Seoul High Court 2010Nu29323 (Law No. 25, 2011)

Cho High-depth 2008west27 Asia (O. 30, 2009)

disposition that considers that the transfer of shares constitutes a gift is illegal;

The disposition imposing tax on deeming that the transfer of shares constitutes a gift is unlawful on the ground that the transfer of shares was not paid without compensation, and that the transfer of shares is not immediately acknowledged, and is merely an intention to deem that there was a transaction of shares in appearance. The allegation in the grounds of appeal alleging legality based on the complete taxation method is without merit.

2011Du14579 Revocation of Disposition of Imposition of Gift Tax

LAA

Head of Seodaemun Tax Office

Seoul High Court Decision 2010Nu29323 Decided May 25, 2011

January 26, 2012

The appeal is dismissed.

The costs of appeal are assessed against the defendant.

The grounds of appeal are examined.

Article 2(1) of the former Inheritance Tax and Gift Tax Act (amended by Act No. 6780 of Dec. 18, 2002) provides that, if any donated property falls under any of the following as of the date of donation due to another person’s donation, gift tax shall be imposed on such donated property in accordance with the provisions of this Act, and Article 23(2) of the former Enforcement Decree of the same Act provides that, if a person who acquires property by another’s donation is a resident, all donated property shall be considered as being donated by the resident, and that, if the donated property is a shareholder, the ownership of the pertinent donated property shall be deemed as being transferred to the Plaintiff without the consent of the Supreme Court in light of the logical and empirical principles and reasoning of the transfer of the transferred shares or the exercise of shareholders’ rights, the lower court determined that the transfer of shares was unlawful or without the consent of the Plaintiff as of 70th day before the date of transfer of the shares, and that the transfer of shares is based on the premise that the transfer of shares was made in accordance with the foregoing provision.