Seocho 2010west 2864 ( December 22, 2010)

The new shares received as payment for the merger of the old shares cannot be deemed to have been trusted in trust.

Since it cannot be deemed that the title truster newly trusted the new shares received as the price for the merger of the old shares, separate from the existing shares held in title trust to the Plaintiff, who is the title trustee, on the ground that the gift tax was imposed on the new shares on the ground of the title trust is unlawful in violation of the

2011Guhap8543 Revocation of Disposition of Imposition of Gift Tax

IsaA

○ Head of tax office

June 8, 201

June 29, 2011

1. The Defendant’s imposition of gift tax of KRW 185,267,360 against the Plaintiff on April 15, 201, in excess of KRW 119,619,29,29, among the imposition of gift tax of KRW 185,267,360 on December 31, 201, shall be revoked.

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

The same shall apply to the order.

1. Details of the disposition;

A. On May 18, 201, 201, ○○ Chemical Co., Ltd. (hereinafter referred to as “○○ Chemical”) merged △△ Chemical Industry Co., Ltd. (hereinafter referred to as “△△△ Chemical”), and changed the name of the corporation to △△ Chemical (hereinafter referred to as “△△△ Chemical”). At the time of the merger, the merger ratio was set at 1.4812 shares of △△ Chemical Co., Ltd., 1.4812 shares of △△△ Chemical Co., Ltd., and 1.021 shares of △△△ Chemical Co., Ltd., 1.021 shares of △△△ Chemical Co., Ltd., and

B. The Plaintiff owned shares of ○○ Chemical and △△ Chemical prior to the merger and received new shares of △△ Chemical in accordance with the merger ratio. The specific details are as follows.

(The following table omitted)

C. Afterwards, as of December 31, 2001, 56,360 shares of △△ Chemical (=62,939 shares-6,579 shares) were sold 62,939 shares among 62,939 shares of △△ Chemical.

D. The Seoul regional tax office revealed that the above ○ chemical shares and △△ chemical shares owned by the Plaintiff are all the shares trusted to the Plaintiff for the purpose of tax avoidance in the course of conducting the inheritance tax investigation of this ○○ Chemical Group’s founder and honorary chairperson, and notified the Defendant of the determination and notification of gift tax to the Plaintiff by applying Article 41-2(1) of the former Inheritance Tax and Gift Tax Act (amended by Act No. 6780, Dec. 18, 2002; hereinafter “former Inheritance Tax Act”). The latter reported on April 15, 2010 that gift tax should be determined and notified to the Plaintiff by applying the provision on constructive gift of title trust property under Article 41-2(1) of the former Inheritance Tax and Gift Tax Act (amended by Act No. 6780, Dec. 18, 200; hereinafter “the former Inheritance Tax Act”) as of December 31, 197, the transfer date of 300 shares to the Plaintiff, 40 shares shares increase in ○○ chemical shares (excluding 97 shares shares).

F. The Plaintiff, who was dissatisfied with the instant disposition, filed an appeal with the Tax Tribunal on April 16, 2010, but was dismissed on December 22 of the same year.

G. Meanwhile, in the case of the instant merger, the Plaintiff received pursuant to Article 16(1)5 of the former Corporate Tax Act and Article 14(1)1(a) of the Enforcement Decree of the same Act (amended by Presidential Decree No. 17457, Dec. 31, 2001; hereinafter the same) on the ground that it satisfies the special taxation requirements under Article 44(1) of the former Corporate Tax Act (amended by Act No. 6558, Dec. 31, 2001; hereinafter the same) and Article 14(1)5 of the same Enforcement Decree (amended by Presidential Decree No. 17457, Dec. 31, 2001

[Ground of recognition] Unsatisfy, Gap evidence 1 to 7, Eul evidence 1, and non-satisfy's office

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

1) The Plaintiff is subject to gift tax under Article 41-2(1) of the former Inheritance Tax and Gift Tax Act (amended by Act No. 5582, Dec. 28, 1998) or Article 43 of the former Inheritance Tax and Gift Tax Act (amended by Act No. 5582, Dec. 28, 1998) with respect to the remaining shares of △△ Chemical Gu, which were held by thisA as the title trustee of △△ Chemical Gu, 2001, except for the shares acquired in the year 2001, among the △△ Chemical Gu, which was held by thisA as the title trustee. Even if the Plaintiff received new shares 45,949 shares in the above △△△ Chemical Gu as a result of the merger, the said new shares are merely a modified product of the △△ City chemical Gu and thus cannot be deemed to have been acquired, and thus, the Defendant is unlawful by applying the provisions of the former Inheritance Tax and Gift Tax Act to the gift tax on the gift of title trust.

