Incheon District Court 2013Guu1618 ( October 16, 2015)

The appraisal value of non-listed stocks in the value recognized as the market price is excluded;

The gift tax, which explicitly excludes the appraisal value of non-listed stocks from the value which is recognized as the market price, is to prevent the occurrence of a result contrary to the principle of tax equity by calculating various appraisal values according to different appraisal methods in the case of non-listed stocks.

2015Nu35781 Revocation of Disposition of Imposing Inheritance Tax

○ Kim

○ Head of tax office

Incheon District Court Decision 2013Guhap1618 Decided January 16, 2015

July 22, 2015

September 9, 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 shall be revoked. The defendant's imposition of KRW 5,001,078,990 on July 1, 2012 against the deceased Lee-○ shall be revoked.

1. Quotation of judgment of the first instance;

The court's explanation on the instant case is about No. 7 and No. 47 of the judgment of the court of first instance.

Each action shall use the term " July 24, 2012" as " July 4, 2012", and shall be cited in accordance with Article 8 (2) of the Administrative Litigation Act and the main text of Article 420 of the Civil Procedure Act, except for the addition of the following judgments with respect to the assertion that the plaintiff emphasizes in the trial of the court of the first instance, as stated in the reasoning of the judgment of the court of the first instance.

2. Additional determination

A. The plaintiff's assertion

(1) The head of the ○○ Tax Office did not recognize the transfer value of the company’s shares from the Plaintiff as the market price, and imposed gift tax on the ○○○○ who acquired the company’s shares, by calculating the value according to the supplementary assessment method as to unlisted shares under the Inheritance Tax and Gift Tax Act. However, even though the said gift tax disposition was revoked upon a request filed by the Tax Tribunal by the ○○○, the instant disposition, which did not calculate the value of the company’s shares by the above transfer value,

(2) Article 49(1)2 of the Enforcement Decree of the Inheritance Tax and Gift Tax Act, which explicitly excludes the appraisal value of non-listed stocks from the value recognized as the market price, is null and void because it goes beyond the scope of delegation under Article 60(2) of the Inheritance Tax and Gift Tax Act, and thus, is in violation of the principle of no taxation without law. Thus, the instant disposition in which the value

B. Determination

(1) According to the first argument, the head of ○○ Tax Office imposed gift tax on ○○ by calculating the value of the shares of this case according to the supplementary assessment method under the Inheritance Tax and Gift Tax Act, on the basis of the premise that the transaction of shares of this case constitutes “the donation of profits arising from a transfer at a low price among persons without a special relationship” under Article 35(2) of the Inheritance Tax and Gift Tax Act. However, the Tax Tribunal determines that the transfer contract of this case was made based on the special circumstances of the parties to the transaction, and that it is difficult to view that the transfer contract of this case was taken over at a price significantly lower than the market price without any justifiable reason under the transactional practice between the parties who are not the parties to the transaction, and thus, determined to revoke the imposition of gift tax. This part of the Plaintiff’s assertion is without merit.

(2) As to the second argument, Article 60 of the Inheritance Tax and Gift Tax Act declares the principle of market value in the evaluation of inherited or donated property under paragraph (1) of the same Article. Paragraph (2) of the same Article delegates the scope of the second argument to the Presidential Decree by presenting the approximate standard which can be recognized as the market price on the premise that the market price is formed through the general and normal transaction, and that the objective exchange value should be properly reflected. In the case of unlisted stocks, the principle of evaluation of taxable items under each subparagraph of Article 49(1) of the Enforcement Decree of the same Act, upon delegation, should be specifically prescribed. However, in the case of unlisted stocks, it is necessary to unify the evaluation method in order to prevent the occurrence of a result contrary to the principle of fair taxation by calculating various appraisal values according to the different appraisal methods

The latter part of Article 60 (2) of the same Act in consideration of the fact that it is difficult to derive the market price due to the fact that it is difficult

Because the appraisal value of non-listed stocks is excluded from the value recognized as the market price by the corporation, it shall be

Article 49(1)2 of the Enforcement Decree of the same Act exceeds the scope of the parent law, or violates the principle of no taxation without law.

Therefore, the plaintiff's assertion on this part is without merit.

3. Conclusion

Therefore, the judgment of the first instance court is legitimate, and the plaintiff's appeal is dismissed as it is without merit.

It is so decided as per Disposition.