Whether there is the legislative intent of the title trust donation agenda and the purpose of tax avoidance

If the purpose of the title trust is tax avoidance, taxes cannot be limited to the gift tax, and it is recognized that there was another purpose of tax avoidance, such as the purpose of avoiding the progressive tax rate pursuant to the global income tax aggregate taxation on other dividend income, taxation on deemed donation of title trust is legitimate

Article 41-2 of the former Inheritance Tax and Gift Tax Act

Article 32-2 of the former Inheritance Tax Act

1. The plaintiff's appeal is dismissed.

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

The judgment of the first instance shall be revoked.

The Defendant’s disposition of imposition of KRW 336,00,000 on November 1, 2005 against the Plaintiff shall be revoked.

1. Circumstances of the imposition disposition;

The following facts are not disputed between the parties, or can be acknowledged in full view of the whole purport of the arguments in Gap evidence 1, Gap evidence 10, Gap evidence 12, Eul evidence 1-1, and Eul evidence 1-2:

A. On January 11, 2000, this title acquired 48,000 shares of Korea Cable TV ○○ Broadcasting (the trade name of December 29, 2005 was changed to ○○○○ Broadcasting Co., Ltd., and was merged with ○○○○○ Broadcasting on September 20, 2008; hereinafter referred to as “○○ Broadcasting”) under the name of the Plaintiff, who is the representative director of the ○○ System, a corporation with business transactional relationship (the acquisition value of 1,000,000,000, hereinafter referred to as “the shares of this case”). On June 30, 2003, this title transferred ○○ Broadcasting Co., Ltd. to Korea Cable ○○ Broadcasting Co., Ltd.

B. On November 1, 2005, the Defendant notified the head of Daegu Regional Tax Office of taxation data, and issued the instant disposition imposing gift tax of KRW 336,000,000 on the ground that the Plaintiff deemed that the instant shares were donated from ○○○○○○, and that the Plaintiff was given a donation of the instant shares, by applying Article 41-2 of the former Inheritance Tax and Gift Tax Act (amended by Act No. 6780, Dec. 18, 2002; hereinafter the same).

C. The Plaintiff, who is dissatisfied with the instant disposition, filed an appeal on June 30, 2006 with the National Tax Tribunal, but was dismissed on April 11, 2007.

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

(1) The reasons why this case’s shares were trusted in title to the Plaintiff

Around July 199, this ○○○○○○○ Internet business (hereinafter “○○○○”) concluded a strategic alliance with a view to expanding a business by linking a super-high speed Internet business with a cable TV business, and received funds from the said business from another cable broadcasting business entity and received the stocks of another cable broadcasting business entity. However, the so-called integrated Broadcasting Act (established by the former Broadcasting Act, the former Composite Cable Broadcasting Act, the former Cable Broadcasting Management Act, the former Korean Broadcasting Act, and the former Korean Broadcasting Act) was planned to be enacted at the time, and the existing relay cable broadcasting is converted into a composite cable broadcasting business. Under the circumstances where the existing relay cable broadcasting is converted into a composite cable broadcasting business, this ○○○○○○ online business (hereinafter “Integrated Broadcasting Act”) concluded an agreement with the Plaintiff, etc. to know the disadvantage that its share holding ratio would be excessively excessive, even if ○○○○○○ was demanded to acquire a large quantity of stocks solely in the name of the Plaintiff’s employees, including the Plaintiff, etc., to independently compensate the Plaintiff’s employees, etc. (hereinafter “○○”).

(2) The assertion that there was no purpose of tax avoidance

In particular, the purpose of tax avoidance was to terminate the title trust from the date of title trust of the instant shares to the Plaintiff, and to dispose of it to a third party, the instant disposition on the ground that the title trust of the instant shares was made for the purpose of tax avoidance is unlawful, inasmuch as the title trust of the instant shares was not specifically avoided due to the title trust, the instant disposition on the ground that the title trust of the instant shares was made for the purpose of tax avoidance is illegal.

