The case holding that, in case where stocks listed in the Korea Securities Dealers Association brokerage market are transferred, the method of first-aid and first-aid should not be applied on the ground that the date of acquisition of transferred stocks cannot be confirmed in calculating the acquisition value thereof.

The case holding that in case where stocks listed in the Korea Securities Dealers Association brokerage market are transferred, the method of securities depository system's purpose or operation in calculating the acquisition value, the legal nature of the entry of account transfer in the customer account book of a securities company, the specific method of transfer stocks under the Transfer of Stock in accordance with the Transfer of Stock Act has been adopted and operated by a securities company to confirm long-term holding stocks of a customer, so the transfer stocks can be identified by the acquisition date, and on the other hand, in calculating transfer margin for calculating transfer income tax, it is meaningful to distinguish and manage stocks by the date of acquisition, it shall not be deemed that the transfer stocks do not constitute cases where the date of acquisition cannot be confirmed, and thus, the latter

[1] Article 98 of the former Income Tax Act (amended by Act No. 6292 of December 29, 200), Article 162 (5) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 17032 of December 29, 200), Articles 174 (4), 174-3 (1) and (2), and 174-4 (1) of the Securities and Exchange Act, Article 80 (7) of the former Enforcement Decree of the Restriction of Tax Reduction and Exemption Act (amended by Presidential Decree No. 15976 of December 31, 1998), Article 20 of the Framework Act on National Taxes

Plaintiff (Law Firm Chungcheong, Attorneys Kim Dong-dong et al., Counsel for the plaintiff-appellant)

Head of Mapo Tax Office

August 23, 2005

1. The Defendant’s disposition of imposition of capital gains tax of KRW 340,550,820 against the Plaintiff on June 24, 2004 shall be revoked.

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

The same shall apply to the order.

1. Details of the disposition;

A. As of December 31, 1999, the Plaintiff owned 114,548 shares issued by UNCF Co., Ltd. (hereinafter “NFF”). However, the Plaintiff became a major shareholder of the non-party company due to the total of 103,598 shares issued by the non-party company owned by the husband and the total of 218,146 shares issued by the non-party company, thereby exceeding 3% of the shares issued by the non-party company.

B. However, upon the registration of the non-party company on July 4, 200 at the Korea Securities Dealers Association brokerage market (hereinafter "Market"), the Plaintiff reported and paid KRW 301,227,160 to the first transfer of the shares acquired later on the basis of the date of entry and purchase of the shares of the non-party company listed in the ledger of the Korea Securities Depository (hereinafter referred to as "BS market") as KRW 2,094,88,270, which was calculated on August 9, 200 to December 26, 200, through a truster account opened at the e-mail branch of securities (hereinafter referred to as "new securities"), and transferred KRW 55,508 shares in the KOSDAQ.

C. On the ground that the acquiring time of the above transferred stocks has not been verified by the stock issuance number, etc., and thus the acquisition time is unclear, the Defendant first transferred the stocks first acquired pursuant to Article 98 of the Income Tax Act (amended by Act No. 6292 of Dec. 29, 2000; hereinafter the same shall apply) and Article 162(5) of the Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 17032 of Dec. 29, 2000; hereinafter the same shall apply) to the first transfer of the stocks (first in first in first in first in first in first in first in second in second in second in second in second in second in second in second in second in second in third in third in third in third in third in order in 27,754,00 won to the Plaintiff on June 24, 2004, and issued the instant disposition

[Ground for recognition] Unsatisfy, Gap 1

2. Whether the instant disposition is lawful

A. The parties' assertion

(1) Won high

The Defendant’s disposition of this case, which deemed otherwise, was unlawful even if all securities companies adopted the method of ex post facto withdrawal of stocks deposited with the Korea Securities Depository, dealt with that the Plaintiff later acquired stocks in transferring Nonparty Company’s stocks issued by Nonparty Company, and thus, deemed otherwise to have first transferred the stocks acquired.

(2) Sheetion;

The stock transaction at the KOSDAQ market is conducted only on the account of a securities company, and the stock certificates are not delivered directly, but the stock certificates are not specified, and the transfer of stocks does not actually take place by the ex post facto ex post facto ex post facto ex post facto ex post facto ex post facto ex post facto ex post facto ex post facto ex post facto ex post facto. Thus, the non-party company’s stocks transferred by the Plaintiff are unclear when the time of acquisition is taken. Thus, the disposition of this case that deemed the first of the stocks acquired by the first ex post facto ex post facto ex post facto

B. Relevant statutes

The entries in the attached statutes are as follows.

