The disposition of this case is against the binding force of the Tax Tribunal's decision of reinvestigation

The instant disposition is against the binding force of the Tax Tribunal’s re-audit decision, and it is difficult to regard the instant disposition as the title trust shares as the grounds for the Defendant’s disposition.

Donation of title trust property under Article 45-2 of the Inheritance Tax and Gift Tax Act

2016Guhap62726 Revocation of Disposition of Imposition of Gift Tax

AA

00,000 Do 00,000 00

a) the Director of the Tax Office

Litigation performers 000

October 7, 2016

November 18, 2016

1. The Defendant’s disposition of imposing gift tax of KRW 9,787,00 (including additional tax of KRW 2,00,000 for additional tax of KRW 2,787,00 for additional tax of KRW 2,787,00 for additional tax of KRW 2,787,00) on April 29, 201 to the Plaintiff on September 2, 2014 (including additional tax of KRW 94,00 for additional tax of KRW 120,202,50 for additional tax of KRW 15, 209) is revoked.

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

Cheong-gu Office

The same shall apply to the order.

1. Details of the disposition;

"BB, which is a corporation 00, acquired 100,000 shares of CCC (hereinafter "CCC") from the existing shareholders on February 9, 2009, and received 50,000,000 shares from the existing shareholders on September 4, 2009 (hereinafter "the total of 200,000 shares") to 95,000,000 shares by participating in the CCC's capital increase for new shares as a result of the allocation of 95,000,000 won (hereinafter "the shares of this case"). The defendant deemed that the plaintiff trusted the shares of this case to BB on September 2, 2014, the defendant disposed of the gift tax of this case 9,787,000 won (including 2,00,000 won for additional payment, 2,787,000 won for additional payment, 209, 2005, 209, 2005, 2009.

[Ground of recognition] Facts without dispute, entry of Gap evidence 1 to 7, purport of the whole pleadings

2. Whether the instant disposition is lawful

Article 1(1) of the former Inheritance Tax and Gift Tax Act (amended by Act No. 9916, Jan. 1, 2010; hereinafter "the Inheritance Tax and Gift Tax Act") provides that "a person who has a domicile in the Republic of Korea or has a domicile in the Republic of Korea for at least one year," and Article 2(1)1 of the same Act provides that "where a person who has received a donation of property is a resident (including a non-profit corporation, the head office or main office of which is located in the Republic of Korea), all donated property by a resident, and where a donee (including a non-profit corporation, the head office or main office of which is located in the Republic of Korea), all donated property by a non-resident shall be subject to taxation

Article 4 (1) of the Inheritance Tax and Gift Tax Act provides, “The donee shall be liable to pay the gift tax pursuant to this Act: Provided, That in case where the donee is a profit-making corporation, the gift tax shall be exempted by the profit-making corporation concerned, and in case where the profit-making corporation, the title holder of the gift tax under Article 45-2, is exempted from the gift tax, the actual owner (excluding profit-making corporation) shall pay the gift tax.” Article 4 (5) provides, “In case where the donee falls under Article 45-2, the donor shall be liable to pay the gift

Meanwhile, Article 45-2(1) of the Inheritance Tax and Gift Tax Act provides that “in case where the actual owner or the nominal owner of any property, who requires a transfer or exercise of the right, is different, the value of such property shall be deemed to have been donated by the actual owner on the date when it is registered, etc. as the nominal owner, notwithstanding Article 1

Although Article 2(1) of the Inheritance Tax and Gift Tax Act does not expressly stipulate that property donated to a profit-making corporation is exempt from gift tax, a profit-making corporation is also liable to pay gift tax, in principle, since the main sentence of Article 4(1) provides that a donee shall not be exempt from gift tax if the profit-making corporation is a profit-making corporation. However, it is reasonable to deem that a profit-making corporation is exempted from gift tax on the ground that property donated to it is subject to corporate tax due to the increase of assets and income from inheritance. The proviso to Article 4(1) of the Inheritance Tax and Gift Tax Act provides that where a profit-making corporation is exempted from gift tax pursuant to Article 45-2 of the Inheritance Tax and Gift Tax Act, the actual owner is liable to pay gift tax. In other words, the actual owner’s liability to pay gift tax pursuant to the proviso to Article 4(1) of the Inheritance Tax and Gift Tax Act is the inherent owner’s own tax liability and its nature differs from the joint and several tax liability to pay gift tax pursuant to Article 4(5) of the Inheritance Tax and Gift Tax Act.

However, the Tax Tribunal makes a re-examination decision in the form of a decision on a taxpayer's request for a trial. Since such re-examination decision is also made by the Tax Tribunal, it is bound by the administrative agency, and the relevant administrative agency must immediately take necessary measures in accordance with the purport of the decision (Articles 80, 81, and 65 of the Framework Act on National Taxes). In particular, the binding force of the decision extends to the judgment on the specific grounds of illegality, such as the order of the decision and the recognition and judgment of the facts constituting the premise

In addition to the statements in Gap evidence Nos. 8, Eul evidence Nos. 2 and 4, the plaintiff submitted a written confirmation to the defendant on June 25, 2014 that the plaintiff donated the total amount of KRW 1 billion to the defendant as the purchase price of the shares of this case to the defendant on June 25, 2014, and ② The Tax Tribunal must state that the source of the acquisition fund must be the person who actually reverts, not BBB, in order to consider the shares of this case as a title trust on December 31, 2015. Such circumstances have not been verified, and it is probable that the plaintiff voluntarily prepared and submitted a written confirmation due to concerns over the expansion of the scope of the tax investigation, and ③ the defendant requested the plaintiff to submit a supporting document such as source of funds, etc. three times during the re-audit period, but the defendant did the disposition of this case again (it cannot be recognized that the defendant discovered new data during the re-audit period).

In spite of the decision of the Tax Tribunal to conduct a reinvestigation (in particular, it is explicitly pointed out that the source of the acquisition fund should be not BB but the actual owner should be separate in order to dispose of it as the defendant, and that such circumstances have not been verified) and that the disposition of this case was made because the plaintiff did not merely request the explanation of the source of the fund and did not comply with the explanation after requesting the plaintiff to conduct a reinvestigation. It is insufficient to view that the re-audit was conducted in accordance with the purport of the re-audit decision.

Furthermore, based on the instant disposition, the Defendant reported that ① the Plaintiff controlled BB in 000 to 100%, ② lack of objective evidence to verify the source of the purchase price of the instant shares, ③ lack of business performance capable of verifying the substance of BB, and tax reports (Evidence 4). However, the Plaintiff’s confirmation document (Evidence 2) means that the Plaintiff donated the acquisition price of the instant shares to BB, and even according thereto, it is the purport that the acquisition price of the instant shares was attributed to BB, and it is difficult to deem that the instant shares acquired with such funds were nominal in B, and as long as there is no proof that the beneficial owner of the source of the acquisition fund was not BB, it is insufficient to recognize that the Defendant’s mere fact that the actual owner of the instant shares and the nominal owner of the instant shares were different.

In full view of these circumstances, the instant disposition is against the binding force of the re-audit decision made by the Tax Tribunal, and it cannot be said that Article 45-2 of the Inheritance Tax and Gift Tax Act applies because it is difficult to deem that the actual owner and the nominal owner of the instant shares are different. Therefore, it is also unlawful.

3. Conclusion

Thus, the plaintiff's claim of this case is accepted on the ground of the reasons.