Cho High-depth2016west 4193 ( October 17, 2017)

Recognition of deemed donation of title trust for stocks of KOSDAQ-listed corporations

The Plaintiff is recognized to have entrusted the instant shares in the name of the Plaintiff, and the instant disposition based on the constructive gift of title trust is legitimate on the ground that the purpose other than the purpose of tax avoidance is not obvious

Article 45-2 (Presumption of Donation of Title Trust Property)

Article 157 (Scope of Large Stockholders)

2017Guhap61614 Revocation of Disposition of Imposing gift tax, etc.

AA

head of Dongjak-gu Tax Office

May 17, 2018

June 7, 2018

1. The plaintiff's claim is dismissed.

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

Cheong-gu Office

The imposition of gift tax on the Plaintiff on November 25, 2015 by the Defendant is revoked. The imposition of the gift tax on the Plaintiff shall be revoked.

1. Details of the disposition;

A. The plaintiff is an employee of KKK (hereinafter referred to as "KK"), KK is a corporation established on June 2, 2005 and BB was in the position of the representative director until May 21, 2007, and Ba is the father of BB and BB is the mother of BB.

(b) On May 15, 2007, the Council of EEE (hereinafter referred to as EEEE"), which was a KOSDAQ-listed corporation, resolved to issue new shares on May 15, 2007, and allocated 1,027,667 shares to K, and 639,00 shares to BB, 245,000 shares to BA, and 2,316,667 shares in total to the Plaintiff, respectively, by means of a third party allotment on June 27, 2007.

C. From April 28, 2015 to July 11, 2015, the director of the Seoul Regional Tax Office: (a) investigated the changes in stocks of EE and notified the Defendant of the details of the investigation; (b) as of November 12, 2007, BB entrusted the Plaintiff with 150,000 shares of EE (hereinafter “instant shares”); and (c) on November 25, 2015, the Plaintiff rendered a decision and disposition of KRW 00,000,000 (hereinafter “instant shares”) pursuant to Article 45-2(1)1 of the former Inheritance Tax and Gift Tax Act (amended by Act No. 8828, Dec. 31, 2007; hereinafter “Inheritance Tax and Gift Tax Act”).

[Ground of recognition] Unsatisfy, Gap evidence 1, 2, Eul evidence 1, 2 and 5, the purport of the whole pleadings

2. Whether the disposition is lawful;

A. The plaintiff's assertion

The instant disposition is unlawful for the following reasons.

1) Non-existence of title trust

The plaintiff acquired EEE shares in the money borrowed from BB to B, and the BB is well aware of the shares, so if a profit occurs, the plaintiff would acquire it and would not compensate for the loss if the loss occurs, and the BB did not trust the shares of this case to the plaintiff.

2) Non-existence of tax avoidance purpose

Even if there is a title trust relationship, BB owns more than 5% of the total number of shares issued by EE, which was a KOSDAQ-listed corporation, in light of the relationship with KKK, Ba, Bc, and the Plaintiff, and thus, BB is liable to pay capital gains tax. Therefore, BB cannot be said to have the objective of tax avoidance due to title trust.

B. Relevant provisions

It is as shown in the attached Form.

(c) Fact of recognition;

1) Paid-in capital increase of the EE’s stocks in this case

A) Article 10(2)6 of the EE’s articles of incorporation provides that stocks shall be allocated to a person other than shareholders, i.e., a third party, if necessary to achieve a company’s managerial purpose, such as the introduction of new technology and the improvement of financial structure, pursuant to Article 418(2) of the Commercial Act. Meanwhile, the EE’s offering of new stocks was made on May 15, 2007 by the board of directors of the EEE’s board of directors for a third party’s offering of new stocks, on June 13, 2007, and on June 27, 2007.

B) On June 27, 2007, investors and the number of shares allocated for capital increase due to the third party allocation of EEE is as follows. The total number of shares issued by EE has increased from 20,43,489 to 27,65,712 shares prior to the capital increase. Meanwhile, BB and KK borrowed KRW 0,000,000,000 from PP (hereinafter “PP”) during the process of acquiring shares as above.

C) The contents included in the electronic disclosure system following the major shareholders’ changes in shares due to capital increase issued on June 27, 2007 due to the allocation by a third party of EE on June 27, 2007 are as follows, and the contents reflecting the shares, etc. of KK’s shares related to BB are as shown in the following [Attachment 2]:

D) Meanwhile, in accordance with Article 57 of the former Regulations on Issuance and Public Disclosure, etc. of Securities (amended by the Financial Supervisory Commission Notice No. 2007 153 of Dec. 28, 2007, hereinafter “securities issuance regulations”), EE calculated the value of KRW 00,000, which is the value calculated by increasing 0.00% of the average closing price per week, the average closing price per week, the average closing price per week, and the recent closing price per week, as of May 14, 2007, as of May 14, 2007.

