Plaintiff 1 and one other (Attorney Jeong-ok, Counsel for the plaintiff-appellant)

Head of Seodaemun Tax Office and one other

September 26, 2014

1. All of the plaintiffs' claims are dismissed.

2. The costs of lawsuit are assessed against the plaintiffs.

The head of Seodaemun Tax Office’s imposition of gift tax of KRW 15,73,540 (including additional tax) imposed on Plaintiff 1 on August 1, 2013 and the head of Yongsan Tax Office’s imposition of KRW 77,937,150 (including additional tax) imposed on Plaintiff 2 on August 1, 2013 (15,733,543 won) shall be revoked (15,73,540 won, 77,937,158 won is a clerical error in the amount of KRW 77,937,937,150).

1. Details of the disposition;

A. The plaintiffs are the shareholders of Hart Co., Ltd., Ltd. (hereinafter referred to as "Mart"), the plaintiffs 1 et al. are the co-borns of the non-party 1 (the non-party 1) and the plaintiff 2 are the children of the non-party 1.

B. On April 20, 201, Nonparty 1 donated 1,224,00 shares of Hadon Co., Ltd. (the share ratio of 51.0%; hereinafter “instant shares”) free of charge on the mersh in which there is a loss carried forward as follows.

A person shall be appointed.

C. On August 1, 2013, Plaintiff 1 acquired the gift benefits of KRW 110,415,408 [2,879 won x 1,224,000 won x 282,000 note x 9,000 won] due to the gift of the shares of this case x 15,733,540 won (including additional tax)] from the head of the Seodaemun-gu Tax Office, and the head of the defendant Yongsan-gu Tax Office imposed a disposition of KRW 354,503,938 on Plaintiff 2 on the same day on the same day on the ground that “The gift benefits of this case x 1,879 won x 1,224,000 won x 905,400 weeks / 9,0000 won x 7,7937,150 won (including additional tax).”

D. Accordingly, Plaintiff 1 filed a request for review on October 26, 2013. On January 17, 2014, Plaintiff 2 was dismissed by the Commissioner of the National Tax Service. Plaintiff 2 filed a request for review on October 24, 2013, and was dismissed by the Commissioner of the National Tax Service on January 27, 2014.

[Ground of recognition] Facts without dispute, Gap evidence 1, 2, 3 (including paper numbers), Eul evidence 1 and 2 (including paper numbers), the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiffs' assertion

Article 41(1) of the Inheritance Tax and Gift Tax Act (amended by Act No. 11130, Dec. 31, 201; hereinafter “Inheritance Tax Act”) provides that “Where any loss exists, or any loss is suspended or closed (hereinafter “contributed corporation”) and the stockholders, etc. of the deficit corporation obtain profits prescribed by the Presidential Decree, the amount equivalent to such profits shall be deemed the value of donated property to the stockholders, etc. of the deficit corporation.” Thus, for the imposition of gift tax, the stockholders, etc. shall obtain profits by donation, and the gift tax shall not be deemed as profits even if calculated pursuant to Article 31 of the Enforcement Decree of the Inheritance Tax and Gift Tax Act (amended by Presidential Decree No. 23591, Feb. 2, 2012; hereinafter the same shall apply).

Therefore, since Meart is a corporation in loss and received a donation, since the value of shares is incidental to the value of shares, gift tax cannot be imposed.

(b) Related statutes;

It is as shown in the attached Table related statutes.

C. Determination

Article 41 (1) 1 of the Inheritance and Gift Tax Act provides that "in case where a person having a special relationship with a stockholder of the surviving corporation has provided property to the relevant corporation without compensation, and a stockholder of the relevant corporation having a special relationship with a stockholder of the surviving corporation has made profits determined by Presidential Decree", the amount equivalent to such profits shall be deemed as the value of donated property to the stockholder of the relevant corporation." Article 31 (6) of the Enforcement Decree provides that "The profits acquired by the stockholder, etc. shall be the amount calculated by multiplying the value of donated property (limited to the amount of losses) by the ratio of stocks or equity shares (limited to the

In light of the provisions of the above Act, since the above provision provides that "if a person obtains profits as prescribed by Presidential Decree, the amount equivalent to such profits shall be deemed the value of the property donated to the shareholder or investor of the corporation in which the loss is deemed the value of the property." Thus, the profits as prescribed by the Enforcement Decree shall be deemed the value of the property donated." According to the main sentence of Article 31 (6) of the Enforcement Decree, "the profits falling under any of the following subparagraphs shall be calculated by multiplying the profits by the ratio of shares or equity shares of the person prescribed in paragraph (5)" and subparagraph 1 of Article 31 provides that "the value of the property donated" shall be the value of the shares of this case multiplied by the ratio of shares of the plaintiffs. Thus, Article 41 (1) of the former Inheritance Tax and Gift Tax Act before amendment by Act No. 9916 of Jan. 1, 2010 shall not be delegated to the part concerning the profits, and it shall not be interpreted as "the value of the property donated to the Supreme Court pursuant to Article 3016 (29) of the Enforcement Decree).

3. Conclusion

Therefore, the plaintiffs' claims are dismissed in entirety as it is without merit. It is so decided as per Disposition.

[Attachment]

Judges Cho Han-chul (Presiding Judge)