In title trust, it should be proved that the obvious purpose of tax avoidance and that there is no tax avoidance at the time or in the future.

The plaintiff asserts that the name of the employee who is a nominal shareholder has been changed in the event of retirement or death by the purpose of calculating the number of promoters of the corporation. However, since the requirements for the number of promoters were abolished before the title trust of the instant shares, the plaintiff's assertion is without merit.

Article 45-2 of the Inheritance Tax and Gift Tax Act

2015Guhap173 Revocation of Disposition of Imposition of Gift Tax

KimA

BB Director of the Tax Office

on 21, 2015

on October 04, 2015

1. The plaintiff's claim is dismissed.

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

피고가 2014. 1. 6. 원고에 대하여 한 2004년 귀속 증여세 QQ,QQQ,QQQ원의 부과처분을 취소한다.

1. Details of the disposition;

A. BB director of the Regional Tax Office conducted a corporate tax integration investigation with respect toCC (hereinafter “instant company”) from September 6, 2012 to December 4, 2012, and confirmed that KimD held the title trust of shares 1,221 shares of the instant company owned by him (hereinafter “instant shares”) to the Plaintiff on December 31, 2004, and notified the Defendant of the taxation data.

B. Accordingly, on January 6, 2014, the Defendant decided and notified the Plaintiff of KRW 56,230,700 of the gift tax attributed to year 2004 in accordance with the provision on deemed donation of title trust property under Article 45-2 of the former Inheritance Tax and Gift Tax Act (amended by Act No. 7335, Jan. 14, 2005; hereinafter “former Inheritance Tax and Gift Tax Act”).

C. The Plaintiff appealed and filed an appeal with the Tax Tribunal on April 3, 2014, but was dismissed on October 20 of the same year.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1 through 6, Eul evidence No. 1, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

Before October 1996, KimD held the title trust of the company’s shares to the Plaintiff, etc., the purpose was to meet the requirements for the number of promoters of the company under the Commercial Act, and thereafter, the name was changed in the case of retirement and death of employees who are nominal shareholders.

After its establishment, the instant company paid all taxes in good faith until the date of its establishment, and KimD owned 76.3% of the total issued and outstanding shares on the shareholder registry as of December 31, 2013, and was registered as an oligopolistic shareholder with secondary liability for tax payment. Since the establishment of the instant company did not have paid dividends up to the date, there is no tax evasion due to the difference in global income tax on dividends, and the transfer income tax and securities transaction tax were faithfully reported and paid at the time of the transfer of shares.

Therefore, since the title trust of the instant shares falls under an exception to the provision on deemed donation of trust property under the former Inheritance Tax and Gift Tax Act because the purpose of tax avoidance is not to achieve, the instant disposition should be revoked in

B. Relevant statutes

Attached Form 2 shall be as shown in attached Table 2.

C. Determination

1) Facts of recognition

A) The instant company was established in 1974 and engaged in the wholesale business of chemicals, such as nitrogen, etc.

는 법인으로서, 설립 당시에는 고EE 외 9인이 합계 QQ,QQQ주를 보유하고 있었는데, 1991년 주식을 병합하여 액면가액이 Q,QQQ원에서 QQ,QQQ원으로, 주식수가 Q,QQQ주로 변경되었다가, 이후 다시 주식을 분할하여 액면가액이 Q,QQQ원, 주식수가 QQ,QQQ주로 변경되었다.

B) KimD shall, in the name of 1982, be one of its own, its employees and nine (8) persons from the high raw materials other than 1982.

(1) The company acquired the entire shares of the company in this case, and thereafter changed the shareholder name on the ground of retirement, death, etc. of employees who are nominal holders.

C) KimD entered into a title trust agreement with four trustees including the Plaintiff on December 31, 2004.

The trustee was registered in the register of shareholders from 1974 to 2008 of the company of this case, and the details of the change in shares and shareholders of the company of this case are as shown in attached Table 1 (the "applicant" as the "Plaintiff").

D) The Plaintiff’s shares as of April 14, 2005 were title trusted by KimD with respect to the instant shares.

In exercising the rights as a shareholder, the Plaintiff shall obtain prior consent from KimD in advance, and the exercise of voting rights at a general meeting of shareholders shall be delegated to a third party designated by KimD or KimD, and the profits to be received as a shareholder shall be returned to KimD, and at any time upon request from KimD, the shares of this case shall be transferred to KimD in the future, as notarized and submitted to KimD. Meanwhile, the Plaintiff prepared and submitted a written confirmation that the investigating public official would not have paid the purchase price for the shares acquired in the name of the Plaintiff in the course of corporate tax integration investigation with respect to the company of this case, and that in fact, the Plaintiff would have lent the name of KimD.

