The increase in the value of the land at issue cannot be evaluated as an increase in the value of property by other person's contribution.

The increase in the value of the land at issue cannot be evaluated as an increase in the value of property by other person's contribution.

Article 2 (Gift Tax Taxables)

2014Guhap519 Revocation of Disposition of Imposition of Gift Tax

OraA

BB Director of the Tax Office

November 11, 2015

December 9, 2015

1. The Defendant’s disposition of imposing gift tax amounting to KRW 4,370,593,00 against the Plaintiff on June 3, 2013 shall be revoked.

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

Cheong-gu Office

The same shall apply to the order.

1. Details of the disposition;

A. On April 22, 2003, the Plaintiff acquired 89,349 square meters of 68 square meters, including DD, EE Ri Mari 11-2, etc., by auction, and additionally acquired 798,327 square meters of 13 lots, including 7-1 square meters, during the period from August 7, 2003 to April 20, 2004 (hereinafter referred to as “total land”).

B. On October 30, 2003, FF Koreanb S&A Co., Ltd. (hereinafter “FFF Koreanb”) submitted an “written amendment of the urban management planning for the development of a golf course” to the effect that the FF Koreanb S&A will implement the golf course development project in the CC-si EEisan 13-1 won (including the total area: 709,595 square meters, and 48 parcels owned by the Plaintiff).

C. On February 28, 2005, the Governor of the Gyeonggi-do decided and publicly announced as urban planning facilities (sports facilities: golf courses) the area of 817,22 square meters of ES Ri 13-1 daily KRW 817,222 square meters of Do Do Do Do Do Do Do Da-si as announced by the Gyeonggi-do Do Do Do Do Do 2005-46. The site determined as above included 72 lots of land (hereinafter referred to as "land in dispute"), excluding nine parcels of forest and fields located in CC

D. On May 13, 2005 and May 25, 2005, the Plaintiff transferred the pertinent land to GG Development Co., Ltd. (hereinafter “G Development”) KRW 25,945,627,50, and reported and paid capital gains tax of KRW 140,475,660.

E. As a result of conducting a tax investigation with respect to the Plaintiff, the commissioner of HH Regional Tax Office deems that the value of the land acquired by the Plaintiff is increased by the contribution of FF Korea Korea & K General Construction Co., Ltd. (hereinafter referred to as “JJ General Construction”), which is a golf course service company, and the FFFFB and J General Construction Co., Ltd. (hereinafter referred to as “service company”). Article 2(3) of the former Inheritance Tax and Gift Tax Act (amended by Act No. 8828, Dec. 31, 2007; hereinafter referred to as “former Inheritance Tax and Gift Tax Act”) and Article 31-9(7) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act (amended by Presidential Decree No. 22042, Feb. 18, 2010); applying Article 2(3) of the former Inheritance Tax and Gift Tax Act and Article 31-9(7) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act (amended by Presidential Decree No. 22075,6271,707,71,707,71,7639,485,56,47,536,47,536,475,47,537,47,539,47,47

The defendant was notified of taxation to the defendant.

F. On June 3, 2013, the Defendant decided and notified the Plaintiff of KRW 4,370,593,00 (including additional tax) as gift tax (hereinafter “instant disposition”).

G. The Plaintiff dissatisfied with the instant disposition and filed an appeal with the Tax Tribunal on July 17, 2013, but the Tax Tribunal dismissed the said appeal on June 30, 2014.

[Ground for Recognition: Facts without dispute, Gap evidence 1, 2, Eul evidence 1, 3, 4, and 5; the whole pleadings

[Purpose]

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

1) Article 2(3) of the former Inheritance Tax and Gift Tax Act does not stipulate at all the "other person's contribution" and "the method of calculating the value of donated property". The instant disposition on which gift tax was imposed by assessing only the value of donated property based on Article 2(3) of the former Inheritance Tax and Gift Tax Act is unlawful since it does not have

2) Since the Plaintiff entered into a service contract with the instant service company and carried out the golf course development project, and paid the service cost to the said company with the Plaintiff’s funds, it cannot be said that there exists another person’s contribution to the increase in the value of the pertinent land and the distribution of economic profit therefrom.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

1) Whether there is a provision on the basis of taxation

Article 2 (1) of the former Inheritance Tax and Gift Tax Act provides for gift tax on donated property by another person.

