Cho High-2016-S-095 (Law No. 17, 2017)

In light of the purchase of shares and the exercise of power in the process of sale, etc., it should be deemed that the shares of this case were nominal trust and had the intent of tax avoidance.

In light of the developments leading up to the acquisition or sale of the instant shares, the Plaintiff, such as the purchase of the instant shares, securing of the company’s management right, selection of persons subject to sale, and determination of sale conditions, etc., actually controlled the company after the acquisition of the instant shares, and exercised the power to dispose of such shares. As such, the actual owner

Articles 4 (Gift Tax Liability) and 45-2 (Legal Fiction as Donation of Title Trust Property) of the former Inheritance Tax and Gift Tax Act

2018Guhap5430 Revocation of Disposition of Imposition of Gift Tax

Aa and 1 other

CC director of the tax office

November 30, 2018

January 25, 2019

1. All of the plaintiffs' claims are dismissed.

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

Cheong-gu Office

The imposition of gift tax (including additional tax) imposed by the Defendant on August 1, 2017 shall be revoked in entirety.

1. Details of the disposition;

A. The Plaintiffs, as married couple, Plaintiff BB, as its main business, operated EE Communications, and operated bond brokerage, bond brokerage, stock investment, etc.

B. From April 2008 to October 2008, Plaintiff A acquired 00,000 shares issued by FF Co., Ltd. (hereinafter referred to as “Nonindicted Co., Ltd.”) (hereinafter referred to as “Nonindicted Co., Ltd.”) from around 2008 to around 2008, with capital increase to 00,000 shares, with capital increase to 00,000 shares; and 0,000,000 shares with 0,000 shares issued by Nonparty Co., Ltd. (hereinafter referred to as “instant shares”) around the end of 2008.

C. From August 22, 2016 to December 16, 2016, the head of the D Tax Office conducted a tax investigation with respect to Plaintiff Aa, and determined that Plaintiff BB had trusted the shares acquired in 2008 for the purpose of tax avoidance and notified the Defendant of the taxation data. Accordingly, on August 1, 2017, the Defendant: (a) on April 1, 2008, on June 2008, on the amount of KRW 0,000,000, on the amount of KRW 000,000,000, on the amount of KRW 000,000,000, on September 7, 2008, on the amount of KRW 9,000,000, on the amount of KRW 000,000,000, and on the amount of KRW 200,000, on the amount of KRW 100,00 as additional tax (including additional tax).

2. Related statutes;

It is as shown in the attached Form.

3. Whether the instant disposition is lawful

A. Summary of the plaintiff's assertion

(1) From 197 to 197, Plaintiff Aa acquired the instant shares with the shares of GG and H H’s purchase price, etc., and delegated only the operation of the non-party company to Plaintiff BB, the husband of the non-party company. In addition, given that part of the purchase fund of the instant shares was a loan made by Plaintiff Aa to the debtor, and the securities account received or purchased by the instant shares was established under Plaintiff Aaaa, the instant shares shall be deemed to belong to Plaintiff Aa under the Act on Real Name Financial Transactions and Confidentiality (hereinafter “Act on Real Name Financial Transactions and Confidentiality”). 2) Even if it is deemed as a trust property under the name of Plaintiff BB as a title trust property, Plaintiff BB acquired the instant shares under the name of Plaintiff Aa in a bad credit condition, and did not have many incomes earned by Plaintiff BBB from the corporate bonds, etc., the non-party company did not pay dividends to the excessive corporation, and Plaintiff B BB did not constitute an oligopolistic shareholder of the non-party company.

(b) Fact of recognition;

The following facts are recognized by comprehensively taking into account the descriptions of the evidence No. 0 and the purport of the whole pleadings.

1) On December 19, 2008, Plaintiff bB and CC entered into a contract with dd and Nonparty Company to transfer its shares and management rights, but D and D failed to perform this contract. As such, e and d and e enter into a contract with e on July 8, 2009 to transfer their shares and management rights of Nonparty Company.

2) As to the criminal facts of violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Embezzlement) that, while actually operating the non-party company with CC, the non-party company used the non-party company's capital increase for personal purposes in 2009, e was convicted of each of the criminal facts, such as the violation of the Aggravated Punishment, etc. of Specific Economic Crimes Act (Misappropriation), which committed the non-party company's acquisition of personal obligations with the non-party company's money. The plaintiff BB made a statement to the effect that the non-party company participated in the sale and embezzlement of the shares of this case to e, because of pressure to repay investment funds during the investigation process of this case.

3) Add also was convicted of the crime of violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Misappropriation in Trust) that the non-party company was seeking to pay the non-party company’s shares and the transfer price of management rights with the money. After the judgment of the court of first instance on DD, the plaintiff bB appeared at the prosecutor and stated as shown in the table on the process of acquiring the shares of this case, the non-party company’s management and sale. The process of selling DD’s shares is below the content that the plaintiff bB attended and testified as a witness at the court of first instance for DD at the above criminal trial.

C. Determination

1) Organization of issues

A) Article 45-2(1) main text of the former Inheritance Tax and Gift Tax Act (amended by Act No. 11130, Dec. 31, 2011; hereinafter the same) provides that “where the actual owner and the title holder are different from the property that requires a transfer, exercise, etc. of the right, the value of the property shall be deemed to have been donated to the actual owner on the date when it was registered, etc. as the title holder, notwithstanding the provisions of Article 14 of the Framework Act on National Taxes, the title holder shall be deemed to have been donated to the actual owner.” Meanwhile, Article 45-2(2) main text of the same Act provides that “where property is registered, etc. under another person’s name without any intention to avoid taxes, it shall be presumed that there exists

B) First, we examine whether the instant shares were title trust between the Plaintiffs, and then examine whether the purpose of tax avoidance exists in the above title trust.