C. Facts of recognition

(1) On July 30, 1999, the Plaintiff acquired 114,548 shares issued at the time of issuing new shares by issuing new shares of the non-party company and entered the Plaintiff’s consignment account (Account Number omitted) opened on July 20, 200 after the KOSDAQ was registered at the KOSDAQ market on July 4, 200, and thereafter deposited the above shares in the Plaintiff’s consignment account (Account Number omitted) opened on behalf of the non-party company on July 20, 200. From August 9, 200 to December 26, 2000, the Plaintiff acquired 24,800 shares in the KOSDAQ market and transferred 5,508 shares as of December 31, 200.

(2) Accordingly, the Plaintiff calculated the transfer value of KRW 5,467,087,10 as indicated in the table 1 below, and the acquisition value of KRW 2,094,88,270 as indicated in the following table 1, and reported and paid capital gains tax of KRW 301,227,160 after calculating gains from transfer in accordance with the following table 2, the Defendant calculated the acquisition value of KRW 27,754,00 according to the first class method as indicated in the table 2 below, and calculated capital gains from transfer again.

(2) In the case of 22,730,270, 2730, 2730, 382,349, 468, 468, 468, 448, 448, 448, 416, 416, 602, 7182, 767, 270, 3820, 3820, 3820, 349, 468, 468, 416, 702, 7182, 067, 274, 270, 301, 270, 270, 274, 647, 607, 647, 641, 777, 7747, 980, 5820

(3) The reason that the transfer of stocks accompanying actual objects, such as loss, theft, etc. caused by actual possession of stocks, complexity of the receipt of actual stocks, increase of expenses for issuance of stock certificates, etc., even at the KOSDAQ market, is inefficient.

Article 174 of the Securities and Exchange Act

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Article 174-2

Pursuant to the provisions of each of the above, when a securities company or customer deposits all of the shares owned by the securities company with the Korea Securities Depository (the new securities also deposited 114,548 shares of the non-party company deposited by the Plaintiff on July 20, 200), the depositor or customer’s account book shall enter the issuer, type, items, and quantity of shares deposited by them, and subsequent stock transactions shall not involve delivery of actual shares, and thereafter, if shares are purchased from the account due to the account due to the account transaction system in the KOSDAQ market without accompanying delivery of the actual shares, the shares shall be deemed to have been deposited, and if shares are sold, the shares shall be deemed to have

(4) However, in cases where a person owns specific stocks for three or more years, the former Regulation of Tax Reduction and Exemption Act (amended by Act No. 5584, Dec. 28, 1998; hereinafter the same shall apply) newly established on December 31, 1997 (amended by the Restriction of Special Taxation Act (amended by Act No. 5584, Dec. 28, 1998; hereinafter the same shall apply) Article 81-3 [the same shall apply as Article 91 of the Restriction of Special Taxation Act (amended by Act No. 6297, Dec. 29, 200)] shall not add the dividend income from such stocks to the tax base of global income, and the withholding tax rate shall also be reduced by 10/100, and if a person transfers a part of stocks, he may benefit from the tax later by continuously transferring the stocks acquired in the way of holding them first and by holding them later (amended by Presidential Decree No. 2380, Jul. 19, 20197).

(5) According to the above legislation, when a securities company pays dividends to a stock-listed corporation or Association-registered corporation, it separates whether the shares of the shareholders are long-term holding shares, and notifies the Korea Securities Depository of the contents thereof. However, a securities company cannot confirm whether the shares deposited in the account of a customer are long-term holding shares solely with the items and quantity of the shares. As such, since January 1, 1998, effective Article 81-3 of the former Adjustment Act, the date of purchase of the remaining shares held by a customer was entered in the customer account book. In addition, in order for a securities company to specify the date of purchase of the remaining shares, if the customer transfers only part of the shares of the same category of shares, it shall be treated that

(6) Ultimately, in light of the purport of Article 80(7) of the former Enforcement Decree of the Conciliation Act and the customer’s interest, all securities companies have been managing the customer’s account by first selling shares through the method of delivery, unless the customer specified shares specifically transferred at the time of the transfer of shares, taking into account the purpose of Article 80(7) of the former Enforcement Decree of the same Act.

