Since the transfer price is deemed to be reverted to a third party under the substance over form principle, the imposition of transfer tax on the plaintiffs is unreasonable.

In the case of a difference between the nominal owner and the actual owner of the transaction, the nominal owner is sufficient to have the judge have a reasonable doubt about the fulfillment of the taxation requirements. In principle, the tax authority has the burden of proof as to the existence of the taxation requirements and the tax base.

Article 14 of the Framework Act on National Taxes

Seoul Administrative Court 2016Guhap63569 Revocation of Disposition of Imposing capital gains tax

○○ Kim et al.

○ Head of Tax Office and one other

March 3, 2017

March 31, 2017

1. Defendant XX head of the tax office fully revokes the imposition of capital gains tax for 20 XX. X. 20 XX year for the Plaintiff Kim ○, the imposition of capital gains tax for 20 XX year for the 20 XX year for the Plaintiff Kim ○, and the imposition of capital gains tax for 20 XX year for the Plaintiff Kim △△△△, the imposition of capital gains tax for 20 XX year for the 20 XX year for the Plaintiff Kim △△

2. The costs of lawsuit are assessed against the Defendants.

Cheong-gu Office

The same shall apply to the order.

1. Details of the disposition;

가. 주식회사 큐○○○(이하 '큐○○○'라 한다. 20XX. XX. XX.자로 상장이 폐지되었다)는 200X. X.경 코스닥 증권시장에 상장된 법인으로, 200X. X. XX. 독일계 사모펀드인 피XXXXX를 상대로 신주인수권부사채 4억 엔을 발행하였고, 위 신주인수권부사채의 신주인수권은 일부 양수도가 이루어진 다음 아래 표 기재와 같이 전량 행사되었다.

B. The head of C○○ New shares issued at the exercise of the right to subscribe to x. XX. 9, 5, 5, 5, 5, 5, 3, 3, 3, 3, 3, 3, 4, 4, 5, 5, 4, 5, 4, 4, 5, 5, 4, 5, 4, 1, 5, 5, 5, 3, 4, 5, 5, 4, 5, 5, 4, 5, 5, 1, 5, 1, 1, 5, 1, 5, 1, 1, 5, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1,

C. The Defendants, upon receiving and disposing of the instant new stocks in their own and employees’ name, determined and notified the Plaintiffs’ 6th day of the issuance of the instant new stocks, thereby acquiring gains on the part of the Plaintiff Kim ○○, the Plaintiff Kim ○, the wage class, the wage class, the wage class, the wage class, the wage class, the wage class, the wage class, the wage class, the wage class, the wage class, the wage class, the wage class, the wage class, the wage class, and the wage class, the Plaintiff Kim △△△, the Plaintiff Kim △△△, and the director of the tax office, the director of the tax office, the director of the tax office, and the director of the tax office, the Plaintiff Kim △△, respectively, of the capital gains tax for 20

D. The Plaintiffs, who were dissatisfied with the request, filed a tax appeal with the Tax Tribunal, but received a decision of dismissal of X. X. 20.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 5, 6, 14 (including branch numbers, hereinafter the same shall apply), Eul evidence No. 1, the purport of the whole pleadings

2. Whether each of the dispositions of this case is legitimate

A. The plaintiffs' assertion

The Plaintiffs lent funds necessary for the exercise of the right to new stocks in the name of the Plaintiffs and their employees to the account in the name of the Plaintiffs, △△△, which had been given instructions from the de facto major shareholder Kim ○○○○○, or from the direction of △△○○○○○○, (hereinafter referred to as the “Seoul △△△△”), and thereafter, the Plaintiffs loaned funds to the account in the name of the Plaintiffs and their employees to make the instant new stocks and sold the instant stocks. The Plaintiffs collected the principal and interest of the instant new stocks that were given loans to the account in the instant securities account from the sale price to the account in the instant securities account and returned all the remainder profits to the Kim△△△△△△△△. Accordingly, in the light of the principle of substantial taxation, the instant new stocks in the instant case was transferred to the account in the name of △△△△△△, but each disposition

B. Determination

1) Article 14(1) of the Framework Act on National Taxes declares the principle of substantial taxation by stipulating that “if the ownership of income, profit, property, act or transaction subject to taxation is merely nominal and there is another person to whom such income, profit, property, act or transaction belongs, the person to whom such income, profit, or transaction belongs shall be liable to pay taxes.” Therefore, if there is a separate person who substantially controls and manages the taxable subject to taxation different from the name of ownership, such as income, profit, property, act or transaction, the nominal owner shall not be the person to whom such income, profit, act or transaction belongs, but the person who actually controls and manages the taxable subject to taxation shall be the person to whom such income, etc. is liable to pay taxes in accordance with the principle of substantial taxation. In addition, the determination of whether it falls under such a case shall be made by comprehensively taking into account various circumstances such as the process of

Meanwhile, in principle, the tax authority bears the burden of proving the existence and the tax base of the facts requiring taxation. This also applies to cases where the tax authority contests that the nominal owner of transaction, etc. and the actual owner of the transaction, etc. are different, barring special circumstances, such as a separate legal provision converting the burden of proof. However, as long as the tax authority imposed tax on the nominal owner of the transaction by deeming the nominal owner as the nominal owner of income, it is necessary to assert and prove that the nominal owner of the transaction, etc. is different from the nominal owner of the transaction, etc., which is subject to taxation. In such a case, the need for proof is sufficient to the extent that the judge has a reasonable doubt as to whether the transaction requirements were satisfied. As a result, it is unclear whether the substance of the transaction, etc. belongs to the nominal owner, and if it becomes impossible to obtain conviction by the judge, then the disadvantage therefrom remains back to the tax authority bearing the ultimate burden of proof (see Supreme Court Decision 2011Du93

2) The following facts are acknowledged in light of the following: Gap evidence 2 to 4, Eul evidence 7 to 14, Eul evidence 2 to 5, witness witness witness witness testimony, XX bank, meeting of financial transaction information and arguments of XX bank, and the purport of the whole pleadings.

