Whether the provision on deemed donation can be applied to forfeited shareholders in the event of an elevated capital increase.

It is reasonable to view that shareholders and directors at the time of capital increase with capital increase and the waiver of the preemptive right to new shares, have agreed explicitly or implicitly, or have ratified it later.

상속세밎증여세법 제39조증자에 따른 증여의제

상속세밎증여세법시행령 제19조금융재산상속공제

1. All of the plaintiff's claims are dismissed.

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

Cheong-gu Office

The Defendant’s disposition of imposition of gift tax of KRW 507,657,810 against the Plaintiff on March 16, 2006 is revoked.

1. Details of the imposition;

A. On January 28, 2001, 2001, ○○○○ Co., Ltd. (hereinafter “○○○○○”) was a corporation established for the purpose of software development, production and sale, and capital was 200 million won (40,000 shares issued in total) at the time of its incorporation.

B. On November 29, 2001 and February 25, 2002, 2002, the ○○○ issued each of the new shares as KRW 185,102 (value assessed 9,25,100,000) with KRW 50,00 per share on November 29, 2001. On February 25, 2002, the ○○○ issued 10,000 new shares with KRW 50,00 per share (value assessed 50,00 per share) with KRW 50,00 (value assessed 50,000) with KRW 10,00 per share. The other shareholders except the ○○○, a representative director, renounced the preemptive right and acquired the entire shares by Kim○○○○.

C. From September 26, 2005 to November 4, 2005, the director of the regional tax office of ○○○○○ has investigated the change of corporate tax and shares with respect to ○○○○○○○ from September 26, 2005, and as a result, he has given up the subscription of new shares issued at a higher price than the market price by shareholders other than Kim○○, and determined that the Plaintiff in a special relationship with Kim○○○○ was a donation of KRW 1,269,000 and KRW 44,00,000 each from Kim○○○, and notified the Plaintiff of the result of the tax investigation on November 18, 2005 by applying Article 39 of the Inheritance Tax and Gift Tax Act (hereinafter referred to as the “Inheritance Tax and Gift Tax Act”).

D. On March 16, 2006, the Defendant decided and notified the Plaintiff of KRW 483,866,490 on November 29, 2001 and KRW 23,791,320 on the gift tax of February 25, 2002 (hereinafter “each of the above gift tax determination and notice”), based on the results of the above tax investigation (hereinafter “each of the instant disposition of imposition”).

E. The plaintiff requested a judgment with the National Tax Tribunal on June 14, 2006, but was dismissed on October 20, 2006, and the decision was served on the plaintiff on October 22, 2006.

Facts without dispute over the basis of recognition, Gap 1, 2, Eul 1-1, 2, 3 and 4, and the purport of the whole pleadings

2. Whether each of the dispositions of this case is legitimate

A. The plaintiff's assertion

(1) On March 31, 2003, the Plaintiff was registered as ○○○ shareholder only after being appointed as ○○○○○○’s auditor, and the Plaintiff did not acquire ○○’s new shares or acquire ○○○’s shares prior to each of the above subscription dates. Accordingly, the Plaintiff is not a shareholder of ○○○○○.

(2) In order to deemed the donation of profits acquired when issuing new stocks at a price higher than the market price under Article 39 of the Inheritance Tax and Gift Tax Act, the shareholders of the pertinent corporation should have renounced all or part of the right to receive allocation of new stocks, thereby allocating forfeited stocks. However, the Plaintiff did not know the fact that ○○○ issued new stocks with capital increase until the time of receiving each of the instant dispositions.

Therefore, the Plaintiff is not obligated to pay gift tax under Article 39 of the Inheritance Tax and Gift Tax Act on the grounds that the Plaintiff did not waive his/her preemptive right to new shares increase

(b) Related statutes;

It is as shown in the attached Table related statutes.

(c) Fact of recognition;

(1) On March 7, 2001, ○○○ offered capital increase with consideration. According to the statement on the state of stock fluctuation, the Plaintiff is deemed to have acquired 80,000 shares at that time. The Plaintiff becomes a shareholder (80,000 shares) even in the statement on the state of stock fluctuation prepared thereafter.

