Seocho 2014west 4258 ( November 14, 2014)

The amount of real estate acquired in the name of the child after the father transfers the real estate acquired in the name of the child to the father shall be deemed to be the donation.

Aa paid KRW 0 billion to BB is not subject to Article 36 of the Inheritance Tax and Gift Tax Act, and it cannot be deemed that BB unilaterally purchased and sold 00 buildings. Therefore, it is reasonable to deem that 00 buildings were owned by Aa, and that Aa paid 00 buildings owned by BB to BB, as sales funds of 00 buildings owned by Aa to be paid by BB, constitute gift.

The donation under Article 2 of the Inheritance Tax and Gift Tax Act or Article 36 of the Inheritance Tax and Gift Tax Act;

2015Guhap2611 Revocation of Disposition of Imposition of Gift Tax

EA and one other

Head of Seodaemun Tax Office

November 6, 2015

November 27, 2015

1. All of the plaintiffs' claims are dismissed.

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

Cheong-gu Office

The Defendant’s imposition of KRW 0,00,000,000 on the gift tax against Plaintiff Aa on December 1, 2013 and the imposition of KRW 0,00,00,000,00 on the gift tax against Plaintiff BB on December 13, 2013 are entirely revoked (it appears that the Defendant’s imposition of KRW 0,00,00,000,000 on the gift tax against Plaintiff BB on December 13, 2013 and “ December 18, 2013” as stated in the written complaint appears to have been written in each of the following subparagraphs:

1. Details of the disposition;

A. On January 9, 198, Plaintiff Aa established a zz and yyy and non-corporate group with the name of 00 times as of January 9, 1998, and served as 00 general directors and the head of Seoul Branch. Plaintiff BB, an son of Plaintiff Aa, entered 00 times around March 2002 and worked as 00 times as zzz and yyyy, etc., and was in charge of the management of its members, withdrawal of funds, and execution.

B. On November 8, 2007, Plaintiff A withdrawn 2.1 billion won from 00 bank accounts (Account Number:0000) around 00 times to 2.1 billion won, and around February 20, 2008, around February 20, 2008, Plaintiff A issued 2.5 billion won to xx in a seller of Seoul 00-dong and 000-0 and above land-based land-based land-based corporation (hereinafter “00 buildings”) as contract deposit, and issued 2.3 billion won from 00 bank accounts (Account Number: 0000) around February 21, 2008 to x as contract deposit, and around February 25, 2008, Plaintiff B paid 2.3 billion won to the above x under the remaining title of the building on February 206, 208.

On the other hand, around May 2008, the Plaintiffs reported and paid KRW 000,000,000 upon submitting the gift contract stating that “Plaintiff Aa donated KRW 0 billion to Plaintiff BB out of the above purchase price,” and upon reporting the gift tax base and entrusting the business.

C. Criminal case process against the plaintiffs

1) Plaintiff A was indicted for committing an act of fund-raising without obtaining authorization, permission, or filing a report or registration under the laws and regulations through 00 times, and embezzlement of approximately 00 billion among the funds raised through such procedures (Seoul District Court Decision 000Gohap00). The court of first instance affirmed all the above criminal facts and sentenced Plaintiff Aa to 20 years of imprisonment with prison labor, and the appeal was filed by Plaintiff Aa (Seoul High Court Decision 000No000) (Seoul High Court Decision 000,000), and the court of second instance (Seoul High Court Decision 00,00 billion won) was already refunded according to the agreement. The court of first instance reversed the first instance judgment and sentenced Plaintiff A to imprisonment with prison labor for 00 times in consideration of the fact that the amount of embezzlement has been reduced to approximately 00 billion won in the appellate court, and that many of the embezzled assets have been returned to 00 times. The court of first instance again appealed the appeal by Plaintiff A but the court of first instance appealed the above judgment.

(Supreme Court Decision 000Do000), November 14, 2013, which rendered a judgment dismissing the appeal, became final and conclusive on the same day.

2) The plaintiff BB performs an act of fund-raising in collusion with the plaintiff Aa, and the plaintiff Aa.

