Seoul Administrative Court 2013Guhap27586 ( October 26, 2014)

In calculating the sum of the amount of gift tax contributed by minor shareholders, it is reasonable to calculate the amount of gift tax

Where there are not less than two minority shareholders who renounced the right to receive new stocks allocated under Article 39 (2) of the Inheritance Tax and Gift Tax Act or who obtained new stocks allocated in short of the number entitled to obtain the allocation under equal conditions in proportion to the number of their possessed stocks, one of the minority shareholders shall be deemed to have renounced his right or obtained the allocation insufficiently.

2014Nu60377 Revocation of Disposition of Imposition of Gift Tax

OraA

The director of the tax office.

Intervenor joining the Defendant

Seoul Administrative Court Decision 2013Guhap27586 Decided June 26, 2014

March 3, 2015

March 17, 2015

1. The plaintiff's appeal is dismissed.

2. The costs of appeal shall be borne by the Plaintiff.

The judgment of the first instance is revoked, and the defendant revoked the disposition of imposition of KRW 45,543,700 on September 11, 2012 against the plaintiff on June 13, 2007.

1. Details of the disposition;

A. The Plaintiff participated in the shares issued on June 13, 200 by the KOSDAQ-listed corporation, 00 (former Haws Co., Ltd.; hereinafter referred to as the “instant company”). 522,450 shares (hereinafter referred to as the “instant shares”) at KRW 1,225 won per share (50 won per share) and total of KRW 640,01,250. Meanwhile, the previous shareholders of the instant company did not allocate new shares to the Plaintiff during the process of the instant capital increase. 00. 200 and 2008. 3. 1. 1. 2. 2. 3. 1. 3. 1. 6. 206 . 16. 1. 206 . 3. 16. 16. 206 . 3. 16. 206 . 3. 16. 206 . 3. 166 . 15 . . 20. 1. 3

[Ground for Recognition: Facts without dispute, Gap evidence 1, Eul evidence 1, purport of whole pleadings]

2. The assertion and judgment

A. The plaintiff's assertion

1) The assertion that a tax cannot be levied

Inasmuch as the Plaintiff did not have a relation with the existing shareholder who renounced the acquisition of new shares of this case, it cannot be taxed unless the gift amount is at least KRW 300 million, and the difference between the appraised value of the shares of this case and the Plaintiff’s acquisition value of the shares of this case does not amount to at least 30% of the appraised value of the shares of this case. However, the assessed value of the profit accrued to the Plaintiff from the offering of new shares of this case is at least KRW 201,65,700, which is below KRW 300,000, and the assessed value of the shares of this case (1,611 won) and the Plaintiff’s acquisition value of the shares of this case (1,225 won) do not fall under the requirement that gift tax may be imposed on the Plaintiff, because the Plaintiff’s disposition of this case by the Defendant was unlawful.

Even if the gift tax can be imposed on the Plaintiff, in applying the gift tax rate to the Plaintiff, the gift tax rate should be calculated individually for each donor and donee in applying the gift tax rate. However, in rendering the instant disposition, the Defendant considered the entire existing minority shareholders who renounced the acceptance of new shares of this case as a donor under the name of the donor who gave up the acceptance of new shares, and imposed the gift tax by applying the highest tax rate (minimum 20%). Therefore, the instant

Attached Form is as shown in the attached Form.

C. Determination by issue

1) Determination on the assertion that a case cannot be taxed

Article 39(1)1 of the former Inheritance Tax and Gift Tax Act (amended by Act No. 8828 of Dec. 31, 2007; hereinafter "the Inheritance Tax and Gift Tax Act") provides that "in case where a corporation issues new stocks to increase its capital and obtains profits from the issuance of them at a price lower than their market price, the amount equivalent to the relevant profits shall be the value of the property of the person who obtains profits from the issuance of such new stocks." Article 39(1) Item (c) of the former Inheritance Tax and Gift Tax Act provides that "if a person who is not a shareholder of the corporation concerned receives profits from the issuance of new stocks directly from the corporation concerned, the profits from which he received the new stocks from the corporation concerned shall not be required to be more than a certain size, or the value of the donated stocks generated from the new stocks purchaser shall not be required to be less than a certain size, and since the fact that the plaintiff acquired the stocks of this case by a third party by the method of direct allocation from the company of this case is identical to the above facts.

2) Determination on the assertion that the tariff rate has been erroneously applied

According to the facts and evidence examined earlier, in rendering the disposition of this case, the defendant may recognize the fact that, as alleged by the plaintiff, the minor shareholders (including shareholders who own less than 1/100 of the total number of shares issued by the company of this case and whose total amount of face value is less than 300 million won) were entitled to the tax rate of 20% for all as one donor. However, in applying the provision of Article 39(2) of the Inheritance Tax and Gift Tax Act, the defendant renounced the right to receive new shares in applying the provision of subparagraph 1 of Article 39(1) of the Inheritance Tax and Gift Tax Act, or obtained the allocation under equal conditions in proportion to the number of shares owned (including the case where new shares

1) The Plaintiff did not present the legal basis for its assertion. The purport of the provision appears to be based on Articles 39(1)1(b) and 35 of the Inheritance Tax and Gift Tax Act, and Article 26 of the Inheritance Tax and Gift Tax Act, and Article 26 of the same Act is different from the case. However, where there are more than two minority shareholders, the profit shall be calculated on the ground that one of the minority shareholders has renounced or failed to receive the allocation of the instant shares in the process of issuing new shares, and the fact that the minority shareholders of the instant company did not receive the allocation of the instant shares in the process of issuing new shares, as seen earlier, is legitimate to apply the gift tax rate by deeming the instant corporate minority shareholders as one in the process of issuing the instant disposition, and the Plaintiff’

3. Conclusion

Therefore, the plaintiff's claim is dismissed, and the judgment of the court of first instance with the same conclusion is just, and the plaintiff's appeal is dismissed as it is without merit. It is so decided as per Disposition.