Seoul Administrative Court-2015-Gu Partnership-69133 ( October 17, 2016)

Seocho 2014west 4551 (O4. 23)

The "gains accruing from the capital reduction" under Article 42 (1) 3 of the Inheritance Tax and Gift Tax Act shall be calculated under Article 31-9 (2) 5 (b) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act.

The "interest on donation due to the reduction of capital" under Article 42 (1) 3 of the Inheritance Tax and Gift Tax Act shall be calculated pursuant to Article 31-9 (2) 5 (b) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act. As such, the disposition on which the gift tax is imposed by calculating the gains on donation by applying Article 31-9 (2) 5 (a) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act

Donation, etc. of other benefits under Article 42 of the Inheritance Tax and Gift Tax Act

The method, etc. of calculating profits for capital reduction under Article 29-2 of the Enforcement Decree of the Inheritance Tax and Gift Tax Act, and donation of other profits

2016Nu54567

AA and 8 others

△△ Tax Office and three others

on October 22, 2017

on October 08, 2017

1. The part of the judgment of the first instance against the plaintiff A shall be revoked.

2. On April 14, 2014, the head of △△ Tax Office revokes the disposition of imposition of gift tax ○○○○○○○ on Plaintiff AA.

3. All appeals by the Defendants are dismissed.

4. The total cost of litigation between Plaintiff A and Defendant △△ Head shall be borne by Defendant △ Head of the tax office, and the remaining costs of appeal between the Plaintiffs and the Defendants shall be borne by the Defendants.

1. Purport of claim

Each gift tax imposition on the Defendants listed in the separate disposition list made by the Defendants against the Plaintiffs is revoked.

2. Purport of appeal

A. Plaintiff AA

The same shall apply to paragraphs 1 and 2.

B. The Defendants

The part of the judgment of the court of first instance against the defendants shall be revoked, and all remaining plaintiffs' claims except the plaintiff AA corresponding to the revoked part shall be dismissed.

1. Partial citement of judgment of the first instance;

The reasoning of the judgment of this court is as follows: (a) the plaintiffs' assertion of 1. 2. The plaintiffs' assertion of 3. 1. and 2. The relevant statutes are as follows: (b) the corresponding part of the judgment of the court of first instance (2. 5 to 4. 6) except where "the plaintiff" of 3. 18 is deemed as "the plaintiff"; and (b) the corresponding part of the judgment of the court of first instance is as stated in Article 8(2) of the Administrative Litigation Act and the main sentence of Article

2. The judgment of this Court

(a) The method of calculating the value of donated property due to the reduction of capital under Article 42 (1) 3 of the Inheritance Tax and Gift Tax Act;

(1) Relevant regulations and issues

① Article 39-2 (1) of the Inheritance Tax and Gift Tax Act provides that "if a corporation gains any profit from the retirement of a part of its shareholders, an amount equivalent to such profit shall be deemed the value of donated property of the large shareholder." The main sentence of Article 42 (1) of the Inheritance Tax and Gift Tax Act provides that "in addition to donations under Articles 33 through 41, 41-3 through 41-5, 44, and 45, the profits falling under any of the following subparagraphs shall be deemed the value of donated property of the person who gains such profit, and shall be the value of donated property of the person who has acquired such profit." In this case, the said profits shall be the value of donated property before and after the increase or decrease in the capital of the corporation, such as capital reduction." Article 39-2 (1) of the Inheritance Tax and Gift Tax Act provides that "in this case, the value of the relevant property shall be the value difference before and after the change in ownership or the value thereof, the method of calculating the value of donated property shall be prescribed by Presidential Decree."

② Article 31-9(2) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act, upon delegation under Article 42(7) of the same Act, provides that “The profits above the standard prescribed by the Presidential Decree” under Article 42(1) of the same Act refers to the profits calculated according to the classification under each of the following subparagraphs. Article 42(5) of the same Act provides for the method of calculating “the difference in the appraised value of the relevant property before and after the change in the ownership shares or the value thereof.” However, Article 29-2(2) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act provides that “the profits arising from the reduction of capital under Article 42(1)3 of the same Act shall be the profits falling under any of the following subparagraphs” and subparagraph 1 provides that “the profits arising from the reduction of capital under Article

(3) Therefore, in calculating the value of donated property due to the reduction of capital under Article 42(1)3 of the Inheritance Tax and Gift Tax Act, it is necessary to determine whether the provisions of Articles 29-2(2) and 31-9(2) of the Enforcement Decree of the same Act

