Ulsan District Court-2016-Guhap-5796 ( January 12, 2017)

Cho-2015-Divisions-1075 (Law No. 16, 28 March 2016)

Since the fact of stock title trust is recognized and there is the purpose of tax avoidance, it constitutes the legal fiction of donation of title trust property.

(1) As with the judgment of the first instance court, there is no evidence to find that the agreement on stock trust was acquired by the unilateral act of the real owner regardless of the intent of the nominal owner, and there is a possibility of undermining the shares in the company’s tax liability as an oligopolistic shareholder due to the company’s default on tax liability, thereby falling under the title trust property donation agenda.

The legal fiction of donation of title trust property under Article 45-2 of the former Inheritance Tax and Gift Tax Act; evaluation of non-listed stocks under Article 54 of the former Enforcement Decree of the Inheritance Tax

2017Nu20347 Revocation of Disposition of Imposition of Gift Tax

Maximum 00

000 director of the tax office

June 2, 2017

June 30, 2017

1. The plaintiff's appeal is dismissed.

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

The decision of the first instance court is revoked. The tax assessment of KRW 00,000,000, gift tax of KRW 00,000,000 for the year 2004, and KRW 00,000,000 for the gift tax of KRW 00,000 for the year 206, and KRW 00,000,000 for the gift tax of KRW 200,000 for the year 2010 is revoked.

1. Quotation of judgment of the first instance;

The reasoning for the court’s explanation on the instant case is as follows, except for the addition of the judgment on the Plaintiff’s assertion in the trial, and thus, it is consistent with the reasoning for the first instance judgment. Therefore, this Court shall accept it in accordance with Article 8(2) of the Administrative Litigation Act and the main text of

2. The plaintiff's assertion

(a) Absence of title trust agreement;

1) According to the written reply prepared at the time of the National Tax Service’s investigation, the Plaintiff only stated the circumstances related to the third acquisition, but did not allow the first acquisition and the second acquisition. The testimony of the right A on the first acquisition is not trustable. The delivery of the seal imprint certificate and the certificate of seal imprint to the non-party company (○○○ corporation) is merely the practice of the company for business convenience, and the Plaintiff was not aware of the fact that the capital increase was made due to the capital increase in documents in 2006. There was no title trust agreement related to the first and second acquisition.

2) In the case of third party acquisition, the Plaintiff made intimidation as if the competent AA would put a disadvantage to dismissal, etc., and had the name borrowed, even if it did not put any disadvantage. Therefore, the Plaintiff revoked the title trust agreement related to third party acquisition by fraud or coercion, and accordingly, the title trust agreement becomes retroactively null and void.

3) The acquisition of the Plaintiff’s shares by a false transfer contract constitutes a false declaration of intention and a false declaration of intention and a false declaration of intention.

(b) Over-assessment of stocks;

1) Although it is apparent that the financial statements of the non-party company are false data prepared by accounting books, the Defendant’s disposition imposing gift tax by evaluating the value of the stock based on such false data is unlawful.

2) Considering the real value of the real estate held by the competent authority at the time of 2010, the item of provisional payments to the competent authority is an unrecoverable claim as of the date of donation. In assessing the value of the instant shares according to the supplementary assessment method, the net asset value, one of the factors for calculation, should be deducted from the item of provisional payments to the competent authority, but the Defendant’s disposition that calculated the value of the instant shares, including such item, is unlawful.

3. Whether to recognize a title trust agreement for the instant shares

A. As to the first to second acquisition

1) The provision on deemed donation under Article 45-2(1) of the former Inheritance Tax and Gift Tax Act shall apply in cases where the actual owner and the nominal owner register in the future of the nominal owner under an agreement or communication with respect to property which requires the transfer or exercise of the right, etc., and thus, registration by unilaterally using the nominal owner regardless of the intent of the nominal owner is not applicable in cases where the tax authority unilaterally establishes that the actual owner is different from the nominal owner. In such cases, if the tax authority establishes only that the actual owner is different from the nominal owner, the burden of proving that the registration, etc., in the nominal owner was made by the unilateral act of the actual owner regardless of the intent of the nominal owner should be borne by the nominal owner who asserts such act

2) In the instant case, comprehensively taking account of the following circumstances acknowledged by the Health Team, Gap evidence Nos. 10, Eul evidence Nos. 4, and Eul evidence Nos. 5, and witness testimony of the court of first instance along with the overall purport of the pleadings, the shares acquired pursuant to the first or second acquisition are deemed to have been held in title by the competentA, and the evidence submitted by the Plaintiff alone is insufficient to deem that the competentA unilaterally transferred the said shares by stealing the Plaintiff’s name regardless of the Plaintiff’s intent.

① According to the shareholders change on the list of the non-party company’s shareholders, it is recognized that the Plaintiff transferred 0,000 shares from the wife B of the IC on December 20, 2004 to the name of the Plaintiff, and that the Plaintiff acquired 0,000 shares with capital increase with capital increase on January 24, 2006 under the name of the Plaintiff.

② The witness authority A of the first instance court testified that part of the shares were transferred to the Plaintiff upon request of the Plaintiff regarding the first acquisition.

③ The Plaintiff appears to allow the use of his/her name by issuing a seal imprint and a certificate of personal seal impression at the request of the competent AA while in office of Nonparty Company.

