Cho High Court Decision 201J 5085 ( October 13, 2012)

Since the appraised value per share has increased, the existing shareholders' profits have been acquired.

Since the parent company is a shareholder of the parent company and the representative director is exercising de facto influence on the management, it constitutes a person with a special relationship, and the value of new shares is increased per share after acquiring the issue price, so it cannot be deemed that the plaintiff, the existing shareholder, did not gain

2012Guhap2645 Revocation of Disposition of Imposition of Gift Tax

XX

the director of the tax office of Western

September 27, 2012

October 25, 2012

1. The plaintiff's claim is dismissed.

2. The costs of lawsuit shall be borne by the Plaintiff.

The Defendant’s disposition of imposition of KRW 000 on March 27, 2009 against the Plaintiff on September 1, 2011 is revoked.

1. Details of the disposition;

A. The Plaintiff is a shareholder who owns 20% of the shares issued in XX Trade Group (hereinafter referred to as the “Article”) and its representative director, and Article XX is a parent company that owns 100% of the shares issued in OO (hereinafter referred to as “OO”).

B. On March 27, 2009, O accepted YY Co., Ltd. (hereinafter “YY”) and YY Co., Ltd. (hereinafter “YY”)’s capital increase with Y’s new shares 19,400 shares and 16,600 shares of YY’s new shares as third party per share.

C. As a result of the tax investigation into Article XX, the director of the Central Regional Tax Office notified the Defendant of taxation data that the Plaintiff received 000 won gift benefits from the OO in the process of capital increase increase with consideration under paragraph (1) on the ground that the Plaintiff was a shareholder company of the Plaintiff under the fact that Y and △△ was a subsidiary company under the control of the Plaintiff.

D. On September 1, 201, the Defendant decided and notified the Plaintiff of the gift tax amount of KRW 000 on March 27, 2009, according to the above taxation data notification.

E. The Plaintiff appealed and filed an appeal with the Tax Tribunal on November 7, 201, but the appeal was dismissed on March 12, 2012.

[Ground of recognition] Facts without dispute, Gap evidence 1, Eul evidence 1, Eul evidence 1, 2, 3, 5 through 9 (including each number), the purport of the whole pleadings

2. Whether the disposition is lawful;

A. Summary of the plaintiff's assertion

The plaintiff asserts that the disposition of this case is unlawful for the following reasons.

(1) On February 3, 2009, the Plaintiff transferred the entire Y shares owned by the Plaintiff to the Simna on February 3, 2009, and the entire Y shares owned by the Plaintiff to the largestB on February 14, 2009. At the time of issuing new shares for capital increase, the Plaintiff was not a shareholder of Y and Y.

(2) Even if not, the Plaintiff andO do not have any special relationship as stipulated in Article 39(1) of the former Inheritance Tax and Gift Tax Act (amended by Act No. 9916, Jan. 1, 2010; hereinafter the same shall apply), Articles 29(1) and 19(2) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act (amended by Presidential Decree No. 220421, Feb. 18, 2010; hereinafter the same shall apply).

(3) Even if not, the Plaintiff did not acquire any benefit through capital increase with consideration, and thus, the instant disposition violates the principle of substantial taxation as prescribed in Article 14 of the former Framework Act on National Taxes (amended by Act No. 11461, Jun. 1, 2012; hereinafter the same).

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

(1) Whether the Plaintiff was a shareholder of the Y and Y and Yeong.

Upon considering Gap evidence Nos. 2, 4, 7, and 8 (including each number), the overall purport of the pleadings is added to the statement (including each number), Y changed the representative director from the plaintiff to the late Y (Y) and the lowest B (S) around February 13, 2009, and each share transfer and takeover with 100% shares owned by the late A (Y) and the highest B (Y), but the plaintiff did not actually pay shares (including the source of the above share acquisition price). However, even if the plaintiff's assertion was based on the plaintiff's assertion that the above shares were not the actual shareholders of Y, Y, and Y, the plaintiff did not actually receive shares from the plaintiff's maximum share transfer or acquisition period, the plaintiff's claim that the above shares were not made within 1 week due to the fact that the plaintiff did not actually receive shares from the plaintiff's maximum share transfer or acquisition period.

