The case holding that the gift tax imposed on the ground that if a voluntary auction is carried out on the basis of the right to collateral security on which the registration of ownership transfer was completed on the ground of sale and purchase, not on the ground that the cause of registration was the actual transaction, but on the ground that the gift was a donation (so-called deemed donation), does not fall under the corresponding tax as prescribed in Article 3

The case holding that the gift tax imposed on the ground that if a voluntary auction is carried out on the basis of the right to collateral security established for which the registration of ownership transfer was completed on the ground of sale and purchase, not on the ground that the cause of registration was the actual transaction but on the gift (so-called constructive gift), does not constitute the corresponding tax under Article 35 (1) 3 of the Framework Act

[1] Article 35 (1) of the Framework Act on National Taxes, Article 18 of the Enforcement Decree of the Framework Act on National Taxes

Korea

Gwangju Agricultural Cooperative (Attorney Lee Dong-soo, Counsel for defendant-appellant)

Gwangju District Court Decision 200Kahap12152 delivered on May 30, 2001

1. The part of the original judgment against the defendant shall be revoked, and the plaintiff's claim corresponding to that part shall be dismissed.

2. All the costs of a lawsuit shall be borne by the plaintiff of the first and second instances.

1. Purport of claim

The distribution amount of 147,778,066 won against the defendant in the distribution schedule prepared by the same court on November 27, 2000 with respect to the real estate auction case of Gwangju District Court 9Tju 35827 shall be changed to 46,675,910 won and shall be corrected to distribute 101,102,156 won to the plaintiff.

2. Purport of appeal

The same shall apply to the order.

1. Basic facts

The following facts do not conflict between the parties, or can be acknowledged by comprehensively taking into account the whole purport of the pleading in each of the evidence Nos. 1, 2, 4, and 5-1 through 3, Gap evidence Nos. 6-1, 2, 7-1, 8, 1-1, 1-2, and 2.

(a)The land and building in Gwangju-dong-dong-dong-dong-dong 178-6 (hereinafter referred to as "the real estate in this case") are subject to the preservation of ownership and the transfer registration under the name of the Lao on May 7, 1994, with respect to the real estate in this case on the same day, the transfer registration for ownership was completed on April 15, 1994 under the name of the son of the Orok-dong-dong-dong-dong-dong-dong-dong-dong 178-6.

(b)On the other hand, Oreuk has transferred 10 real estates, including the instant real estates, to Ore Jin.

C. On June 16, 1995, the registration of seizure of the real estate in this case was cancelled on December 27, 1995 in the name of the Jeju Tax Office under the Plaintiff’s control.

D.On the other hand, on March 25, 1996, following the cancellation of the above attachment registration, the Defendant registered the establishment of a mortgage on the instant real property with the maximum debt amount of KRW 130 million, the obligor's fault, the mortgagee's fault, and the mortgagee's right to collateral security, the maximum debt amount of KRW 65 million, the debtor's leapju, and the mortgagee's right to collateral security as the defendant.

E.In the latter, the Plaintiff, on April 3, 1997, notified the 10 real estate, including the instant real estate, to whom was donated by the Oral Jin as a donation of the instant real estate, and notified the imposition of gift tax on May 31, 1997 on the total of 10 real estate, including the instant real estate, around 197, around 7,413,532, the payment period, and notified the correction of the tax amount on July 31, 1997.

F. On June 16, 1999, the Defendant applied for a voluntary auction of the instant real estate by the Gwangju District Court 9Hu35827, Jun. 16, 1999, and conducted the auction procedure. As a result, each of the instant real estate was sold at auction and the actual amount to be distributed was KRW 149,138,956. On the date of distribution of the instant case, the Plaintiff, on the date of distribution, at KRW 130,023,506 including gift tax and additional dues, and at the same time, the Gwangju Dong-gu Office, which is the seizure authority, was the seizure authority, to demand the distribution of KRW 1,360,890 as well as the amount of KRW 247,940,68

G.However, on November 27, 2000, the auction court prepared a distribution schedule that excludes the Plaintiff from the distribution of dividends, under the premise that the secured claims based on the Defendant's right to collateral security take precedence over the Plaintiff's tax claims. The auction court distributed the Defendant 1,360,890 won in the order of 147,778,066 won in the order of 2nd order to the Defendant in Gwangju Dong-gu Office.

