It is insufficient to view that the Plaintiff lent the instant share price, and that the Plaintiff constitutes the actual owner of the instant shares.

In light of the current status and relationship of property holdings, the details of the statement at the time of interrogation of the prosecution, etc., it is insufficient to view that the Plaintiff is deemed to have lent the acquisition fund to the nominal shareholder who is an employee, and rather, it seems that there was an intent to avoid capital gains tax, etc. of the major shareholder on listed stocks.

Article 45-2 (Presumption of Donation of Title Trust Property)

2015Guhap68772 Revocation of Disposition of Imposition of Gift Tax

ZZ

YThe director of the tax office

August 26, 2016

September 9, 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 to jointly pay gift tax of KRW 1,936,873,380 to the Plaintiff as of August 1, 2013 is revoked.

1. Details of the disposition;

Around 2010, the Defendant: (a) opened an ○ Securities Account in the name of ○○○○○ (hereinafter “instant account”); and (b) traded 234,574 shares in the name of ○○○○○○○○○○○ (hereinafter “instant shares”) (hereinafter “instant shares”); (c) decided and notified ○○○, a title trustee, of KRW 1,936,873,380 of the gift tax donated in 2010 on August 28, 2013; and (d) designated the Plaintiff, a title truster, as a joint obligor and notified the Plaintiff of the payment of the said gift tax (hereinafter “instant disposition”).

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1 and 2, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. Facts of recognition

1) The relationship between the Plaintiff and leap○○

The Plaintiff is the representative director and the largest shareholder (95% in equity ratio), and the ○○○○ Co., Ltd. holds 80% of the shares of ○○ Construction. From May 15, 2007 to October 3, 2011, the Plaintiff worked in ○○ Construction Co., Ltd. and worked in ○○ Construction Co., Ltd. from October 4, 201 to April 2013.

2) Details of entry and withdrawal of the account of this case

The Plaintiff deposited into the account of this case or transferred money from the account of this case as follows.

Classification

Date

Amount (won)

Details of deposits

October 13, 2010

300,000,000

October 21, 2010

300,000,000

October 22, 2010

500,000,000

October 25, 2010

480,000,000

October 26, 2010

500,000,000

November 1, 2010

500,000,000

November 10, 2010

500,000,000

November 22, 2010

200,000,000

November 24, 2010

20,000,000

November 26, 2010

250,000,000

Total

3,750,000,000

Details of remittance

August 31, 2011

50,000,000

September 1, 2011

500,000,000

September 2, 2011

500,000,000

September 5, 2011

47,000,000

September 6, 2011

194,000,000

November 15, 2011

416,900,00

Total

2,107,900,000

3) ○○○ Stock Transaction

From April 2010, the Plaintiff began to purchase ○○○○○○ shares. From September 2010, the Plaintiff purchased a large quantity of shares from September 2010 and came to hold 5% or more of the shares of ○○○○○○○ shares around November 2010. KRW 3,750,000 deposited in the instant account was used in purchasing ○○○ shares. As of December 31, 2010 on the base date, the current status of ○○○○ shareholder as of December 31, 2010 is as follows.

Number of issued shares

Maap○

○○waps Co., Ltd.

Number of Stocks

Ratio of Shares

Number of Stocks

Ratio of Shares

Number of Stocks

Ratio of Shares

7,946,403 note

401,389 Shares

5.05%

234,574 Shares

2.95%

91,007 Shares

1.14% by mass

[Ground of recognition] Facts without dispute, entry of evidence Nos. 5, 6, 12 and the purport of the whole pleadings

B. Whether the instant shares were held in title trust

In addition to the purport of the entire pleadings, evidence Nos. 5 and 6, the Plaintiff prepared a monetary loan agreement with the purport of lending KRW 3,800,000,000 to leap○○ on October 10, 2010 (this interest is paid by an amount calculated by 5% per annum of the amount actually borrowed on the 10th day of each month, the maturity period was until February 24, 2012, and the loan was to be used only for the investment of securities, etc.). ② The Plaintiff and leap○○ may recognize the fact that the Plaintiff prepared an application for consent of the right of pledge with the purport of establishing a pledge on the shares in this case under the name of leap○○ around December 2010.

However, in light of the following facts and circumstances, the written evidence Nos. 2, 8, 11, 12, and 2 through 12, each of the following facts and circumstances, which can be acknowledged by adding the whole purport of the pleadings, the Plaintiff’s assertion based on a different premise is rejected, since it is difficult for le○○ to deem that the Plaintiff purchased the instant shares by using the name of le○○○○.

① On April 3, 2012, the Plaintiff, even though imposed capital gains tax on the grounds that he/she transferred shares held on or around April 3, 2012 and did not report capital gains tax, was examined by the Daejeon District Prosecutors’ Office for the following purposes: (a) under suspicion that he/she concealed or omitted property to evade national taxes without paying such tax. In the process of changing the property held at the time into cash property, the Plaintiff had leap○○ found the proceeds of sale of real estate, etc. or changed the checks in cash.