2) Plaintiff’s shares, etc., and KK

A) The shares of EE related to BB as of November 12, 2007, the closing date of the register of shareholders, are as follows:

B) On the other hand, on March 30, 2007, before EE’s capital increase with capital increase, BB prepared and submitted a statement of changes in stocks, etc. to the effect that the BB transferred all of KK’s capital to MM International Limited (hereinafter “MM”) on March 30, 2007, and on May 21, 2007, before the date of closing the register of shareholders.

The representative of KK has been changed from BB to DD.

3) Summary Order, etc. against BB, etc.

A) BB, on August 13, 2014, stated in the Prosecutor’s Investigation that:

With respect to the process of the change of the director of KK, I first known the new source of investment in the smart card , which was the purpose of the establishment of KKK, and came to invest in the content production company, YYYYY (hereinafter “EE”) by lending funds from PP, YYYY (hereinafter “EE”). The investment method was to participate in the third party allocation of shares, and was to participate in the capital increase with capital increase equivalent to KRW 0 billion in the name of KRK and her own name. However, if the principal is the representative of KKKKK, it was necessary to report the change of the share ownership from the representative of KRK and report the change of the major shareholder.

MM's acquisition of shares of KK is a disposal of the cost of KRW 00 million at the request of the principal.

The reason why the EEE’s participation in the capital increase was to be made was that the PP, a content producer, was interested in the acquisition of the EE, but the PP was to borrow funds from KK and the principal, and if KK and the principal are to receive the EE’s stocks with such funds, the PP was not only the same as the direct investment of the PP, but also the company was to normalize the company in the EE’s name. Accordingly, the principal borrowed approximately KRW 0 billion in the name of KK and KRW 000 million in its own name and KRW 000 million in its own name and KRW 000 million in its own name, thereby participating in the capital increase for capital increase after the issuance of capital increase. Since then, the P offered the PE to the affiliated company of the PP and the H as security.

I have transferred the shares of KK to MM in order not to report 5% of the shares, and the shares of KK are not the shares they own nominal trust.

The acquisition price of 210,00 shares allocated in the name of Ba 245,00 shares, Bc, and 210 shares allocated in the name of Ba is the aggregate of the personal funds of Ba and BC and the principal's funds, and the shares price of 195,00 shares allocated in the name of the Plaintiff was personally lent to the Plaintiff. The terms of borrowing the Plaintiff's shares were the conditions that the Plaintiff would bring about as much as the Plaintiff would pay for the principal.

I have used the securities account in managing Ba and Bc.

On May 21, 2007, before the date of closing the register of shareholders, the representative of KK changed from BB to DD.

YA transfer of management rights of EE to Y is not the person himself/herself but the major shareholder of EE, and 00 won he/she received was not the price for securing management rights.

I repaid 00 won from YY to PP, and disposed of ESE shares of Ba, Bc and KRK as follows:

The order for selling shares of Ba and BC is the principal, and the order for selling shares of KKK also has become the plaintiff.

BB made a statement in the prosecutorial investigation on October 17, 2014 as follows.

H: The suspect (BB; hereinafter referred to as the "suspects" in this Schedule) borrowed KRW 00 from PP and HH on May 11, 2007 from the previous statement and stated that the suspect and KK participated in the allocation of EE third party capital increase shares in the name of the suspect and KK and received the allocation of shares equivalent to 1.60,000 shares.

The answer: N., I will do so.

HH’s loan of KRW 00 from PP and HH on May 11, 2007

The answer: PP has a lot of interest in the management right of EE, a content production company, which is a content production company, as one of the TF operations and three saws. At the time, the author was the EE adviser, but he did not say that EE's management right is known and the right of management of EE can not be invested in lieu of the PP while making contact with the PP through the right of school guarantee.In this process, the author proposed that PP will provide the shares allocated by participating in the EE capital increase with the funds when borrowing 00 won from the PP, and that the PP will accept the proposal and prepare the stock transfer contract and borrow 00 won from the PP.

(b)

The phrase: 00 won received from YY on June 17, 2009 was for the repayment of the individual debt of PP, and it is essential to find out the stocks that have been assigned as security after the repayment of the individual debt.

The answer: N., I will do so.

