Seocho 2012west 3841 (Law No. 17, 2014)

The disposition of this case is unlawful because it is possible to impose gift tax on shareholders for increase in stock value of a black corporation, but there is no provision concerning the calculation of the value of donated property.

In relation to donation of cash, etc. to a non-party company in which the plaintiffs own 100% shares, gift tax can be imposed on the plaintiffs pursuant to Article 2 (3) of the Inheritance Tax and Gift Tax Act on the increase in the value of stocks of the non-party company. However, since the non-party company is a black company, the disposition imposing gift tax of this case is unlawful

Articles 2 and 42 of the Inheritance Tax and Gift Tax Act

2014Guhap52558 Revocation of Disposition of Imposition of Gift Tax, etc.

KimA, KimB, and KimCC

QQ세무서장, RR세무서장

October 24, 2014

November 25, 2014

1. On February 1, 2012, the head of the pertinent tax office revoked the imposition of gift tax (total sum of Plaintiff KimCC ○○○○, Plaintiff KimB ○○○, and total sum of Plaintiff KimB ○○○○) and additional tax (total sum of Plaintiff KimCC ○○, Plaintiff KimB ○○○, and Plaintiff KimB ○○○○) as indicated in attached Tables 1, 2012.

2. 피고 QQ세무서장이 2012. 6. 1. 원고 김AA에 대하여 한 별지 1 목록 제1항 기재 증여세 ○○○원 및 가산세 ○○○원의 부과처분을 각 취소한다.

3. The costs of lawsuit shall be borne by the Defendants.

Cheong-gu Office

The same shall apply to the order.

1. Details of the disposition;

A. As of December 31, 2003, FF (hereinafter referred to as FF) was a company that operates a HH golf club located in GGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGG, and the representative director is the Plaintiff KimA. As of December 31, 2003, the 60.84% of the total number of the issued shares of FF (the 60.84% of the total number of issued shares) was owned by Plaintiff KimA, ○○○○○○GGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGE and the representative director is the Plaintiff Kim GGGGGGGGGGGGGGGGGG, and the Plaintiff Kim GGGGGGGGGGGGGGGGGGG owned the 4%’s total number of issued shares.

B. On August 25, 2004, Plaintiff KimB received 150 shares from Plaintiff KimA on August 25, 2004, and 400 shares from Plaintiff KimCC on September 3, 2004, respectively. Accordingly, Plaintiff KimCC’s shares were 88% of shares issued, Plaintiff KimB owned 11%, and Plaintiff KimA, respectively.

C. From November 26, 2004 to February 27, 2010, Plaintiff KimA and LeeD made a donation of FF’s issued shares (hereinafter “the donation of this case’s shares”) to ○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○, hereinafter “instant shares”), and the Plaintiff KimCC’s assistant, on January 12, 2005, the donation of cash ○○○○○○○○○○○○○○○○○○ (hereinafter “the cash”).

List of votes

Date of donation;

donor

Gifted articles

Number of Stocks

The assessment value per share;

Amount of increase in assets;

The relation between Kim Jong-woo

November 26, 2004

D. D

FF Stocks

Ministry of Foreign Affairs

January 12, 2005

IB

Cash

Materna

15, 2005

KimA

FF Stocks

Reference

206.27

February 28, 2007

208.28

.28, 2009

202.27

D. With respect to the donation of the instant stocks and cash, GG City reported and paid corporate tax by including the increased value of assets in the pertinent business year as the profit from the receipt of assets in the gross income.

E. The head of the Seoul Regional Tax Office, from October 27, 201 to December 7, 2011, conducted an integrated investigation into the corporate tax against F and GGG City, and a gift tax investigation into the Plaintiff KimCC and KimB. As a result, GG City was based on the Plaintiff KimA, etc. from November 26, 2004 to February 27, 201, as the increase in the share value of GG City was gratuitously apportioned to the Plaintiffs through the instant shares and the instant donation donated with cash, the said GG City was subject to gift tax pursuant to Article 2(3) of the Inheritance Tax and Gift Tax Act (hereinafter “Inheritance Tax and Gift Tax Act”), and the said GG City was calculated and notified the Defendant of the gift tax by applying the provision “the profits derived from the change in the share or value due to the acquisition or transfer of the business, the change in the organization of the corporation’s organization, etc.” under Article 42(1)3 of the Inheritance Tax and Gift Tax Act.