2. Judgment on the plaintiff's claim

A. The parties' assertion

Although the Plaintiff’s taxation claim falls under the so-called corresponding tax under Article 35(1)3 of the Framework Act on National Taxes and Article 18(1) of the Enforcement Decree of the same Act, the auction court prepared an illegal distribution schedule that preferentially distributes dividends to the Defendant, and thus the above distribution schedule should be modified. The Defendant asserts that the Plaintiff’s taxation claim does not fall under the above provision, and the Defendant’s secured claim based on the right to collateral does not prevail over the Plaintiff’s taxation claim.

(b) Relevant statutes;

Article 35 (1) of the Framework Act on National Taxes provides that "National taxes, additional dues, or expenses for disposition on default shall be collected in preference to other public imposts or other claims," and the proviso of the same paragraph provides that "the same shall not apply to the public imposts or other claims falling under any of the following subparagraphs, however, the same shall not apply to the public imposts or other claims" and in Article 35 (1) 3 of the same Act provides that "in the sale of the property for which the fact that the establishment of the right of lease on a deposit basis, pledge, or mortgage is registered before the due date (hereinafter referred to as "legal due date") is proved as prescribed by Presidential Decree, the national taxes or additional dues (excluding national taxes and additional dues imposed on the property) shall be collected from the proceeds of the sale of the property for which it is proved as prescribed by Presidential Decree."

In addition, Article 18 (1) of the Enforcement Decree of the Framework Act on National Taxes provides that the gift tax is one of the "national taxes imposed on the property" under Article 35 (1) 3 of the Framework Act on National Taxes and so-called "national taxes."

(c) Markets:

The purpose of Article 35(1)3 of the Framework Act on National Taxes is to properly harmonize the judicial request to guarantee transaction safety and the public interest request to secure the realization of tax claims with respect to the secured real rights accompanying the public disclosure. Thus, even if the pertinent tax is priority over the claims secured by the secured real rights, it shall not infringe on the essential contents of the secured real rights, and therefore, the "national tax imposed on the property" under the proviso of Article 35(1)3 of the same Act means a national tax imposed by recognizing the ability to pay for the property in question, as it can be sufficiently predicted that the person who acquires the secured real rights can be imposed on the property in the future (see Supreme Court en banc Decision 96Da23184 delivered on March 18, 199).

Therefore, the relevant tax is limited depending on such predictability of the acquirer of the right to collateral security. In this case, in order to avoid gift tax imposed on the real estate in this case, the registration of establishment of the right to collateral security was imposed and collected gift tax. The defendant's registration of establishment of the right to collateral security was completed on May 7, 1994 and completed one year and nine months after the registration of establishment of ownership was completed on the real estate in this case. The fact that the registration of establishment of the right to collateral security was cancelled at the time of the cancellation of the registration of the right to collateral security, as seen above, has no obligation to investigate the relationship between the seller and the purchaser, and to examine whether the goods were donated, since the registration of establishment of the right to collateral security was cancelled by the plaintiff, it can not be seen that the defendant's right to collateral security was established under the name of the husband and the right to collateral security under the name of the plaintiff's provisional registration and the right to collateral security was not established under the name of the plaintiff's right to collateral security (the plaintiff's right to collateral security right of collateral security was established under 95.2).

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit. Since the judgment of the court below partially differs from this conclusion, the part of the judgment below against the defendant shall be revoked, and the plaintiff's claim corresponding to that part shall be dismissed as per Disposition.

Judges Oh Jeong-chul (Presiding Judge)