Early High Court Decision 2015Du0276 ( October 22, 2015)

In the case of title trust, proof must be made by objective and timely evidence that there has been no tax to be avoided at that time or in the future.

In the case of title trust, it is necessary to prove that there was no tax to be avoided at the time or in the future by objective and conclusive evidence that there was no tax to be avoided in the future, and to the extent that there was no doubt if there is ordinary person, but it is insufficient to recognize that the submitted material alone did not have the purpose of tax

2016Guhap60165 Revocation of Disposition of Imposition of Gift Tax

Ma-○

○ Head of tax office

October 11, 2016

November 15, 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 decision that the disposition of imposing gift tax of KRW 392,989,840 (including additional tax) against the plaintiff on September 1, 2014 is revoked.

1. Details of the disposition;

A. On December 14, 1992, ○○○ Co., Ltd. (hereinafter “○○○”) established a biotechnology-related product business for its business purpose. The Plaintiff’s maximum penalty was ○○ managing director from January 2005 to March 2013.

B. Around May 26, 2011, ○○ purchased KRW 360,000 (hereinafter “instant shares”) totaling KRW 2,660,00 per share of 2,660 (hereinafter “instant shares”) from Lee○○, an executive officer of the same company, and KRW 360,000 (hereinafter “instant shares”) from Lee○○, an executive officer of the same company. On December 31, 201, the Plaintiff transferred the instant shares under the Plaintiff’s name.

C. As a result, from May 19, 2014 to July 11, 2014, the director of ○○ Regional Tax Office: (a) conducted an investigation into stock change with respect to △△△ corporation (hereinafter “instant tax investigation”); (b) deemed that this ○○ was a title trust with the Plaintiff, and notified the Defendant thereof.

라. 이에 피고는 이 사건 주식의 매수가액인 957,600,000원을 증여재산가액으로 하여, 2014. 9. 1. 원고에 대하여 ��구 상속세 및 증여세법(2011. 12. 31. 법률 제11130호로 개정되기 전의 것)��(이하 '구 상속세및증여세법'이라 한다) 제45조의2에 따라 증여세 392,989,840원(가산세 포함)을 결정��고지(이하 '이 사건 처분'이라 한다)하였다.

E. On November 19, 2014, the Plaintiff appealed to the Tax Tribunal, but the Tax Tribunal rendered a decision to dismiss the claim on October 22, 2015. Meanwhile, the Tax Tribunal paid KRW 392,989,840 on June 29, 2015.

Grounds for Recognition

Facts without dispute, Gap evidence Nos. 1, 2, 4, 6, Eul evidence Nos. 1 and 2, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

For the following reasons, the instant disposition made by the Defendant against the Plaintiff is unlawful.

1) Non-existence of the title trust agreement (main assertion)

○○○ arranged to purchase the shares of this case. In light of the fact that ○○○ had arranged for the purchase of the shares of this case, ○○ was an excessive debt, and ○○ was unable to purchase the shares under its name, and ○○○ received the Plaintiff’s passbook and the Plaintiff’s registration seal stamp through ○○○○○, the managing director of the ○○○○○○○○, and the Plaintiff could not know the purpose of use since not informed or obtained the Plaintiff’s consent. Since then, ○○ requested the re-issuance of the passbook on the ground that the employee was lost of the passbook on November 2012, and the Plaintiff became aware of the existence of the shares only around that time, there was no agreement on title trust between the Plaintiff and ○○○.

2) Non-existence of the purpose of tax avoidance (preliminary assertion)

In addition, this case’s shares were not owned by ○○ and the seller of the shares of this case, and ○○○ and ○○○, a third party’s gift tax from bypassing transfer of the shares of this case, did not constitute “tax evasion purpose” under Article 45-2 of the former Inheritance Tax and Gift Tax Act, and the title trust period was only about nine months, and ○○ did not pay dividends even once after its establishment. This case’s shares were about 4% of the total number of outstanding shares of ○○○ and ○○ and the seller of the shares of this case, and this case’s shares did not constitute an oligopolistic shareholder. In view of the fact that ○○ and the third party’s gift tax from bypassing transfer of the shares between the title trustee and the third party after the title trust did not constitute “tax evasion purpose” under Article 45-2 of the former Inheritance Tax and Gift Tax Act, but did not constitute “tax evasion method” under Article 45-2 of the former Inheritance Tax and Gift Tax Act, and the value of the shares at the time of this case’s gift tax evasion method was within KRW 5300,08.0.

B. Relevant statutes

Attached Acts and subordinate statutes.

(c) Fact of recognition;

1) ○○○-based shareholder status on December 31, 201 as follows.