F. On February 1, 2012, the director of the tax office imposed gift tax and additional tax from 2004 to 2010 on the Plaintiff KimCC and KimB, and the head of the tax office on February 1, 2012. However, it was confirmed that the disposition of erroneous imposition of gift tax and additional tax was taken on November 26, 2004 as to the gift of this case, even though the donor was in D with respect to the gift of this case, and that the disposition of erroneous imposition of gift tax and additional tax was issued on the Plaintiff KimCC and KimB ex officio on May 14, 2012. Ultimately, the details of the disposition of imposition of gift tax and additional tax imposed on the Plaintiff KimCC and KimB in relation to the gift of this case are as shown in [Attachment 1] 2 and 3.

G. Plaintiff KimCC and KimB were dissatisfied with the said taxation and filed an objection on April 26, 2012, but the said Plaintiffs’ objection was dismissed on May 25, 2012.

아. 한편, 피고 QQ세무서장은 2012. 6. 1. 원고 김AA에게 이 사건 주식 증여 중2004. 11. 26.자 증여와 관련하여 별지 1 목록 제1항 기재와 같이 증여세와 가산세 합계 ○○○원을 결정・고지하였다(이하 피고 RR세무서장의 원고 김CC 및 김BB에 대한 증여세, 가산세 부과처분과 피고 QQ세무서장의 원고 김AA에 대한 증여세, 가산세 부과처분을 통틀어 '이 사건 처분'이라 한다).

(j) The Plaintiffs were dissatisfied with the instant disposition and claimed for adjudication on August 17, 2012, but the Tax Tribunal dismissed the Plaintiffs’ request on January 17, 2014.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1 through 5, Eul evidence Nos. 1 through 11 (including branch numbers), the purport of the whole pleadings

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) Whether the gift value of this case constitutes donated property

The value of the gift of this case, which is an unrealized gain that is a share value increase, is not a property in a state in which the donee, who is a shareholder, can exercise a direct control over the property donated to the donee, or the donee, considering that the donee is in an economic aspect and controls and manages the gain in reality, and thus does not constitute a donated property under Article 31 of the Inheritance Tax and Gift Tax Act. Ultimately, the disposition of this case is an illegal disposition that was imposed

(2) Taxation based on Article 2(3) of the Inheritance Tax and Gift Tax Act (in violation of the legal principle of taxation)

Article 2(3) of the Inheritance Tax and Gift Tax Act (amended by Act No. 2011, Dec. 31, 2011; Act No. 20135, Jan. 21, 2011; Act No. 20135, Jan. 21, 2011; Act No. 2014, Jan. 21, 2011; Act No. 2013, Jan. 21, 2011; Act No. 2010, Jan. 31, 2011; Act No. 2010, Jan. 2, 2011; Act No. 2010, Jan. 2, 2011; Act No. 2010, Jan. 3, 2011; Act No. 2010, Jan. 3, 2011).

(3) Taxation based on Article 42(1)3 of the Inheritance Tax and Gift Tax Act

The Defendant calculated the gift tax by applying the aforementioned provisions mutatis mutandis, deeming the gift tax of this case as similar to the type of transaction under Article 42(1)3 of the Inheritance Tax and Gift Tax Act, particularly where the ownership shares or the value thereof changes due to business acquisition/business exchange/business exchange, and corporate restructuring. However, the gift of this case cannot be deemed as the type of transaction similar to the type of transaction under Article 42(1)3 of the Inheritance Tax and Gift Tax Act. Rather, the gift of this case is similar to the type of transaction under Article 41(1) of the Inheritance Tax and Gift Tax Act. Furthermore, the calculation of the value of the gift of this case goes against the taxation equity by significantly unreasonable comparison with the case where Article 41 of the Inheritance Tax and Gift Tax Act applies. Accordingly, the Defendant’s calculation of the value of the gift of this case pursuant to Article 42(1)3 of the Inheritance Tax and Gift Tax Act cannot be deemed as having been made

(iv) double taxation;

The GG City received the instant shares and cash, and paid corporate tax by appropriating them as assets increase profits. The dividend income of the GG City pursuant to the increase in the number of the instant shares and cash donations was distributed to the Plaintiffs subject to income tax, which is the donee, and the dividend income tax was withheld, and the Plaintiffs had already paid the income tax calculated by adding dividend income to global income. Nevertheless, the Defendants again imposed gift tax on the Plaintiffs in relation to the instant donation violates Article 2(2) of the Inheritance Tax and Gift Tax Act, which prohibits double taxation against the same taxable object.

