shall not be deemed to have received a donation of money transferred from the section.

The money transferred by the plaintiff to the plaintiff is merely a return of the money that the plaintiff's 's 's 's 's 's 's 's ' has been borrowed for investment

Article 2 of the Inheritance Tax and Gift Tax Act

2018Guhap57568

AA

BB Director of the Tax Office

November 1, 2018

January 24, 2019

1. The Defendant’s imposition disposition of KRW 00,00,00 (including additional tax of KRW 00,000,000) for the gift tax of KRW 201 X. 201 X. the Plaintiff is revoked.

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

Cheong-gu Office

The same shall apply to the order.

1. Details of the disposition;

A. The Plaintiff’s father CCC made an investment in FFFF (hereinafter “FFF”) in EE through DD around X around X in 200 X, and also proposed an investment in the Plaintiff residing in the United States.

B. Upon the request of CCC, the Plaintiff remitted 50 million won to the account under the name of XX.DD on March 2009, and X. X. 200 X. The representative director of the non-party company remitted 050 million won to the account under the name of GG that was located in the non-party company.

C. CCC transferred KRW 00 billion to the Plaintiff’s Hbank account (hereinafter “instant money”) on August 200, 200 X.

D. In the course of conducting a tax investigation with respect to the Plaintiff and CCC from X. XX to X. 1X., the Director of the Regional Tax Office of II: (a) when the Plaintiff invested KRW 00 million in the non-party company through DD but failed to recover it, the Plaintiff deemed that CCC donated the instant monetary amount to the Plaintiff and notified the Defendant of the relevant taxation data.

E. The Defendant imposed a gift tax of KRW 00,000,00 (including additional tax of KRW 00,000,000) on the instant money on the Plaintiff, X. 201X. X., 201 X. XX. (hereinafter “instant disposition”).

F. Although the Plaintiff filed an appeal with the Tax Tribunal, the Plaintiff was dismissed under XX. 201X.

[Ground of recognition] Facts without dispute, Gap evidence 1 through 3, 8, 9 evidence, Eul evidence 1 (including each number), the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The parties' assertion

1) The plaintiff's assertion

The Plaintiff planned to make an investment of KRW 0 billion in the purchase of shares of the non-party company in X around X in 200 X, and proposed that the Plaintiff and the JJ also make an investment. The Plaintiff and the JJ proposed that, although they did not want to make an investment, they would make a loan to the non-party company whose cash liquidity was insufficient at the time of the Plaintiff’s refusal of father’s recommendation, and upon acceptance of the above proposal by CCC, the Plaintiff and JJ lent the above amount to CCC by transferring the amount of KRW 00 million to the accounts in the name of DD and GGG, which are designated by each CCC. After the failure of the CCC’s investment, the Plaintiff and JJ could receive a refund of the above amount from the CCC around X around 201, under the premise that the Plaintiff did not directly return the amount of KRW 00 billion to the non-party company and the Plaintiff did not directly incur loss to the Plaintiff and thus, the Plaintiff did not directly recover the amount of KRW 1 billion in the instant case.

2) The defendant's assertion

In the course of the tax investigation, the plaintiff explained that "the plaintiff was reimbursed for the personal investment amount that was not returned from DCC to the plaintiff's account from DCC (Evidence 2), while the JJ lent 'D' to 'D' in the course of the tax investigation, and 'CCC paid 00 million won out of the purchase price to DoD' as the creditor of DoD (Evidence 5). Since then, 'A evidence 18' was proved to be revised and submitted by the JJ, whether the J lent DoD to CR, but in some case, 'J' was chosen to 'D' in the process of the tax investigation, but the plaintiff's direct investment in Dod' was preserved as the plaintiff's own investment losses incurred in the process of the donation.

(b) Fact of recognition;

1) The Plaintiff deposited KRW 10 million in the account under the name of 200X. X. XX.DD, and KRW 200,000,000 in the account under the name of X. X. XX. GG, with respect to the above money, the Plaintiff was the borrower, CCC was the lender, the date on which each of the above dates was made, the interest rate was zero, the lending period was 24 months, and the lending period was 24 months, and if there is no special reason not later than one month prior to the maturity, there is a loan certificate that is automatically extended (the evidence No. 7-1, 2, hereinafter referred to as “the loan certificate of this case”). However, the Plaintiff submitted a pre-assessment review that did not submit the loan certificate during the tax investigation period.

2) CCC drafted a certificate of stock transfer (Evidence 6) and a certificate of loan (Evidence 5) with the following content between X. X. XX.D.:

○ Certificates of Transfer of Stocks

(A) CCC, (B) DD

In accordance with the principle of trust and good faith, the above "B" promises to transfer to "A" the shares of the KK-Eup LLriri LLri - the FFF in the case of an EE-pro-pro-pro-pro-pro-pro-pro-an

§ 1.(A) Rights and Amount of Investment

A shall invest daily X00,000,000 (0,000,000) in B and own 29% shares of the total amount of shares of the said corporation, and shall have the right to dispatch two registration directors of the corporation and one auditor.