(2) Interpretation of relevant provisions

In light of the following facts, the Inheritance Tax and Gift Tax Act, the provisions of the Enforcement Decree of the same Act, and the system of the relevant provisions, etc., the value of donated property due to capital reduction under Article 42(1)3 of the Inheritance Tax and Gift Tax Act shall be calculated by applying Article 31-9(2) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act

① Articles 33 through 41-5 of the Inheritance Tax and Gift Tax Act provides for the comprehensive donation example clause as the title "the donation of other profits" under Article 42. The subordinate provision directly corresponding to Article 42 of the Inheritance Tax and Gift Tax Act, which is the comprehensive donation example clause, is the same title title "the donation of other profits" under Article 31-9 of the Enforcement Decree of the same Act. Article 29-2 of the Enforcement Decree of the Inheritance Tax and Gift Tax Act provides for the matters delegated under Article 39-2 of the Inheritance Tax and Gift Tax Act, which is the provision for individual donation of capital reduction, as a matter of principle.

② The main text of Article 42(1) of the Inheritance Tax and Gift Tax Act provides that “for the benefit in question where the profit is acquired above the standard prescribed by the Presidential Decree” as the value of donated property, and Article 42(3) provides that “for the benefit in question, the benefit in question shall be determined by the Presidential Decree before and after the change in the ownership shares or the value thereof,” and Article 31-9(2)5 of the Enforcement Decree of the same Act provides that “for the purpose of Article 31-9(2) of the same Act, matters necessary for the method of calculating the difference in ownership shares or the value thereof before and after the change in the ownership shares or the value thereof shall be determined by the Presidential Decree.” As such, Article 42 of the Inheritance Tax and Gift Tax Act provides the formula concerning the difference in ownership shares or the value thereof before and after the change in the ownership shares or the value thereof, the benefit above the standard prescribed by the Presidential Decree shall be applied in preference to other provisions.

③ Article 29-2 (2) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act provides for the benefit arising from the reduction of capital under Article 39-2 (1) of the same Act as well as the benefit arising from the reduction of capital under Article 42 (1) 3 of the same Act, but the specific formula under Article 42 (1) 1 of the same Act provides for the inclusion of the number of shares to be reduced, etc. by the person with a special relationship with the major shareholder. The foregoing formula is only intended for the calculation of the benefit under Article 39-2 of the Inheritance Tax and Gift Tax Act, which applies to the case where the benefit of the major shareholder with a special relationship is acquired by the major shareholder with the decreased shareholder. In the capital reduction under Article 42 (1) 3 of the same Act, even if there is no special relationship between the decreased shareholder and the shareholder who acquired the benefit, the method of applying the above formula is not clearly prescribed in calculating

④ Article 31-9(2)5(a) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act provides that “The phrase “the value calculated by applying mutatis mutandis the provisions of Articles 28 through 29-3 of the same Act.” The phrase “the value calculated by applying mutatis mutandis the provisions of Articles 28 through 29-3 of the same Act” is only the phrase “value calculated by applying mutatis mutandis the provisions of Articles 28 through 29-3 of the same Act, not the phrase “value of donated property.” The phrase “Article 31-9(2)5(b) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act does not stipulate the phrase “Article 31-9(2)5(a) of the same Act.” If the phrase “(a)” subject to the foregoing item(a) is the entire formula for calculating the amount of shares under Article 31-9(2)5(a) of the same Act, the phrase “the foregoing provision shall not apply mutatis mutandis to the calculation of the amount of shares under Article 28 through 29(2).

⑤ In the case of capital reduction, such as an inequal payment of the price for retirement of shares less than the value of shares, profits arising from capital reduction are distributed to the remaining shareholders from the reduced shareholder. Article 29-2 of the Enforcement Decree of the Inheritance Tax and Gift Tax Act focuses on whether the distribution of these profits between the reduced shareholder and the specially related shareholder is subject to taxation only from a logical point of view regardless of the actual transfer income. However, Article 31-9(2)5 of the Enforcement Decree of the Inheritance Tax and Gift Tax Act focuses on whether the actual increase in the value of the entire property after capital reduction.