④ On February 28, 2001, the Plaintiff was registered as an executive officer of the non-party company for at least ten years after the Plaintiff was appointed as a director of the non-party company. It is difficult to deem that the Plaintiff, an executive officer of the non-party company, was unaware of the status

⑤ The Plaintiff did not take any civil and criminal measures for about 10 years from the date of filing the instant lawsuit with respect to the IC after the acquisition of title 1 to 2.

B. As to the third acquisition

1) As to the allegation of revocation by duress

According to the evidence No. 24-1 to No. 5 of the evidence No. 24-2, the crime of coercioning the Plaintiff to the effect that “A made the Plaintiff prepare a contract for stock transfer and acquisition related to the third acquisition” is a crime of coercion by threatening the Plaintiff, and that the authorityA made a statement to the effect that the Plaintiff recognized the facts of crime at the investigation stage. However, the authorityA, as a joint and several tax obligor of gift tax imposed on the Plaintiff, has a high possibility of distorted the statement at the investigation stage according to the above interests, there is no objective evidence as to the coercion of the authorityA in addition to the statement of the Plaintiff and the authorityA, and the Plaintiff did not take any measures as to the preparation of the share transfer agreement on June 23, 2010 before the instant disposition takes place. In light of the above facts, there was no coercion of the authorityA or there was no evidence to acknowledge that the Plaintiff made a title trust agreement by coercion, and there was no other evidence to acknowledge that the Plaintiff made a title trust agreement by coercion.

2) As to the assertion of revocation of fraud

Although the Plaintiff asserts that the name transfer should be made by deception by the authorityA that the name transfer would not be disadvantageous, there is insufficient evidence to acknowledge the deception by the authorityA, in addition to the Plaintiff’s unilateral assertion, and there is no other evidence to acknowledge it.

3) As to the assertion that it is invalid as a false declaration of intention and a false declaration of intention

Since the title trust act has a strong intention to transfer the right, the Plaintiff’s assertion that the title trust agreement of the instant shares is invalid as a false declaration of intention and a false declaration of intention, is without merit.

4. Whether the stocks of this case are excessively appraised

A. As to the assertion that stock assessment was conducted on the basis of false financial statements

1) In assessing the value of unlisted stocks, which are donated property, based on the supplementary valuation method, the burden of proving the net asset value is, in principle, to the tax authority. However, in calculating the net asset value of the relevant corporation as of the date of transfer, the fact that the assets of the relevant corporation are under circumstances or circumstances different from the statement of financial position of the relevant corporation falls under exceptional reasons. Thus, the burden of proving such special reasons lies on the person liable for duty to pay tax (see Supreme Court Decision 2002Du12458, May 13,

2) In this case, the Defendant appears to have calculated the net asset value based on the standard balance sheet (Evidence No. 6 and No. 10) submitted by the non-party company at the time of corporate tax declaration. The Plaintiff asserted that the financial statements of the non-party company were false data prepared by the window dressing accounting. However, the investigation report (Evidence No. 12) prepared in the rehabilitation procedure for the non-party company was subject to the non-party company 2015 business year, and the above report alone cannot be known that there was a window dressing accounting for the previous business year, as alleged by the Plaintiff. The Plaintiff presented only the items that can be viewed as the provisional payment in the financial statements, and did not specifically state the possibility of an abstract window dressing accounting while it presented only the items that can be viewed as the provisional payment in the financial statements, and it is insufficient to acknowledge that the financial statements of the non-party company were false, and there is no other evidence to acknowledge the Plaintiff’s

B. As to the assertion that an irrecoverable claim should be deducted from the net asset value

1) In assessing the value of unlisted stocks, which are donated property, according to the supplementary valuation method, the net asset value of the relevant corporation as of the date of donation cannot be included in the amount of accrued claims at the time of the date of donation. However, since claims are impossible to be recovered due to exceptional reasons in the determination of the taxable amount of gift taxes, the burden of proving such special reasons lies in the person liable to pay tax (see, e.g., Supreme Court Decision 2005Du5574, Oct. 23, 2007). In addition, the determination of whether a company’s claims are irrecoverable claims that cannot be included in the net asset value should be made by taking into account the circumstances relevant to the obligor’s ability to repay, such as the obligor’s financial status, financing capacity, social status, occupation, and other ability to manage the company, the cause and amount of claims, and the time of the company’s exercise of claims (see, e.g.

2) In addition to the purport of the entire pleadings in this case, in addition to the statement on the health stand, Gap evidence Nos. 13 through 17, it is recognized that at the time of acquiring the △△△-dong 000-00 square meters and the second floor above the ground at the time of acquiring the △△△-dong 1 through 3, △△-dong 00-00 square meters and the second floor above the ground, △△-dong 000-00 square meters and 000.0 square meters at △△-dong, △△-dong, △△-dong, △△-dong, △△-gun, △△△△-gun, △△-gun, △△-gun, △△△-gun, △△-gun, △△-gun, 000 square meters and 000 square meters prior to the same Ri, it is difficult to conclude that the other evidence cited by the plaintiff did not have any other evidence to acknowledge that at the time of the appraisal date.

5. Conclusion

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

As such, the plaintiff's appeal is dismissed.