The Plaintiff should be deemed to have held title trust with the instant shares and had the purpose of tax avoidance.

The actual owner of the instant securities account is the Plaintiff, and it is reasonable to deem that the Plaintiff was the title trust of the instant shares to the instant corporation, and it is insufficient to deem that there was an obvious purpose that is neither a tax avoidance nor a tax avoidance nor a tax avoidance

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

2015Guhap661 Revocation of Disposition of Imposition of Gift Tax

AA

○ Head of tax office

July 17, 2015

August 21, 2015

1. The plaintiff's claim is dismissed.

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

Cheong-gu Office

The Defendant’s imposition of gift tax on September 4, 2013 by KRW 00 ○○○ and KRW 00 ○○○○ on the gift tax of KRW 2006, each of which is imposed by the Plaintiff, shall be revoked.

1. Details of the disposition;

A. On September 14, 2005, the Plaintiff opened the ○ Securities Account (hereinafter referred to as the “Securities Account”) in the name of BBB (trade name before the change: CCC corporation; hereinafter referred to as the “instant corporation”) with the representative director, and purchased and sold the shares of listed corporations, such as EE, etc. (hereinafter referred to as the “the shares of this case”) using the instant securities account from September 21, 2005 to May 2, 2006.

B. The director of ○○○ Regional Tax Office, as described in the above paragraph (a), notified the Plaintiff of each gift tax on December 31, 2005 and on December 31, 2006, pursuant to Articles 45-2 and 4 of the former Inheritance Tax and Gift Tax Act (amended by Act No. 8828, Dec. 21, 2007; hereinafter referred to as the “former Inheritance Tax and Gift Tax Act”), on the ground that the Plaintiff opened the instant securities account and transferred the instant shares to the instant corporation in title trust.

C. Accordingly, on September 13, 2013, the Defendant imposed the gift tax on the donated portion ○○○○○○ and the gift tax on the donated portion on December 31, 2006 on the Plaintiff on December 31, 2005 (hereinafter “instant disposition”).

D. On November 26, 2013, the Plaintiff appealed for a trial to the Tax Tribunal, but on November 26, 2014

11. The dismissal was made on 27.

[Ground of recognition] Unsatisfy, Gap evidence 1 to 4, Eul evidence 1 to 4

each entry and the purport of the whole of the arguments.

2. Whether the instant disposition is lawful

A. The plaintiffs' assertion

1) Although the Plaintiff ordered the employees of the instant legal entity to open a securities account under the Plaintiff’s name, the said employees merely opened a securities account under the name of the instant legal entity and did not reach an agreement on title trust between the Plaintiff and the instant legal entity. The instant securities account pursuant to the Act on Real Name Financial Transactions and Confidentiality should be deemed as owned by the instant legal entity. As such, the Plaintiff cannot be deemed as having held title trust with the instant legal entity.

2) Even if the Plaintiff trusted the instant shares to the instant corporation, the instant securities account was established by the number of employees, and the securities transaction tax, etc. was conducted through a securities company, which was withheld from the securities company, and the transfer income tax following the stock transfer was not imposed on the Plaintiff, who is not the major shareholder, and the tax evasion amount on the dividend income of the instant shares was low, cannot be deemed to have been the purpose of tax avoidance in light of the following:

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

1) Whether a title trust exists

Article 45-2(1) of the Inheritance Tax and Gift Tax Act applies to property, the transfer or exercise of the right of which requires a registration, etc., and where the actual owner and the nominal owner register in the future of the nominal owner under an agreement or communication, regardless of the intent of the nominal owner. In such a case, if the tax authority establishes only that the actual owner is different from the nominal owner, it shall be proved that the unilateral act of the actual owner is performed by the real owner regardless of the intent of the nominal owner, the nominal owner should be the nominal owner (see, e.g., Supreme Court Decision 2007Du15780, Feb. 14, 2008). However, in full view of the following circumstances recognized by adding the overall purport of oral proceedings to the statements in subparagraphs 4 and 6, it is reasonable to deem that the actual owner of the securities account of this case is the Plaintiff, and therefore, it is reasonable to deem that the Plaintiff registered the title trust of the shares in this case to the corporation.