If so, if the PP and HH are repaid KRW 00 to the PP, whether the shares equivalent to 1.60,000 shares, which were placed as security, are actually owned by the suspect or not.

The answer: N., I will do so.

If so, 1,020,000 shares secured under the name of KRK must be owned by the criminal suspect in substance.

The answer: D or KK borrowed KRW 00.00 billion in the name of D or KK, but in substance, D or K borrowed KRW 00 billion from PP and offered 00.0 billion in the name of KK, and shares assigned as security are also shares.

door: 00 won received by the suspect from YY around June 17, 2009 as Mason’s name

The answer: Y on June 17, 2009, YY first made an investment with the company in the form of one roof two family at the time of the first investment. Accordingly, the title of the contract was written as 'new business investment and management participation contract'. However, if YY only collects YY in the form of a company, it can be clean for the company, and if YY finds that there is a value of acquisition, such as a building, etc., and if Y keeps two roof, it can be sing one another. I would directly operate the company. YY in order to acquire YY, I would like to resolve 00 won of PP (0 won borrowed from PP) and 8.41% of shares. Accordingly, I would like to accept 00 won in return for securing Y's new business investment and management participation contract, and I would accept 00 won in return for securing YY's shares, and I will accept 00 won in return for securing Y's shares.

The sentence: around June 17, 2009, KK representative Kim Mack will be "YY and new business investment and management participation contract" and 00 won will be received. If so, 00 won should not be considered as the sales of KK corporation.

I do not: I do not have any connection with the transfer of management rights of KRE to KRE. I would not have any connection with the transfer of management rights of KRE. I would be KR if I would become KRK if I would have become KRK and would be red way if I would use KR and would have entered into a contract to use KR and would not be deemed 00 won as the sale of KRK. However, in order to repay the personal debt of 00 won, I would have entered into a contract in the name of KRK and the funds would have been paid to TPP. Accordingly, 00 won would not have any money that can be considered as the operating income of KR.

Note: 00 won received from Y is not considered as KK's operating income, and therefore, it is required that it is not recorded as KK's sales.

The answer: N. K.K. has no role in the name of N. K., and only borrowed.

C. : Whether the suspect has taken over management rights of YE with full payment of Y0 won in PP, YY, and YE

The answer: N.S. :

The sentence: Then, the suspect's debt was depreciated, and eventually, the suspect showed 00 won's profit, and the 00 won's profit should be the suspect's profit.

The answer: N, as a result, I will do so.

L: YY only paid management 00 won with management premium, and there is no need to do so on the ground that Y did not have any other purpose and would have to pay 00 won of personal debt of P.

The answer:Y's admission, which gives 00 won in return for the right of management, may be argued to the extent that YY gives 00 won in return for the right of management, and it is understood to do so. However, from the standpoint of YY, in order for YY to take management rights, YY must pay 00 won in the personal debt of PP. So, the amount was 00 won as the personal debt of PP, and the amount was repaid.

(1) In the case of 1,60,000 shares offered as security must be held by the criminal suspect, on the other hand, in the case of 00 won of the personal debt of the criminal suspect.

The answer: N., I will do so.

C. : around November 6, 2009, the suspect will put 1,020,000 shares out of the above 1.660,000 shares into the O-Investment Finance KK account.

The answer: N., I will do so.

The sentence: 1,027,667 shares of EE are arranged as KK assets in the tax settlement statement, and if the above circumstances are the same, the shares of the suspect are also the shares of KK assets.

The answer: N., I will do so.

C. The suspect, on May 21, 2007, had already resigned from the representative of KKK, and since shares have already been held in excess of MF, the suspect stated that the shares of KK 1,027,67 shares of KK are not shares of the suspect, and what is the reason why the quantity of KK's shares is stated as the suspect's ownership.

The answer: I have stated that, in the sense that KRK is not a shareholder of KRK, the shares of KRK are not offered. However, if it is possible to make investments or funds of the company in mind, it is in fact its own possession, and if it is in that sense, KR is a company, and the assets of KR of KR are in substance owned.

Note : Healy recognizes that the suspect has managed 1,027,667 shares of EE in the account of the Plaintiff and KKKK account, a borrowed account, but required to do so.

The answer: N, I will recognize.

(b)

m.: A statement that the suspect has sold the shares at the KK KK O investment account that has been held in the name of the vehicle and that the shares are not issued as a check of KRW 000 billion on November 17, 2009.

The answer: N., I will do so.

No. : Before the statement, KRW 000,000,000 out of the above check was used by OO(OOOOO) and KRW 100,000 was used by OOOO casino, and no summary is required.