§ 2 (Duties and Rights)

"B" shall receive an investment of X0 million won (0,000,000) to "A" and shall transfer 29% shares of the total amount of shares to a person designated by "A" after acquiring the said corporation, and register as a director, and shall appoint a person designated by "A" as an auditor.

○ The loan certificate

Japan: daily X00 million won (0,000,000,000)

The above amount shall be borrowed with the fund to take over the FFF capital in the KK-Eup LLri-ri-ri-ri-ri-ri-prool.

(a) The first loan amount: X00,000,000: X0,000

(2) The second loan amount: X00,000,000: X0,000: X in 200 X.

The name of the lender: CCC, the name of the borrower: DD

3) DDR prepared a letter of payment (No. 12) stating that "I will promptly transfer its own apartment and other property and gather goods to CCC within the limit of 0 billion won until they are repaid," and "I will submit a letter of payment (No. 12)." On March 13, 2018, "I will prepare a sales contract with GGG and other shares, a shareholder of the non-party company, and plan hotel acceptance. However, I will inevitably prepare a local hotel facility confirmation with the Chairperson, and received an investment promise from X 1,000,000,000 won until X 2,000,000,000,000 won to the Plaintiff. The Plaintiff was unable to request X CC to pay to the Plaintiff, and the Plaintiff did not receive a letter of debt collection or delivery from the Plaintiff by 2,000,000,000,000,000 won, and it did not receive a letter of debt collection or delivery from the Plaintiff.

4) Upon receipt of a written explanation on the source of various funds from X around X in 201 X, prior to the commencement of the tax investigation, the Plaintiff’s female JJ submitted the first explanation of X. X. 5 (Evidence No. 5) and X. X. 18 (Evidence No. 18). The JJ transferred the 200X X. X. XX. 1) to the account of DD, but the CCC returned KRW 00,000,000 from CCC, the first explanation of the amendment was written “D loan recovery KRW 00,000,000 (CCC),” and each of the amended explanation was written “CCC (CC)”.

1) The date is the same as the date the Plaintiff remitted KRW 50 million to the account of DDR.

The director of the Seoul Regional Tax Office, based on the above statement of vindication, considers that J was returned KRW 00,000,000 that J lent to CCC or DD, and did not impose gift tax on the above money.

5) The Plaintiff was subject to a tax investigation conducted around 201X. XX., and submitted a vindication (Evidence B, hereinafter referred to as “instant vindication”) regarding the instant monetary amount as follows.

○ 201X. X. x. CCC deposits KRW 300 million.

Transfer of KRW 00,00,00 to DD accounts with X. X. XX. MM tourist hotel investments.

Transfer of KRW 00,00,00 to the GG account with the investment funds in X. X. XX. MM tourist hotel;

X. X. DD’s personal investment deposit is not implemented and thus returned due to the default of payment.

However, in the case of the CCC’s guarantee for the investment amount, 00 million won reimbursement to the Plaintiff.

6) As to the details of the preparation and submission of the instant vindication, the OO, which was an officer in charge of funding from NNN2 to 2016, was present as a witness in this Court and testified as follows.

2) At the time, CCC was a representative director and stockholder of this company.

At the time when CCC invested in the non-party company, it confirmed and reviewed the investment contract, the amount of investment to be invested by the Chairperson of CCC, etc. at the time of the investment in the non-party company. At that time, CCC received and operated the PPP sports around February 2009.

원고에 대한 세무조사 대응업무를 맡은 NNNNNN 주식회사의 QQQ 부장이 작성한 소명서를 본인에게 검토 요청 하였는데, 본인은 이 사건 금원에 관하여 이자를 안준 경우 증여세 문제가 생기기 때문에 대여금을 간접투자금이라고 표현을 바꾸어 이 사건 소명서를 제출하도록 하였다.

The Plaintiff said that it would not make an investment in the recommendations of the CCC, and that CCC made an oral promise that CCC would make an investment in the form of indirect investment, and that CCC would make an oral promise that CCC would make a compensation to the Plaintiff if the Plaintiff was unable to receive the said money, regardless of the form of investment or loan to CCC. Moreover, CCC paid the indirect investment amount, as the Plaintiff would have made a request for the money to CCC in 201X because it is necessary for the funds to be made in 201X.

The content of H is equal to that of the Plaintiff’s lending of money to his father, or investment. However, if the Plaintiff was aware of the interest until the repayment of the loan was made, the donation problem would occur, and if the Plaintiff was an indirect investment, it would not be possible to make any profit or loss because there would be no tax unless the profit or loss would be known about the investment amount.

Around 201X. XX. Around 201, RR tax accountants were accompanied to the RR regional tax office, and the investigator did not ask this case, and there was no specific explanation after the submission of the vindication of this case, but the certified tax accountant provided an explanation by the witness on the following grounds: (a) he made several talks, and (b) made several talks, and (c) made it possible for him to explain that he would be indirect investment once again, and (d) made several comments on the loan certificate or other evidence; (b) made a gift tax assessment on the only part of his mind that he did not have any awareness of being able to do so because of the lack of her friencing relationship. On the other hand, the investigator did not submit a loan certificate in the pre-announcement of taxation and did not provide a loan certificate in the pre-assessment review.