A) Since around 200 X around 200, Kim Jong-chul who controls various listed companies through a borrowed name account, he/she became a de facto major shareholder of Q○○○ by taking over shares from the major shareholders of Q○○○○, thereby exercising the management right over Q○○○, along with his/her past business of lending bonds, in the form of Daap-gu, Do-

B) The Plaintiff Kim ○ entered into an investment agreement with 20 XX. XX. Q. Q.C○○. The main contents of the agreement are that Plaintiff Kim ○○ made payment to Da○○○○○ for the establishment of 2, 3, and 3,000 won for the establishment of the new shares. The investment period is from 200,000 to 20,000,000 won for the establishment of the new shares, and the period of investment is from 20,000 to 20,000,0000 won for the establishment of the new shares. The Plaintiff Kim ○ may recover the investment amount by disposing of

C) He purchased the preemptive right to acquire new shares 5, 1, 3, and 5 in the names of the plaintiffs and their employees using the loan funds from the 20 XX. XX. The bond company Kim Jong-tae purchased the preemptive right to acquire the new shares 5, 1, 3, 3, and 5 at a trade-level, commercial-level, commercial-level, and commercial-level. From around X. XX. 200 of X. X. X. 200, Kim Jong-tae distributed false news report materials to the press that "the production of the circirb book board is soon commercial-level," and the documentary ○○○○’s price increased in the short term from the 1, X. X. 200 to the 2,00,000 capital-level, from the 1, X. X. 2

D) The Plaintiffs sold the instant shares in intensively from 20 XX. X. X. to Haman, and withdrawn approximately KRW 1 billion from X. XX. X. XX. to 8 times in the check. On the day when the Plaintiffs’ checks were withdrawn, the Plaintiffs signed that they received the said check from the citizen XX of the Kim △△’s employees. The Financial Supervisory Service, when investigating unfair trade, etc. of the instant shares with respect to Qu ○○ stocks, was deemed to have paid KRW 1.0 million out of the sales price of the instant shares to Kim △△ and the part of the said checks on the financial transaction information meeting, which was carried out by △△△△, was found to have been paid to the side of the day when the checks were withdrawn by △△△ on the day when the checks were withdrawn. In light of the fact that some of the said checks on the financial transaction information meeting was made out to be paid to the person on which the instant shares were withdrawn.

E) In undergoing an investigation from the Financial Supervisory Service, Plaintiff Kim ○ received the instant new shares from the Plaintiff to acquire the Plaintiff’s funds by obtaining the recommendation from the Plaintiff to make investments in the C○○ New shares. Plaintiff Kim △△△△△ or employee Park △△△△ received a communication from the Plaintiff to sell the instant shares. Of the sales price of the instant shares, Plaintiff Kim △△△△△△ paid part of the purchase price and the profits he paid to △△△△△. In the event of the profit of the instant shares, the last day of the profit becomes final and conclusive, and later, Plaintiff Kim ○ stated that he would talk at that time. Plaintiff Kim ○ was investigated by the prosecutor’s office, and he was said to have lent KRW 20 million to 3% per month in order to exercise the preemptive right at around 200,000. However, the Plaintiff did not have been aware of and did not have made investments in the name of the Plaintiffs and employees, and the Plaintiff made an investment in the name of △△△△△. The remainder of the instant new shares was returned to 100.

3) In light of the statement to the effect that an investment agreement only was prepared and the lending period and interest rate were not prepared, and that the Plaintiffs were to divide some of the investment profits, there may be room to view that the sale price was reverted to the Plaintiffs’ capital gains. However, there is no evidence suggesting that considerable of the sales price of the shares in this case to be paid to Kim ○○○, the relevant capital gains, and the relevant capital gains were distributed again from Kim △△△, and it is difficult to conclude that the above sale price was reverted to the Plaintiffs’ capital gains since it was difficult to find out that the Plaintiffs did not have any obvious reasons leading to the increase in the share price and that the profits were attributed to the Plaintiffs. In addition, if the Plaintiffs were to have been charged with the acquisition price of the shares in this case in the process of selling the shares in this case, it can be seen that the Plaintiffs were to have been charged with the acquisition price of the shares in this case, and that the Plaintiffs were to have been charged with the acquisition price of the shares in this case, and that the Plaintiffs were to have been charged with the acquisition price of the shares in this case.

4) At the present stage, it is difficult to accurately calculate capital gains that should be attributed to the Plaintiffs, and thus, each of the instant dispositions should be revoked in its entirety. The Plaintiffs’ assertion is with merit.

3. Conclusion

The plaintiffs' claims are justified, and the costs of lawsuit are assessed against the losing party. It is so decided as per Disposition by the defendants.