early 2012 Middle 5347 ( October 26, 2013)

Since shares are disposed of after being held in title trust and are used in the debt redemption of the title truster, it is reasonable to view them as deemed donation of title trust.

Return of title trust property refers to the return of the relevant title trust property, and it cannot be deemed that the title truster disposes of the trust property and receives the payment thereof.

Article 45-2 of the Inheritance and Gift Tax Act

2013Guhap5075 Revocation of Disposition of Imposition of Gift Tax

Park AA

Head of the tax office

September 4, 2014

October 16, 2014

1. The plaintiff's claim is dismissed.

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

Cheong-gu Office

The Defendant’s disposition of imposing gift tax on the Plaintiff on July 1, 2012 is revoked.

1. Details of the disposition;

"A. The Director of the Gwangju Regional Tax Office: (a) conducted a tax investigation on BB (hereinafter "BB") and thisCC, etc. between April 12, 2012 and May 25, 2012, and notified the Defendant of the taxation data to the effect that thisCC acquired BB shares 590,000 shares (hereinafter "the shares in this case") under the name of the Plaintiff on August 13, 2009, hereinafter "the Defendant notified the Defendant of the taxation data that it acquired BB shares 590,00 shares (hereinafter "the shares in this case"); (b) the Defendant: (c) on July 1, 2012, 201, the Plaintiff was subject to the restriction on the donation of the shares in this case by the Plaintiff pursuant to Article 45-2(1) of the former Inheritance Tax and Gift Tax Act (amended by Act No. 9916, Jan. 1, 2010; hereinafter referred to as "the Inheritance Tax and Gift Tax Act") by 200.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1 through 3, Eul evidence Nos. 1, 2 and 5 (including branch numbers, if any; hereinafter the same shall apply) and the purport of the whole pleadings

2. The assertion and judgment

A. Summary of the plaintiff's assertion

The instant disposition is unlawful for the following reasons.

1) TheCC acquired the instant shares under the name of the Plaintiff and disposed of both the instant shares within the filing period under Article 31(4) of the Inheritance Tax and Gift Tax Act, and this constitutes a case where the donated property was returned to the donor.

2) The instant shares were acquired at will by means of the Plaintiff’s account, etc., and the Plaintiff did not enter into a title trust agreement, etc. with thisCC to determine the instant shares under the Plaintiff’s name.

3) ① The CC purchased 2,455,783 shares from DaD and has already secured the management right of BB prior to the acquisition of the shares. ② The CC acquired the shares of this case, including management premium, at OOCO higher than the trading price, and sold them within 3 months after the acquisition, the transfer margin did not have occurred at all. ③ The reason why the CC acquired the shares of this case in the name of the Plaintiff is that it was required by MaD to purchase all the shares owned by MaD, the main transferor, or that it was to avoid the duty to report to a major shareholder under the Financial Investment Services and Capital Markets Act. The CC did not acquire the shares of this case in the name of the Plaintiff for the purpose of tax evasion.

(b) Related statutes;

It is as shown in the attached Table related statutes.

(c) Fact of recognition;

1) BB was an enterprise registered to the KOSDAQ market around December 6, 2002, and its listing was abolished on April 18, 2012.

"2) ThisCC, around August 2009, entered into a contract with ADD, which is the largest shareholder of BB and the representative director of BB, and AD transfers 4,000,000 shares and management rights of BB to BCC to OO (OOO per share including management rights). A approximately KRW OOOOO on the date of the contract, and the remainder of the OOOOOOOOO was entered into within six months from the date of the contract, and the remainder was to be paid on July 30, 2010 (hereinafter referred to as the “instant share transfer contract”). However, as at the time of the above share transfer contract, AD held some shares in the name of a related party, POD as well as PDD under the name of a related party, POD acquired the shares of the Plaintiff as the transferee, EOOD Association, Kim Jong FD, Kim Jong FD, MaG, and her husband II under the name of the transferor.

