National Tax Service Review and Transfer 2010-0248

The amount paid separately from the acquisition price of stocks shall not be included in acquisition price.

In addition to the amount paid for acquiring stocks, it is reasonable to view that the amount additionally remitted is not included in the acquisition value of stocks in light of the fact that the transferor corporation treated it as the provisional payment, that part of it is treated as the payment for capital increase with capital increase, and that the remainder is paid separately from the transfer value of stocks.

2011Gudan4308 Disposition of revoking capital gains tax

Kim XX et al.

The director of the tax office.

October 25, 2011

December 13, 2011

1. Each of the plaintiffs' claims is dismissed.

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

Each imposition of capital gains tax of KRW 129,361,730 on June 1, 2010 against Plaintiff KimA and Plaintiff KimB and KRW 52,071,880 on the capital gains tax of KRW 129,361,730 for the year 2006 against Plaintiff KimB shall be revoked.

1. Details of the disposition;

A. On June 20, 2005, the Plaintiffs acquired 36,000 common shares (hereinafter referred to as "the initial shares of this case") of the P City Development Co., Ltd. (hereinafter referred to as "P City Development"), and subsequently, transferred 276,00 shares (hereinafter referred to as "the shares of this case") through two new shares offering (hereinafter referred to as "Plaintiff KimA Kim 141,452 shares, PlaintiffB 134,548 shares, and hereinafter referred to as "the shares of this case"). On September 1, 2006, the Plaintiffs acquired 276,00 shares through two new shares offering (hereinafter referred to as "the shares of this case").

B. On February 13, 2009, the Plaintiffs confirmed and reported the transfer income tax of this case with the transfer value of KRW 11,584,00,000,000, and acquisition value of KRW 9.120,000,000,000. However, on June 1, 2010, the Defendant calculated the acquisition value of the shares of this case as KRW 7.2 billion (in the amount reported by the Plaintiffs, the acquisition value of the shares of this case was not recognized as acquisition value) again, and then determined and notified the Plaintiff KimA of the transfer income tax of KRW 129,361,730 for the year 2006 and the transfer income tax of KRW 52,071,880 for the PlaintiffB for the year 2006 (hereinafter “instant disposition”).

[Reasons for Recognition] Facts without dispute, entry of Eul's evidence 1 to 5 (including each number), the purport of the whole pleadings

2. Whether the disposition is lawful;

A. The plaintiffs' assertion

The Plaintiffs acquired the initial shares of this case KRW 7.920 million (the first loan of this case KRW 6.0 billion and additional loans KRW 1.920 million in lieu of the transfer price), and thereafter paid KRW 1.2 billion as the price for capital increase. Accordingly, even though the acquisition price of the shares of this case was KRW 9.12 billion in total, the disposition of this case reported otherwise was unlawful.

(b) Fact of recognition;

(1) The plaintiffs lent CC, the representative director of XX city development, KRW 1 billion on May 14, 2005, and KRW 5 billion on June 2, 2004. The plaintiffs acquired the shares of this case as a collateral, and thereafter acquired the shares of this case in lieu of satisfaction of the above loan.

(2) The Plaintiffs (actually, Plaintiff KimA) transferred the amount of KRW 370 million on May 23, 2005, KRW 1.550 billion on June 28, 2005, KRW 1.920 billion on a total, and KRW 1.920 billion on a deposit basis, to the account of the development of XX city. However, the development of XX city was treated as KRW 1.92 billion on a deposit basis by the Plaintiffs.

(3) After acquiring the initial shares of this case, the Plaintiffs acquired additional 2.4 million shares through capital increase with capital increase (1.2 billion won for capital increase). The Plaintiffs were treated as having paid KRW 1.2 billion for capital increase in the above KRW 1.2 billion, and the remaining amount of KRW 720 million was paid in the form of debt payment, separately from the transfer price for the instant shares, after transferring the instant shares to the Plaintiffs.

[Reasons for Recognition] The above evidence, Gap evidence Nos. 1 through 3, Eul evidence Nos. 6 and 7, part of the witnessCC's testimony, the purport of the whole pleadings

C. Determination

As to whether the above KRW 1.92 billion is included in the acquisition value of the shares of this case, the above facts and the evidence are as follows. In other words, the plaintiffs paid KRW 7.2 billion for the acquisition of the shares of this case ( KRW 6.2 billion for the first loan of this case + KRW 1.2 billion for the purpose of acquiring the shares of this case, and separately, the amount of KRW 1.92 billion transferred to the account of city development was treated as the plaintiffs' provisional deposit, and the above KRW 1.2 billion out of the above KRW 1.92 billion was treated as the plaintiffs' provisional deposit, and the remaining amount was paid separately from the transfer price of the shares of this case, and there was no data that the plaintiffs separately paid the premium of this case. In light of the above, it is reasonable to deem that the acquisition value of the shares of this case is not included in the acquisition value of the shares of this case.

D. Sub-committee

Therefore, the instant disposition that calculated capital gains by deeming the acquisition value of the instant shares as KRW 7.2 billion is lawful.

3. Conclusion

Therefore, the plaintiffs' claim of this case is dismissed in its entirety as it is without merit. It is so decided as per Disposition.