2) Whether title trust of the instant shares was held

In full view of the following circumstances, it is reasonable to view that Plaintiff BB held a title trust with Plaintiff Aa as the actual owner of the instant shares, by comprehensively taking account of the facts acknowledged earlier, the evidence, and the evidence as seen earlier, as indicated in the evidence No. 00. The Plaintiffs’ assertion on this part is rejected.

A) Plaintiff BB stated that it purchased the shares of this case in the name of Plaintiff Aa with the funds held by the principal at the time of the criminal case against DD. In addition, in light of the developments leading up to the acquisition or sale of the shares of this case, the purchase of the shares of this case, the securing of management rights of the non-party company, the selection of persons subject to sale of the shares of this case, and the decision of sale conditions, etc. were made by Plaintiff BB and CC, and Plaintiff AA appears to have never been involved

B) On the other hand, Plaintiff A has been specialized in corporate bonds, corporate bond brokerage, and stock investment business, while Plaintiff BB had been specialized in corporate bonds, corporate bond brokerage, and stock investment business after graduating from May 2005 to June 2005. Plaintiff BB appears to have claimed that Plaintiff A purchased stocks of KRW 00,000,000 of the above stocks from around October 2005 to KRW 00,000,000,000,000,000,000,000,000 won, by participating in H’s capital increase in the capital increase of KRW 00,000,000,000,000 won, and acquired KRW 00,000,00,000,000 from H’s acquisition of stocks in the name of the Plaintiff A’s investment company. However, Plaintiff BB appears to have also claimed that Plaintiff A acquired the stocks of KRW 2,00,00,00 in the name of the Plaintiff’s investment company.

C) In accordance with the Act on Real Name Financial Transactions, even if Plaintiff A becomes a contracting party in a relationship with a financial institution by opening a securities account or receiving a loan, it is a separate matter from the determination of who is the actual right holder of the instant shares among the Plaintiffs. Moreover, deeming the provision on deemed donation of title trust property as a donation is aimed at achieving policy goals, such as meeting the substance and name of the ownership of the property and preventing tax avoidance (see, e.g., Supreme Court Decision 2014Du43653, Jan. 12, 2017). As such, in determining the “actual owner” under Article 45-2 of the former Inheritance Tax and Gift Tax Act, it does not necessarily have to coincide with the owner under private law. In light of the aforementioned circumstances, Plaintiff BB appears to have been directly managing and operating the securities account in the name of Plaintiff Aa, etc., and since it actually controlled and exercised the right to dispose of the instant shares after acquiring the instant shares, it should be seen as the actual owner of the instant shares.

3) Whether the purpose of tax avoidance is recognized

A) The burden of proof as to the absence of the purpose of tax avoidance may be proven by means of proving that there was a purpose other than the purpose of tax avoidance, and that there was no purpose of tax avoidance. However, as the nominal owner who bears the burden of proof, there was an obvious purpose of tax avoidance and no relation to the title trust to the extent that it is recognized that there was no purpose of tax avoidance, and that there was no tax to be avoided at the time of the title trust or in the future, and that there was no tax to be evaded at the time of the title trust, the burden of proof should be proved to the extent that it would not be doubtful if ordinarily by objective and objective evidence (see, e.g., Supreme Court Decision 2017Du39419, Dec. 1

B) According to the following facts and circumstances revealed in light of the respective descriptions and the overall purport of the pleadings in Eul evidence No. 0, even if Plaintiff BB made a title trust of the instant shares to Plaintiff Aa with bad credit standing, it is determined that such principal purpose was as well as the intent or purpose of tax avoidance. The evidence submitted by the Plaintiffs alone proves that there was no tax evasion at the time of the title trust or in the future. It is difficult to view that the evidence submitted by the Plaintiffs was proven beyond doubt if it was ordinary. The Plaintiffs’ assertion is without merit.

(1) ㅁㅁ지방국세청장은 2013년경 원고 bbb에 대한 세무조사 후, 원고 bbb가 2007년부터 2011년까지 사채중개업에서 발생한 수입금액 00억 0,000만 원에 대한 종합소득세를 신고ㆍ납부하지 않았다는 이유로, 합계 0억 0천여만 원의 종합소득세, 지방소득세 등을 부과하였다. 또한 원고 bbb는 2005. 4. 13. JJ 주식회사에 00억 원을 대출하면서 선이자로 0억 0,000만 원을 공제하였는데, 이에 대한 종합소득세를 신고ㆍ납부하지 않았다. 이처럼 원고 bbb는 사채업, 사채중개업 등으로 얻은 수입에 대한 종합소득세 등을 제대로 신고ㆍ납부하지 않아 왔으므로, 조세채무가 체납된 상태에서 원고 aaa에게 이 사건 주식을 명의신탁한 것이나 다름없다.

(2) On September 2, 2006, Plaintiff BB acquired 00,000 shares of KKK stock company in the name of hhh. on the ground that: (a) on January 2, 2018, the head of the LL Tax Office imposed gift tax of KRW 0,00,000 on hh, applying the provision on constructive gift for nominal trust; and (b) designated Plaintiff BB as a joint and several tax obligor and notified the payment thereof. However, Plaintiff BB, etc. did not pay it up to the present date.

4. Conclusion

Therefore, the plaintiffs' claims are without merit, and all of them are dismissed. It is so decided as per Disposition.