Seocho 2013west 4701 ( October 23, 2014)

Where stock acquisition funds are paid with the established capital by cash donation, the taxation of gift tax under Article 42 (4) of the Inheritance Tax and Gift Tax Act by deeming the stocks as a direct donation.

Where stock acquisition funds are paid with the established capital by cash donation, the disposition imposing gift tax by applying Article 42(4) of the Inheritance Tax and Gift Tax Act by deeming the stocks as having been donated directly shall be reasonable and the "ordinary increase in value" shall be calculated based on the net value of profit and loss.

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

Gift, etc. of other profits under Article 31-9 of the Enforcement Decree of the Inheritance Tax and Gift Tax Act

2014Guhap54639

ParkB and one other

○ Head of tax office

on January 20, 2016

on 03 October 2016

1. All of the plaintiffs' claims are dismissed.

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

Cheong-gu Office

On July 9, 2013, Defendant ○○○○○○ (including additional tax ○○○○) imposed on Plaintiff GabB on Plaintiff 2 on July 9, 2011, and the imposition of gift tax ○○○ (including additional tax ○○○) in July 10, 2013 against Plaintiff GabCC on July 10, 2013 is revoked.

1. Details of the disposition;

A. The Plaintiffs are children of ParkA and OD, and Park Dong is the chairman of ○○○ Group.

B. On March 27, 2015, the current status of ownership of ○○○○, a main affiliated company of the ○○○○○ Group, was changed as follows.

Standard point of time is December 31, 2009, and on March 31, 2011, March 30, 2012, 201, and on March 29, 2013, March 28, 2014, May 15, 2015

Stock Company

★★★★★28.29%23.28%23.27%23.27%26.15%23.19%

ParkA9.88% 8.13% 8.13% 8.13%8.13% 8.13% 7.21%

Stock Company

Span6.54%0%0%00%0%

Stock Company

Periodical0.15% 15.34% 20.90% 20.90% 21.29% 18.89%

Stock Company

△0%5.38%0%0%0%0%

Other

Minority shareholders 55.14% 47.87% 47.70% 47.70% 44.43% 50.71%

C. On March 10, 2008, the Plaintiffs invested each ○○○○○○○ on, and established △△△△△ on, March 10, 2008, and owned 25% of the shares of the △△△△△. On the same day, Park Dong donated ○○○○○ and the △○○○○○○ on the same day to the Plaintiff ParkB, respectively, and the Plaintiffs reported and paid gift tax on the △△△△△ on the same day.

(d) The process of raising the stock value of △△ Company;

1) On April 23, 2008, △△△ Co., Ltd. purchased all 1.5 million shares of ○○○○○ Co., Ltd.’s shares. On the same day, △△△ Co., Ltd. participated in the capital increase by issuing new shares of ○○○ Co., Ltd., and paid ○○○○○○ on the same day, and acquired 37.5%

2) On June 1, 2009, ○○○○ Co., Ltd. issued ○○○○○○○○○○○○○○○○○○○ Company by private placement, and △△○○ Co., Ltd. acquired 15.32% of the shares of ○○○○○ upon converting the entire convertible bonds into shares on December 17, 2010 after acquiring the entire convertible bonds.

(e) the merger process of affiliates;

On January 25, 2011, △△△ Co., Ltd. merged Dool Co., Ltd. on January 25, 201. On November 2, 2011, △△△ Incorporated Co., Ltd. merged △△△△△ corporation. The Plaintiffs came to hold 8.93% of the shares of △△△ Incorporated Co., Ltd. in accordance with the merger agreement between △△

F. Defendant’s taxation

1) In the process of conducting a general consolidated investigation of corporate tax on ○○○○○ Group from August 14, 2012 to November 30, 2012, △△△△△△△△ Company’s total appraised value of △△△△ Company’s shares increased from ○○○ KRW to ○○○○ KRW KRW KRW KRW KRW KRW KRW KRW KRW KRW KRW KRW KRW KRW KRW KRW KRW KRW KRW KRW KRW KRW KRW KRW KRW KRW KRW KRW KRW KRW KRW KRW KRW KRW KRW KRW KRW 1669 of the former Inheritance Tax and Gift Tax Act (amended by Act No. 9269 of December 26, 2008). ② The Plaintiffs’ share increase in KRW KRW 13 of the former Inheritance Tax and Gift Tax Act (amended by Act No. 9269 of December 17, 2010) to KRW 16 of the former Inheritance Tax and Gift Tax Act (amended by Act No. 1201 of Dec. 17, 2010).