The answer: I do not think that the entry of a casino exclusively for foreigners is illegal.

Note : 00,000,000 won is required to be used by the suspect in the casino

The answer: N.V. and I will withdraw and use them at the end of each year. However, if you bring a large amount of money in a casino exclusively for foreigners and change it into a chip, the goods will be free to play the game with a converted chip. Therefore, there are many cases where we change a general chip and exchange it again, but the check will enter a casino with a certain amount of KRW 00,000,000 as an Ama.

C) Meanwhile, on May 11, 201, the Plaintiff was investigated by the Financial Supervisory Service, and stated to the following purport.

I opened an OO branch account on June 18, 2007, and BB created one account by creating one account.

On June 27, 2007, I participated in the allocation of the EE to a third party’s capital increase and received an allocation of KRW 195,000 (00,000,000) to the South-west Branch Account of OE Securities.

The calculating entity (owner) of the OE Stock Exchange Account is BB, and the EEE Stock Acquisition Fund is also funds of BB.

Although the above shares are owned by BB, if the shares are thereafter held, if the interests of BB are the profits of BB, then the damages were incurred by BB.

On July 2, 2007, one hundred and forty-eight,00 shares of EE were released from the OE's OE branch account and entered into the OO branch account in the name of Ba, which is in accordance with BB's instructions.

On August 3, 2007, 100,000 EEE shares were deposited into an OO branch account under the name of the principal. O securities O branch account is one of the principal’s account, and BB received and delivered them from another person’s O securities account, and entered them into an OO branch account again after receiving them from another person’s O securities account, and entered them into an OO branch account of another person. It is ambiguous that another person’s OO securities account is whose account is whose account the other person’s account is.

On November 8, 2007, the EEE shares 150,000 shares were released from the OO branch account in the name of the principal, which is in accordance with BB’s instructions, and the reasons for delivery are well known.

D) On August 29, 2014, the Plaintiff stated the following purport in the prosecutorial investigation.

I opened an account at the direction of BB, and the BB included shares in the account and made profits to the account, the benefit portion should be given in case of the loss, and the shares should be refunded if the loss occurs, and the account was opened accordingly.

It is well known that the account created by the principal was used by BB, and whether the account was 195,000 shares by participating in the EEE’s subscription for new shares, and the source of the fund is also well known.

195,000 shares, which were entered into one's account, are considered as shares owned by BB because BB, after being allocated shares, the BB intended to give the margin if the benefits come to the interests of BB, was later released to BB.

E) On November 6, 2014, the Seoul Central District Court issued a summary order of KRW 00,000,000 (20,000) on the following criminal facts against BB, as a violation of the Financial Investment Services and Capital Markets Act, and the said summary order became final and conclusive.

BB is an adviser of KK who actually operates KK as a substantial operator of KK.

A person who holds stocks, etc. of a stock-listed corporation in excess of 5/100 of the total number of the stocks, etc. of the stock-listed corporation shall report his/her holding status, etc. to the Financial Services Commission and the Korea Stock Exchange within five days from the date thereof, and where the total number of stocks, etc. held is changed by at least 1/100 of the total

Nevertheless, while BB owned 2 October 2009 the shares 2,449,000 shares of EEE in the name of the Plaintiff, Ba, Bc and KK on October 22, 2009 (8.86% holding ratio), BB sold 47,00 shares of EE in the name of the Plaintiff and changed the number of shares to 2,402,00 shares (5.66% holding ratio) by October 29, 2009, BB did not report the said change to the Financial Services Commission and the Exchange.

On November 11, 2009, BB sold E shares 1,020,00 shares held under the name of KK and changed to 1,328,000 shares (holding ratio 3.25%), but BB did not report the said change to the Financial Services Commission and the Korea Stock Exchange until November 18, 2009.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 2, 5, 7, 8, Eul evidence Nos. 3, 4, and 7

D. Determination

1) Whether title trust is held

A) The main text of Article 45-2(1) of the Inheritance Tax and Gift Tax Act provides that “where the actual owner and the nominal owner are different from the property (excluding land and buildings) which requires a registration, etc. for the transfer or exercise of the right, the value of the property shall be deemed to have been donated to the actual owner by the nominal owner on the day (where the property is a property requiring a transfer of ownership, referring to the day following the end of the year following the year in which the date of acquisition of ownership falls) on which the actual owner registers, etc. as the nominal owner, notwithstanding Article 14 of the Framework Act on National Taxes.” Meanwhile, the purport of the provision is to effectively prevent title trust acts committed by the actual owner of the property for the purpose of tax avoidance and realize tax justice (see, e.g., Supreme Court Decision 2011Du10232

