Whether it can be deemed that the difference between the transfer price of shares and the market price of shares was donated

Each of the instant dispositions against which gift tax is imposed on the Plaintiff on the ground that the acquisition of shares at a price significantly low is a donation of the difference between the transfer value of shares and the market value, and that each of the instant dispositions against which gift tax is imposed on

The contents of the decision shall be the same as attached.

1. All of the plaintiff's claims are dismissed. 2. Costs of lawsuit are assessed against the plaintiff.

1. Details of the disposition;

The following facts are not disputed between the parties, or there is no counter-proof in each entry of Gap evidence 1-1, 2, 5-2, 1-2, 2-1, 1-2, and 2-3, respectively, and there is no counter-proof.

A. On March 31, 1994, the Plaintiff acquired 21,000 shares of the non-party company’s shares of KRW 105,00,00 per share from the non-party ○○○○ corporation (hereinafter “non-party company”) with the face value of KRW 5,000 per share, respectively, from the non-party 1’s share of KRW 19,000 per share with the face value of KRW 95,000 per share from the non-party 1,00 per share.

B. In determining that the above lessons and U.S. 20,781 per share were transferred to the Plaintiff at a remarkably low price of 5,000 won per share, the Defendant applied Article 34-2(1) of the former Inheritance Tax Act (amended by Act No. 4805 of Dec. 22, 1994; hereinafter the same shall apply), and the above lessons, etc. were subject to Article 34-2(1) of the former Inheritance Tax Act (amended by Act No. 4805 of Dec. 2, 1994; hereinafter the same shall apply), which was 200,000 won which is the total value of the above transfer, and 831,240,000 won which is the difference between the above market value, 381,868,000 won which is 30,000 won which is 96,000 won which is 9,000 won or less per share.

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

Article 55 (1) of the former Income Tax Act (amended by Act No. 4803 of Dec. 22, 1994) provides that "if it is deemed that the tax burden on the income has been reduced unfairly due to transactions with a resident having a special relationship with the resident having a transfer income, the Government may calculate the income amount in the current year regardless of the resident's act." According to Article 29-3 of the former Inheritance Tax Act, where income tax is levied under the Income Tax Act, no gift tax shall be levied." Thus, in light of the above provisions, in a case where a single transaction meets the requirements for imposing income tax and gift tax, the tax authority should impose only income tax and may not impose gift tax on the plaintiff. Thus, in this case, the transfer of shares at a price much lower than the market price of the shares owned by the plaintiff constitutes an unlawful transfer of shares between the resident having a special relationship with the resident having a transfer income tax under Article 55 (1) of the former Income Tax Act and the defendant's act of transferring shares to the plaintiff, which is an unlawful transfer of shares.

Article 34-2 of the former Inheritance Tax Act (amended by Presidential Decree No. 14469 of Dec. 30, 1994) / Except for cases falling under the provisions of Article 34 of the former Inheritance Tax Act (amended by Presidential Decree No. 1469 of Dec. 30, 1994), where a property is transferred to a person having a special relationship prescribed by Presidential Decree in consideration of the significantly low value (in cases where the property is transferred to his/her spouse or lineal ascendant or descendant), the transferor of the property shall be deemed to have donated an amount equivalent to the difference between the price and the market price to the person who takes over the property.

Article 41 [The remarkably low or high value and the definition of a person in a special relationship] (1) The value of remarkably low or significantly low under the provisions of Article 34-2 (1) of the Act, and the value of which under the provisions of Article 14-2 (1) 2 is not more than 70/100 of the value appraised under the provisions of Articles 5 through 7 on the basis of the current status of the date commencing an inheritance or the date of donation.

(2) "Person in a special relationship" in Articles 34 (2) and 34-2 (1) and (2) of the Act means a transferor or transferee (hereafter referred to as "transferr, etc." in this paragraph) and a person in a relationship falling under any of the following subparagraphs:

1. Relatives of the transferor, etc.;

Article 29-3 (Scope of Donated Property) (3) In the case of paragraphs (1) and (2) of the former Inheritance Tax Act (where gift tax is levied on donated property, the gift tax shall not be levied.

Article 55 of the former Income Tax Act [Calculation by Wrongful Acts] (1) If it is deemed that the act or calculation prescribed by the Presidential Decree of a resident who has real estate income, business income, other income, transfer income, or forest income has reduced unreasonably the tax burden on the relevant income due to transactions with a person with a special relationship with the resident, the Government may calculate the amount of income in the current year

The former Enforcement Decree of the Income Tax Act (amended by the Presidential Decree No. 14467 of Dec. 31, 1994)

Article 111 [Dispudiation of Wrongful Acts] (1) The term “person in a special relationship under Article 55 of the Act (hereafter the same shall apply in this Article)” means a person in relationship falling under any of the following subparagraphs:

1. Relatives of the income earner;

(2) The term “if it is deemed that any act makes the burden of tax reduced unreasonably in Article 55 (1) of the Act means the occasion falling under any of the following subparagraphs:

1. Where assets are purchased from a person with a special relationship in excess of the market price or assets are transferred to a person with a special relationship;

C. Determination

On March 31, 1994, the Plaintiff acquired a total of KRW 40,00 per share of KRW 5,00,000,000 per share of the non-party company from the ○○○○○ and the above ○○○m, the Plaintiff’s accommodation on March 31, 1994. As seen earlier, the fact that the market price of the non-party company’s shares is 20,781 per share is not clearly disputed by the Plaintiff. Thus, the Defendant’s acquisition of the property at a significantly low price from a person with a special relationship as above by the Plaintiff, which constitutes a taxation requirement under Article 34-2(1) of the former Inheritance Tax Act, and Article 41(1) and (2)1 of the former Enforcement Decree of the Inheritance Tax Act, deeming the difference between the market price and the total acquisition price as a donation by the Plaintiff, and imposing the gift tax of this case is lawful.

“The Plaintiff’s assertion that the transfer income tax may be imposed on the Plaintiff, ○○○○○, etc. on the above-mentioned shares, because the Plaintiff’s assertion that the transfer and acquisition of the above shares constituted a case where the transferor unfairly reduced the transfer income tax pursuant to the provisions of Article 55(1)1 and Article 111(2)1 of the former Income Tax Act, and thus, the transfer income tax may be imposed on the transferor at the market price of the pertinent property rather than the actual transfer price. However, only if the taxing authority determined that the transfer price of the pertinent property would be remarkably lower than the market price of the pertinent property, the transfer income tax should be imposed on the Plaintiff by deeming that the transfer and acquisition of the pertinent shares would not be imposed on the Plaintiff at the market price of the pertinent property, such as the Plaintiff’s relatives, etc., and that the transfer and acquisition of the shares would not be imposed on the Plaintiff at least on the transfer and acquisition price of the pertinent property. Unless otherwise expressly provided for in tax law, the transfer and acquisition tax should not be imposed on the Plaintiff’s transfer and transfer price.

3. Conclusion

Therefore, the plaintiff's claim of this case seeking revocation on the premise that each of the dispositions of this case is unlawful is dismissed as all of the grounds for appeal, and the costs of lawsuit are assessed against the losing plaintiff.