2) The net income of ○○ from 2004 to 2012 is as follows, and ○○ did not pay dividends for the same period.

m. (○○) Question and answer (No. 3)

Am: Whether it was possible to find out the fact that the name of the person in question is used for shares, etc. when the ○○ issued or opened a deposit passbook, a Korean currency investment securities account, a certificate of personal seal impression, etc. to you.

The answer: although it was unaware of the acquisition of ○○’s shares, it was known that the securities account, etc. issued by ○○ was used in the course of the accident.

m: Whether the title trust of the shares in question (the shares in this case) to the spouse Kim ○○ is not the case.

Note: G. G. G. G. G. G. L. G. L. L. L. L. L. L. L. L. L. L. L. L. L. L. L. L. L. L. L. L. L. L. L. L. L. L. L. L. L. L. L. L. L. L. . L. L.

m: If the shares were donated to the spouse, whether the gift tax return was made;

The answer: He did not report. He will not report.

(E) Method of changing ownership of the relevant shares from ○○○ to ○○○○.

The answer: He donated that ○○○ transfers to Kim○-○.

4. A written statement (A evidence 6)

The phrase: (At the time of requesting the Plaintiff to create a securities account through the wife and requesting the Plaintiff to do so) how the Plaintiff made a statement is essential.

The answer: The answer is hot, as it is not specifically heard where it is used, so it is necessary on the company's day.

The text: It is necessary that the statement has obtained the plaintiff's consent or notified him/her of the fact that he/she again transferred the passbook of the securities account in the name of the plaintiff and the registration seal stamp.

The answer: It did not obtain the consent of the plaintiff because it was not actually the plaintiff. Since it was only possible to transfer the passbook and the registration seal held on the line, it was not necessary to contact the plaintiff separately, and there was no contact.

3) At the time of the instant tax investigation, ○○ stated as follows, and the Plaintiff’s maximum ○○, who is the Plaintiff’s penal father, submitted a written statement as follows.

4) The ○○ employee, who participated in the issuance of the borrowed name securities account under the Plaintiff’s name, stated in this Court the following as follows:

/ Witness at ○○○

The text: (Plaintiff's) If a passbook and a registration seal stamp are issued, the document was delivered from anyone.

The answer: He was received from the ○○○ Standing Director at the time.

In the text: A witness, around May 201, deposited the purchase money transferred by ○○ to a securities company’s branch in the Plaintiff’s name and wired the money to a securities account under the Plaintiff’s name, and transferred the money to ○○ and ○○○ account, and transferred the shares in the securities account of ○○ and ○○ to the securities account under the Plaintiff’s name.

Answer: Examples.

sentence: (At the time of contact to the Plaintiff on October to November, 2012), the witness sent any speech to the Plaintiff.

The answer: He requested that all the shares in the account be reissued to the nearest securities company at the location of the account be transferred to the Kim○ account that is known by the third party.

sentence: The plaintiff heard the horse and made a statement to the witness.

답: 솔직히 처음에 전화를 하자마자 짜증을 냈었습니다. "저번에도 한번 계좌를 만들어가지고 귀찮게 하더니 또 나도 모르게 뭘 넣어 놨냐, 왜 자꾸 귀찮게 하냐"라고 짜증을 냈었습니다.

In the past, I would like to say that, even though I would like to say, I would like to use a securities account in the name of the plaintiff, I would like to make a borrowed transaction.

Answer: Examples.

The text: Then, the securities account in the name of the plaintiff needs to be asked to the highest ○○ on the ground that the passbook and the registration seal stamp are not yet returned to the plaintiff, so it is essential to receive the passbook and the registration seal stamp again from the highest ○○○.

Answer: Examples.

The text: In the past, the Plaintiff’s account was used in the name of the Plaintiff, and even at that time, it is necessary to deliver the account to the Plaintiff for the purpose of ○○’s transaction.

The answer: Examples. The plaintiff is aware of who is the largest ○○ is sentenced to the request by the head of the penalty department, and who is not aware of who is used.

5) Meanwhile, despite the filing of a lawsuit seeking the payment of a loan of KRW 15.9 million with respect to ○○○○, on May 3, 2013, where ○○ rendered a favorable judgment (○○ District Court 2012 ○○○○○○○○) and entered it in the defaulters’ list because it did not repay the above debt. Since June 27, 2002, ○○○ was liable to guarantee ○○ Bank with respect to KRW 1,548,000,000,000,000 for ○○○○ Card, 7.330,000 won for ○ Card since March 6, 2004, 200, ○○ Savings Bank bears the principal and interest of KRW 3.188,538,00 for ○ Savings Bank, 1,388,529,000 for ○○ Bank, and 200,000 won.

