Article 34-4 of the former Inheritance Tax Act (amended by Act No. 4022 of Dec. 26, 198), Article 41 (1) and (2), and Article 41-3 of the Enforcement Decree of the same Act (amended by Presidential Decree No. 13196 of Dec. 31, 1990), and Article 9 of the same Act concerning the assessment of value of donated property shall apply in the purpose of legislation of the same Act, and in the calculation of the established taxable requirements or taxable value of the same provision (negative)

Article 34-4 of the former Inheritance Tax Act (amended by Act No. 4022 of Dec. 26, 198), Article 41 (1), (2), and Article 41-3 of the Enforcement Decree of the same Act (amended by Presidential Decree No. 13196 of Dec. 31, 1990), the legislative intent of Article 41-3 of the same Act is to impose gift tax on a person with a special relationship as prescribed by the Act, which is donated a gift equivalent to the amount of payment of stocks and the market value of the stocks through the procedure of waiver and takeover of preemptive rights to new stocks. In light of the legislative intent and the text of the provision, the taxable object of gift tax is the difference between the amount of payment at the time of payment and the amount of market value at the time of payment at the time of the stock price which is the interest corresponding to the remarkably low price under the above Acts and subordinate statutes, so the provisions of Article 9 of the same Act on the assessment of the value of the donated property are not applicable in discussing the establishment of taxable requirements or the calculation of the taxable value.

Article 34-4 of the former Inheritance Tax Act (amended by Act No. 4022 of Dec. 26, 1986); Article 41(1) and (2), and Article 41-3 of the Enforcement Decree of the same Act (amended by Presidential Decree No. 13196 of Dec. 31, 1990)

Plaintiff

Head of the tax office

Seoul High Court Decision 90Gu11617 delivered on August 27, 1991

The judgment below is reversed and the case is remanded to Seoul High Court.

1. According to the reasoning of the judgment below, the court below assessed the following facts on March 24, 1987 as a shareholder of ○○○ Co., Ltd. and the above company as a shareholder of ○○○ Co., Ltd., 20,000 won at 20,000 won and 50,000 won at 30,00 won, and assessed the above new shares at 40,000 won as stated in Article 41(2) of the former Enforcement Decree of the Inheritance Tax Act (amended by Presidential Decree No. 13196, Dec. 31, 1990) at the time when the plaintiff and the non-party 1 et al., who had a special relationship under Article 41(2) of the former Enforcement Decree of the Inheritance Tax Act (amended by Presidential Decree No. 13196, Dec. 31, 199) did not accept 3,240 shares and assessed the price of the above new shares at 30,000,000 won per share.

2. Article 34-4 of the former Inheritance Tax Act provides that a person who has received benefits as determined by the Presidential Decree as consideration for remarkably low ratio of shares from the person having a special relationship with the company concerned as determined by the Presidential Decree shall be deemed to have received such benefits, and Article 41(1) of the former Enforcement Decree provides that the scope of consideration significantly low or poor under the above Act shall be limited to the scope of specially related persons. Meanwhile, Article 41-3 of the former Enforcement Decree provides that the scope of benefits as determined by the Presidential Decree under Article 34-4 of the Act shall be limited to the scope of the specially related persons, while Article 34-4 of the former Enforcement Decree provides that, in allocating shares or equity shares (hereinafter referred to as “new shares”) to increase the amount of capital or investment of the corporation, shareholders or investors (hereinafter referred to as “shareholders”) are entitled to receive new shares in excess of their share ratio, the difference between the amount of payment of new shares and the value of shares under Articles 5 through 7 of the Act at the time of the establishment of the market price of the gift tax in light of the language and purpose of the above provision.

As a result, the court below erred by misapprehending the legal principles on the interpretation of the above provisions, which affected the conclusion of the judgment, and thus, the ground for appeal assigning this error is with merit.

3. Therefore, the judgment of the court below is reversed and the case is remanded to the court below. It is so decided as per Disposition by the assent of all participating Justices.

Justices Choi Jae-ho (Presiding Justice)