Seoul Administrative Court 2012Gudan16070 ( November 27, 2013)

Provisions on the scope of large shareholders under the Income Tax Act do not violate the principle of excessive prohibition, equality, and tax equality under the Constitution.

Unless the provisions regarding major shareholders set the scope of major shareholders in light of the financial policy, the national economy, social policy, and tax and technical factors, the discrimination cannot be deemed arbitrary or unfair on the ground that such discrimination may not be deemed arbitrary or unfair on the ground that it may arise due to minor differences in stock ratio or total market value. Therefore, this disposition is justifiable.

Article 157 (Scope of Large Stockholders)

2013Nu32931 Revocation of disposition of imposing capital gains tax

1. AA 2.B

The director of the tax office.

Seoul Administrative Court Decision 2012Gudan16070 decided November 27, 2013

June 24, 2014

August 19, 2014

1. The plaintiffs' appeal is dismissed.

2. The costs of appeal are assessed against the Plaintiffs.

The judgment of the first instance is revoked, and each disposition of the capital gains tax imposed by the Defendant on July 7, 201 by the Plaintiff Cho Jae-A and the Plaintiff headB on July 7, 2011 is revoked.

1. Quotation of judgment of the first instance;

The reasoning for the court’s explanation on the instant case is as follows: (a)(1)(b) as to whether the instant disposition in the judgment of the court of first instance is contrary to the no taxation without law; and (b) as to the Plaintiff’s assertion added in the trial, the reasoning for the judgment of the court of first instance is the same as that of the judgment of the court of first instance; and (c) as such, it is cited in accordance with Article 8(2) of the Administrative Litigation Act and the main sentence of Article

2. Parts to be changed;

(B) Whether it violates the principle of no taxation without law

The principle of legality of taxation is the original mission of ensuring the predictability for the people in the future by clearly stipulating the requirements, procedures and effects of taxation in advance by law and promulgateing them to the people. To this end, it is argued by the plaintiffs that the statutory provisions on the requirements and effects of taxation can be able to forecast taxation with the duty of due care of the healthy people in terms of its content, and there is no possibility or uncertainty.

The plaintiffs, even though they are married couple, are in separate accounting systems under our Civil Act, insofar as there is no institutional system under the tax law that allows access to information on the shares ratio or total market value of other spouse, it would result in imposing legal effects unexpected to taxpayers and thus contravene the principle of no taxation without law. However, the provisions of the Enforcement Decree of this case under delegation of the legal provisions of this case clearly and uniformly stipulate the requirements or effects of taxation, and it would be unlikely to undermine legal stability and predictability in interpreting and applying them. However, even if they are married couple or other relatives, it may be difficult to grasp their respective shares status. However, in order to prevent modified donation using one of the legislative purposes of the legal provisions of this case, it is necessary to identify not only one shareholder who transfers shares, etc. but also those who are their spouse relations with them, and if the market value of the shares, etc. of the pertinent corporation is more than OOO members, it is difficult to see that they are subject to no taxation without law if they go against the principle of no taxation without law.

3. Determination on the additional argument

A. The plaintiffs' assertion

In light of the legislative intent of the instant legal provision and the instant Enforcement Decree provision, the Plaintiffs asserts that in order to make a constitutional and lawful statutory interpretation that removes the unconstitutionality of the instant legal provision and the Enforcement Decree provision in light of the fact that it goes against the principle of excessive prohibition in cases where the minimum degree of damage and balance of legal interests are not met, the Plaintiffs should not interpret the instant legal provision and the Enforcement Decree provision as a legislative provision and interpret the presumption provision to the effect that the taxpayers are given an opportunity for counter-proof that there is no purpose of tax avoidance.

B. Determination

The legislative intent of the instant legal provision and the Enforcement Decree provision is not only the prevention of modified donation using listed stocks, but also the method of imposing taxes on the transfer of listed stocks in cases where all stocks are owned more than a certain size or the total market value of the stocks owned is more than a certain size without subject to taxation under the circumstance where there is an dispute as to whether the transfer of listed stocks is subject to taxation in order to ensure the equity of taxation with respect to the transfer of other assets, such as real estate, etc. In addition, if the capital market is developed in a sound manner, there is the legislative intent to gradually expand the scope of the taxable object (see Constitutional Court Decision 2004HunBa32, 2004HunBa32, 2005HunBa63, 102HunBa 104, 105, 105, 105, 104, and 105, Constitutional Court Decision 2006)

Therefore, the plaintiffs' position to understand the purport of the legislation of the instant legal provisions and the Enforcement Decree provisions to the effect that the transfer margin from the transfer of shares is exceptionally imposed only when the purpose of tax avoidance exists, is difficult to accept. Furthermore, even if the taxation requirements prescribed in the instant legal provisions and the Enforcement Decree provisions are satisfied on the premise of the limited understanding of the legislative intent, if the taxpayer proves that the purpose of tax avoidance is not for tax avoidance, the above argument that the above argument by the plaintiffs should be interpreted

4. Conclusion

Therefore, the plaintiffs' claim of this case is dismissed, and the judgment of the court of first instance with the same conclusion is just, and the plaintiffs' appeal is dismissed as it is without merit. It is so decided as per Disposition.