(2) The Plaintiff’s South East-dong ○○○○○ (hereinafter “○○”) was a domestic corporation that developed fingerprint-type software and registered on the KOSDAQ as a witness, which was a representative director. However, ○○○○, a U.S. corporation that acquired ○○○○○ with 9.24 million won and 9.4 billion won, (hereinafter “○○○○,” a company that sells an fingerprint-type program developed by ○○○○, was operated by ○○, and hereinafter “○○○○”). When ○○○’s KOSDAQ had been suspended due to its poor management, the Plaintiff’s capital became extinct, and ○○○○○’s KOSDAQ had been suspended. In order to ○○○○ and registered on the KOSDAQ, ○○○○ requested an exchange of shares owned by ○○○○○○ and those owned by ○○○○○○.

(3) On October 19, 2001, Kim ○○ sold ○○○○○○○○○ Co., Ltd. for KRW 10,306,777,50 (the proceeds from sale is to be paid in cash until November 28, 2001) the amount excluding the transfer income tax out of the proceeds from sale was KRW 9,240,427,00, which was owned by ○○○○○○○○○○○○ Co., Ltd. (the proceeds from sale was to be paid in cash).

(4) However, under the foreign exchange transaction regulations at that time, an individual could not make a direct investment exceeding $3 million, and ○○○ was not an indirect investment as an extraordinary foreign corporation. Therefore, Kim○-○ paid KRW 9,240,427,00 to ○○○○ in the form of capital increase with a view to capital increase (the capital increase with a view to November 29, 2001) and indirectly acquired ○○○ shares through ○○○○○○.

(5) On November 29, 2001, ○○ entered into a share sales contract with ○○○○ to purchase KRW 9,240,427,450 shares of ○○○○○ owned by ○○○○○ and KRW 2,733,33 shares.

(6) The ○○○○ acquired the shares of ○○○○ and appropriated them as investment securities. However, the ○○○ applied for legal management in the U.S. court due to the accumulation of deficit in business management. At the time of settling accounts for the business year 2002, the ○○○ dealt with the said ○○○○ shares by reducing the total value on the account books of the said ○○ shares as zero won.

(7) As ○○○○ decided to increase its capital as of February 27, 2002 in order to raise the liquidation cost, ○○○ issued capital increase as of February 25, 2002 to pay the said capital increase, 500 million won of the said new shares as of February 25, 2002, and 10,000 shares of the said new shares also acquired by Kim○○.

(8) The status of ○○○○’s shares held before and after capital increase increase is indicated in the following table.

for each shareholder.

Paid-in capital increase as of November 29, 2001

Paid-in capital increase as of February 25, 2002

Before capital increase

After Capital increase

Before capital increase

After Capital increase

Number of Stocks

Ratio of Shares

Number of Stocks

Ratio of Shares

Number of Stocks

Ratio of Shares

Number of Stocks

Ratio of Shares

Total

340,000 Shares

100%

525,102 note

100%

525,102 note

100%

535,102 Shares

100%

○ Kim

200,000 Shares

58.82%

385,102 Shares

73.34%

385,102 Shares

73.34%

395,102 Shares

73.84%

80,000 Shares

23.53%

80,000 Shares

15.24%

80,000 Shares

15.24%

80,000 Shares

14.95%

Other

60,000 Shares

17.65%

60,000 Shares

1.42%

60,000 Shares

1.42%

60,000 Shares

1.21% by mass

(9) At the time of issuing capital increase, ○○○○○ shareholder, other than Kim○○, and the Plaintiff, in addition to ○○○, ○○○○, Kim○, Kim○, Nam○, Kim○, Kim○, Kim○○, and Park○○○, but ○○ was the former ○○○○○, and ○○ was the head of ○○’s strategic planning office (management director), and ○○○ was the head of ○○○○.

(10) According to the meeting minutes of the board of directors, on November 12, 2001, 10:00 a.m., 10:00 a.m., the representative director Kim○, directors Lee○, Kim○○, and Lee○○○○, the auditor attended to make a decision to grant capital increase for new shares (185,102 shares). The new shares are allocated in proportion to the number of shares owned by shareholders listed in the register of shareholders as of November 12, 2001, but the other procedures necessary for issuing new shares were decided to be entrusted to the representative director. However, the board of directors did not actually make such a decision and prepared the meeting minutes as above.

