff of KRW 1,461,716,310 for the gift tax of 2004 calculated as follows on August 1, 2006, on the ground that the difference after deducting the total amount of the initial acquisition value and the profit from the actual increase in corporate value from the value of the shares of this case was 30% or more than the initial acquisition value (hereinafter "the disposition of this case").

【Calculation Details of Taxable Value of Gift Tax】

donor

(1) Number of shares.

(2) A share:

Acquisition Value

Decisions

(3) A share;

(4) Actual value.

(5) Increase per stock.

(6) Total amount of documentary evidence.

Values

Increase

(=3-No.2)

(=X)

○ Yellow Water

10,000 Shares

100 won

35,431 won

5,000 won

30,331 won

3,033,100,000 won

[Details of Determination of Gift Tax]

Classification

Amount

Taxable Value of Gift Tax

3,003,100,000 won

Appraisal and Receipt, etc.

30,000,000 won

Tax Base

3,003,100,000 won

Tax Rate

50.00%

Calculated tax amount and determined tax amount

1,041,550,000

Additional Tax for Insincere Report

208,310,00 won

Additional Tax for Insincere Payment

166,856,310 won

Total final tax amount

1,416,716,310 won

Amount of tax notified after deduction

1,416,716,310 won

D. On November 6, 2006, the Plaintiff appealed to the National Tax Tribunal, but was dismissed on July 30, 2007.

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The plaintiff asserts that the disposition of this case is unlawful for the following reasons.

1) The provision of Article 41-3 of the Inheritance Tax and Gift Tax Act provides that, without any connection with the purpose of preventing an irregular change in the value of high-value property or that it uniformly imposes gift tax on a stock transaction that is not a gift for the purpose of donation under the intrinsic nature by stipulating that a transaction between the largest shareholder of a company and an executive and a related party with respect to stock transaction shall be imposed with respect to the transaction of stocks, without any connection with the purpose of preventing a change in the value of assets, thereby violating the principle of excessive prohibition under the Constitution. Article 31-6 (5) of the Enforcement Decree of the same Act delegated by Article 41-3 of the Inheritance Tax and Gift Tax Act (amended by Presidential Decree No. 17791 of Dec. 5, 202) provides that where the acquired stocks are unlisted stocks, it shall be calculated uniformly on the basis of net profit and loss in calculating profits from a substantial increase in the value of the company. Accordingly, it shall be excluded from the calculation of the actual value of the investment company's investment in 004.

2) The Plaintiff does not acquire the instant shares with an internal government for the purpose of gaining the profit from the market price by making use of the internal government (in light of the circumstances of the non-party company at the time of the transfer of the instant shares, the number of ○○ does not constitute “the largest shareholder, etc. who is deemed to be in the position of using the non-public information as to the management, etc. of the company” under Article 41-3(1) of the Inheritance Tax and Gift Tax Act at the time of the transfer of the instant shares, and the value of the instant shares increases due to the registration of the shares of the non-party company as a result of efforts by its officers and employees including the Plaintiff

3) On March 31, 2003, the Plaintiff transferred 1,000 shares of the instant shares to ○○○ Investment, and did not own them at the time of registration and did not gain any profit from the registration. Therefore, the amount equivalent to the gift tax on this portion is unfairly imposed.

4) As the Plaintiff renounced 3,50 shares of stock option 5,750 shares already granted on the condition of acquiring the instant shares from Yellow Water, the Plaintiff had to exclude the above 3,500 shares from the aforesaid 10,000 shares in calculating the registered profits. However, the Plaintiff calculated the registered profits based on the entire shares of this case.

(b) Related statutes;

Article 22 (Inheritance Deductions of Financial Property)

Article 41-3 (Presumption of Donation of Benefits from Listing, etc. of Stocks or Equity Shares)

Article 63 (Appraisal of Securities, etc.)