In collusion, in order to pay KRW 000,000,000 of the purchase price of 00 building, the court embezzled KRW 00,000,000,000 for the purpose of paying KRW 000,000,000, and Plaintiff BB embezzled KRW 00,000 to pay KRW 00,000 for the establishment of a collateral security right to 00 building and the loaned KRW 00,000 (U.S. District Court Decision 00,000). The court of first instance convicted Plaintiff BB and Prosecutor of the above criminal facts, and acquitted Plaintiff BB and Prosecutor of the embezzlement portion (Seoul High Court Decision 00No00,00). The court of the second instance dismissed Plaintiff B’s appeal on the suspended sentence of 0 years for imprisonment and the Prosecutor’s appeal on the embezzlement portion on the same date (Supreme Court Decision 2000Do5290, May 29, 200).

D. Meanwhile, the Plaintiffs sold all real estate owned in the names of the Plaintiffs and their family members, including selling 00 buildings at around 00 billion won at around the beginning of August 2012, 2012, when a search and seizure was conducted by an investigative agency on 00 occasions, on or after July 31, 2012, and received KRW 00 billion for sale on August 9, 2012, and Plaintiff A returned KRW 00 billion out of the above sale price as the price for the repayment of damage.

E. The director of the Seoul Regional Tax Office from May 1, 2013 to July, 2012 conducted an integrated investigation into the financial source and individual identification of the Plaintiffs, and determined that Plaintiff BB donated KRW 0 billion to Plaintiff Aa for sale of 00 building on August 3, 2012. Accordingly, on December 1, 2013, the Defendant notified Plaintiff Aa of KRW 0,000,000 as gift tax and notified Plaintiff Aa of the designation of joint and several taxpayers for gift tax and the notification of gift tax payment to Plaintiff BB on December 13, 2013.

F. The Plaintiffs are dissatisfied with the instant disposition and filed an objection on August 6, 2014 by the Tax Tribunal.

Although the appeal was filed, it was dismissed on November 14, 2014.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1 through 4, 9, 10, 22, Eul evidence Nos. 1, 2, 13, 16, 17, the purport of the whole pleadings

2. Whether the disposition is lawful;

A. The plaintiffs' assertion

1) The plaintiff Aa returned 0 billion won received from the plaintiff BB to 00 times. This can be deemed as the case where the debt was exempted from 00 times or where the third party received the debt repayment from the plaintiff BB. Since the plaintiff Aa is currently in a state of economic insolvency, the gift tax imposed on the plaintiff Aa pursuant to Articles 4(3) and 36 of the Inheritance Tax and Gift Tax Act (hereinafter "the Inheritance Tax and Gift Tax Act") is unfair, and thus, the gift tax imposed on the plaintiff BB is also illegal.

2) The plaintiff Aa purchases real estate several times in the name of the family members, including the plaintiff BB.

However, according to the advice that the tax office's investigation on the source of funds is likely to take place with respect to real estate that accrues from the lease income, it is merely the return and payment of gift tax on the purchase fund of the Plaintiff bb 00 building that is 00 billion won in actual 00 building purchase fund, not the donation by Plaintiff b b , but the donation by Plaintiff b b b , because the purchase and sale of the 00 building did not purchase the 00 building building, and the payment by Plaintiff b b a 0 billion won in the purchase price of the 00 building to Plaintiff Aa cannot be deemed as a donation. As above, the purchase and sale of the 00 building building was unilaterally carried out by Plaintiff Aa, and thus, the gift tax assessment on Plaintiff A is improper, and thereby, the gift tax assessment on Plaintiff b b . is also unlawful.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

1) Determination on the first argument

According to Articles 4(3) and 36 of the Inheritance Tax and Gift Tax Act, the obligee is exempted from the obligation or a third party;

In the case of receiving a repayment of obligation from the recipient, the amount equivalent to the profits from such exemption and repayment shall be deemed to be the value of donated property of the person who has acquired such profits, but when the donee is deemed incapable of paying the gift tax, it shall be exempted from all or part of the gift

In light of the fact that Plaintiff BB paid KRW 0 billion to Plaintiff Aa for the sale of 00 billion in the building, and that Plaintiff Aa returned KRW 0 billion in the amount of damage reimbursement to Plaintiff Aa at 00 times, the above circumstance alone does not deem that 00 times was exempted from part of the obligation to Plaintiff Aaa, and that 00 times was returned part of the amount of damage from Plaintiff Aaaa, and that Plaintiff BB was not deemed to have received part of the amount of damage from Plaintiff BB, a third party, and could not be deemed to have received part of the amount of damage from Plaintiff BB, cannot be interpreted as a case where Article 36 of the Inheritance Tax and Gift Tax Act applies. Accordingly, the claim by the prior Plaintiffs on a different premise is without merit.

