Whether it constitutes a deemed donation of title trust shares

If it is proved that the fact of taxation requirements has been presumed in light of the empirical rule, the fact must be proved that the fact is not eligible for application of the empirical rule.

Article 26-2 of the National Tax Basic Act

2015Guhap764 Revocation of Disposition of Imposition of Gift Tax

AA and 1

Chuncheon Tax Office et al. 1

The director of the tax office of Cheongju shall pay gift tax of KRW 1,229,92,760 (additional tax) to Plaintiff A on February 11, 2014.

(B) The disposition of imposition by the head of Chuncheon Tax Office and the gift tax made on February 11, 2014 by the head of Chuncheon Tax Office to Plaintiff BB.

265,794,180 won (including additional taxes) shall be revoked.

November 26, 2015

December 10, 2015

1. In the imposition of gift tax of KRW 1,229,92,760 (including additional tax) imposed on Plaintiff A on February 11, 2014, Defendant Cheongcheon Tax Office’s imposition of KRW 306,731,360 (including additional tax) and the penalty tax of KRW 265,794,180 (including additional tax) imposed on Plaintiff BB on February 11, 2014, the portion of the penalty tax of KRW 66,282,840 shall be revoked.

2. The plaintiffs' remaining claims are dismissed.

2. 3/4 of the costs of lawsuit is assessed against the Plaintiffs, and the remainder is assessed against the Defendants.

Cheong-gu Office

1. Details of the disposition;

A. On July 3, 1995, the Plaintiff’s father CCC established AD Korea Co., Ltd. (hereinafter “D”) on July 3, 1995, and at the time of its establishment, the details of registration on the register of shareholders of the non-party company are as follows. DD transferred 750 shares of the non-party company’s shares registered in its name on the register of shareholders on November 16, 201 to Plaintiff AAA, and 250 shares to Plaintiff BB (hereinafter “instant shares”). The director of the Daejeon Regional Tax Office confirmed that DD transferred shares to the non-party company was under title trust by CCC, the actual owner of the instant shares, and notified the Defendants that DD transferred the shares of this case to the effect that CCC would be a gift tax gift tax bypassing its children.

D. Accordingly, on February 11, 2014, the director of the tax office of Cheongju imposed a gift tax of KRW 1,229,92,760 (including additional taxes) on Plaintiff AA, and the director of the tax office of Chuncheon imposed a gift tax of KRW 265,794,180 (including additional taxes) on Plaintiff BB on the same day (hereinafter “each disposition of imposition against the Plaintiffs”).

E. The Plaintiffs appealed and filed an appeal with the Director of the Tax Tribunal on March 18, 2014. However, the said claim was entirely dismissed on May 14, 2015.

[Ground of recognition] Facts without dispute, Gap evidence 1 through 3, Gap evidence 8-2, 3, Eul evidence 1-1, 2, Eul evidence 2, 3, and 4 (including provisional number), the purport of the whole pleadings

2. Whether each of the dispositions of this case is legitimate

A. The plaintiffs' assertion

1) On July 3, 1995, at the time of the incorporation of the non-party company, CCC had already donated the shares of this case to the plaintiffs, and thereafter, the plaintiffs held a title trust with DDR. The transfer of this case is not a donation to the plaintiffs, but merely merely a fact that the plaintiffs, who are the shareholders of the shares of this case, have sought the shareholders' name from DDR. Even if CCC and DD were to have existed between CCC and DD, the time when CCC knew that the shares of this case were donated to the plaintiffs, a title trustee, and consented to the transfer of the trust status. Accordingly, since the exclusion period of imposition against the plaintiffs had already expired, the defendants cannot impose gift tax on the plaintiffs. Each disposition of this case by the defendants is unlawful in each of the unlawful disposition of this case since the transfer of this case was inevitable to resolve the title trust relationship between the plaintiffs and DD.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

1) Determination on each of the dispositions in the instant case (including additional taxes for insincerey payment)

(1) The Plaintiffs and the Defendants, as the grounds for the disposition of the instant case and the Defendant’s non-party 1’s shares, were deemed to have been donated to Non-party 1 on November 16, 201, and the CCC’s non-party 1’s non-party 1’s non-party 2’s non-party 4 and non-party 2’s non-party 1’s non-party 1’s non-party 1’s non-party 1’s non-party 5’s non-party 2’s non-party 1’s non-party 2’s non-party 1’s non-party 2’s non-party 1’s non-party 2’s non-party 2’s non-party 1’s non-party 3’s non-party 1’s non-party 5’s non-party 1’s non-party 1’s non-party 5’s non-party 1’s non-party 2’s non-party 3’s non-party 1’s shares.

(2) Article 47-2(1)3 of the former Framework Act on National Taxes provides that if a taxpayer fails to make a tax base return under the tax laws for the purpose of 20/100 of the total amount of taxes to be paid or deducted from the amount of taxes to be paid for the purpose of 20/10 of the former Enforcement Decree of the Framework Act on National Taxes (amended by Act No. 12848, Dec. 23, 201; hereinafter referred to as “former Framework Act on National Taxes”) that the Plaintiffs were unable to file a tax return for the purpose of 40/10 of the former Enforcement Decree of the Framework Act on National Taxes or for the purpose of 7/100 of the total amount of taxes without filing a tax return for the purpose of 20/10 of the former Enforcement Decree of the said Act, the former Act provides that the Plaintiffs may not be deemed to have filed a false tax return for the purpose of 40/10 of the former Framework Act on National Taxes or the former Enforcement Decree of the Framework Act on National Taxes, which provides for the following:

C) However, in a lawsuit seeking revocation of a tax disposition, the determination is based on whether the amount exceeds a legitimate tax amount. The parties concerned can submit objective tax bases and materials supporting the tax amount until the closing of argument in the fact-finding court. If a legitimate tax amount to be imposed lawfully is calculated based on such materials, only the portion exceeding the legitimate tax amount should be revoked, but in such case, the entire tax assessment should not be revoked, and in such a case, the court must actively find a reasonable and reasonable and reasonable calculation method and not impose a duty to calculate a legitimate tax amount (see, e.g., Supreme Court Decision 94Nu13527, Apr. 28, 1995). Of each of the dispositions of this case, the portion of the additional tax for improper filing of a tax return in the above case is unlawful, but it does not necessarily lead to the revocation of the entire amount of the additional tax for improper filing of a tax. Thus, the conclusion is that the part of the additional tax for improper filing of a tax in this case should be revoked

Therefore, the plaintiffs' claim of this case is justified within the scope of the above recognition, and the remaining claims are dismissed as it is without merit. It is so decided as per Disposition.