[1. Interrogation of Defendants 1 and 2]

When trading ○○○○ shares, the Plaintiff traded part of the name of ○○○ in order to avoid the major shareholder requirements. The money transferred from the instant account to the Plaintiff’s account after August 201 is recovered from ○○○○ that invested in the Plaintiff’s name.

[Examination of Suspects No. 27, 2012]

In around 2010, the Plaintiff: (a) opened and lent a securities account to Ma○○○; (b) traded 3 billion shares using the instant account; and (c) talked with Ma○○ that he would withdraw money from the account after closing the stock transaction and withdraw money from the account in around 2011; and (d) transferred approximately KRW 1.5 billion to the Plaintiff’s account.

After receiving the first interrogation of suspect, the Plaintiff paid the full amount of capital gains tax, etc. in arrears on November 22, 2012.

On the other hand, on November 21, 2012, leap○○ also stated to the following purport: (a) the Daejeon District Prosecutors’ Office was suspected of aiding and abetting the Plaintiff’s act of hiding or omitting the Plaintiff’s property; (b) was examined at the Daejeon District

Around 2007, he traded approximately KRW 3-40,000,000, but did not hold or trade shares in bulk after the loss. Since the Plaintiff’s employees were unable to refuse the Plaintiff’s request, he opened the instant account and made an authorized certificate and security card available to the Plaintiff for share transaction. Since the Plaintiff’s employees were unable to refuse the Plaintiff’s request, he was able to do so by opening an authorized certificate and security card. Since the details of the transaction are not confirmed, he was well aware of the details of the transaction, he did not know about the transaction, and the Plaintiff discarded the authorized certificate and security

As to the reasons stated above at the time of interrogation of suspect by the prosecution, the Plaintiff was in an imminent state where the person may be detained at the time, and the prosecution pressured that the scope of investigation may be expanded due to embezzlement, breach of trust, etc. unless the crime is acknowledged. In the case of true statements, the Plaintiff asserted that his act was likely to undergo an investigation due to the violation of the Securities and Exchange Act, etc., and that he made such statements in order to prevent damage to le○○○ and to promptly terminate the investigation.

However, it is difficult to view that the statement at the time of the Plaintiff and Ma○○○ was made by force against the intent of the Plaintiff. All of the statements made by the two persons are consistent with each other in that the Plaintiff opened the instant account at the Plaintiff’s request, and the Plaintiff engaged in a transaction of ○○○○ stocks through the instant account, and thus, it is difficult to reject the credibility of the statement. In view of the Defendant’s accusation or investigation details, as it is mainly subject to investigation as to whether the Plaintiff committed an act of concealing property through financial transactions with le○○, etc., and thus, if the Plaintiff actually lent money to le○○○ as alleged by the Plaintiff, it does not appear to have been disadvantageous to the Plaintiff by making a true statement. The Plaintiff stated that even if the first investigation was made, even if the Plaintiff made a statement that le○○ had lent money to le○○ at the time of the first investigation, the Plaintiff had been able to escape from the suspicion related to the act of concealing property by using the said monetary loan contract and the written consent for pledge. Furthermore, the circumstances alleged by the Plaintiff, that it could not have been subject to police pressure.

② From May 2007, ○○ worked for a company controlled by the Plaintiff. From 2007 to 2010, only earned income of 58,434,920 won and only income of 58,434,920 won and the money deposited into the account of this case reaches KRW 3.7 billion. The Plaintiff was granted a pledge right to the shares of this case after the Plaintiff paid approximately KRW 3.7 billion to le○○, and the Plaintiff was not provided with a security prior to that time. Moreover, the Plaintiff filed a lawsuit to prove that the Plaintiff did not take measures to recover claims even after the maturity period specified in a monetary loan agreement (24 February 24, 2012) was expired, and the tax authority’s investigation with respect to the instant share acquisition fund against oneself and leap○○○ was conducted on February 14, 2013.

The Plaintiff asserts that ○○○○ was a demand for the provision of information on ○○○○○○, giving an opportunity for ○○○○○ to obtain profit from the loan, and that ○○○○○ was expected to obtain profit from the loan, and that it was necessary to continuously grasp information on the investment-related company. However, examining the Plaintiff’s assertion that ○○○○○ was an objection from ○○○○○ on December 7, 2010, 63,000 won on December 8, 201, and 41,00,000 won on December 10, 201, and 89,598,000 won on December 10, 201, and 51,960,000 won on April 4, 201, it is difficult to deem that ○○○○○○’s loan was established with an annual interest rate exceeding 10% of the amount actually borrowed from 00% of the Plaintiff’s loan and its interest rate on December 10, etc.

