Seoul Administrative Court 2008Guhap4355 ( October 24, 2009)

Cho High Court Decision 2008west0686 (Law No. 23, 2007)

It is deemed that the profit-making corporation shall be the gross income when it purchases securities at a low price from an individual with a special relationship.

It is argued that even if a profit-making corporation purchases securities from an individual with a special relationship at a low price, the difference between the low price and the market price shall be deemed a gift, but the difference shall be deemed as gross income pursuant to

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

Article 2 (Gift Tax Taxables)

Article 4 (Gift Tax Liability)

1. The plaintiff's appeal shall be dismissed.

The second appeal cost shall be borne by the plaintiff.

The judgment of the first instance shall be revoked, and the disposition of imposition of corporate tax of KRW 99,478,210 against the plaintiff on December 12, 2007 by the defendant shall be revoked.

1. Quotation of judgment of the first instance;

The reasoning for this Court’s explanation concerning this case is as follows, except for adding the following judgments to the reasoning for the judgment of the court of first instance, and the reasoning for the judgment of the court of first instance is as stated in the part of the reasoning for the judgment of the court of first instance. Thus, this Court shall accept it in accordance with Article 8(2) of the Administrative Litigation Act and the text

[Attachment]

(a) revise Article 167-8 of the Enforcement Decree of the Income Tax Act, which is the second and second below, to Article 167-4 of the Enforcement Decree of the Income Tax Act at the time of the “Article 167-8;

(b) revise the term "for the purpose of inserting the vitality of the third reduction" below the fifth being 'for the purpose of inserting the vitality.'

[Supplementary Judgment]

A. The plaintiff's assertion

The Inheritance Tax and Gift Tax Act, unlike the concept of donation under the Civil Act, provides that the term "donation" under Article 2 (3) means a free transfer (including a transfer at a remarkably low price) of tangible or intangible property (including a transfer at a remarkably low price) by which economic value can be calculated, or an increase in the value of another person's property by means of a direct or indirect method, to another person, notwithstanding the name, form, purpose, etc. of such act or transaction. In addition, Article 35 of the Inheritance Tax and Gift Tax Act provides that the transfer of property at a price lower than the market price shall be regarded as a donation in comparison with the market price. The special provision of this case does not include any stipulation that restricts the scope of the subject of inheritance or donation, or that limits the items of taxation, such as where the Plaintiff, a donee, is limited to a case where the Plaintiff, who is an individual, is a corporation, not a gift tax.

(b) Related statutes;

It is as shown in the attached Form.

C. Determination

Therefore, Article 15 of the Corporate Tax Act and Article 11 of the Enforcement Decree of the Inheritance Tax and Gift Tax Act provide that the donee shall pay the gift tax if the donee is a profit-making corporation, instead of paying the gift tax, and treat it differently from the case of profit-making corporation. Article 26(1) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act provides that "less there is a difference between 30/100 and 300 million or more of the market price, or the difference between 30 million or more," and Article 26(3) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act Article 35(1) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act provides that "for a profit-making corporation, the difference between the market price and the 30/100 or more of the market price and the 300 million won, whichever is less than the market price, should be determined by taking into account the difference between the market price and the 200 million won of the securities purchased from the profit-making corporation."

2. Conclusion

Therefore, the plaintiff's claim of this case shall be dismissed as it is without merit, and the judgment of the court of first instance is just, and the plaintiff's appeal is dismissed as it is without merit. It is so decided as per Disposition.