Paragraph 3, the term "donation" means the name, form and title of the act or transaction.

It is stipulated that the transfer (including the transfer of tangible and intangible property at a remarkably low price) of the tangible and intangible property which can calculate economic value to another person without compensation by direct or indirect means, or the increase of the value of another person's property by contribution. This is to introduce a comprehensive donation concept under the tax-related law in order to cope with an irregular inheritance and donation in advance, and to convert the previous regulations on deemed donation into the regulation for calculating the value uniformly. In principle, in a case where any transaction and act constitute the concept of donation under Article 2 (3) of the former Inheritance Tax and Gift Tax Act, it shall be deemed that the gift tax may be levied pursuant to Article 2 (1) of the same Act (see Supreme Court Decision 2008Du17882, Apr. 28, 201). Accordingly, this part of the Plaintiff's assertion is without merit.

2) Whether to increase the value of property by the contribution of another person

In this case, the value of the land increased by the contribution of another person (the service company of this case).

We examine whether or not.

A) Facts of recognition

(1) On May 10, 2003, the Plaintiff’s implementation of the golf course development project as seen earlier with FF Korea’s Non-AW and the golf course development project.

The service contract was concluded for the purpose.

(2) The Plaintiff renounced the performance of the above service contract by the FF Korea S&A, and the J-Comprehensive case

It entered into a new service contract with the snow.

(3) On November 30, 2006, the Plaintiff made a settlement agreement to pay KRW 1,244,875,192 as service payment to J General Construction.

(4) On December 8, 2006, the Plaintiff paid KRW 1,244,875,192 to J General Construction.

[Reasons for Recognition: Evidence Nos. 12, 13, 22, 26, 28 through 33 (and numbered numbered)

2) Each entry and the purport of the whole pleadings

B) Determination

According to the above facts of recognition, the plaintiff entered into a service contract with the service company of this case and the plaintiff's lawsuit

After implementing a golf course development project on the land at issue, the service company of this case paid the service cost with the Plaintiff’s funds.

Therefore, the service company of this case seeks to increase the value of the land as a result of the service.

It cannot be evaluated as the "increased increase in the value of property by another person's contribution" under Article 2 (3) of the Inheritance Tax and Gift Tax Act.

C) Judgment on the defendant's argument

(1) Summary of the defendant's assertion

The instant service company was actually a company controlled by the Plaintiff and did not enter into a normal service contract between the Plaintiff and the said company, or paid by the Plaintiff to J General Construction.

It is not the Plaintiff’s funds.

(2) Determination

The above facts and the defendant's value of donated property in order to take the disposition of this case

In determining the market price of the land at issue, the amount of KRW 1,244,875,192 (the service cost paid by the Plaintiff) is deducted from the service cost borne by the taxpayer as “the service cost borne by the taxpayer.” In rendering the instant disposition, the Defendant also considered the service cost paid by the Plaintiff as the Defendant’s contributory portion in light of the circumstances, etc., the evidence submitted by the Defendant alone is insufficient to acknowledge the Defendant’s assertion, and there is no other evidence to acknowledge it otherwise (On the other hand, there is no evidence to deem that the

(3) Therefore, the defendant's argument is without merit.

D) Sub-determination

Ultimately, there is a lack of evidence to prove that there was "an increase in the value of property by another person's contribution" as to the land at issue under Article 2 (3) of the former Inheritance Tax and Gift Tax Act, and thus the instant disposition

3. Conclusion

Therefore, the plaintiff's claim of this case is reasonable, and it is decided as per Disposition.