2) Determination on the second argument

According to the descriptions of Gap evidence 7, 14, 15, 18, 23, Eul evidence 3 through 6, 8, 12, the plaintiff

The gift contract, gift tax base return, and direct payment, submitted by the defendant, are affixed with the seals of the plaintiff BB, and the plaintiff BB voluntarily pays as above.

In order to establish gift tax, 80 million won was loaned from the National Bank of Korea at the National Bank of Korea, and on April 22, 2008, the establishment registration of neighboring mortgage was completed on 00 buildings, and Plaintiff BBB was granted the above loan.

In the process, the certificate of personal seal impression to be used for the above loan contract was issued directly by the investigation agency and the investigation agency became aware that 00 buildings were in its name at the time of the above loan contract.

The facts stated that Plaintiff BB reported himself as a rental business operator of 00 buildings and paid all taxes therefrom. The Plaintiffs and their families resided in a high-class house and owned five vehicles, and transferred a large amount of foreign currency to Plaintiff AAA cC residing in a foreign country. On July 31, 2012, the investigative agency commenced an investigation into the Plaintiffs on July 31, 2012, and executed seizure and search, the Plaintiffs and their families immediately escaped and end contact, and Plaintiff BB sold 00 buildings immediately upon the commencement of the investigation as above.

In full view of the following circumstances, it is reasonable to view that Plaintiff Aa unilaterally purchased and sold 00 buildings, and that 00 buildings were owned by Plaintiff BB. Therefore, the Plaintiffs’ assertion that differs from this premise is without merit.

① Plaintiff BB entered 00 times in 2002 and thereafter its member management division from 2004

The chief of the office has been in charge of the main duties such as withdrawal of funds and execution while working as the chief of the office, and it is difficult to view that he was unaware of the circumstances of the 00

② Moreover, Plaintiff BB was issued a certificate of personal seal impression at the time of concluding a loan contract with 00 buildings as collateral, and was also aware that the ownership transfer registration of 00 buildings was made in its own name at that time. Moreover, Plaintiff BB was used to pay gift tax on the purchase fund of 00 buildings.

③ In the acquisition of real estate under the name of the family by embezzlement of 00 funds, Plaintiff A did not have paid gift tax in the process of the acquisition of the remaining real estate except for 00 buildings. The reason for the acquisition of 00 buildings in the name of Plaintiff BB and the payment of gift tax on the purchase fund seems to have been for Plaintiff B to definitely relocate 00 buildings to Plaintiff B.

④ Plaintiff A asserts that the reason for paying gift tax on the purchase fund of 00 buildings is to avoid an excessive comprehensive real estate holding tax to be imposed on oneself, and to avoid an investigation into the source of funds. However, the comprehensive real estate holding tax on 00 buildings exceeding the gift tax of 000 million won to be imposed on Plaintiff Aa in the name of Plaintiff Aa does not seem to have more than the comprehensive real estate holding tax to be imposed on 00 buildings in the name of Plaintiff Aa, and it is difficult to understand that Plaintiff A tried to avoid an investigation into the source of funds only for 00 buildings among several real estate acquired under Plaintiff A’s family name.

⑤ Plaintiff A may lower the purchase price if it purchased the real estate under the name of Plaintiff BB or his family members in the name of the individual for the reasons for the purchase of the real estate under the name of Plaintiff BB, and the real estate was scheduled to be returned to 00 times after the acquisition of the real estate again, but it appears that Plaintiff Aa did not have the real estate returned to 00 times by Plaintiff Aa until the investigation into Plaintiff Aa was commenced with respect to Plaintiff A., but the real estate was owned for about four years by Plaintiff BB, and it does not seem that Plaintiff AB was returned to 00 times if the investigation into Plaintiff Aa was not commenced.

6. The plaintiffs and their families have continued to reside in high-class houses, possession of representative vehicles, overseas transfers, etc. for a long time, and they seem to have been aware of the embezzlement act of plaintiffs Aa directly or indirectly.

3. Conclusion

Therefore, the plaintiffs' claims are dismissed in entirety as it is without merit. It is so decided as per Disposition.