(3) Claim that gift tax may not be imposed on the Plaintiff who nominally purchased the name without the purpose of evading gift tax.

Although the Plaintiff was registered as a shareholder in the register of shareholders of Jungbu Broadcasting, the Plaintiff was exempted from the scope of exercise of rights as a shareholder, and was merely lent only the name in accordance with the demand and instruction of Lee ○○, so there was no purpose of evading gift tax, etc., and therefore, gift tax cannot be imposed on the Plaintiff merely a title trustee.

(b) Related statutes;

Article 41-2 of the former Inheritance Tax and Gift Tax Act

Article 32-2 of the former Inheritance Tax Act

(c) Fact of recognition;

The following facts are not disputed between the parties, or can be acknowledged in full view of Gap evidence 2 through Gap evidence 8, Gap evidence 10, Eul evidence 12, Eul evidence 14, Eul evidence 2 through 7, Eul evidence 8-1 through 4, Eul evidence 9 through 12-1, Eul evidence 12-2, Eul evidence 12-1 and 2, and the whole purport of the pleadings as a whole in the testimony of part of Lee Jong-soo's testimony of the court of first instance.

(1) ○○○ was entrusted with the president of the Korea Relay Broadcasting Association for more than 10 years, and a number of intermediaries, etc. were operated under his name or in the name of his employee, and thus, ○○○, an online service provider, who is an early early high-speed Internet service provider, ○○, by providing funds to ○○○○, helps relay cable broadcasting operators to take over other relay cable broadcasting operators, etc., and to attract them to a regional cable broadcasting company, instead of helping the subscribers of ○○○, as it is, to expand the early high-speed Internet service by joining the super-high speed Internet service operated by ○○○.

(2) Around July 20, 1999, the ○○○○ entered into a strategic alliance agreement for the promotion of the super-high speed Internet business and cable transport business. Around August 1999, the subsidiary agreement related to the acquisition was written, and the investment support agreement was written on September 8, 1999 (hereinafter referred to as “the combination of the strategic alliance agreement, the subsidiary agreement, and the investment support agreement” collectively referred to as “the partnership agreement”). The main contents of the partnership agreement are ○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○’s funding necessary for the acceptance of other cable broadcasting businesses and the improvement of the facilities, and the specific contents of the agreement are as follows.

A person designated by ○○○ or a person designated by ○○○○ (e.g., a screener, etc.) shall pay the acquisition fund with a maximum of 30 billion won to a broadcasting station or a person designated by ○○○○ (a broadcasting station, etc.).

(b) A (a) broadcasting station, etc. shall use acceptance funds only for accepting the third broadcasting station, and immediately refund the already paid acceptance funds if acceptance is not made.

A broadcasting station, etc. that causes a disaster shall quarterly repay the underwriting fund to Dricker, etc. for three years from the date of the conclusion of this contract ( July 20, 2001) from the date of the conclusion of this contract.

In order to secure the repayment of acceptance fund, ○○ shall establish a pledge on all stocks of a broadcasting station taken over in order to secure the repayment of acceptance fund, etc., and shall establish a security for transfer for the list of assets in which acceptance is recorded. At the option of Dlimra, etc., a transfer of stocks, the pledge of which is established, may be substituted for repayment of such stocks.

(3) On September 1, 1999, Lee Jong-seok lent ○○ to Lee, pursuant to the Agreement on the Association of the Republic of Korea, the amount of money to be provided to Dog Dog Dog, to Dog Dog Dog Dog Dog Dog Dog dog Dog Dog Dog Dog Dog Dog Do, and the power of attorney was granted to Dog Dog Dog Dog. Pursuant to the Agreement on the Association of the Republic of Korea, Dog Dog Dog Dog Dog d Dog d Dog d Dog d Dog d Dog d Dog d Dog d Dog d Dog e., to d Dog Dog e., free of charge, 35,034,000 won as the funds for acquiring cable Dog d Dog d Do.

