Seoul High Court 2007Nu25598 (Law No. 8415, 2008)

Appropriateness of the disposition in which the market price of the donated property is applied

If there are other trading cases identical or similar to the donated property according to the substance over form principle, and the objective exchange price formed by normal transactions, it is reasonable to evaluate the donated property at the market price.

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

The appeal is dismissed.

The costs of appeal are assessed against the Plaintiff.

쇠鹬 쇠鹬 3000 쇠鹬 3000

We examine the grounds of appeal.

1. As to the grounds of appeal Nos. 1 through 5

The main sentence of Article 60 (1) of the former Inheritance Tax and Gift Tax Act (amended by Act No. 8139 of Dec. 30, 2006; hereinafter referred to as the "former Inheritance Tax and Gift Tax Act") provides that "the value of the property on which inheritance tax or gift tax is levied shall be the market price as of the date of commencing the inheritance or the date of donation (hereinafter referred to as the "date of appraisal"), and Paragraph (2) of the same Article provides that "the market price under the provisions of paragraph (1) shall be the value which is generally accepted if free transactions are conducted between many and unspecified persons and which is recognized as the market price under the conditions as prescribed by the Presidential Decree, such as expropriation, public sale price, and appraisal price," and Paragraph (1) of the same Article of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act (amended by Presidential Decree No. 1933 of Feb. 9, 2006; hereinafter referred to as the "Enforcement Decree") shall apply to the property which is identical to or similar to the market price of the property at issue.

As above, Article 60 of the former Inheritance Tax and Gift Tax Act declares the principle of market value in the appraisal of inherited or donated property under Article 60 (1). Article 60 (2) of the former Inheritance Tax and Gift Tax Act provides that the market value of the property is formed through general and normal transactions, which can be recognized as the market value on the premise that the objective exchange value should be reflected, and the specific scope of the market value shall be prescribed by Presidential Decree. The provision of transaction value, etc. on the "relevant property" subject to taxation under each subparagraph of Article 49 (1) of the Enforcement Decree delegated by the former Inheritance Tax and Gift Tax Act is an example of representative cases that can be seen as the market value of inherited or donated property (see Supreme Court Decision 2000Du5098, Aug. 21, 200). Since Article 60 (2) of the former Inheritance Tax and Gift Tax Act does not limit only the transaction value, etc. on the "relevant property" subject to taxation to include only the market value, etc. of the relevant property identical or similar to the relevant property subject to the Enforcement Decree of this case, it cannot be determined as the scope of taxation principle.

In the same purport, the lower court is justifiable to have determined that the Defendant’s imposition of gift tax of this case, which assessed the value of donated property pursuant to the Enforcement Decree of this case.

The court below did not err in the misapprehension of legal principles as to the clearness of the tax base, the principle of tax equality, the exclusion of predictability, the law of the day-to-day and abuse of discretionary power, etc.

2. Regarding ground of appeal No. 6

In light of the contents of Article 78(2) of the former Inheritance Tax and Gift Tax Act and the fact that an additional payment for additional gift tax is for inducing a taxpayer to pay the amount of tax in good faith by the due date for return and payment, financial benefits are deemed to have been received for the amount of tax unpaid by the due date for the violation of the obligation to pay, and thus, it cannot be deemed that even if the amount of tax unpaid due to a difference in the appraisal of the value of donated property is excluded from the subject of the imposition of the additional payment for unfaithful payment. Furthermore, such circumstance alone does not constitute a justifiable reason for the payment of tax unpaid (see, e.g., Supreme Court Decision 96Nu16308, Nov. 2

In the same purport, the lower court is justifiable to have rejected the Plaintiff’s assertion that “The Plaintiff, as an individual, is unable to report and pay gift tax by confirming the value of similar trading cases in accordance with the Enforcement Decree of the instant case.”

The judgment of the court below is not erroneous in the misapprehension of legal principles as to legitimate grounds for appeal.

3. Conclusion

Therefore, the appeal is 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.