2) On the other hand, on September 11, 2012 and November 19, 2012, ○○ Tax Office notified Plaintiff ParkB of the results of the tax investigation that: (a) gift tax on April 23, 2008; (b) gift tax on December 17, 2010; (c) gift tax on November 2, 201; and (d) gift tax on November 2, 2011. Plaintiff ParkB filed a request for pre-assessment review with the National Tax Service on December 18, 2012; and (d) the National Tax Service rendered a decision on November 24, 201 that the tax base and tax amount calculated by subtracting the ordinary increase in stock value from the value of donated property and that the remainder of the claim will be paid.

3) On July 9, 2013, the Defendant corrected the tax base based on the result of the foregoing pre-assessment review, and imposed the Plaintiff ParkB on the Plaintiff ○○○○○○○○○○ on April 23, 2008, the gift tax on December 17, 2010, and the gift tax on November 2, 201. On July 10, 2013, the Defendant imposed the Plaintiff GamCC on the Plaintiff ○○○○○○○○○○○ on the gift tax on April 23, 2008, the gift tax on the gift on December 17, 2010, and the gift tax on the gift ○○○○○○○ on November 2, 2011.

4) The Plaintiffs filed an appeal with the Tax Tribunal on October 4, 2013, but received a decision of dismissal on January 23, 2014, and filed the instant lawsuit with the Defendant’s revocation of the entire taxation disposition against the Plaintiffs on March 18, 2014. The Defendant revoked ex officio the KRW ○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○ on April 23, 2016, each of which was pending the instant lawsuit, against the Plaintiffs on March 7, 2016 (hereinafter “instant disposition”).

[Reasons for Recognition] Facts without dispute, Gap evidence 1-8, 11, Gap evidence 3-4, Gap evidence 4-5, 8, Gap evidence 6, Eul evidence 10 through 13, Eul evidence 15-2, 3, 8, 9, Eul evidence 16-2, and 3, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiffs' assertion

1) Violation of the no taxation without law

Article 42(4)1 of the former Inheritance Tax and Gift Tax Act provides that the act of receiving cash from ParkA and the act of acquiring property in cash shall be a separate act and legal treatment thereof. Article 42(4)2 and 3 of the former Inheritance Tax and Gift Tax Act provides that the case where the pertinent property is donated directly by the minors, etc., and Article 42(4)1 of the former Inheritance Tax and Gift Tax Act provides that the said property shall not be included in cash. If the gift tax can be imposed even where the value of the property increases after receiving cash donation, if the scope of taxation can not be limited, it seriously infringes on taxpayers’ predictability, and Article 42(4) of the former Inheritance Tax and Gift Tax Act provides that the gift tax cannot be interpreted as a tangible comprehensive provision. In addition, even if the comprehensive gift tax was introduced, it cannot be deemed that the gift of the fund subject to taxation under Article 42(4)1 of the former Inheritance Tax and Gift Tax Act should not be limited to a specific transaction and act subject to taxation under Article 42(4)2)4 of the former Inheritance Tax Act.

In addition, ParkA only donated cash to the plaintiffs, and unlike the actual situation, it is not permissible to reorganize the transaction contents of the transaction contents that ParkA donated stocks to the plaintiffs by the Park △ after issuing the stocks to the plaintiffs, barring any special circumstance to deem that the act of cash donation by the Park △ is the most unfair act of the Park △, and it is difficult for the plaintiffs to pay gift tax after they donated cash to the plaintiffs, and it is difficult for the plaintiffs to expect not only that the plaintiffs paid gift tax but also that at the time when the plaintiffs acquired the stocks of the corporation △△△△, the value of the shares of the corporation △△△ was increased in the future. Accordingly, the substance over form principle under Article 14 of the Framework Act on National Taxes cannot be applied to the plaintiffs

2) Illegal in calculating the value of donated property

Article 42(4) of the former Inheritance Tax and Gift Tax Act provides that the gains from the increase in the value of property shall be deemed the value of property donated. However, even though the profit from the substantial increase in the value of property to be deducted should be based on the net asset value not on the value of net profit but on the net asset value, the Defendant erred in calculating the value of property donated on the basis of net profit and loss.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

