early 2015 Heavy090 ( June 11, 2015)

Where there is no income reported, cash lending shall not be deemed to have been made to others.

In case where the amount of money transferred from a third party is taxable as a donation, it is unclear whether the donee had economic ability to lend money to a third party in case where the donee has no income reported, and thus no disposition imposing the gift tax is erroneous.

2015Guhap2360 Revocation of Disposition of Imposition of Gift Tax

○ ○

○ Head of tax office

April 20, 2016

May 11, 2016

1. The plaintiff's claim is dismissed.

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

Cheong-gu Office

The Defendant’s disposition of imposition of KRW 348,044,40, which was imposed on the Plaintiff on June 16, 2014, shall be revoked.

1. Details of the disposition;

A. On May 13, 2009, Gangwon-do issued a bill of KRW 10 million to the Plaintiff. On July 6, 2009, on a bill of KRW 7,000,000, KRW 50 million to the Plaintiff’s bank account, KRW 2,000,000 to the Plaintiff’s bank account on July 7, 2009, KRW 10,000,000 to the Plaintiff’s bank account, KRW 1,000,000 to the cashier’s checks on July 8, 2009, and KRW 40,000,000 to the Plaintiff’s bank account on July 8, 2009.

B. On June 16, 2014, the Defendant deemed that the Plaintiff’s receipt of KRW 880,000,000 (hereinafter “the instant money”) from Gangwon-do○○○ as seen above constitutes a gift and imposed a gift tax of KRW 348,04,440 (including additional tax) on the Plaintiff in 2009 (hereinafter “instant disposition”).

C. On September 15, 2014, the Plaintiff appealed to the director of ○○ Regional Tax Office, but the director of ○○ Regional Tax Office dismissed the Plaintiff’s objection on October 24, 2014. The Plaintiff filed a request for a trial with the Tax Tribunal on January 22, 2015, but the Tax Tribunal dismissed the Plaintiff’s request on June 1, 2015.

[Reasons for Recognition]

facts without dispute, Gap evidence 1, Gap evidence 2-1, 2, Gap evidence 3, Eul No. 1 and 2

Each entry of evidence, the purport of the whole pleading

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

From August 2008 to September 2008, the Plaintiff lent the sum of KRW 160 million between the casino located in the ○○○○○, around April 27, 2009, KRW 420 million around May 2009, KRW 80 million around May 2009, and KRW 960 million around May 2009, and received the instant money from the Gangwon○○○○. The instant disposition on the premise that the Plaintiff received a donation of the instant money from the Gangwon○○○○○ was unlawful. The instant disposition on the premise that the Plaintiff was unlawful.

B. Relevant statutes

The entries in the attached Table-related statutes are as follows.

C. Facts of recognition

1) From around 2005, the Plaintiff engaged in the bond business, such as lending gambling money at ○○ Casino. The strong ○○ was a person who has considerable financial capacity and was so-called VIP customer of ○○ Casino.

2) On June 30, 2007, from around March 23, 2013 to around March 23, 2013, ○○ remitted KRW 10 million to the Plaintiff, which was less than KRW 500,000,000,000,000. The sum of the above remittance amount reaches approximately KRW 180,000,000. The Plaintiff remitted to ○○○○ through multiple times the amount less than KRW 1 million,00,000,000 or more, and the sum of the above remittance amount reaches approximately KRW 3 million.

3) On March 26, 2009, Gangnam-gu, ○○○○○○○○○○○ Dong, which was owned by ○○○○○○○○○○, sold ○○○○○ building at KRW 5.6 billion to ○○○○, and received respectively payments of KRW 5.5 billion on March 26, 2009 from ○○○○, a down payment of KRW 500 million on April 27, 2009, an intermediate payment of KRW 1.5 billion on April 27, 2009, and KRW 3.6 billion on July 6, 2009.

[Reasons for Recognition]

Gap evidence Nos. 4, 9, 11, and 12; witness ○○’s testimony; purport of the whole pleadings

D. Determination

1) In light of the following circumstances, it is reasonable to deem that the Plaintiff received a gift of KRW 840 million from Gangwon○○○○, by comprehensively taking account of the facts acknowledged in the lower judgment as to KRW 840,000,000, which was delivered as a check or deposited into the account among the instant money, and the Plaintiff received KRW 840,000,000 from Gangwon○○○.