(11) At the time of November 12, 2001, Lee ○○, a director of ○○○, worked as an executive officer at ○○○○○○○○○ (the director of a research institute). The director Kim ○○○○ worked as the head of the team at ○○○○○○○○○○○○○○○, and the director of ○○○○○○○○ also worked at ○○○○○○○, and the director was instructed to handle the work of capital increase with respect to capital increase.

(12) There was no objection from the directors and shareholders of ○○○ in relation to the issue of capital increase with respect to the issue of capital increase and the issue of capital increase.

(13) The Plaintiff asserted that ○○ acquired 80,000 shares out of paid-in capital increase that was made on March 7, 2001, in each of the demands submitted by ○○ upon filing a pre-assessment review request and a request for a national tax trial on each of the instant dispositions.

Facts without dispute over the basis of recognition, Gap's evidence 3 through 14, Eul's evidence 3, 4, Eul's evidence 5-1 through 4, a part of the witness Lee ○, and the purport of the whole pleadings.

D. Determination

(1) Whether the Plaintiff is not a shareholder of ○○○○

(A) The fact of ownership of shares is to be proven by the tax authority through the data, such as the list of shareholders, the statement of stock transfer, or the certified copy of the corporate registry, etc. However, even if a shareholder appears to be a single shareholder in light of the above data, where there are circumstances, such as where the shareholder was stolen or registered in a name other than the real owner, the actual owner cannot be deemed a shareholder, but the nominal owner who asserts that he is not a shareholder should prove that he is not a shareholder (see Supreme Court Decision 2003Du1615, Jul. 9, 2004).

(B) We examine the instant case. As seen earlier, the Plaintiff’s ownership of ○○○○ shares from 2001 to 80,000 shares on the list of changes in stocks, etc. in ○○○○○○○’s shares, and the Plaintiff’s title as ○○○○’s major shareholder, who is a representative director, and claimed that 80,00 shares were acquired at the time of a request for pre-assessment review and a request for national tax trial. In full view of the above, the Plaintiff’s assertion that ○○○ shareholder was a shareholder of ○○○○○○○.

Therefore, the Plaintiff’s burden of proving that the Plaintiff is not the shareholder of ○○○○○. However, it is not sufficient to acknowledge the Plaintiff’s each statement of evidence Nos. 2 through 14 and the testimony of ○○○○ witness alone, and there is no other evidence to acknowledge it. Therefore, the Plaintiff’s assertion

(2) Whether there was no waiver of the preemptive right to new shares issued at the time of issuing new shares

The following circumstances are as follows: (a) capital increase was normally made in appearance until the time of the instant disposition; (b) there was no objection from the Plaintiff as well as other shareholders until the time of the instant disposition; (c) capital increase was made by ○○○○○○○○○○, a U.S. corporation, but investment approximately KRW 9.2 billion in ○○○○○○, but the registration of ○○○○○○’s KOSDAQ was deferred on the wind that ○○○○’s capital was destroyed due to bad management; (d) it was made under mutual agreement between the ○○○○○○○ and the ○○○○○○○○○○○○○○○○○○○○’s representative director to ○○○○○○○○○○ and the ○○○○○○○○○○○’s ○○○○○○’s ○○○’s ○○’s ○○ ○○ ○ ○ ○○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○.

Therefore, it is difficult to accept this part of the Plaintiff’s assertion.

3. Conclusion

Therefore, the defendant's each disposition of this case is legitimate, and the plaintiff's claim seeking revocation is without merit, and all of them are dismissed. It is so decided as per Disposition.

public official law, order of law,

former Inheritance Tax and Gift Tax Act (amended by Act No. 7010 of Dec. 30, 2003)

Article 39 (Presumption of Donation by Capital Increase)

(1) Where a corporation issues new stocks or equity shares (hereafter in this Article, referred to as "new stocks") for the purpose of increasing its capital (including the amount of investment; hereafter in this Article and Article 39-2, the same shall apply), a person who obtains benefits falling under any of the following subparagraphs shall be deemed to have received a donation of the amount equivalent to such benefits:

2. In case where new stocks are issued at a price higher than the market price, the benefits falling under any of the following items:

(a) In case where the stockholders of the relevant corporation have renounced wholly or partially the right to receive new stocks, and where the forfeited stocks are allocated, the benefits acquired by the person who received such allocation, by accepting it, from the person who renounced the new stocks to be acquired;

(3) Persons with a special relationship, scope of minority shareholders, method of calculating profits and other necessary matters under paragraphs (1) and (2) shall be determined by the Presidential Decree.

