Seoul Administrative Court 201Guhap2873 (O6. 17)

Cho High Court Decision 2010Du2325 ( October 28, 2010)

A gift tax disposition is deemed to have justifiable grounds for high-priced transfer, in violation of law.

(1) It is difficult to conclude that there was an inherent listed interest in the market price at the time of the transfer of shares at the time of the transfer of shares. The transfer value, which appears to have been taken into account the management rights and listed interest held by the Plaintiffs, considerably exceeds the market price at the time of the relevant shares, is not justifiable in light of transaction practices

2011Nu23568 Revocation of Disposition of Imposition of Gift Tax

LAA et al.

The Director of the Pacific District Office

Seoul Administrative Court Decision 2011Guhap2873 decided June 17, 2011

November 1, 2011

January 13, 2012

1. The defendant's appeal is all dismissed.

2. The costs of appeal shall be borne by the Defendant.

1. Purport of claim

On April 21, 2010, the Defendant revoked each disposition of KRW 1,336,030 on the gift tax of KRW 51,381,880, and KRW 1,336,030 on the gift tax of KRW 51,380 on the part of the year 206 against Plaintiff LA and KRW 20 on the part of Plaintiff Chapter B.

2. Purport of appeal

The judgment of the first instance is revoked. All of the plaintiffs' claims are dismissed.

1. Quotation of judgment of the first instance;

The reasons for this Court's decision are as follows, except for the supplement of the first instance court's decision, and they are cited by the court of first instance.

2. Parts in supplement of the determination rate in the first instance;

In the case of the transfer of shares, the Defendant asserts that the amount exceeding the market price at the time of the transfer of shares falls under the transfer of property subject to gift tax unless there is any justifiable reason as to the amount exceeding the market price. However, whether the listed profits are reflected in the market price of shares can not be uniformly determined on the ground that the listed profits are not necessarily evaluated as an economic value. Thus, it cannot be uniformly determined on the ground that the listed profits are not always evaluated on the market price of the shares, and the status, shares ratio, type and distribution of shares, the company’s own characteristics and type of business, the authorization of the brand in question, the company’s credit rating, the degree of activation of the stock market, and the domestic and foreign competition, etc. Furthermore, in the case of a contract between an attorney and an accounting firm with an equal person as at the time of the transfer of shares, the agreement between the parties should be respected in light of the principle of private autonomy, and it cannot be readily concluded that there is no justifiable reason to conclude that the above listed profits were traded at the time of the transfer of shares and the market price in question.

3. Conclusion

Therefore, the judgment of the first instance court is justifiable, and all appeals by the defendant against the plaintiffs is dismissed. It is so decided as per Disposition.