(5) Violation of the principle of good faith

The plaintiffs trust the tax authority's reply that no gift tax is levied on the gift value of this case and did not report and pay gift tax accordingly. In contrast to the previous expression of opinion, the defendants' assertion that the gift value of this case constitutes subject to gift tax and the disposition of this case is in violation of the principle of trust and good faith.

(6) Violation of imposition of additional tax

Even if the principal portion of the instant disposition is lawful, the Defendants were not subject to gift tax on the matters similar to the instant case several times. The Plaintiffs trusted the Defendants’ public opinion list and did not report and pay gift tax. Therefore, the Plaintiffs’ failure to report and pay gift tax should be deemed to have justifiable grounds that are not attributable to the Plaintiffs’ failure to report and pay gift tax. Accordingly, the penalty tax portion among the instant disposition is unlawful.

B. Relevant statutes

Attached Table 2 shall be as stated in the relevant statutes.

C. Determination

(1) Introduction and purport of the complete comprehensive gift taxation

The former Inheritance Tax and Gift Tax Act (amended by Act No. 7010, Dec. 30, 2003; hereinafter “former Inheritance Tax and Gift Tax Act”) borrowed the concept of donation under the Civil Act with no definition provision on the concept of donation. The concept of donation borrowing alone does not have any way to prevent the avoidance of gift tax through an irregular donation without following the form of donation under the Civil Act. As such, the tax authorities have several statutory provisions on donation (Articles 32 through 42 of the former Inheritance Tax and Gift Tax Act). However, the regulations on individual donation donation have problems in which it is impossible to cope with a new type of gift due to a new type of gift financial product or financial technique, a variety of capital transactions, etc., and the legal basis for the imposition of gift tax on the transfer of such various forms of donation, and the so-called comprehensive donation donation under the former Inheritance Tax and Gift Tax Act (amended by Act No. 7010, Dec. 30, 2003; hereinafter referred to as the “former Inheritance Tax and Gift Tax Act”) and Article 23 of the former Inheritance Tax and Gift Tax Act (3).

(2) Contents of the complete comprehensive gift taxation

Article 2(1) of the Inheritance Tax and Gift Tax Act amended by Act No. 7010 on December 30, 2003 provides that donated property from another person's donation is subject to gift tax. Article 2(3) of the Inheritance Tax and Gift Tax Act provides that "The term "donation" means a free transfer (including a transfer at a remarkably low price) of tangible or intangible property (including a transfer at a remarkably low price) to another person by direct or indirect means, or an increase of the value of another person's property by which economic value can be calculated, regardless of the name, form, purpose, etc. of the act or transaction, or a free transfer (including a transfer at a remarkably low price) of tangible or intangible property, which is distinguishable from a gift under the Civil Act."

(3) Whether the taxation can be made by applying Article 2(3) of the Inheritance Tax and Gift Tax Act

(A) As seen earlier, it is difficult to simply interpret Article 2(3) of the Inheritance Tax and Gift Tax Act as a confirmatory and declaration provision in light of the structure with other provisions, such as the introduction of the concept of donation based on the complete universalism under Article 2(3) of the Inheritance Tax and Gift Tax Act in order to impose gift tax on the transfer of property in a variety of unpredicted forms or increase in the value of property (see, e.g., Supreme Court Decision 208Du17882, Apr. 28, 2011) (see, e.g., Supreme Court Decision 208Du17882, Apr. 28, 201). In light of the background of the introduction of Article 2(3) of the Inheritance Tax and Gift Tax Act, the legislative intent, and the system with other provisions, etc., it is reasonable to deem that the taxation of gift tax based on Article 2(3) of the Inheritance Tax and Gift Tax Act is possible.

(B) In light of such legal principles, as seen earlier, Plaintiff KimA, etc., who donated the instant shares and cash to GGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGG’s related parties, by means of donation of the instant shares and cash in GGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGG’s shares within the scope of the share holding ratio by the Plaintiffs, who are shareholders of the instant shares and cash donation, within the scope of the share holding ratio by means of donation of the instant shares and cash donation. Therefore, it is reasonable to deem

Therefore, the first and second arguments of the preferred plaintiffs on different premise are without merit.