Enforcement Decree of the former Inheritance Tax and Gift Tax Act (amended by Presidential Decree No. 17828, Dec. 30, 2002)

Article 19 (Inheritance Deductions of Financial Property)

(2) For the purpose of Article 22 (2) of the Act, the term “major shareholder or largest investor as prescribed by the Presidential Decree” means the relevant stockholder, etc. in case where the total sum of stocks held by one shareholder or one investor (hereinafter referred to as the “shareholders, etc.”) and those held by a person with a relationship falling under any of the following subparagraphs is

1. Relatives;

2. Persons other than employees and employees, who maintain their livelihood with the property of such stockholders, etc.;

3. A person who is in the relationship falling under any of the following items with an enterprise group as determined by the Ordinance of the Ministry of Finance and Economy (including persons who are officers of the enterprise concerned), or who is deemed to exercise de facto influence on the management through exercising the right to appoint and dismiss officers of the enterprise, and determining business policies:

(a) Other companies belonging to an enterprise group;

(b) A person who substantially controls an enterprise group;

(c) Relatives of the persons under item (b);

4. Non-profit corporations established by one shareholder, etc. and persons under subparagraphs 1 through 3 who occupy the majority of directors or contribute assets;

5. Nonprofit corporations in which an officer of an enterprise under the main sentence of subparagraph 3 or (a) is the president.

6. A corporation in which one stockholder, etc. and persons under subparagraphs 1 through 5 own 30/100 or more of the total number of stocks issued;

7. A corporation in which one stockholder, etc. and persons under subparagraphs 1 through 6 own 50/100 or more of the total number of stocks issued;

8. Non-profit corporations established by one shareholder, etc. and persons under subparagraphs 1 through 7 who occupy the majority of directors or contribute assets;

Article 29 (Calculation Method, etc. of Value Deemed Donation at Time of Capital Increase)

(1) The term "person in a special relationship" and "person who has accepted or renounced new stocks or forfeited stocks which are in a special relationship" in Article 39 (1) of the Act means the person who has a relationship falling under any subparagraph of Article 19 (2) with the person who has not accepted or forfeited stocks.

(3) The benefits deemed to have been donated pursuant to Article 39 (1) of the Act shall be the benefits calculated according to the following classification:

3. Profits referred to in Article 39 (1) 2 (a) of the Act: An amount calculated by multiplying the amount obtained by subtracting the amount referred to in item (b) from the amount referred to in item (a) by the forfeited number

(a) The value of subscribed stocks per stock;

(b) Value per stock calculated by the following formula: Provided, That in case of a corporation falling under any subparagraph of Article 22 of the Enforcement Decree of the Income Tax Act, where the appraised value per stock after the capital increase is larger than the value per stock calculated by the following formula, the relevant value

(Number of stocks increased due to X capital increase per stock) + (the number of stocks increased due to X capital increase per new stocks) ¡À(the number of stocks increased due to the total number of stocks issued before the capital increase + the number of stocks increased due to the capital increase).

(c) X (the total number of forfeited stocks/actual stocks acquired by a person with a special relationship with the stockholder who has renounced the subscription of new stocks) of the stockholders who have renounced the subscription of new stocks;

General Provisions of Inheritance Tax and Gift Tax Act

39-0-1 Timing for donation of capital increase or decrease.

In the case of capital increase by "cases where the relevant benefits are obtained" in Article 39 (1) of the Act, it means the date of payment of the stock price (in cases where a person who has received a certificate of preemptive rights before the date of payment of the stock price has received a certificate of preemptive rights, the delivery thereof) and in the case of capital reduction, it means the date of resolution of