[Reasons for Recognition] Facts without dispute, Gap evidence 3 through 14, evidence 16 through 18, each entry of evidence 2, 5, evidence 10 to 12 (including each number), witness's testimony of OO and the purport of the whole pleadings

C. Determination

According to Article 2(3) of the former Inheritance Tax and Gift Tax Act (amended by Act No. 13557, Dec. 15, 2015), the term "donation" means a gratuitous transfer of a tangible or intangible property (including a transfer of property at a remarkably low price) or an increase in the value of another person's property by means of a direct or indirect method, regardless of the name, form, purpose, etc. of such act or transaction.

In full view of the facts acknowledged earlier and the overall purport of the pleadings, the instant money that CCC transferred to the Plaintiff on X. 201X. X. was returned by CCC to the Plaintiff on 200 X. XX. and X. 200 X. 200,000,000 won that it borrowed from the Plaintiff for the purpose of its investment funds, and the Plaintiff cannot be deemed to have received free donation of the instant money from CCC. The Plaintiff’s assertion is with merit, and the instant disposition is unlawful.

① A person who determines to make an investment in the non-party company and directly entered into an investment contract of KRW 0 billion with DDD is the Plaintiff’s father-CC. The Plaintiff and JJ do not directly visit DD due to the relationship mainly residing in the United States, nor did they have any explanation about the investment. DD also did not think of the Plaintiff and JJ as the counter-party to the transaction. Thus, the Plaintiff and JJ cannot be deemed to have directly entered into an investment contract with the non-party company.

② The Plaintiff and JJ cannot be deemed to have remitted a large amount of KRW 100,000,000,000 to DD or GG that do not have a face-to-face-to- X in X-X in 2000. Rather, the Plaintiff and JJ believe that the Plaintiff and JJ may sufficiently receive refund of each of the above amounts ( principal) invested by the Plaintiff and JJ in the non-party company, even if CCC failed to make an investment in the non-party company, it is reasonable to view that the Plaintiff and JJ provided surplus funds to CCC with other assets, and that the Plaintiff and JJ would be able to fully receive a refund of each of the above amounts ( principal). However, it is reasonable to view that CCC directly wired the above amounts to DD or GG designated by CCC.

3) In the event that the investment in the non-party company of the CCC is successful, there is a possibility that the amount equivalent to the investment return should be returned along with the principal as interest. In such a case, the phrase “investment amount” in the instant vindication prepared by the Plaintiff may be deemed as an expression bearing in mind the interest or profit that has not been finalized.

③ While entering into an agreement with CCC to make an investment in KRW 0 billion by acquiring stocks of a non-party company from DD, it is difficult to deem that CCC promised to return principal by recommending the Plaintiff and the JJ to make an investment or loan to his/her husband and to provide an unfair benefit. Considering the unique nature of gender relationship, CCC would have guaranteed the return of principal when it extended funds from the Plaintiff and JJ, and from the standpoint of CCC at the time, it is highly likely that CCC would have provided funds even by entering into a loan agreement by guaranteeing the return of principal, etc., even if it extended funds from a third party other than his/her children.

④ The nature of the agreement between the Plaintiff and CCC and the JJ and CCC is determined according to the terms and conditions of the agreement. In light of the facts and the purport of the entire arguments recognized earlier, it is difficult to view the Plaintiff and the JJ as having entered into an investment agreement with DDD or having incurred direct investment losses, even though the Plaintiff and the JJ were merely limited to the use of the word “investment” or “loan” selected by the Plaintiff and the JJ in submitting the first explanation. As such, it is unreasonable to view that the Defendant imposed gift tax on the Plaintiff as to the Plaintiff. In light of the substance of RD trading, the Plaintiff may also be deemed as having provided the CCC with funds to use it as an investment in the non-party company, as in the case of the Plaintiff, as in the case of the JJ, and it is difficult to deem that the Plaintiff had entered into an investment agreement with DD or incurred direct investment losses.

⑤ Even based on the statement of the instant vindication submitted by the Plaintiff, the purport of the Plaintiff is not to have been compensated by CCC, but to guarantee the return of principal for investments introduced by CCC. Ultimately, the content of the Plaintiff and the JJ’s vindication was somewhat different from the determination of the parties to the contract and the assessment of legal relations and the use of terms, and its nature is the same in that the amount transferred to DD and GG was invested in the non-party company via CCC. Therefore, it is difficult to determine that the legal relationship between the Plaintiff and CCC, JJ and CCC was differently formed solely based on the statement of the instant vindication.

(6) Although there is room for doubt as to the time when the loan certificate that the Plaintiff submitted late at the time when the Plaintiff requested for review of the legality of taxation was made, even if such loan certificate was made later, as seen earlier, insofar as it can be evaluated that the substantial legal relationship between the Plaintiff and CCC is a loan or a similar loan that entails an agreement to return the principal amount, it cannot be deemed that CCC returned the instant money, which was anticipated to return to the Plaintiff according to the agreement, and cannot be deemed as a donation to the Plaintiff.

3. Conclusion

Therefore, the plaintiff's claim shall be accepted for the reasons and it is so decided as per Disposition.