(4) 이○석은 이 사건 지원금으로 ○○방송 및 다수의 중꼐유선방송업체를 인수하면스 인수한 유선장송사업자의 주식 중 일부를 친인척 또는 종업원에게 명의신탁하여 그들 명의로 주주명부에 등재하게 하였다. 원고는 하○택으로부터 입금받은 사건 지원금으로 1999.11.경부터 2000.5.경까지 사이에 ○○방송 주식 480,000주 중 216,000주를 금 52억 4백만 원에 매수한 후, 이○석 명의로 51,349주(지분율 10.7%), 이○석의 종업원인 김○규 명의로 116,651주(지분율 24.3%), 원고 명의로 48,000주(지분율 10%, 이 사건 주식)를 주주명부에 각 등재하였다

(5) However, as ○○○○ did not secure sufficient stocks necessary for the receipt of ○○ Broadcasting, it transferred 216,000 shares of ○○○ Broadcasting to 7 billion won Korean Cable Broadcasting Co., Ltd., and underreporting KRW 1122,200,000,000 for acquisition.

(6) In addition, during the period from August 28, 1998 to April 26, 2001, Lee Jong-seok acquired 62,800 shares of ○○ Network Co., Ltd.’s 62,800 shares (acquisition value of 314,00,000) and entrusted title to ○○○○, an employee, bypassing donation to ○○○○, and made an employee re-transfer part of the shares to ○○○, and again transfer the shares to ○○○○○○, the amount equivalent to KRW 140,00,000 of the gift tax on the cash and shares directly donated to ○○○, by omitting reporting the amount of KRW 14,70,00 as gift tax on the cash and shares directly donated to ○○○○, a reduction in the transfer value of ○○○ Cable Co., Ltd.’s shares acquired with the instant subsidy to ○○ Representative Co., Ltd., Ltd., which, in turn, did not receive KRW 1,000,00.

(7) According to the minutes of an executive officer and employee meeting (Evidence A2) submitted by the Plaintiff on April 16, 1999, the statement stated that this ○○○ made a decision to allow an executive officer and employee to directly operate the acquired company by lending the acquisition fund to an intermediate person who contributed to the acquisition fund received from the dlim, and that this ○○○○○ made a contract with the Plaintiff and employee with the Ha○○-si, Han-dong, Han-ho, ○-ho, ○○, Kim Il-ho, ○, ○○-ho, ○, ○○-ho, ○○, and ○○○ (Evidence A6) on November 3, 1999, the business agreement (Evidence A6), in which the Plaintiff and the employee entered into with the Ha○-si, Han-ho, ○-ho, ○-ho, ○, and ○○ (hereinafter referred to as the “Plaintiff, etc.”).

(8) On March 30, 2005, at the time of investigation by the Daegu director of the Daegu Regional Tax Office, Lee Jong-seok stated that he was aware of the possession details of the shares of the cable broadcasting company acquired with the instant subsidy under another’s name, and that the specific details were well known. In the first instance court, he was in charge of the president of the Korea Cable Broadcasting Association at the time, and that he was not well aware of the company’s date because he was aware of the employees and dealt with it.

(9) Article 8(2) of the Integrated Broadcasting Act provides that “The stock or equity shares of a broadcasting business operator engaged in general programming or specialized programming of news reports shall not be owned in excess of 30/100 of the total number of stocks or equity shares of a broadcasting business operator.” As to the broadcasting business engaged in general programming and specialized programming of news reports, the Integrated Broadcasting Act, instead of imposing restrictions on ownership, provided that the restriction on ownership of the stocks or equity shares of a broadcasting business operator, including the CATV broadcasting business, etc., allows large enterprises, media companies, and foreign capital to participate in the broadcasting business, and provided that restrictions on mutual concurrent operation between business operators engaged in terrestrial broadcasting, CATV broadcasting,

(10) The acquisition of a small relay cable broadcasting company or a CATV broadcasting company by having a person in charge of each region take over a small-scale cable broadcasting company or a small-scale cable broadcasting company is aimed at promoting the business of CATV broadcasting for each region by integrating certain relay cable broadcasting companies secured by certain subscribers, and this is currently the representative director of a large number of CATV broadcasting companies including 00 ○○○ Cable (Change from ○○ Cable Telecommunication) and ○○○ Cable Broadcasting Co., Ltd.