① In the instant securities account, KRW 000 million was deposited on six occasions, and the said money was accounted for as the provisional payment account against the Plaintiff of the instant corporation.

② The Plaintiff transferred ○○○○ billion won from stock transaction, which occurred from stock transaction using the instant securities account, to the Plaintiff’s private account. The instant shares were not included in the short-term trading securities owned by the instant corporation. The said profits from stock transaction were not accounted as the profits of the instant corporation (see subparagraph 4). The actual profits from the instant stock transaction were reverted to the Plaintiff.

③ Around August 2013, the Plaintiff filed a revised return on the dividend income of the instant shares (in 2006, KRW 000,000, KRW 00,000) as the Plaintiff’s individual income.

④ The instant securities account was borrowed from the instant ○○○○○○○○○○○○○○○○ million from the instant ○○ Securities Account, which was held by the instant corporation. In light of the loan amount, transaction period, etc., the employee did not have opened the instant securities account by mistake.

2) Whether there was an objective of tax avoidance

A) The legislative intent of Article 45-2(1) of the former Inheritance Tax and Gift Tax Act is to effectively prevent the act of tax avoidance using the title trust system and realize the tax justice. As such, the proviso to the same Article is applicable only where the purpose of tax avoidance is not included in the purpose of the title trust. In such cases, the burden of proving that the purpose of tax avoidance was not included in the purpose of the title trust lies in the person who asserts the provision (see, e.g., Supreme Court Decision 2013Du16982, Jan. 16, 2014). Furthermore, the application of the presumption of gift cannot be avoided solely on the ground that the nominal owner is not the nominal owner with the purpose of tax avoidance (see, e.g., Supreme Court Decision 2010Du24968, Mar. 28, 2013). In addition, where the title trust was deemed to have been made for any reason other than the purpose of tax avoidance, and it cannot be deemed that there was no possibility of tax evasion reduction in the title trust (see, 20030.

B) As long as the Plaintiff acquired the instant shares through a title trust to the instant corporation, it is presumed that the Plaintiff had an objective of tax avoidance in light of the aforementioned legal doctrine. In addition, in light of the following circumstances that can be acknowledged by comprehensively taking account of the overall purport of the arguments as seen earlier, it is insufficient to deem that the testimony of the statement and witness transfer requirement alone was an obvious purpose unrelated to the tax avoidance to the extent that the presumption was followed and the Plaintiff did not have an objective of tax avoidance. Furthermore, even if the Plaintiff had the main purpose of personal investment, it is reasonable to deem that there was an intention to avoid the comprehensive income tax on the dividend income of the instant shares. Accordingly, the Plaintiff’s assertion on this part is without merit.

① The Plaintiff asserted that the securities account in the name of the instant legal entity was used for personal investment. However, for this purpose, there is no reasonable ground for using the securities account in the name of the instant legal entity, not that of the Plaintiff’s personal name.

② The dividend income from the instant shares was KRW 000,000,000,000,000,0000,0000,0000,0000,0000,0000,0000,0000,0000,0000,000,0000,000,000,000,0000,000,000,000,000,000,000,0000,0000,000,0000,000,0000,000,000,000,000,000,000

③ The Plaintiff, who opened the instant securities account for investment purpose, was able to have sufficiently anticipated that the amount of tax would naturally accrue due to dividend income, failed to file a report. Ultimately, the Plaintiff avoided the tax on the dividend income accrued in 2006 and 2007, and if the dividend income was more generated, the amount of tax evaded by the Plaintiff would have exceeded the amount of tax avoided.

④ Article 45-2(1) of the former Inheritance Tax and Gift Tax Act has the character of ‘tax' that is not ‘tax' in that it imposes gift tax on what is not the substance of the gift in order to effectively prevent the act of tax avoidance by using the title trust system and realize the tax justice.

3. Conclusion

Thus, the plaintiff's claim is dismissed as there is no ground.