A) The Plaintiff did not submit objective data regarding the fact that the Plaintiff lent a total of KRW 960 million to Gangnam ○○ through several times from August 2008 to May 2009.

B) Upon undergoing a tax investigation, the Plaintiff stated that “Gang○○ was lent from several million to 200 million won as chips, and the date, amount, and signature was affixed, and all of them were discarded.” On February 25, 2016, the Plaintiff stated that “at the time of receiving the tax investigation, all of the borrowed money was repaid, and then discarded without keeping the materials”. The Plaintiff’s statement and assertion are inconsistent with the Plaintiff’s assertion that it was discarded even if the Plaintiff was paid KRW 880,000,000 from Gangnam○○, even if it was not paid all of KRW 960,000,000,000,000,000 won of the loan alleged by the Plaintiff.

C) At ○○ Casino, the Plaintiff, while engaging in the bond business, proposed to offer money as a result of arranging real estate at this Court (Gang○○○). However, it is difficult to readily understand that the Plaintiff, who was aware of the Plaintiff at that time, did not immediately receive the money for the first time, was able to do so from that time, and that he did not receive the money for the first time, and that he did not receive the money for the first time, from August 2008 to September 2008, the Plaintiff gave a loan of KRW 160 million to ○○○○ and was not repaid at all, and additionally lent KRW 300 million around April 27, 2009, or that ○○○○○○○○○ was additionally lent KRW 500 million upon receipt of the money for each of the loans at that time (hereinafter “○○○○○○ building”). Moreover, the Plaintiff did not receive the money for the first time, even if having received the money for the first time, the Plaintiff did not receive the money for each of the loan at that time.

D) The Plaintiff received approximately KRW 180,000,000 from Gangwon○ to March 23, 2013 from Gangnam○ to March 23, 2013 (hereinafter referred to as the above) (C. 2). The Plaintiff asserted that the Plaintiff was paid KRW 180,000 to Gangwon○, but the Plaintiff did not specify whether the Plaintiff was paid for any loan.

E) From August 2006 to August 2012, 2012, the Plaintiff ○○ and ○○, ○○, ○○, ○○, ○○, and ○○○ in 26 times. The Plaintiff returned to the Republic of Korea on September 17, 2009, when he left the Republic of Korea to ○○ on September 17, 2009.

F) In regard to the question of “one need to borrow money from overseas and receive money from the account” in this Court, U.S. testified that “I will not be able to go through an account. If you get a loan and return from overseas, it may go against ○○ Management Act and habitual gambling. If you get a wrong transaction to be done with an account, it may go against the violation of ○○ Management Act and habitually gambling. If you trade with an account, it may be a problem later.”

2) As long as, among the instant money, in a lawsuit imposing gift tax on the Plaintiff’s account, the deposit in the name of the person who was recognized as a donor by the tax authority in the lawsuit imposing gift tax is revealed to have been withdrawn and deposited in the account in the name of the taxpayer, such deposit is presumed to have been donated to the taxpayer. Thus, barring special circumstances, such as the withdrawal of such deposit and the deposit in the name of the taxpayer, etc. were made for other purposes than donation, the taxpayer needs to prove such deposit (see Supreme Court Decisions 9Du4082, Nov. 13, 2001; 96Nu3272, Feb. 11, 1997).

In this case, as recognized in the above 1-A of the first 1-A, the KRW 40 million was withdrawn from ○○○○ bank account and deposited in the Plaintiff’s account via account transfer. As such, the above KRW 40 million was presumed to have been donated to the Plaintiff (in light of the above circumstances in Section 1, the above KRW 40 million was deemed to have been donated to the Plaintiff, and the evidence presented by the Plaintiff alone cannot be deemed to have any special circumstances, such as that the said deposit was made for any other purpose than donation.

3) The instant disposition on the ground that the Plaintiff received the instant money from Gangwon-do○○○ was lawful.

3. Conclusion

The plaintiff's claim of this case is dismissed as it is without merit. It is so decided as per Disposition.