[Ground of recognition] Facts without dispute, entry of evidence Nos. 2, 3 and 4, purport of the whole pleadings

2) Determination as to whether the purpose of tax avoidance exists

A) The legislative purport of Article 45-2(1) of the former Inheritance Tax and Gift Tax Act is to impose taxes using the title trust system.

Inasmuch as an exception to the principle of substantial taxation is recognized in the purport of effectively preventing tax avoidance and realizing the tax justice, the proviso of the same Article is applicable only where the purpose of tax avoidance is not included in the purpose of the title trust, and the taxes provided for in the proviso thereof cannot be limited to the gift tax, and in the title trust, the person asserting it can prove that there was no purpose of tax avoidance. Therefore, the fact that there was no purpose of tax avoidance may be proved by the method of proving that there was a purpose of tax avoidance other than the purpose of tax avoidance. However, as the nominal owner who bears the burden of proof, the nominal owner who bears the burden of proof has a clear purpose of tax avoidance which is not related to the tax avoidance to the extent that it is recognized that there was no purpose of tax avoidance in the title trust, and the fact that there was no tax avoidance at the time of the title trust or in the future,

(1) In light of the legal principles as seen earlier, the presumption of gift cannot be applied solely on the ground that the actual owner does not have a purpose of tax avoidance (see, e.g., Supreme Court Decisions 2004Du11220, Sept. 22, 2006; 2004Du1421, Jun. 11, 2004).

B) However, the whole of the arguments are made on the evidence and evidence No. 5, which was incurred prior to the above facts of recognition.

In light of the following circumstances, the Plaintiff’s assertion and submitted evidence alone are insufficient to acknowledge that there was a clear and obvious purpose different from the tax avoidance in the title trust of the instant shares, or that there was no tax avoidance in the future at the time of the title trust, and there is no other evidence to acknowledge otherwise. Therefore, the Plaintiff’s assertion is without merit.

① The Plaintiff initially held the title trust of the instant company’s shares under the Commercial Act

The purpose was to meet the requirements for the number of promoters of the food company, and thereafter, the employee who is the nominal shareholder was customarily changed the name when the employee dies or dies. However, the requirements for the number of promoters of the stock company under Article 288 of the former Commercial Act (at least seven persons prior to October 1, 1996, at least three persons prior to July 24, 2001) were abolished on July 24, 2001, which was prior to the title trust of the instant shares to the Plaintiff. In addition, the aforementioned requirements are applicable to the time of incorporation of the stock company. Since the above provisions are not applicable to KimD that acquired all the shares of the instant company in 1982 after the incorporation of the instant company, it cannot be said that there was no need for the title trust on the grounds of the aforementioned provisions from the beginning.

(2) In addition, where an employee or a person who has trusted the existing name, retires or dies.

Despite the fact that the shares can be simply returned to the name of KimD, the actual owner, there is no evidence to acknowledge that there was a separate and obvious reason or purpose that should undergo a crypt procedure, such as finding a new title trustee and preparing a letter, obtaining authentication, etc.

③ The Plaintiff continues to continue from the title trust of the instant shares to the present date by KimD.

In the position of oligopolistic shareholders of the instant company, regardless of whether the instant shares are held in title trust, the secondary tax liability or deemed acquisition tax under the Framework Act on National Taxes and the Local Tax Act is imposed, and thus, it cannot be deemed that there was a purpose to avoid this. However, as seen earlier, the secondary tax liability of oligopolistic shareholders under the former Framework Act on National Taxes (amended by Act No. 7930, Apr. 28, 2006) is determined according to the shareholding ratio by the shareholder’s oligopolistic shareholder’s shareholding ratio (Article 39 of the above Act). In the event of the instant company’s default tax, there is a low secondary tax liability ratio of KimD equivalent to the shares held in title trust to the Plaintiff, thereby resulting therefrom.

(4) The holding of shares shall be in excess of whether a corporation actually pays dividends or amount of dividends available.

Notwithstanding the foregoing, the current income tax system does not necessarily take into account the occurrence of dividend income. Under the current income tax taxation system, dividend income of unlisted stocks is subject to global taxation, and thus, if the Plaintiff distributes dividends under the status of the nominal owner of the instant stocks, tax evasion may occur due to the difference in global income tax.

⑤ In fact, surplus earnings from the company’s non-dispositionable profits from the business year 2004 to the business year 2012

Until the Do has continuously increased up to the date of the title trust of the shares, there was a significant possibility that shareholders will be distributed in the future, and even in each letter submitted by the Plaintiff to KimD at the time of the title trust of the shares of this case, the profits that the Plaintiff would be entitled to become the nominal owner of the shares of this case shall

include the content of this chapter.

3. Conclusion

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