Rather, in light of the statement made by the Plaintiff and the leap○○ at the time of interrogation of the suspect, the Plaintiff and the applicant for a monetary loan for consumption or a written consent to establish a pledge (Evidence A. 6) that was drafted between the Plaintiff and the leap○○○ was aimed at preventing the Plaintiff from asserting his right to the said loan by taking advantage of the fact that the leap○○○ had

③ Based on the premise that KRW 3,750,000, which was deposited in the instant account, was a loan, the Plaintiff sent to ○○○ on February 14, 2013 a document verifying the purport of seeking the return of the outstanding principal and outstanding principal, and won on March 27, 2013 (Seoul Central District Court Decision 2013Da36571, supra) on December 17, 2013. The Plaintiff asserted that the Plaintiff agreed to borrow KRW 3,750,000, which was deposited in the instant account from the Plaintiff in the instant lawsuit, and that the Plaintiff paid KRW 21,107,90,000,000 to the Plaintiff who disposed of the instant shares, the Plaintiff agreed to repay the loan in entirety.

Meanwhile, from January 9, 2013 to February 19, 2013, the tax authority investigated the acquisition fund of the instant shares with respect to ○○ from January 9, 2013 to February 19, 2013, and converted the Plaintiff into the person subject to investigation. Unlike the fact that the public prosecutor was investigated, the Plaintiff and ○○ filed a lawsuit against ○○ seeking the return of the loan, and unlike the purport of the statement only for four months and only, the Plaintiff borrowed money from the Plaintiff in the lawsuit. However, prior to that, the Plaintiff did not take any measures to collect the claim against ○○ for a period of one year after the maturity period under the monetary loan contract became due (the interest was not paid during that period). Rather, in light of the fact that the Plaintiff filed a civil lawsuit after sending a certificate of contents against ○○ upon conversion to the person subject to investigation, the mere fact that the Plaintiff claimed a refund of the loan against ○○ was insufficient to acknowledge that the Plaintiff lent the instant shares to ○○.

④ In light of the Plaintiff’s current status and relationship between the Plaintiff and Ma○○’s property, the details of the statement made at the time of prosecution’s personal affairs, etc., Ma○○ appears to be the name holder of the instant shares, and the Plaintiff is the actual owner

B. Whether the Plaintiff has the purpose of tax avoidance

Article 45-2(1) of the former Inheritance Tax and Gift Tax Act (amended by Act No. 11130, Dec. 31, 2011) provides that the value of the property shall be deemed to have been donated to the actual owner, unless the actual owner and the nominal owner of the property are different from those of the tax avoidance purpose, the title holder is deemed to have been donated to the actual owner (see, e.g., Supreme Court Decision 2013Du9779, Oct. 17, 2013). The burden of proving that there was no tax avoidance purpose exists a person who asserts it (see, e.g., Supreme Court Decision 2013Du9779, Oct. 17, 2013). Thus, the purpose of tax evasion after title trust is not to determine whether there was any tax evasion purpose (see, e.g., Supreme Court Decision 2009Du11389, Dec. 31, 2012).

Since the Plaintiff had already owned 5% or more of the shares of this case, if the shares were transferred after acquiring them in the name of the Plaintiff, the transfer income tax was paid. In the event that the shares of this case were transferred after acquiring them in the name of ○○○○, the amount of possession falls short of 5% and the transfer income tax was not paid (Article 94(1)3 (a) of the Income Tax Act). Even if the Plaintiff acquired the shares of this case in the name of ○○○ for reasons other than the purpose of tax avoidance as alleged by the Plaintiff, it appears that there was an intent of tax avoidance as well as the intent of the above tax avoidance. Therefore, it is insufficient to deem that the Plaintiff asserted that there was no purpose of tax avoidance, and there is no other evidence to acknowledge it (in addition to the above tax avoidance purpose, it is difficult to see that the minor reduction of taxation takes place as incidental to the title trust).

(c) Additional tax on improper non-declaration;

According to Article 47-2(2) of the former Framework Act on National Taxes (amended by Act No. 11873, Jun. 7, 2013), where a person fails to file a tax base return by the statutory due date of return due to an unlawful act, an amount equivalent to 40/100 of the amount of unpaid tax shall be the penalty tax. The purport of imposing penalty tax is to induce a person liable for tax payment to file a return on tax base in good faith, as the imposition and collection of national tax is either impossible or considerably difficult, in cases where the person conceals or disguises all or part of the fact that serves as

However, even though the Plaintiff traded the instant shares in the name of leap○○○○, the Plaintiff completed a monetary loan agreement with leap○○, setting up a pledge on the instant shares in the name of the Plaintiff, etc., made the instant shares the same appearance as that of leap○○○○. Based on this, civil litigation (Seoul Central District Court 2013Gahap36571) was also carried out. This constitutes a case where the imposition and collection of taxes are significantly difficult because all or part of the facts constituting the basis for calculating the tax base or the amount of national tax are concealed or pretended, thereby imposing penalty tax.

Therefore, the instant disposition imposing an excessive penalty on the Plaintiff is lawful.

3. Conclusion

Thus, the plaintiff's claim of this case is dismissed as there is no ground.