Seocho 209west 2102 (Law No. 9.17, 2009)

The propriety of the disposition that denies transaction example and evaluates it as a supplementary evaluation method in the evaluation of unlisted stocks

The disposition that is assessed as a supplementary method because it is difficult to view that there was a free transaction between many and unspecified persons in view of the fact that two shareholders have transferred the same day in accordance with the face value, and that it is a transaction between the representative director and the executive officers and employees.

The contents of the decision shall be the same as attached.

1. All of the plaintiff's claims are dismissed.

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

The primary claim: the defendant's imposition of KRW 336,20,620 of the gift tax on September 7, 2005 against the plaintiff on January 6, 2009 (it appears to be a clerical error in the statement on January 12, 2009) shall be revoked.

Preliminary Claim: The defendant revoked a disposition rejecting an application for payment in kind filed with the plaintiff on March 9, 2009.

1. Basic facts

A. AAAAB Co., Ltd. (hereinafter referred to as a "non-party company") is an unlisted company established for the purpose of the game machine manufacturing business. In the case of capital increase of 130,000 won per par value of 5,000 won on September 7, 2005 (hereinafter referred to as the "instant capital increase"), the previous shareholders acquired 74,000 shares among the existing shareholders, and only 74,000 shares, and the remaining 56,000 shares were not acquired by the existing shareholders, and the plaintiff et al. allocated them to the employees of the non-party company as indicated below, including the plaintiff, and accordingly, the plaintiff et al. acquired them at 5,00 won per share (hereinafter referred to as the "stocks acquired by the plaintiff").

B. The director of the Seoul Regional Tax Office, during the period from September 19, 2008 to October 29 of the same year, found that the non-party company allocated forfeited stocks to the Plaintiff at a price lower than the market price, and notified the Defendant of the result.

C. Accordingly, the defendant assessed the "value per share before capital increase in accordance with the supplementary assessment methods pursuant to Articles 39(1)1(a), 60(3), and 63(1)1(c) of the former Inheritance Tax and Gift Tax Act (amended by Act No. 8828, Dec. 31, 2007; hereinafter referred to as the "Inheritance Tax and Gift Tax Act, regardless of whether it had been amended before and after amendment), and Articles 29(3), 54, and 56 of the Enforcement Decree of the Act, "value per share before capital increase in accordance with the supplementary assessment methods" as 1,288,534 won, and then calculated the "value per share after capital increase was calculated as 96,681 won after deducting the remaining difference by 91,681 won (=6,981; -601,50,500 won per share; - 2601,2608 won per share).

D. Meanwhile, on January 23, 2009, the Plaintiff requested the Defendant to pay the pertinent shares in kind, but the Defendant rendered a disposition refusing to grant the payment in kind on February 24 of the same year on the ground that the instant shares are inappropriate to be managed and disposed of (hereinafter “instant disposition refusing payment in kind”).

[Reasons for Recognition] Gap evidence 1 to 8, Eul evidence 1 to 3, and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's principal

(1) A petition concerning the primary claim(s)

(A) On September 4, 2005, the shares of the non-party company were traded at KRW 5,000 per share between KimCC and NewD and HaE, which was before the issuance of the new shares, and on the other hand, the non-party company was unable to provide a game machine with major revenue source due to the "Public Notice of Standard for Handling of Gift (Public Notice No. 2004-14, Dec. 31, 2004; hereinafter the "Public Notice of this case")" in the game software establishment, so the sales sharply decreased. In light of these circumstances, the market value of the stock of this case, which is an objective exchange value, shall be deemed 5,00 won per share. Nevertheless, the defendant's assessment of the value of the stock of this case by supplementary evaluation methods, and it is unlawful to impose gift tax by deeming the difference to have been donated by the plaintiff.

(B) Even according to the supplementary assessment method, the instant taxation is unlawful in that the Defendant assessed the net asset value including the inventory assets of KRW 4.397 billion, and it assessed the net profit and loss value without reflecting it even though the game machine was virtually impossible to generate profit.

(2) A proposal concerning the preliminary claim (payment refusal in kind)

Although the shares of this case are not included in the scope of property inappropriate for management and disposition, the defendant's refusal of payment in kind of this case is against the law and illegal.

