Madern 201J 2391 ( October 07, 2011)

It is probable that it will avoid global income tax, etc. and constitutes a title trust for tax avoidance purposes.

The title trust is likely to avoid a considerable amount of global income tax, etc. due to the title trust of stocks, and it is not different from the fact that no actual dividend has been made. Thus, the title trust is deemed to have been made for the purpose of tax avoidance as well as the presumed evasion of criminal proceeds.

2011Guhap6401 Revocation of Disposition of Imposition of Gift Tax

XX

Head of Suwon Tax Office

June 15, 2012

June 29, 2012

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

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

Each disposition taken by the Defendant against the Plaintiff on April 13, 201, the imposition of KRW 000, KRW 000, KRW 000, KRW 000, KRW 000, KRW 000, KRW 000, KRW 000, KRW 000, KRW 000, and KRW 000, KRW 2006, respectively, shall be revoked.

1. Details of the disposition;

A. NewA made a title trust on December 21, 200, each of the shares issued by the Plaintiff, ① 1,000 shares out of 5,00 shares issued by the said Company, ② 10,00 shares issued by the said Company on May 31, 2006; ③ 55,000 shares issued by the said Company on August 31, 2006; ③ 7,000 shares out of the shares issued by the said Company; ④ 10,000 shares issued by the said Company on December 14, 206, respectively.

B. While establishing an OO on September 25, 2006, NewA trusted 10,000 shares issued by the said Plaintiff out of 70,000 shares issued by the said company (hereinafter “the shares of this case, including the shares held in title trust to the Plaintiff, hereinafter “the shares of this case”).

C. The Defendant deemed that newA trusted the instant shares to the Plaintiff for the purpose of tax avoidance. On April 15, 201, the Defendant imposed on the Plaintiff the imposition of KRW 000,000, gift tax for the portion of the donation as of December 21, 2004, ② KRW 000, gift tax for the portion of the donation as of May 30, 2005, ③ KRW 000, gift tax for the portion of the donation as of August 31, 2006, ④ KRW 00, gift tax for the portion of the donation as of September 25, 2006 for the portion of the donation as of September 25, 2006, ⑤ KRW 00, gift tax for the portion of the donation as of December 14, 2006 (hereinafter collectively referred to as the “instant disposition”).

D. The Plaintiff appealed and filed an appeal with the Tax Tribunal on July 4, 201, but the Tax Tribunal dismissed the Plaintiff’s claim on October 7, 201.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1, 2, Eul evidence Nos. 1, 2, 3, and 9, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

1) The disposition of restricting the amount of the share capital to be donated is unlawful, since the company established by the most advanced payment and increased capital was not actually paid for the shares of this case.

2) In order to avoid the presumption of criminal proceeds from the management of an illegal entertainment room, New A made a title trust to the Plaintiff with the instant shares for the purpose of avoiding the presumption of criminal proceeds from the management of the illegal entertainment room, and there was no actual distribution by the said companies, so New A had

B. Relevant statutes

former Inheritance Tax and Gift Tax Act (amended by Act No. 8830 of Dec. 31, 2007)

Article 45-2 (Legal Fiction as Donation of Title Trust Property)

(1) Notwithstanding Article 14 of the Framework Act on National Taxes, in case where the actual owner and the nominal owner are different from the property which requires a registration, etc. for the transfer or exercise of rights (excluding land and buildings; hereafter the same shall apply in this Article), the value of such property shall be deemed to have been donated from the actual owner by the nominal owner on the date when it is registered, etc. to the nominal owner (where the property is subject to a change of ownership, referring to the date following the end of the year following the year in which

1. Where any property is registered in another person's name without the purpose of tax avoidance, or transfer is not made in the name of the actual owner who acquired the ownership;

C. Determination

1) Determination as to the assertion that in the case of a lump sum payment, the provision on donation agenda cannot be applied

On the other hand, it is merely a subjective intention of the promoters or directors who make a payment, even if it is actually used as a means of the best payment of the share capital, in the case of the fictitious payment of the share capital for the purpose of the establishment of a company or the capital increase and immediately withdrawing the share capital immediately after the incorporation of a company or the capital increase. Even if it is actually used as a means of the best payment of the share capital, it is merely a subjective intention of the promoters or directors who make a payment, and thus, the validity of the share capital payment that constitutes a collective procedure such as the incorporation of the company or the capital increase is not determined (Supreme Court Decision 9Du8039 delivered on March 27, 2001). Therefore, the validity of the share capital is recognized and thus, in the case of the title trust of the shares generated therefrom, the provisions of the title trust property under Article 45-2 of the former Inheritance Tax and Gift Tax Act (amended by Act No. 8830 of Dec. 31, 2007, hereinafter referred to as the "former").

2) Determination as to the assertion that there was no purpose of tax avoidance

A) The legislative purport of Article 45-2(1) of the former Inheritance Tax and Gift Tax Act is to recognize an exception to the principle of substantial taxation to the purport that the act of tax avoidance by effectively preventing the act of tax avoidance by using the title trust system. Thus, if the title trust was recognized to have been achieved for any reason other than the purpose of tax avoidance, and only a minor reduction of tax incidental to the said title trust occurs, it cannot be readily concluded that there was "the purpose of tax avoidance" in such title trust. However, in light of the legislative purport as seen above, it is impossible to determine that there was a "the purpose of tax avoidance" in such title trust unless the purpose of tax avoidance is not included in the purpose of the title trust, and it cannot be deemed that there was an intention of tax avoidance by applying the proviso of the said provision, and the burden of proving that there was no intention of tax avoidance in this case is a nominal owner (see Supreme Court Decision 2007Du1931, Apr. 9, 2009; 2007Du1931, etc.). Meanwhile, the title holder did not have any other objective or objective purpose of tax avoidance.

B) In full view of the statements in Eul evidence No. 12 and the testimony of new witness evidence, it is recognized that new shares were held in title trust with the aim of evading additional collection of criminal proceeds. Meanwhile, considering the overall purport of the arguments in the evidence No. 8, No. 3, and No. 8, the plaintiff in collusion with new shares No. 2000 won from January 5, 2007 to October 2008, the plaintiff used 00 won per month by receiving 00 won per month from the representative of the OO's office of the O from the O to the YY's account from Jan. 5, 2008 to Sep. 10, 2008, the plaintiff's new shares were embezzled for the purpose of using 00 won from the YY's corporate account to the YB's living expenses, etc. The plaintiff did not have any other reason to recognize that the new shares were distributed out of the 000-MY's new shares for the purpose of 0000-M.

3. Conclusion

Therefore, all of the plaintiff's claims are dismissed as it is without merit. It is so decided as per Disposition.