4) In addition, upon receipt of the remainder payment of OOE on August 10, 2009, thisCC and SDR entered into a special agreement with BB to take overall charge of BB’s petroleum chemical business until July 31, 2010 by paying OOE again to BB, and acquiring the chemical balance business part of BB’s petroleum chemical business until July 31, 2010.

5) Meanwhile, according to the instant share transfer contract on August 4, 2009, thisCC acquired shares 2,455,783 shares (12.44%) in the name of BB from AD from BD (i.e., OO members per share x 2,455,783 shares) in the OO (i.e., shares x 2,455,783 shares). Around that time, thisCC completed the transfer of entry into the register of shareholders and took office as the representative director of BB.

6) In addition, under the above share transfer contract on August 13, 2009, thisCC acquired 560,167 shares each share from DoD, Kim HH and EE Scholarship under the name of the Plaintiff, Kim HH and Foundation, and completed the change of entry into the name of the Plaintiff and this II on the same day.

7) Thereafter, from August 31, 2009 to September 15, 2009, thisCC sold all of the instant shares in the form. At the time, thisCC was a major shareholder (not less than 5%) under Article 157(4) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 22580, Dec. 30, 2010) and was liable to pay capital gains tax in the event that capital gains accrue from the sale of the instant shares.

[Reasons for Recognition] The facts without dispute; Gap evidence Nos. 4 through 6; Eul evidence Nos. 3, 4, 6, and 7; the inquiry result against the Seoul Regional Tax Office of this Court; the fact inquiry result to the Seoul Regional Tax Office of this Court; the purport of this Court; the whole

(d) Whether Article 31 (4) of the Inheritance Tax and Gift Tax Act is applicable

On the other hand, if it is interpreted that gift tax cannot be imposed on the grounds that the title trustee’s return of the price for disposal of the property held in title trust or the equivalent amount of the value of the property donated to the title truster is deemed to be a donation, the purport of the law to restrain title trust for the purpose of tax avoidance would be eliminated. The object to be deemed a donation pursuant to Article 45-2(1) of the Inheritance Tax and Gift Tax Act is the instant shares itself. Even if the instant shares are sold within three months and the sales price belongs to CC, the truster, who is the trust, even though the instant shares were sold within the scope of three months, it cannot be deemed that the property donated pursuant to Article 31(4) of the Inheritance Tax and Gift Tax Act was returned (see, e.g., Supreme Court Decision 2005DuOOO, Feb. 8, 2007). Accordingly, the Plaintiff’s assertion on other premise

E. Determination as to whether there was an agreement on title trust

1) Relevant legal principles

The provision on deemed donation under Article 45-2(1) of the Inheritance Tax and Gift Tax Act shall apply in cases where a real owner or a nominal owner makes a registration, etc. in the future of the nominal owner by agreement or communication with respect to the property, the transfer or exercise of the right of the nominal owner. As such, in cases where a tax office unilaterally makes a registration, etc. in the name of the nominal owner, regardless of the intent of the nominal owner, regardless of the intent of the nominal owner. In such cases, the tax office must prove only the fact that the actual owner is different from the nominal owner, and the burden of proving that the registration, etc. of the nominal owner was made by a unilateral act of the real owner regardless of the intent of the nominal owner

2) Determination

In light of the above legal principles, it is not sufficient to recognize that thisCC acquired the instant shares by arbitrarily stealing the Plaintiff’s name, solely with the statement No. 7, as to the instant case, and there is no other evidence to acknowledge it.