(b) Fact of recognition;

(1) Operational status of the non-party company

(A) On January 16, 2004, when the non-party company opened a "AAnet Scocot (hereinafter referred to as the "the game of this case"), which is a kind of screen game, and offered free gifts, such as paying a maximum of 5,000 won of cultural products to the game machine users once as a prize, by being classified by the "use price classification" on January 16, 2004. However, according to the public notice of this case that prohibits the provision of the game, the above product is deemed a speculative game product and it is impossible to provide free gifts to the users.

(b) Sales, income, and net income (unit: 00 won);

(C) Monthly sales after December 31, 2004 (unit: 1,000 won) at the time of the instant public notice

(d) Stock transactions between executives;

On September 4, 2005, the representative director KimCC of the non-party company purchased 3,750 shares of the non-party company in total from the director newD and the auditor PEE in the amount of KRW 5,000 per share (newD and HaE resigned from each director and auditor on the day of sale).

(2) Omission of inventory assets and income adjustment

(A) When the National Tax Service conducted a corporate tax investigation on the non-party company from June 21, 2005 to August 16, 2005, it found that the non-party company included the last inventory assets in the sales price at the last time, and adjusted the amount of income by reserving the omitted inventory assets to gross income in the business year of 2004.

(B) On October 1, 2005, the National Tax Service imposed additional corporate tax of KRW 1,523,610,943 due to the omission of inventory assets on the non-party company. The non-party company paid the above tax amount.

(C) In filing a return on the tax base and amount of corporate tax accrued for each business year from 2005 to 2007, the non-party company filed a return on the reservation of the sales and disposal of the assets omitted for the pertinent business year as follows.

[Basis] Evidence Nos. 1, 9 through 12, evidence Nos. 15, evidence Nos. 4, evidence Nos. 9 through 11, and the purport of the whole pleadings

C. Judgment on the main claim

(1) Evaluation methods of unlisted stocks

In the case of unlisted stocks not listed on the Korea Stock Exchange, if there are actual examples of transactions that appear to properly reflect the objective exchange values thereof, such price shall be deemed to be the market price. However, if there is no such actual example or it is difficult to calculate the market price by any other means, the value thereof shall be assessed according to the complementary evaluation methods under the law. Here, the market price refers to the objective exchange price formed through normal transactions in principle, and there is a reason to view that the transaction price falls under the market price at the time of donation as of the time of donation as objectively and objectively reflects the general and normal exchange value (see Supreme Court Decision 9Du2505, Feb. 11, 2000).

With respect to this case, the above sales cases claiming that the Plaintiff should be deemed to be the market price on the basis of the assessment base date of the instant tax disposition regarding the stocks of the non-party company, are not considered to be the market price that is generally accepted in a case where transactions are conducted freely between many and unspecified persons in light of the transaction type and content, such as ① two shareholders have transferred at once on the same day three days prior to the capital increase for consideration of the instant case, ② the representative director and the executives and employees, etc.

As long as there is no data to recognize the market price as of the base date of appraisal of the instant tax disposition regarding the shares of the non-party company, the assessment of shares acquired by the plaintiff shall be calculated according to the supplementary assessment method prescribed in Article 63(1)1 (c) of the Act. Ultimately, the assessment of shares by the non-party company that the defendant issued pursuant to the above provision

(2) Whether the method of appraisal of shares is feasible or not

(A) Provisions of the statute

In the application of Article 60 (3) of the Inheritance Tax and Gift Tax Act, where it is difficult to calculate the market price in accordance with the method provided for in Articles 61 through 65 in consideration of the type, scale, transaction situation, etc. of the relevant property, where it is difficult to calculate the market price, the value according to the method of supplementary assessment shall be deemed to be the market price. Article 63 (1) 1 (c) of the Inheritance Tax and Gift Tax Act provides that the shares and equity shares that are not listed on the Korea Stock Exchange shall be appraised according to the method provided for in the Presidential Decree in consideration of the assets and profits of the relevant corporation.

Meanwhile, Article 54 of the Enforcement Decree of the Act provides that the weighted average value of net profit and loss evaluated by the method of calculating the weighted average value of "net profit and loss for the last three years" by dividing the weighted average value of "net profit and loss" and "net asset value of the corporation concerned" by the total number of issued stocks shall be the weighted average value of 3 to 2, respectively. Articles 55 and 56 provide for the detailed method of calculating "net asset value" and "net profit and loss for the last three years" respectively. Accordingly, "net asset value" is the amount calculated by subtracting liabilities from the value appraised by the corporation under the provisions of Articles 60 through 66 of the Inheritance Tax and Gift Tax Act as of the base date of appraisal, while "net profit and loss for the last three years" per share shall be the weighted average value of each net profit and loss for three business years until the business years in which three years have passed before the base date of appraisal, which is the date of donation.