1) Determination on the first argument

The first argument by the plaintiffs is that since the "property" under Article 42 (4) 1 of the former Inheritance Tax and Gift Tax Act does not include cash, it cannot be taxed on the basis of Article 42 (4) 1 of the former Inheritance Tax and Gift Tax Act or Articles 2 (3) and 42 (4) 1 of the former Inheritance Tax and Gift Tax Act to the plaintiffs who received cash donation, and this case is not subject to the principle of substantial taxation, and thus, the plaintiffs' donation is cash and cannot be viewed as shares of △△△△△. Examining the logic of the above argument, if the plaintiffs confirmed whether the donation is cash or shares of △△△△△△△△, and as a result, if the plaintiffs received cash, the issue is whether Article 42 (4) 1 of the former Inheritance Tax and Gift Tax Act or Articles 2 (3) and 42 (4) 1 of the former Inheritance Tax and Gift Tax Act can be applied to the plaintiffs who received cash donation, it is necessary to first determine whether the plaintiffs should

A) Determination on the property donated to the Plaintiffs

(1) The principle of substantial taxation under Article 14 of the Framework Act on National Taxes refers to the principle of imposing national taxes, which provides that when a taxpayer takes a unreasonable form or appearance that differs from the substance with respect to the taxation requirements of income, profit, property, transaction, etc., such as income, profit, property, etc., which constitutes taxation requirements depending on the hidden substance, regardless of the form or appearance (see, e.g., Supreme Court Decision 2010Du1385, Sept. 10, 2015).

(2) According to the evidence No. 10-1, No. 2, No. 11-1, and No. 11-2, each of the following facts are revealed: on March 10, 2008, ParkA donated each of ○○○○○ and ○○○○○○○○○ on the part of Plaintiff ParkB on March 10, 2008; on the same day, △△△ Co., Ltd. was established; and on the part of the shareholder of △△△△△, only parents and children related persons, GaD, and the Plaintiffs are recognized. Considering the overall purport of the arguments in the above recognition, it is reasonable to deem that the Plaintiffs received the shares of △△△△ from ParkA, taking into account the following circumstances.

① 박AA은 ○○○○그룹의 회장으로서 주식회사 ★★★★★의 최대주주였는바 주식회사 ○○○○의 최대주주인 주식회사 ★★★★★를 통하여 주식회사 ○○○○을 지배하고 있었다. 그런데 주식회사 △△가 설립되고 나서부터 박AA은 주식회사 ★★★★★와 주식회사 □□□을 통하여 주식회사 ○○○○을 지배하게 되었고, 주식회사 △△가 주식회사 □□□에 합병되게 됨에 따라 주식회사 △△의 주주들은 간접적으로 주식회사 ○○○○을 지배할 수 있게 되었다. 이와 같은 지배구조의 변화가 가능하였던 이유는 주식회사 ★★★★★, 주식회사 □□□의 최대주주가 박AA으로서 의사결정권자였고 주식회사 △△의 주주가 박AA 자신을 포함한 부모・자녀 관계였기 때문으로 볼 수 있고, 지배구조의 변화를 하게 된 이유로는 주식회사 ★★★★★는 코스닥 상장회사로서 여러 가지 법적 규제를 받고 있는 점, 비상장회사를 주식회사 ○○○○의 대주주로 확보함으로써 박AA의 영향력을 공고히 할 수 있고, 그 과정에서 박AA이 자신의 재산을 미리 배우자 또는 자녀에게 분산시켜 놓을 수 있는 점이 고려되었을 것으로 보인다. 위와 같은 목적 하에 주식회사 △△가 2008. 3. 10. 설립되었고, 실제로 주식회사 △△는 설립된지 얼마 되지 않은 2008. 4. 23. 주식회사 ○○○○의 주식 150만 주를 보유하고 있던 주식회사 ◇◇◇◇◇◇의 주식 전부를 매입하고, 같은 날 주식회사 □□□의 유상증자에 참여하여 주식회사 □□□의 지분 37.5%를 확보하였을 뿐만 아니라 주식회사 △△가 주식회사 □□□의 대주주가 된 이후에 주식회사 □□□은 주식회사 ○○○○의 전환사채를 인수하여 결국 주식회사 ○○○○의 지분 15.32%를 취득하였다. 위 유상증자 참여는 주식회사 □□□의 100% 주주였던 박AA이 신주인수권을 포기함에 따라 가능한 것이었고, 주식회사 □□□의 전환사채 인수는 주식회사 ○○○○이 주식회사 □□□에게 전환사채를 발행하였기 때문에 가능하였는바 이는 모두 박AA의 영향력 하에 이루어진 것이다(원고들은 이를 경영상의 판단에 따라 이루어진 경영활동이라고 주장하나 위와 같은 사정에 비추어 볼 때 위와 같은 과정을 경영상의 판단이라고 보기 어렵다).