Rather, comprehensively taking account of the overall purport of the arguments cited earlier, the Plaintiff: (a) as a senior high school of thisCC, worked for the company operating or exercising substantial influence; (b) upon the request of thisCC, the Plaintiff appears to have opened a securities account in its own name; (c) provided personal seal impression, seal impression, passbook, passbook, ID, and password to thisCC; and (d) on September 5, 201, the Plaintiff also decided on September 5, 201 to request for the establishment of a securities account, seal impression, and seal impression, in relation to the instant case of business embezzlement, etc. of thisCC; and (b) as such, the Plaintiff had no doubt as to what money or stocks were used. Comprehensively taking account of the fact that the Plaintiff prepared a written statement stating that “the Plaintiff should have found another workplace on the ground of this case’s request,” the Plaintiff’s assertion as to the purpose of tax avoidance is also reasonable to deem that the Plaintiff explicitly or implicitly delegated the acquisition of the instant shares.”

1) Relevant legal principles

The legislative purport of Article 45-2(1) of the Inheritance Tax and Gift Tax Act is to recognize an exception to the substance over form principle in the purport that the act of tax avoidance using the title trust system is effectively prevented, thereby realizing the tax justice. Thus, if the title trust was recognized to have been made for reasons other than the purpose of tax avoidance, and it is merely a minor reduction of tax incidental to the said title trust, it cannot be readily concluded that there was such a purpose of tax avoidance. However, in light of the legislative purport as above, only if the purpose of the title trust is not included in the purpose of tax avoidance, it is impossible to determine that there was a purpose of tax avoidance by applying the proviso of the said provision, so it cannot be deemed that there was an intention of tax avoidance. In addition, the burden of proving that there was no purpose of tax avoidance exists a person who asserts it (see, e.g., Supreme Court Decision 2013DuOOOO, Oct. 17, 2013).

Furthermore, as the nominal owner who bears the above burden of proof, there was an obvious objective irrelevant to the tax avoidance to the extent that it is deemed that there was no tax avoidance purpose in the title trust, and should be proven to the extent that if there was ordinary doubt by the evidence objectively and objectively acceptable that there was no tax avoidance at the time of the title trust or in the future (see Supreme Court Decision 2004Du204, Sept. 22, 2006). Whether there was such tax avoidance purpose should be determined at the time of the title trust of stocks at the time of the title trust, and it should not be determined as to whether there was such tax evasion (see Supreme Court Decision 2012Du200, Nov. 28, 2013).

2) Determination

In light of the above legal principles, this case's stocks were purchased from MaD on August 4, 2009 from MaD to 2,455,783 shares and then become the largest shareholder, and then purchased the shares in this case's name from MaD's specially related parties. The average trading price for the two months before and after the purchase was made was OO, the average transaction price for the two months before and after the purchase was made was OO, as seen earlier. Since this CC sold all of the shares in this case's place until September 15, 2009, according to the above facts, this CC purchased the shares in this case's market price higher than the market price and was damaged by selling them in the market price, and there are circumstances where this CC did not actually generate transfer margin.

However, the following facts found as follows: (i) even if thisCC actually sustained losses by selling the instant stocks in its name, whether there was a tax avoidance purpose should be determined as at the time of the title trust; (ii) insofar as there was no room to increase the stock price at the time of subsequent sale at the time of title trust, it cannot be readily concluded that there was no purpose of tax avoidance merely because it acquired the instant stocks at a price higher than the market price, including the management right premium, due to the fact that the Plaintiff acquired the instant stocks at a price higher than the market price. (ii) Furthermore, thisCC was a person liable to pay capital gains tax as the largest shareholder of BB, while the Plaintiff did not do so, the global income tax rate of 2009 was 6%; (iii) while the Plaintiff’s global income tax rate of 209 was higher than the global income tax rate applied when acquiring the instant stocks in its name, it may be said that this combined income tax was not imposed by distributing the stocks to the Plaintiff, etc.; and (iv) even if the Plaintiff did not have any reason to acknowledge the Plaintiff’s request to purchase the instant stocks or its related stocks under the title trust agreement.

Therefore, the plaintiff's assertion on this part is without merit.

3. Conclusion

Therefore, the plaintiff's claim of this case is reasonable, and it is decided as per Disposition.