6) In order to donate the instant shares to Kim○, a spouse, the ○○○○ entered into a share transfer and takeover contract with the purport of having the transferor on November 13, 2012 as the Plaintiff, the transferee as Kim○, and the purchase price of KRW 957,60,000, and submitted to the head of ○○ Tax Office on March 29, 2013 a written statement of tax base return and payment of capital gains tax.

Grounds for Recognition

The facts without dispute, Gap's evidence Nos. 2, 3, 6, 7, 8 (including paper numbers), Eul's evidence Nos. 3, Eul's testimony by the witness ○○, this court's ○○ Co., Ltd., ○○ Co., Ltd., and the result of each credit information submission response to ○○ Co., Ltd. and ○○

D. Determination

1) Determination on the first argument

The provision on deemed donation of title trust 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 make a registration, etc. in the name of the nominal owner by agreement or communication with respect to the property necessary for the transfer or exercise of the right, etc., so that such registration, etc. may not apply in cases where the actual owner unilaterally makes a registration, etc. in the name of the nominal owner, regardless of the intent of the nominal owner. In such cases, the tax authority may only prove that the actual owner is different from the nominal owner, and the verification that the registration, etc. of the nominal owner was made by the unilateral act of the actual owner regardless of the intent of the nominal owner should be made by the claiming owner (see Supreme Court Decision

The testimony of ○○○ is insufficient to acknowledge that the Plaintiff used the Plaintiff’s name without the Plaintiff’s consent, and there is no other evidence to acknowledge that the Plaintiff used the Plaintiff’s name without the Plaintiff’s consent. Rather, according to the above facts of recognition, the Plaintiff appears to have been notified that ○○○ at the time of delivering passbook, securities account, registration seal stamp, etc. upon the Plaintiff’s request by the ○○○○○○○○, which was the original penalty book, would have been used with respect to the ○○○’s shares in which the ○○○○○, etc. was in service at the time of delivering the passbook, securities account, etc., and ② the Plaintiff appears to have delivered the securities account with the ○○○, even though ○○○ was sufficiently aware that the securities account would be used in the securities transaction, and ③ even if ○○○ was used in connection with the other borrowed securities transaction, the Plaintiff’s assertion that the Plaintiff did not request the Plaintiff’s return of the securities account to the ○○○○, etc., without explicitly’s consent to the instant securities account.

2) Judgment on the second argument

A) The legislative purport of Article 45-2(1) of the former Inheritance Tax and Gift Tax Act is to recognize an exception to the substance over form principle to realize tax justice by effectively preventing the act of tax avoidance using the title trust system. Thus, if the title trust was deemed to have been made for any reason other than the purpose of tax avoidance, and it is merely a minor reduction of tax incidental to the said title trust, it cannot be readily concluded that there was "the purpose of tax avoidance" in such title trust. However, in light of the above legislative purpose, only if the purpose of the title trust is not included in the purpose of tax avoidance, it cannot be deemed that there was the purpose of tax avoidance by applying the proviso to the above provision, and thus, it cannot be said that there was no purpose of tax avoidance.

Meanwhile, the burden of proof as to the absence of the purpose of tax avoidance may be proven by means of proving that there was a purpose other than the purpose of tax avoidance with respect to the absence of the purpose of tax avoidance. However, as the nominal owner who bears the burden of proof, there was a clear purpose irrelevant to the tax avoidance to the extent that there was no purpose of tax avoidance in the title trust, and if there was no tax to be evaded at the time of the title trust or in the future, based on objective and objective evidence, it should be proved to the extent that there was no doubt (see Supreme Court Decision 2012Du546, Nov. 28, 2013).

B) According to the above facts and each of the above evidence, (i) the Plaintiff was aware of the following facts; (ii) it is insufficient to confirm that there was an obvious purpose of tax avoidance (e.g., evasion of compulsory execution) to the extent that ○○○ et al. did not have any purpose of tax avoidance; (ii) on December 31, 2011, the Plaintiff donated the instant shares to Kim○, the spouse of which was no longer than several months; (iii) the Plaintiff did not separately pay capital gains tax on the same date as the acquisition value and transfer value; (iv) the Plaintiff donated the instant shares to Kim○, the Plaintiff did not have any other purpose of tax avoidance at KRW 61,520,00 (including acquisition value,60,000,000 - 60,000,000,000 won or less of gift tax; and (v) the Plaintiff did not have any objective purpose of tax avoidance at KRW 60 or more of gift tax.

3. Conclusion

Therefore, the plaintiff's claim is dismissed as it is without merit. It is so decided as per Disposition.