[1] The person who bears the burden of proof and the degree of proof in a lawsuit seeking revocation of the disposition imposing tax

[2] Whether the procedure for transferring a register of shareholders in the transfer of shares without issuing share certificates constitutes a taxation requirement of gift tax (negative)

[3] If shares are returned again after meeting the taxation requirements of gift tax due to the transfer of shares, whether the taxation requirements of gift tax retroactively cease (negative)

[4] The elements for calculating the value of donated property pursuant to the supplementary evaluation method under Article 63 (1) 1 (c) of the former Inheritance Tax and Gift Tax Act

[1] Article 26 of the Administrative Litigation Act / [2] Article 26 of the former Inheritance Tax and Gift Tax Act (amended by Act No. 6780 of December 18, 2002), Articles 2 (1) 1, 4, 31, and 32 (current Deletion) of the former Inheritance Tax and Gift Tax Act / [3] Articles 2 (1) 1, 4, 31, 32 (current Deletion), and 44 of the former Inheritance Tax and Gift Tax Act (amended by Act No. 6780 of December 18, 202) / [4] Article 63 (1) 1 (c) of the former Inheritance Tax and Gift Tax Act (amended by Act No. 6780 of December 18, 202)

[1] Supreme Court Decision 97Nu13894 delivered on July 10, 1998 (Gong1998Ha, 2164) Supreme Court Decision 2002Du6392 Delivered on November 13, 2002 (Gong2003Sang, 98) Supreme Court Decision 2003Du14284 Delivered on April 27, 2004 (Gong2004Sang, 919) / [2] Supreme Court Decision 97Nu6506 Delivered on August 29, 197 (Gong197Ha, 2960) / [4] Supreme Court Decision 2003Du5723 delivered on October 15, 2004 (Gong2004Ha, 1865)

Plaintiff 1 and one other (Attorney Park Il-hwan, Counsel for the plaintiff-appellant)

Head of the Jeonju Tax Office

Gwangju High Court Decision 2005Nu707 decided March 23, 2006

All appeals are dismissed. The costs of appeal are assessed against the plaintiffs.

We examine the grounds of appeal.

1. Generally, in a lawsuit seeking revocation of the disposition imposing tax, the burden of proof as to the facts requiring taxation shall be borne by the imposing authority. However, if the facts alleged in light of the empirical rule in the course of a specific lawsuit are revealed, it cannot be readily concluded that the pertinent disposition is an unlawful disposition that failed to meet the taxation requirement, unless the other party proves that the pertinent facts in question are not eligible for the application of the empirical rule (see, e.g., Supreme Court Decisions 97Nu13894, Jul. 10, 1998; 2003Du14284, Apr. 27, 2004).

Examining the reasoning of the judgment below in light of the records, we affirm the judgment of the court below that recognized that the non-party 1 was to donate the shares of Young-gu Kan-si, Inc. (hereinafter "the shares of this case") and Daeyang-si, Inc. (hereinafter "the shares of this case") which were held in his name or held in title with the non-party 2 and 3 as a donation to the plaintiffs, and there is no error

In addition, the transfer of shares takes effect only by the declaration of intention of the parties in accordance with the general principle regarding the transfer of nominative claim, and the transfer of shares cannot be deemed as not satisfying the taxation requirements of gift tax on the ground that the transfer of ownership in the register of shareholders, which is merely a requisite for setting up against the company, has not been completed (see, e.g., Supreme Court Decision 97Nu6506, Aug. 29, 197). Supreme Court Decisions 93Nu3103, Apr. 27, 1993; 93Nu14196, Feb. 22, 1994, etc. cited in the ground of appeal by the plaintiffs, are different from this case, and are not a proper precedent to be invoked in this case.

On the other hand, as long as the taxation requirements of gift tax have been met on the transfer of stocks, even if Nonparty 1 received a return of the instant stocks from the Plaintiffs through the lawsuit for confirmation of shareholder rights after the deadline for filing a return under Article 68 of the Inheritance Tax and Gift Tax Act, it cannot be deemed that the taxation requirements of gift tax already satisfied are retroactively extinguished. The Plaintiffs’ ground of appeal on this point has no merit.

2. In full view of the provisions of Article 60 of the Inheritance Tax and Gift Tax Act and Article 49 of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act (amended by Presidential Decree No. 1660 of Dec. 31, 199), the market price stipulated in the above Act refers to an objective exchange price formed through a general and normal transaction. Thus, even if there is a transaction practice, if the transaction price cannot be deemed as a price formed through a normal transaction that properly reflects the objective exchange value of donated property, and if the subject of donation is non-listed stocks, the market price is difficult to be calculated, and the value may be calculated according to the supplementary assessment method stipulated in Article 63(1)1 (c) of the Inheritance Tax and Gift Tax Act (see Supreme Court Decision 2003Du5723 of Oct. 15, 2004). Meanwhile, the former Inheritance Tax and Gift Tax Act (amended by Act No. 6048 of Dec. 28, 199) provides for exceptions to the largest shareholder.

Examining the reasoning of the judgment below in light of the records, it is proper for the court below to determine that the defendant's measure which assessed 10% increase of shares based on the shares held by the largest shareholder, etc. is legitimate in calculating the value of shares in this case according to the supplementary evaluation methods stipulated in Article 63 (1) 1 (c) of the Inheritance Tax and Gift Tax Act, and there is no violation of the misapprehension of legal principles

3. Therefore, all appeals are dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Yang Sung-tae (Presiding Justice)