However, if there are special circumstances such as abnormal increase in the amount of net profit or loss for the last three years due to a temporary contingent case, it shall be calculated by the average value of estimated profit per share.

(B) Whether the calculation of net asset value is reasonable or not u300 u300 n u300

According to the evidence Nos. 3-1, 2, and 5-1, 5-2 of the evidence Nos. 1, 502, 446,54 of the non-party company's distribution assets on the balance sheet as of December 31, 2004 [1,472,43,208 of the current asset + inventory assets (raw materials 30,013,346 of the current asset + inventory assets (raw materials 30,013,346)]; fixed assets are 1,683,518,264 won in total; 1,683,518,818 won in total; 1,027,612,932 won in total; the non-party company's stock return for corporate tax for 204, 4,278, 225 won in total; 4,393,2363,437,581 of the Corporate Tax Act; 3057,581 of the net assets of the defendant.

The Plaintiff asserts that inventory assets of KRW 4,393,223,363 should be excluded from assets because it did not contribute to the realization of future revenues. However, as seen earlier, in light of the fact that the National Tax Service reserved the entry of KRW 4,393,223,363 of the non-party company’s inventory assets in the calculation of earnings in the year of 2004, and the non-party company adjusted the amount of income by making a reserved disposition in the calculation of earnings in the business year in which the above inventory assets were actually disposed of in the calculation of losses in the business year from 2005 to 2007, it is difficult to recognize that the above inventory assets do not

(c) as to the feasibility of calculating net profit and loss;

In calculating the net profit and loss value, the defendant's calculation of the net profit and loss value based on the net profit and loss value for the last three years per share is illegal. The plaintiff asserts that the source of the profit and loss of the non-party company was the game of this case, and that the calculation of the net profit and loss, which did not reflect the circumstances that making it impossible due to the notice

However, in light of the following circumstances: (a) there was no apparent change in the monthly sales after the notice of this case; (b) there was no sudden decrease in the sales amount as of September 2005, which was the date of capital increase for new shares; and (c) there was no evidence to prove that there was a change in the net profit and loss value of the non-party company in the business year 2005; and (d) there was no objective data to verify the scope of change in the value of the non-party company's profit and loss due to the notice of this case, even if the value of the non-party company was significantly decreased due to the notice of this case, and there was no supplementary data to determine the scope of the change in the value of the stocks; and (c) there were various circumstances revealed in the pleadings, such as the legislative intent of the public notice of this case, the defendant calculated the net profit

(3) Sub-decisions: The instant taxation disposition is lawful.

D. Determination on the conjunctive claim

(1) Legal principles

The system of payment in kind prescribed by the Act is a system that enables a taxpayer to pay in donated property by relaxing the financial burden on the person liable for tax payment. The management and disposal of property subject to payment in kind is inappropriate, taking into account equity with the person liable for tax payment in cash, an application for payment in kind may be refused. Whether it is deemed inappropriate to manage and dispose of property subject to payment in kind shall be determined individually by taking into

(2) Determination

As seen earlier, the record of the net loss from the year 2006 was recorded by the non-party company. In addition to the whole purport of the argument in the statement in Eul evidence 1 to 5 and Eul evidence 10-1 to 5, it is recognized that the appraised value per share of the shares of this case was zero won as of January 31, 2009, the time when the plaintiff filed the application for payment in kind. The representative director who acquired the shares of the non-party company with the issued shares of this case and the plaintiff and four other parties who filed the application for payment in kind with the shares of the non-party company upon the imposition of gift tax, all of the non-party company's acquisition of the shares with the issued shares of this case, and the expected person to purchase the shares of this case can only be extremely limited to the representative director or employees of the non-party company, and it

According to the above facts, the shares of this case had no prospect for sale at a considerable price, such as where the loss of value that cannot be recovered due to the fluctuation of market price was predicted at the time of application for payment in kind, and it is reasonable to view that this constitutes "where the management and disposition of the property subject to payment in kind is inappropriate, which is the reason for refusal of the application for payment in kind." The plaintiff's assertion on this part

(3) The theory of lawsuit: The refusal of payment in kind in this case is legal.

3. Conclusion

The plaintiff's primary claim and conjunctive claim are dismissed as it is without merit.