Article 19 (Inheritance Deductions of Financial Property)

(c) Fact of recognition;

The following facts may be acknowledged in light of the above evidence and evidence of subparagraph 4, evidence of subparagraph 5-1 to 8, evidence of subparagraph 8 through 26, evidence of subparagraph 1 to 31, evidence of subparagraph 2, evidence of subparagraph 32-1 to 22, evidence of subparagraph 3-1 to 9, evidence of subparagraph 3-1, evidence of subparagraph 3-2, evidence of subparagraph 4, evidence of subparagraph 5, evidence of subparagraph 8-1 to 26, evidence of subparagraph 3-1 to 4, evidence of subparagraph 5, evidence of subparagraph 8-1 through 5, and the whole purport of the arguments and arguments:

1) On April 2, 1998, the non-party company was established with capital of KRW 200 million for the purpose of designing, manufacturing, and selling semiconductor chips and related products. The non-party company was established with capital of KRW 2290,000,000,000 as of the end of several occasions of capital increase, but it was difficult for the non-party company to conduct repeated losses, such as where there was a net loss of KRW 819,000,000 and KRW 1.560,000,000 on 2.78,000,000.

2) On November 1, 2002, the number of YO, the representative director and the largest shareholder of the non-party company, transferred 68,300 shares of the non-party company to 12 executive officers and employees, including the Plaintiff, to KRW 1,00 per share in order to encourage them to work, and in order to secure the stock option amount to be allocated to the executive officers and employees recognized as additional contributions at the time, or to the executive officers and employees who will be employed in the future, the number of YO, the largest shareholder, was the representative director of the non-party company, and was prepared and submitted a written confirmation from the above transfer date.

3) Accordingly, on November 1, 2002, the Plaintiff acquired the instant shares from Yellow Water in KRW 1,000 per share. On December 29, 2000, the Plaintiff prepared a written confirmation to waive 3,500 shares out of KRW 5,750 already granted from the non-party company and submitted it to the non-party company.

4) Meanwhile, the contents of the stock option agreement concluded on December 29, 200 between the Plaintiff and the non-party company are as follows.

Article 4 (Details of Exercise of Stock Options)

The details of exercise of preemptive rights to purchase stocks shall be as follows:

(a) The subject shares: Registered common shares of the non-party company;

(b) Quantity granted: 5,750 shares;

3) Method of granting: The board of directors shall determine the difference between the issue of new stocks, the issuance of treasury stocks, the exercise price of stock option and the market price of treasury stocks at the time of exercising the preemptive right to purchase stocks, in cash or as treasury stocks.

4) Exercise price: 7,500 won on the basis of par value 5,000 won.

5) The duration of exercise and the number of events are as follows:

(1) The period of compulsory possession shall be three years from December 29, 2000 to December 28, 2003.

(2) The duration of exercise shall be five years from December 29, 2003 to December 28, 2008, and in case of the quantity of exercise, 20%, 30%, and 50%, respectively, of the total number of exercise events may be exercised during the first year, second year, and third year, respectively, and the remainder of exercise period after the third year, may be exercised within the end of the duration of exercise.

(3) If a person retires from the exercise of the preceding item three years after the retirement thereof, he/she shall exercise his/her authority within three months from the retirement date.

6) Extinguishment of rights

In the exercise of authority under paragraphs (2) and (3), the preemptive right to share purchase that is not exercised until the expiration of the period for exercise shall be deemed extinguished.

5) Meanwhile, as of January 1, 2002, the Plaintiff owned 6,000 shares of the non-party company as of November 1, 2002, acquired 10,000 shares of the non-party company from Yellow Water on November 1, 2002. On March 31, 2003, the Plaintiff transferred 1,000 shares of the non-party company to ○○ Chang Investment at KRW 40,000 per share (including transfer of the above shares from the plaintiff around 2003, transfer of 20,00 shares of the non-party company from the officers and employees of the non-party company to 40,00 shares per share).

6) However, upon the Plaintiff’s transfer of 1,00 shares on March 31, 200, the Plaintiff reported and paid 3,650,000 capital gains tax after filing a transfer income tax return to the head of Ansan Tax Office on April 7, 2003 to the effect that “1,00 shares of the company outside Korea shall be transferred to KRW 1,000 per share on December 15, 1999 and transferred to KRW 40,000 per share on March 31, 203.”