(6) Although there are legislative errors that stipulate that "share or value after the change" should be deducted from "share or value before or after the change" in the formula of each item of Article 31-9 (2) 5 of the Enforcement Decree of the Inheritance Tax and Gift Tax Act, the gift tax subject to taxation can be derived from the acquisition value as a matter of course in terms of its concept and nature, "in the case before and after the change" in the main sentence of the same subparagraph, it can be known that the simple difference means the value, and the above Enforcement Decree was amended by Presidential Decree No. 23591 of February 2, 2012, it can be easily found that "share or value before or after the change" is deducted from "share or value after the change," and it can not be said that the calculation of the value of property through the above formula is impossible because the above provision is simple clerical error. Even if there is a problem that completely distributes the gift benefits due to the reduction of capital, etc., as alleged by the Defendants, the legislative interpretation or application of statutes cannot be resolved.

(b) Calculation of the difference in the evaluation of the relevant property under Article 31-9 (2) 5 of the Enforcement Decree of the Inheritance Tax and Gift Tax Act

① Article 31-9(2)5 of the Enforcement Decree of the Inheritance Tax and Gift Tax Act provides that “The gains exceeding the standard prescribed by the Presidential Decree” under the main sentence of Article 42(1) of the Inheritance Tax and Gift Tax Act shall be classified into “the gains where the appraised value of the relevant property is changed in item (a) or “the cases where the appraised value is changed” under item (b) with respect to the method of calculating the said appraised value,” and “the cases where the appraised value is changed” under item (b) with respect to the method of calculating the said appraised value.

(2) The provisions of the Inheritance Tax and Gift Tax Act and the Enforcement Decree of the same Act stipulate the ratio of stocks owned as ‘share ratio' or ‘share ratio' if they are used separately from ‘share ratio' or ‘share ratio' (Article 15, 29, 30, etc. of the Enforcement Decree), and Article 31-9 (2) 5 (a) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act interpret the ratio of stocks held, the value of ‘share ratio' in the above formula (Article 31-9 (2) 5 (a) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act as ‘share ratio' is under one (1) and it is unclear that such formula becomes under one (1) and the value of the shares becomes under one (1) 】 (share ratio after a change - shares after a change in the number of stocks held cannot be considered only when a change in the ratio of stocks held under subparagraph 2 (a) is made under the above formula but only when a change in the ratio of stocks held under subparagraph 3 (b) is made under the above formula.

③ The Defendants asserts that in determining whether the difference in the appraisal value of the pertinent property is 30/10 or more of the value per share before the change in the appraisal value of the relevant property is made under the main sentence of Article 31-9(2)5 of the Enforcement Decree of the Inheritance Tax and Gift Tax Act, “the difference in the appraisal value of the relevant property” should be considered as “the difference in the value per share of shares.” However, according to the main sentence of Article 42(1) and Article 42(3) of the Inheritance Tax and Gift Tax Act, “the difference in the appraisal value of the relevant property” should be considered as “the donated property value of the person who obtains the benefit.” Article 31-9(2)5 of the Enforcement Decree of the Inheritance Tax and Gift Tax Act provides that “the relevant appraisal value shall be calculated according to the following provisions.” Unlike the provisions of Article 29-2(2)1 of the Enforcement Decree of the same Act, the said appraisal value should be considered as “the total value of shares acquired” as “the above appraisal value of the relevant property.

C. Whether the calculation of the gains from donation is lawful

Examining the above facts in light of the above legal principles, the company of this case shall decide to reduce its capital, purchase shares at a price lower than the market price of this case from the audit file to retire, and thus there was no change in the number of shares owned by the remaining shareholders after the reduction of capital, but the appraisal price of the shares has changed due to the increase in the shares owned by the plaintiffs due to the reduction of capital of the company of this case. As such, the profits earned from the reduction of capital under Article 42 (1) 3 of the Inheritance Tax and Gift Tax Act shall be calculated by applying Article 31-9 (2) 5 (b) of the Enforcement Decree of the same Act. Nevertheless, each disposition of this case is unlawful since it calculated the gift gains by applying Articles 31-9 (2) 5 (a) and 29-2 (2) 1 of the Enforcement Decree of the Inheritance

3. Conclusion

The plaintiffs' claims shall be accepted in its reasoning. Since the part against the plaintiffs AA in the judgment of the court of first instance is unfair in accordance with its conclusion, the appeal against the defendant △△ Director is accepted, and the part against the plaintiff AA in the judgment of the court of first instance is revoked, and the defendant △ Director revokes the disposition of gift tax against the plaintiff AA, and all appeals against the defendants other than the plaintiff AA are dismissed as it is without merit.