2) However, the Plaintiff received 62,639 shares of ○○ Chemical shares and △△ Chemical shares in return for a merger with the existing ○○ Chemical shares and △△△ Chemical shares. Among them, 10.00 shares of ○○ Chemical shares and 16,180 shares of △△△ Chemical shares that were acquired in 2001, which were not subject to gift tax prior to the deemed donation of title trust (=10,00 shares of ○ Chemical shares x 16.180 shares x 16.180 shares x 16.180 shares of △△△ Chemical shares x 16.180 shares x 16.12 shares of △△△△ Chemical shares x 16.31 December 31, 201, the remaining 27,386 shares, excluding 6,389 shares, may be deemed to have newly registered title trust with the Plaintiff as of December 31, 201.

(b) Related statutes;

It is as shown in the attached Table related statutes.

C. Determination

1) We examine the following circumstances, which are acknowledged by comprehensively taking into account the aforementioned adopted evidence and the overall purport of pleadings, i.e., ① when the shareholder of the merged company acquires the shares of the surviving company or the newly incorporated company in lieu of the shares of the merged company through a merger with the merged company, the replacement of the shares of such merged company and the shares of the surviving company or the newly incorporated company does not dispose of the shares of the merged company and acquire the shares of the surviving company or the newly incorporated company at its own will, but merely replace the shares of the merged company, which are the previous assets held by the shareholder as a result of the merger with another company, with the shares of the surviving company or the newly incorporated company (see Supreme Court Decision 2008Du230, Feb. 10, 201). 2) In the case of a merger under several laws, a method of assessing its liabilities as fair value, it is understood that the shares of the merged company are a type of gains from disposal, not a "evaluation profits" for the shares of the merged company.

deemed taxable and taxable, and meet the requirements for special taxation under the former Corporate Tax Act, such as this case.

Meanwhile, even if the former shares were not imposed separately on the title truster at the time of merger, the acquisition value, which serves as the basis for calculating gains on the transfer of new shares, shall not be 'acquisition value of new shares' (Article 72 (1) 4 of the former Enforcement Decree of the Corporate Tax Act). (3) An independent provision on the constructive gift of title trust property under Article 41-2 (1) of the former Inheritance Tax and Gift Tax Act, which requires registration, etc., as to whether the provision on the constructive gift of title trust property is transferred or to exercise the right, imposes gift tax on the actual owner as tax requirement. In this case, the Plaintiff merely received ○○ chemical new shares, which were kept as the title truster as the same as the other shareholders, under the merger agreement concluded between ○○ Chemical and △△△ Chemical, a merged corporation, and thus, it is difficult to view that the above provision on the constructive gift of new shares, which was issued to the title truster, was unlawful on the ground that there was no possibility that the above provision on the constructive gift transfer of the new shares to the title truster.

2) However, as seen earlier, the Plaintiff received 62.639 shares of ○○ Chemical shares, which were previously held and disposed of before December 31, 2001, in return for the merger of ○○ Chemical shares and △△△ Chemical shares, and 33,965 shares of new shares, which were received in return for 16,180 shares of ○○ Chemical shares and 16,180 shares, which were acquired in the year 2001, prior to which no gift tax was levied (=10,00 shares of ○ Chemical shares x 16.180 shares x 16.180 shares x 16.12 shares of △△△△ Chemical shares x 16.386 shares excluding 6.389 shares of the remaining 27.386 shares, and this portion of new shares, which were disposed of as of December 31, 2001, should be deemed to have been revoked as of December 31, 20019.

3) Therefore, the Plaintiff’s above assertion is with merit.

3. Conclusion

Therefore, the plaintiff's claim shall be accepted on the grounds of its reasoning, and it is so decided as per Disposition.