According to the above facts of recognition, since the actual shareholders of Y and Y, are the plaintiffs, the plaintiff's assertion about this is without merit.

(2) Whether the Plaintiff and theO’s special relationship exists

According to Article 29(1) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act, the person who has a special relationship under Article 39(1)2 (c) of the former Inheritance Tax and Gift Tax Act refers to the one under each subparagraph of Article 19(2) where the transferee of new shares and the existing shareholder who received profits from him/her have a relationship under each subparagraph of Article 19(2). As such, the relationship between the Plaintiff and theO

First, the Plaintiff and OO’s health relationship under Article 19(2)7 of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act, Eul’s 20% of the issued shares under Article XX(2)5-2, the Plaintiff’s birth number is 31% of the issued shares under Article XX(2)7 of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act, and Article XX(2)7 of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act provides that the Plaintiff and O’s shares are 10% of the issued shares under Article XX(2)7 of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act and Article 19(2)7 of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act (see, e.g., Supreme Court Decision 70% of the total issued shares and outstanding shares and 20% of the total issued shares and 60% of the total issued shares and 10% of the total issued shares and 60% of the investment of the Plaintiff.

Next, Article 39(1)3 of the former Inheritance Tax and Gift Tax Act provides that "the person who is in a special relationship with the Plaintiff and the OO shall exercise de facto influence over the management of the executives by exercising the right to appoint and dismiss the executives, and by determining the business policy (in this case, in light of the language of the above provision or the form prescribed in Article 26(4)2 and 3 of the Enforcement Decree of the same Act, whether the company belongs to an enterprise group as prescribed by Ordinance of the Ministry of Strategy and Finance shall not be a problem). According to the above facts and evidence, the Plaintiff shall exercise de facto influence over the management of the OO as a shareholder under Article XX, the parent company, and the representative director, the 100% parent company of the OO, and the Plaintiff and the O are in a relationship under Article 19(2)3 of the same Act.

Therefore, the plaintiff and theO constitute a person with a special relationship under Article 39(1) of the former Inheritance Tax and Gift Tax Act, and the plaintiff's assertion on this is without merit.

(3) Whether the principle of taxation on snow elements is violated

First of all, the purport of the legislation of Article 39(1)2 of the former Inheritance Tax and Gift Tax Act, Article 29(1) and (3) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act, etc., on the assertion that the Plaintiff did not acquire any benefit from the issue price of new shares, is that if the issue price of the new shares exceeds the assessed value, the economic benefit equivalent to the difference between the issue price and the appraised value would accrue between the existing shareholders and the third purchaser of the new shares without compensation. In addition, the purpose of legislation and the language of the provision, on the grounds that the Plaintiff’s donation equivalent to the difference between the payment amount of the new shares and the market value of the new shares is subject to gift tax, through the procedure for waiver and acceptance of preemptive rights between the existing shareholders and the third purchaser of the new shares. In light of the above legislative purport and language, where a corporation issues new shares at a price higher than the market value of the existing shares and thus a benefit calculated pursuant to Article 29(3) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act is deemed a gift of 00 won per share after such increase of the above 1000 won per share.

In addition, as to the assertion of violation of the principle of substantial taxation, the plaintiff's assertion that is the premise of the above assertion, i.e., the plaintiff's assertion that the plaintiff did not have any profit from the capital increase with the capital increase in this case, is without merit. Article 14 of the former Framework Act on National Taxes declares the principle of substantial taxation, while Article 3 (1) of the same Act provides special provisions on Article 14 of the same Act, Article 3 (1) of the same Act provides that where the tax law provides special provisions on the above Article 14, the preferential application of the above provision of the Framework Act on National Taxes shall be excluded. Thus, the above provision of the former Inheritance Tax and Gift Tax Act on

(4) Sub-determination

There is no assertion or evidence that the instant disposition is unlawful, and the instant disposition is legitimate.

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit. It is so decided as per Disposition.