Seoul Administrative Court 2010Guhap43198 ( October 19, 2012)

Cho High Court Decision 2010No4022 ( November 25, 2011)

No gift shall be deemed to be in violation of the substance over form principle.

Inasmuch as the fact that a deposit in the name of a person recognized as a donor by a tax authority is withdrawn and deposited in a bank account in the name of a taxpayer is presumed to have been donated to the taxpayer, the entire amount deposited shall not be deemed to be in violation of the principle of no taxation without the law and substance over form.

2012Nu6362 Revocation of Disposition of Imposition of Gift Tax

Song XX

Head of Eastern Tax Office

Seoul Administrative Court Decision 2010Guhap43198 decided January 19, 2012

June 27, 2012

July 25, 2012

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 disposition of imposing gift tax of KRW 000 on the Plaintiff on September 6, 2010 shall be revoked.

1. cite the judgment of the first instance;

The reasoning of this court’s judgment is as follows: (a) adding a judgment on the Plaintiff’s assertion is the same as the relevant part of the judgment of the court of first instance. Pursuant to Article 8(2) of the Administrative Litigation Act and Article 420 of the Civil Procedure Act,

2. Judgment on the plaintiff's assertion

In light of the fact that Song and the Plaintiff returned KRW 000 to the Plaintiff with respect to the amount of the pertinent entry from the Plaintiff following the conciliation established after the instant disposition, the Plaintiff asserts that the instant disposition included up to the above KRW 00 in donated property violates the principle of no taxation without law and the principle of substantial taxation.

According to the statement in Gap evidence No. 15, SongB filed a lawsuit against the plaintiff et al. (U.S. District Court 2010Gahap12902) against the plaintiff et al. (U.S.). On February 10, 2012, where the lawsuit is pending, mediation is conducted to the effect that "the plaintiff and SongCC jointly pays 00 won to Song, with respect to the amount of subscription," the plaintiff and SongCC shall be jointly and severally. However, the standard period for determining the illegality of taxation in a tax lawsuit is not only at the time of the disposition, but also at the time of the acquisition of the property by gift, "the gift tax meets the taxation requirements at the time of the acquisition of the property by gift," and "the donated property (excluding money) is not returned within a certain period of time under the agreement between the parties, and it cannot be viewed that the donation was never made (Article 31(4) of the Inheritance Tax and Gift Tax Act, but it cannot be viewed that the plaintiff's disposal of the property in question and it cannot be accepted.

Since the judgment of the first instance is justifiable, the appeal filed by the plaintiff is dismissed.