7) The Seoul regional tax office conducted a tax investigation on corporate stock changes with respect to the non-party company from March 20, 2006 to May 31, 2006, and as a result, on November 1, 2002, which was three years prior to registering the stocks of the non-party company in the Korea Securities Dealers Association, issued a notice to the Defendant as taxation data.

8) In calculating the gift tax on the Plaintiff’s registered profits of the instant shares, the Defendant calculated the assessment value per share as of the date of settlement ( March, November 13, 2004) as at the base date of the Korea Securities Dealers Association (the base date of February before and after the base date of appraisal pursuant to Article 63 of the Inheritance Tax and Gift Tax Act) as at 35,431 won, and the substantial increase in corporate value per share was calculated as at 5,000 won based on the net profits and losses of the Nonparty Company, which were submitted by the Nonparty Company pursuant to Articles 36-6(5) and 56(3) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act.

D. Determination

1) Determination on the first argument

A) The purpose of Article 41-3 of the Inheritance Tax and Gift Tax Act is to make it possible for the largest shareholder, etc. to make it possible to make an illegal division of profit by donating or transferring for consideration stocks to his/her children, etc. to a related party, etc., or to keep the donee or the acquisitor without transferring them, and to solve the problem of controlling the affiliate without any tax burden. In this case, the expected amount of profits on the listing or registration in the future is not appropriate at the time of donation of non-listed stocks, and it is possible to make it possible after listing or registration, so it is a system that accurately evaluates the profits after listing or registration and adjusts the amount of non-listed stocks as listed stocks.

B) Therefore, the above provision is limited to the case where the largest shareholder, etc. who can use information that is not disclosed about the management, etc. of a company is donated or transferred within the scope of the donor in accordance with the above legislative intent. As such, it is not a legislation that violates the principle of proportionality in the Constitution by infringing the legitimacy of the legislative purpose and the appropriateness of the means of evaluation of listing or registration that is made later after stock transaction, since the largest shareholder, etc., as well as the executives, donated the unlisted stocks prior to listing or registration, or publicly announcing the control over an affiliate without tax burden by transferring salt at the same time.

C) In addition, in calculating the listing or registration profit, it should be calculated by deducting the taxable value or acquisition value of the gift tax of unlisted stocks from the appraised value of the relevant stocks as of the date on which the settlement of accounts is based. However, in a case where considerable time is required from the donation or acquisition of unlisted stocks to the listing or registration, the substantial increase in the corporate value may be included in the period, such as the improvement of the business performance of the issuing corporation during the period. Therefore, it

However, Article 31-6(5) of the Inheritance Tax and Gift Tax Act provides that the calculation of profits from a substantial increase in corporate value shall be based on the amount of net profits and losses of the relevant company in principle. This is considered to be a relatively fair and objective assessment of corporate value, based on the materials, such as financial statements reflecting the business performance of the relevant company. As such, it cannot be deemed that the calculation method of profits under the provision of the Enforcement Decree of the said Act is unreasonable

Therefore, this part of the plaintiff's assertion is without merit.

2) Judgment on the second argument

The phrase “a person who is deemed to be in a position to use undisclosed information pertaining to the business management, etc. of a company” under Article 41-3(1) of the Inheritance Tax and Gift Tax Act means a person who needs to have knowledge of his position and duties, shareholder status, corporate governance, etc. of the company and to have been in a position to use such information. In fact, whether there was a specific plan or information pertaining to the business disclosure, in particular, whether there was a specific plan or information related to the business disclosure, does not require that person actually used such information.

Unlike the plaintiff's assertion, in interpreting the meaning of a donor as stipulated in the above provision, there is no special reason for interpretation as a person who has become aware of significant information that may cause a company disclosure, such as listing or registration plan, or a change in the value of the company's stocks. This interpretation also goes against the principle of strict interpretation under the tax law.

C. In addition, so long as ○○ at the time of transfer of the instant shares to the Plaintiff is deemed to have been in the position of being directly involved in the management of the non-party company as the largest shareholder of the non-party company at the time of transfer of the instant shares and having been in the position of using information inside the non-party company more easily than anyone, ○○ number, the largest shareholder of the non-party company, at the time of the Plaintiff’s assertion, could not easily expect the registration of shares of the non-party company, even though the ○○ number, which was the largest shareholder, could not be deemed to have been in the position of using information that

Therefore, the plaintiff's assertion on this part is without merit.