B) The Plaintiff stated to the effect that, in addition to the above evidence, Eul evidence, Eul evidence No. 13B and the purport of the entire pleadings, i.e., ① BB lent EB shares allocated to the Plaintiff under the Plaintiff’s name from the prosecutor’s investigation, and the condition that the Plaintiff borrowed E shares was the condition that the Plaintiff would bring about eE shares to pay eB only when the principal would have been paid, and that eE shares were managed by the prosecutor’s office, i.e., e., e., e., e., e., e., e., e., e., PEB’s account at the borrowed e.B.’s account under the name of the Plaintiff’s e.B.’s e.b., e., e., e.B.’s account for e.B’s acquisition of EB shares. However, the Plaintiff’s request for the issuance of e.B shares was 1B’s account.

2) Whether the purpose of tax avoidance is tax avoidance

A) Article 45-2(1) of the Inheritance Tax and Gift Tax Act provides that in case where the actual owner and the nominal owner are different from the property (excluding land and buildings) which requires a registration, etc. for a transfer or exercise of the right, the value of the property shall be deemed to have been donated to the actual owner by the nominal owner on the date when the registration, etc. is made under the nominal owner (where the property is the property requiring a transfer of its title, it refers to the date following the end of the year following the year in which the date of acquisition of ownership falls), notwithstanding the provisions of Article 14 of the Framework Act on National Taxes: Provided, That this shall not apply to cases falling under any of the following subparagraphs, and Article 45-2(1)1 of the Inheritance Tax and Gift Tax Act provides that "where the property is registered

Meanwhile, the legislative intent of the above provision is to effectively prevent the act of tax avoidance using the title trust system and realize the tax justice. Thus, if the title trust was recognized as having been made for any reason other than the purpose of tax avoidance and only the reduction of minor taxes incidental to the title trust, it cannot be readily concluded that there was a "tax avoidance purpose" in such title trust. However, in light of the above legislative intent, only if the purpose of the title trust is not included in the purpose of tax avoidance, it cannot be deemed that there was an intention of tax avoidance by applying the proviso of the above provision. Thus, if it is deemed that there was an intention of tax avoidance, it cannot be said that there was no other purpose of tax avoidance, and whether there was an intention of tax avoidance should be determined at the time of the title trust, and on the other hand, the burden of proving that there was no purpose of tax avoidance, such as proving that there was no other purpose of tax avoidance, and if there was no other purpose of tax avoidance, it can be proved that there was no objective or objective purpose of tax avoidance in the future 10th of the title trust (see, 2014).

B) Meanwhile, Article 94 (1) 3 (a) of the former Income Tax Act (amended by Act No. 9897 of Dec. 31, 2009; hereinafter referred to as the "Income Tax Act") provides that "the stocks of a stock-listed corporation under the Financial Investment Services and Capital Markets Act are transferred by a major shareholder prescribed by Presidential Decree in consideration of the ratio of stocks owned, total market value, etc., and income accruing from the transfer of stocks not through transactions on the securities market under the same Act shall be deemed capital gains." Article 157 (4) 1 of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 22034 of Feb. 18, 2010; hereinafter referred to as the "Enforcement Decree of the Income Tax Act") provides that "one stockholder or investor who owns stocks or equity shares of a corporation, and his/her relative under Article 20 of the Enforcement Decree of the Framework Act on National Taxes, and any other person who has a special relationship owns 30/100 or more of the stocks as of the relevant listed corporation as of the business year.

C) As seen earlier, the following circumstances can be acknowledged by the overall purport of each evidence and pleadings as seen earlier, i.e., (i) BB is obligated to pay transfer income tax on the transfer of EE shares on November 12, 2007; (ii) the total amount of EE shares held in title by the Plaintiff, etc. is 2,552,000 shares (KK 1,020,000 shares + Ba, 2,000 shares, respectively, 27,65,712 shares at the time, and 9.23% of the total number of EE shares issued, and thus, BB is not obligated to pay transfer income tax on the transfer of E shares; and (iii) the Plaintiff’s assertion that there is no obvious reason to deem that the transfer of title trust or the transfer of shares held in title trust did not have any other purpose to pay transfer income tax on the transfer of E shares; and therefore, there is no reason to deem the Plaintiff’s assertion that the transfer of title trust or the transfer of shares was not for tax evasion.

3. Conclusion

Therefore, the plaintiff's claim is dismissed as it is without merit. It is so decided as per Disposition.