D. Determination

(1) The legislative purport of Article 41-2(1) of the Act stipulating the constructive gift of title trust property is to recognize an exception to the substance over form principle to the purport that the act of tax avoidance by using the title trust system is effectively prevented, thereby realizing the tax justice. Thus, the proviso of the same Article is applicable only where the purpose of tax avoidance is not included in the title trust, and the burden of proving that there was no purpose of tax avoidance in the title trust. The actual owner has no intention of tax avoidance, and the application of the provision on gift presumption cannot be avoided solely on the ground that there was no purpose of tax avoidance in the title trust (see, e.g., Supreme Court Decision 2004Du1223, Jan. 28, 2005). However, if the title trust was recognized as having been made for reasons other than the purpose of tax avoidance, and only a remote circumstance exists that could lead to the occurrence of future tax reduction, it cannot be deemed that there was no clear intention of tax avoidance, such as 300Du3604, supra.

(2) As to the assertion that there was no purpose of tax avoidance

In light of the above legal principles, the Plaintiff’s assertion that ○○○○○○○’s shares were not subject to tax avoidance under the title trust 1’s name, and that ○○○○○○○’s shares were not subject to tax avoidance under the title trust 2’s name, and that ○○○○○○○’s shares were not subject to tax avoidance under the title trust 1’s title trust 2’s title trust agreement, and that ○○○○○○’s shares were not subject to tax avoidance under the title trust 1’s name, and thus, it is difficult to view that there was credibility of each of the above facts stated in the title trust 2’s assertion that ○○○○’s shares were not subject to tax avoidance under the title trust 1’s name, and that ○○○○’s shares were not subject to tax avoidance under the title trust 2’s title trust agreement, and that ○○○’s shares were not subject to tax avoidance under the title trust 1’s title trust agreement.

(3) As to the assertion that gift tax cannot be levied since the Plaintiff failed to acquire the substantial right to shares

The provisions of Article 32-2(1) of the former Inheritance Tax Act (amended by Act No. 4283, Dec. 31, 1990) intends to prevent the abuse of the title trust system by concealing donations in property requiring registration, etc. for the transfer or exercise of rights, and thereby avoiding "Gift". As such, the legislative intent is to prevent the abuse of the title trust system by means of avoiding " gift tax". Thus, if a different name, such as registration, etc., was made differently for the purpose of avoiding gift tax by concealing donations and not for the purpose of evading gift tax, it shall not be deemed as gift (see Supreme Court Decision 95Nu8768, 8755, 8782, Sept. 29,

However, Article 41-2(1) of the former Inheritance Tax and Gift Tax Act (amended by Act No. 6780, Dec. 18, 2002; hereinafter the same) which applies to the taxation disposition by death, where the actual owner and the nominal owner are different, the value of the property shall be deemed to have been donated to the actual owner on the date when the property is registered, etc. as the nominal owner, notwithstanding Article 14 of the Framework Act on National Taxes: Provided, That this shall not apply where the property is registered, etc. in the name of another person without the purpose of tax avoidance: Provided, That the same shall not apply to cases where the property is registered, etc. in the name of another person without the purpose of tax avoidance. The legislative intent of the above provision is to recognize an exception to the principle of substantial taxation with the purport of effectively preventing the tax avoidance by using the title trust system, and thus, if the purpose of the title trust is tax avoidance, the taxes under the above proviso cannot be limited to the gift tax (see, e

Therefore, even if the Plaintiff did not intend to evade gift tax by leasing only the name under the request and instruction of Lee ○○○○, it is recognized that Lee ○○ had the purpose of tax avoidance, such as the purpose of avoiding the progressive tax rate based on the global income aggregate taxation on dividend income. Therefore, the Defendant’s instant disposition is lawful, and the Plaintiff’s assertion on a different premise is without merit.

3. Conclusion

Therefore, the plaintiff's claim of this case is 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.