3) Judgment on the third argument

In general, the burden of proving the facts of taxation requirement in a lawsuit seeking revocation of disposition imposing tax shall be borne by the imposing authority. However, if it is revealed that the facts of taxation requirement have been presumed in light of the empirical rule in the course of a specific lawsuit, it cannot be readily concluded that the other party is an unlawful disposition that fails to meet the taxation requirement, unless the other party proves that the facts in question were not eligible for application of the empirical rule (see Supreme Court Decision 97Nu13894, Jul. 10, 1998).

However, according to the above facts, when transferring 1,00 shares on March 31, 200, the plaintiff submitted a transfer income tax return to the head of Ansan Tax Office on April 7, 2003 that "transfer 1,000 shares of the non-party company to KRW 1,000 per share on December 15, 199 and transfer 40,000 won per share on March 1, 31, 2003". Thus, it is reasonable to view that the above transfer shares as 1,00 shares out of the shares that were acquired on December 15, 199 are transferred. Accordingly, the plaintiff did not prove that it is the transfer of 1,00 shares out of the shares of this case. Thus, it is legitimate to calculate profits from the registration of this case without excluding 1,00 shares out of the shares of this case.

Therefore, the plaintiff's assertion on this part is without merit.

4) Judgment on the fourth argument

A) According to the above facts, it is reasonable to view that the Plaintiff acquired the instant shares from Yellow Water on the condition that the Plaintiff renounced the stock option of 3,500 shares to the non-party company. However, the waiver of the said stock option agreed between the Plaintiff and Yellow Water was the price for acquiring the instant shares at a price lower than the market price at the time (it is in the relationship between the non-party company and the non-party company, even though the Plaintiff’s waiver of the stock option was in the relationship between the non-party company, it is in the relationship between the acquisition of the instant shares and the economic rationality, and it is not deemed that it was made in consideration of the registration or listing of the instant shares.

Therefore, the plaintiff's assertion that the above 3,500 shares should be excluded in calculating the registration profit of the shares of this case is without merit.

B) However, Article 31-6 (3) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act adopts the method of deducting the acquisition value per share as of the date of acquisition from the evaluation value per share as of the date of settlement of accounts. As seen earlier, the Plaintiff renounced the stock option, which is an intangible property right with property value, in addition to the payment of the amount of KRW 1,000 per share to acquire the instant shares. Since the waiver is in a de facto quid pro quo relationship with the acquisition of the instant shares, this also should be included in the "acquisition value" under Article 31-6 (3) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act, along with the acquisition price paid by the Plaintiff (in the current Income Tax Act where the confirmation principle of rights is adopted, the economic profit equivalent to the difference between the market price and the exercising price of the relevant shares should be determined or realized by acquiring shares by exercising the stock option. However, it is reasonable to view that the Plaintiff’s tax obligor’s income is fair by preventing the taxation balance of taxable years, as well as by uniformly identifying the acquisition value of the stock option based on the purpose of Article 13.

Therefore, although the defendant calculated the fair market value of the stock option that the plaintiff waived at the time of the transfer of the stock in this case and calculated the registration profit of the stock in this case by reflecting it as an element for calculating the registration profit of the stock in this case, the defendant's disposition of this case otherwise reported is unlawful (it is determined whether the disposition is legitimate in a disposition of revocation of the disposition of taxation in this case, depending on whether it exceeds a legitimate tax amount or not. Thus, the party concerned may submit arguments and materials supporting objective tax base and tax amount until the closing of argument in the fact-finding court, and when computing the legitimate tax amount to be imposed lawfully by such materials, only the portion exceeding the legitimate tax amount shall be revoked. However, in this case, the fair market value of the stock option at the time of the transfer of the stock in this case cannot be calculated because there are no particular

3. Conclusion

Therefore, the plaintiff's claim of this case is justified and it is so decided as per Disposition.