(4) Whether the calculation of the value of the donated property by applying Article 42(1)3 of the Inheritance Tax and Gift Tax Act is unlawful

(A) Article 2(3) of the Inheritance Tax and Gift Tax Act only provides for the subject of taxation subject to the application of the "total universal taxation of gift tax" and does not directly provide for the method of calculating the value of the donated property acquired through the donation. This seems to be due to the impossibility of the legislative form of the "total taxation of gift tax" to directly provide for the method of calculating the value of the donated property with respect to the various and new types of donations not in accordance with the form of donation under the Civil Act. As seen earlier, the legislators adopted the "total taxation of gift tax" as mentioned above, thereby expanding the scope of taxation of gift tax; while calculating the value of the donated property (which is calculated on the basis thereof) by applying the "Calculation of the value of the donated property" under the title of the "Article 2(3) of the Inheritance Tax and Gift Tax Act," which is the "Calculation of the value of the donated property (Articles 32 through 42 of the former Inheritance Tax and Gift Tax Act) by converting the existing provision on the donated property (Article 33 through 42 of the latter Inheritance Tax and Gift Tax Act) from the perspective and the legislative purport of comprehensive taxation.

(B) In light of the above legal principles, the Defendant: (a) donated profits equivalent to the increase in the value of the shares of GGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGG’s shares by means of donation of the shares of this case and cash; and (b) such transaction was calculated by applying the above provision, considering that the transaction constituted transaction types under Article 42(1)3 of the Inheritance Tax and Gift Tax Act; and (c) in particular, the transaction constitutes a case where shares owned or the value of the shares is changed due to business acquisition/business exchange or corporate restructuring; and (d) comprehensively taking into account the facts acknowledged as above and the purport of the entire arguments as seen earlier, it cannot be applied directly or by analogy to Article 42(1)3 of the Inheritance Tax and Gift Tax Act in calculating profits (value of donated property) by the gift of this case; and (e) otherwise, if the above provision directly or by analogy is applied, it not only infringes upon the predictability of the taxpayer

(1) Article 42(1)3 of the Inheritance Tax and Gift Tax Act provides that the value of donated assets shall be the value of the company's capital acquired by the change or reduction of its assets through the former part of the business, such as the change or merger or division of capital, and the conversion or exchange of convertible bonds. Since the Plaintiff KimA et al. contributed the shares and cash to GG through the increase or decrease of capital, it does not constitute the type of transaction that may cause increase or decrease of assets, and thus, it does not constitute the type of transaction under the former part of the above provision. Article 42(1)3 of the Inheritance Tax and Gift Tax Act provides that the latter part of the above provision provides that the value of the company's profits acquired by the change or change of its assets can not be seen as the change or change of the value of the company's assets through the change or exchange of the company's assets (the above provision provides that the change or change of the company's assets cannot be seen as the change or change of the company's assets's existing type of business by considering the above evidence and the purport of the entire business.

C) Meanwhile, Article 41(1) of the Inheritance Tax and Gift Tax Act provides that where a person in a special relationship with a shareholder, etc. of a corporation having a deficit, or having a suspended or closed business, etc. (hereinafter referred to as a "specified corporation") obtains profits from the relevant specified corporation through a transaction, such as donation of property to the relevant specified corporation, the amount equivalent to such profits shall be the value of the pertinent specified corporation's donated property. The donation of this case constitutes a case where a person in a special relationship with the shareholder of the relevant corporation (Plaintiff KimA, etc.) (the plaintiff KimA, etc.) has obtained profits (the profits equivalent to the increase in the value of the shares and cash held by the plaintiff) from the corporation through the transaction of donation of property (the shares and cash in this case) to the relevant corporation (the profits equivalent to the increase in the value of the stocks and cash held by the plaintiff).

However, in full view of the purport of the evidence No. 4-2 of the Inheritance Tax and Gift Tax Act, in cases where the tax authority, after the introduction of the provision on the complete taxation of gift tax, donated the assets to the black corporations (not corporations without losses), it pursuant to the complete taxation of gift tax, upon the determination of whether the said provision may be imposed on the relevant shareholders (see, e.g., Supreme Court Decision 201Do1458, Oct. 6, 2004; Supreme Court Decision 201Do1447, Jun. 17, 2004; Decision 4-409, Mar. 22, 2005; Supreme Court Decision 4-539, Apr. 11, 2005; Supreme Court Decision 201Do2747, Oct. 25, 2004).

3. Conclusion

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