② On the other hand, ParkA’s actual intent, which was scheduled to be established for the same purpose as described in paragraph (1), appears to have donated the shares of △△ corporation to the Plaintiffs. Nevertheless, ParkA merely takes the form of a donation of shares acquisition funds to the Plaintiffs and making the Plaintiffs acquire shares of △△△, thereby making the Plaintiffs acquire shares of △△△. Considering the same economic substance, ParkA’s intent and its economic substance are identical, it can be deemed that ParkA donated the shares of △△△ corporation to the Plaintiffs.

③ From among the shareholders of △△△△ Co., Ltd., there was no person who has been engaged in Aluminum-related business for a long time. Considering that the remaining shareholders were all families of ParkA, ParkA would have practically exercised their influence, and that the Plaintiffs would have been able to pay the establishment fund of △△△ corporation, which was an unlisted company, with the money received from ParkA, all of them can be deemed to have been by the intention of ParkA.

④ Above all, the Plaintiffs paid the above money as the establishment fund of △△ on the same day after receiving the money from ParkA on March 10, 2008. Considering the fact that the time close and the amount of the donation fund and the establishment fund of △△△ is almost the same, the Plaintiffs may be deemed to have actually donated the stocks of △△△ from ParkA.

⑤ If a taxpayer is able to levy gift tax even if he/she acquired a specific property by making an economic decision after a considerable time has elapsed since the donation of cash, and the value of the property has increased after a considerable time, it is true that the scope of taxation cannot be limited. However, the Plaintiffs cannot be deemed to have made an independent economic judgment as to the place of use of cash donated. However, if the Plaintiffs used cash specified by ParkA as the fund for acquiring stocks of △△△ as the fund for acquiring stocks of △△△, it cannot be deemed to have received the shares of △△△△ from the ParkA to have received the shares of △△△.

B) Sub-decisions

Therefore, as long as the Plaintiffs consider the donated property as the shares of △△△ Company, the Plaintiffs’ remaining arguments on the premise that the donated property is cash are without merit.

2) Determination on the second argument

A) Article 42(5) of the former Inheritance Tax and Gift Tax Act provides, “The benefit under paragraph (4) shall be the amount calculated as prescribed by Presidential Decree considering the value of the relevant property as of the date the cause for increase in property value occurs, the acquisition value (referring to the taxable value of donated property in cases of donated property), the ordinary value increase, the contributory portion of the property acquisitor’s value increase, etc.” Accordingly, Article 31-9(7) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act (amended by Presidential Decree No. 23527, Jan. 25, 2012; hereinafter the same shall apply) provides, “the amount calculated as prescribed by Presidential Decree” in the former part of Article 42(5) of the same Act means the amount calculated by subtracting the value of the relevant property from the value of the relevant property, the ordinary value increase, and the net value increase per share 】 (i) the amount calculated as of the date the increase in net value per share by the date the increase in net asset value per share 】 the relevant net value increase by the date of acquisition.

Meanwhile, Article 54(1) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act provides that "The net value per share and the value of assets per share in the assessment of non-listed stocks shall be the weighted average value of 3 and 2, respectively." Article 54(4) of the same Act provides that "the stocks of a corporation whose liquidation procedures are being followed in the case of an assessment of net asset value, or whose business is deemed difficult to continue due to the death of the business operator, etc., (i) the stocks of a corporation prior to the commencement of business, a corporation whose business is less than 3 years prior to the commencement of business, a corporation whose business is less than 3 years prior to the commencement of business, and the stocks (ii) of a corporation whose total amount of losses exceeds the total amount

B) In full view of the purport of the argument in Gap evidence No. 5, the Samil Accounting Corporation assessed the shares of △△△ at the time of the merger between △△ and △△△ Incorporated. At the time, the average of the net value per share and the net asset value per share increased by 2:3 per share; ○○ in 2008; ○○ in 2009; ○○ in 2009; and ○○ in 2010.

The following circumstances revealed in light of the above facts: ① assessing the value per share as net profit and loss amount is an exception to assessing the value as net asset value; ② Article 54(4) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act provides that the same can be applied to the interpretation of Article 31-6(5) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act. ③ Since △△△ has continuously paid the amount of income from 2008 to 2010, it appears that the company in the liquidation procedure is difficult to continue its business, and it appears that the company does not fall under the category of “company with business suspension or closure,” ④ △△△△△△△△ Company did not directly deduct the net asset value per share of the Plaintiffs at the time of the merger, and thus, it cannot be viewed that the Defendant did not dispose of the shares based on the net asset value per share.

3. Conclusion

Therefore, the plaintiffs' claim of this case is dismissed in entirety as it is without merit, and it is so decided as per Disposition.