Seoul Administrative Court 2014Guhap69761 ( October 25, 2015)

Seocho 2013west 5035 (2014.09)

As to the assertion that the shares of this case were not donated

Where a taxpayer has prepared a written confirmation to the person who is a taxable fact, the evidence of the written confirmation cannot be readily denied, unless there is any special circumstance to the effect that it is difficult to consider it as evidence for specific facts due to lack of the content thereof.

Article 2 of the Inheritance Tax and Gift Tax Act

2015Nu50629 Revocation of Disposition of Imposition of Gift Tax

***

*The Director of the Tax Office

Seoul Administrative Court Decision 2014Guhap69761 decided June 25, 2015

December 18, 2015

2016.01.22

1. The plaintiff's appeal is dismissed.

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

The judgment of the first instance shall be revoked. The part of the Defendant’s imposition of gift tax of KRW 000,000,000 against the Plaintiff on August 1, 2013 exceeds KRW 00,000,000, shall be revoked.

1. Quotation of the reasons for the judgment of the first instance;

1) At the time of incorporation of the non-party company, who is the actual owner.

Unless special circumstances exist, such as that if a tax authority received a written confirmation from a taxpayer that a certain part of a transaction is a processing transaction during the course of a tax investigation, it is difficult for the tax authority to readily deny the evidence of such written confirmation only by means of evidence of the fact-finding, such as where the written confirmation was forced against the intent of the originator, or it is difficult to consider it as evidence of the specific fact due to insufficient details (see, e.g., Supreme Court Decision 2001Du2560, Dec. 6,

As to the instant case, the following facts are acknowledged in full view of the purport of the entire pleadings in the statement of Nos. 2 through 6 of the Ministry of Health and Welfare.

① On May 13, 2013, the Plaintiff’s father, Nonparty**, the actual owner of the non-party company, was the Plaintiff’s father and the non-party Kim*, the actual owner of the non-party company, who was the non-party company, entrusted the trust of trust with 0,00 shares of Kim** including the shares of this case at the time of incorporation of the non-party company**, head*, Jin**, on December 16, 202.”

② On May 27, 2013, Nonparty *, the owner of the instant shares under the name of Nonparty * also stated that “The instant shares with the company outside the lawsuit and the instant shares are owned by Kim**” while the tax agent was present at the meeting.

③ On June 10, 2013, the Plaintiff was present at the Seoul Regional Tax Office, along with the tax agent, and stated that “The Kim** was a shipping company at the time of the establishment of the non-party company, ********** as the largest shareholder of the stock company, and the non-party company’s shares in the tugboating business under the Harbor Act were not held more than 30%, which was held in title trust to the least*****, etc. Even if the Plaintiff was to receive gift tax from the donation of the instant shares, the Plaintiff would have sought to be held in the name of the Plaintiff, but there was no choice to be held in title trust to the head*** due to restrictions on the Harbor Act. At the time of receiving the instant shares

④ The tax official in charge of the instant tax investigation found out the documents arranged to the effect that “The transfer value shall be KRW 00 million and the financial data for comparison with the investigation shall be KRW 00 million” (hereinafter “documents of this case”) in the office of the non-party company to the effect that “the transfer value of the stocks of the non-party company shall be KRW 00 million in preparation for the possibility of tax investigation” (hereinafter “documents of this case”).

The above facts and "the shares of this case were owned by the original Kim***, the last** was trusted in title to the plaintiff," and there is no reason to believe that the plaintiff, Kim*, the last*, the last*** the three statements are in accord with each other, the contents of which are very specific, the last***, etc. was forced by a tax official or a meeting, and in light of the contents of the documents of this case discovered in the office of the non-party company, it is reasonable to view that the shares of this case were originally owned by the plaintiff, and they were donated to the plaintiff through the last**, the trustee, the last 6-1 through 3 of the evidence No. 5-1, No. 5-2, and the evidence No. 6-3, respectively.

Therefore, the defendant's disposition of this case conducted on the same premise is legitimate, and the plaintiff's assertion against this is without merit.

2) Whether the instant tax investigation constitutes an illegal duplicate investigation

Article 81-3 of the former Framework Act on National Taxes (amended by Act No. 6782, Dec. 18, 2002; hereinafter the same) provides that "no re-audit shall be made against the same tax item and the same taxable period", and that "the tax investigation in 2010, tax investigation in 2008, *** and ************** whether to impose gift tax on the Plaintiff considering the substance of the stock transfer transaction between the head of the tax investigation in this case as the title trust with the shares in this case ******** as the substance of the stock transfer transaction in this case *** as the donation of the shares in this case **** as the donation of the shares in this case to the Plaintiff, taking account of the overall purport of arguments in the items in subparagraphs 1-2 and 4, and the tax investigation conducted in 2013, the plaintiff's assertion that the above part of the tax investigation in this case is prohibited as follows."

Classification

The investigation period

Transaction Subject to Investigation

Issues

Tax Investigation in 2010

208

CHAPTER**********

(2) Transfer of shares between the parties

Whether to impose gift tax on the Plaintiff by deeming that the substance of the above transaction was nominally held by the Plaintiff**** as the shares in this case.

This case’s tax investigation

202

L*** and head*

Transfer Transactions of Stocks

Whether gift tax should be levied on the Plaintiff by deeming that the above transaction substance Kim* donated the instant shares to the Plaintiff.

3) Whether the instant disposition constitutes double taxation

The instant disposition is a disposition based on Article 2 (1) 1 of the former Inheritance Tax and Gift Tax Act, on the ground that Kim* has donated the instant shares to the Plaintiff, while the disposition of gift tax is based on Article 2 (1) 1 of the former Inheritance Tax and Gift Tax Act, ** the head of the tax office* for the purpose of tax avoidance, based on the provision on the constructive gift of title trust property under Article 41-2 of the former Inheritance Tax and Gift Tax Act, on the ground that the Plaintiff has entrusted the instant shares to Kim*** for the purpose of tax avoidance. Therefore, the disposition of this case and **

3. Conclusion

Then, the plaintiff's claim shall be dismissed as it is without merit, and the judgment of the court of first instance shall be this.

In conclusion, the plaintiff's appeal is just and without merit, and it is dismissed. It is so decided as per Disposition.

shall be determined as above.