(7) On the other hand, the Plaintiff issued an order for electronic trade of stocks on the KOSDAQ market by using a computer installed with the home exchange system instead of alternative securities (if the Plaintiff sells stocks on the market, it may issue an order to sell stocks on the computer market within the limit of the balance of stocks deposited with the Korea Securities Depository after entering the consignment account, within the scope of the balance of stocks deposited with the Korea Securities Depository). On the other hand, when the transaction is conducted, the amount of stocks between the Stock Exchange that deposits securities and stocks instead of managing the

(8) On February 18, 1999, when the Plaintiff sold Non-Party Company’s shares, it managed the Plaintiff’s account by means of automatic processing from the shares purchased or stored in the last place on the date of entry in the customer account book (the date of entry or purchase) in accordance with the ex post facto ex post facto ex post facto ex post facto ex post facto ex post facto ex post facto ex post facto ex post facto ex post facto ex post facto ex post facto ex post facto ex post facto ex post facto ex post facto ex post facto ex post facto ex post facto ex post facto ex post facto ex post facto ex post facto ex post facto ex post facto ex post facto ex post facto sales (the date of purchase). The Plaintiff did not raise any objection thereto (as of December 31, 200, the ex post facto ex post facto ex post facto ex post facto ex post facto ex post facto ex post facto sales certificate).

[Reasons for Recognition] A without dispute, A2, 3 (part), 4-1, 2 (part), 5, 6-1, 2, 7, 8, 9-1, 2, 10-1, 2, 2-1 through 4, 2-1, 3, 4-1, 4, 5, 6-1 and 2, 7, 7

[Evidence Evidence] Gap 3 (Partial) and Gap 4-2 (Partial)

(d) Markets:

(1) Article 174(4) of the Securities and Exchange Act provides that the Depository may keep deposited securities by mixing them with the types and items, and Article 174-3(1) of the same Act provides that a person who enters the customer account book and the depositors account book shall be deemed to possess the securities respectively. Article 174(2) of the same Act provides that where a substitute entry in the customer account book and the depositors account book is made for the purpose of transferring securities or establishing a pledge, it shall have the same effect as a delivery of securities. Article 174-4(1) of the same Act provides that a customer of the depositor and the depositors shall be presumed to have co-ownership share on the deposited securities according to the types, items and quantity of securities stated in the

Therefore, in order for a holder of stocks to make a transaction on the KOSDAQ market, he/she shall deposit the stocks with the Korea Securities Depository. Since the customer or the depositor’s sole ownership of deposited stocks is extinguished through the mixed storage of stocks and the ownership is changed to co-ownership, the intensive deposit of stocks is a delegation contract relationship that performs the duty of mixed deposit contract in which stocks are held in custody and transfer of stocks, receipt of principal and interest, etc., and the customer and the depositor are not entitled to claim the return of the same kind and quantity of stocks as the co-owner of the total quantity of stocks, but can also claim only the same kind

However, in order for a customer to transfer deposited shares, if the customer returned the share certificates from the Korea Securities Depository through the Korea Securities Depository and delivered them again to the other party, it is impossible to do so. Thus, under such securities depository system, the method of transferring the share of deposited shares by transfer of the right to claim the return of the object is used, and it takes the same effect as the issuance of shares, as the account transfer is recorded in the customer account book or

(2) In addition, according to the facts acknowledged earlier, since the implementation of Article 81-3 of the former Enforcement Decree of the Early Reduction and Exemption Act grants tax benefits on the dividend income of long-term holding stocks, there is a need to distinguish whether stocks are long-term holding stocks, and on the other hand, all securities companies including securities have to manage the balance stocks of customer accounts by the date of acquisition (the date of entry or purchase). If part of them are transferred pursuant to Article 80(7) of the Enforcement Decree of the former Enforcement Decree of the Early Reduction and Exemption Act, it has been a practice of managing the stocks acquired later in the account first by first transferring them. As such, the method of transferring the stocks adopted and practiceed by securities companies as of January 1, 1998 as of the business process until now, is fair and reasonable in consideration of Article 80(7) of the former Enforcement Decree of the Early Reduction and Exemption Act and the interest of customers, and thus, the tax authorities should respect it in light of the purport of Article 20(7) of the Framework Act on National Taxes.

(3) Ultimately, as the transfer of shares deposited with the Korea Securities Depository under the securities depository system consists of the transfer of shares by the method of transferring the shares deposited with the Korea Securities Depository by the transfer of the right to claim the return of the object, it is impossible to specify the transfer shares by itself. Moreover, the entry of transfer of shares in the account transfer in the customer account book of a securities company which is the depositor is the same as the issuance of shares and cannot be deemed merely a transfer of shares in an account that does not simply mean that the transfer of shares is conducted. Alternative securities are adopted and operated as the basis of the business process of transfer of shares in accordance with the Long-Term Holding Stocks Act to confirm the shares held by customers like other securities companies, and the Plaintiff did not raise any objection. The above method does not mean that the transferred shares can be identified by the date of acquisition even if a part of shares of the same item are transferred over several occasions, and on the other hand, it is meaningful to distinguish and manage the shares by the date of acquisition of the shares in calculating transfer income tax.

(4) Therefore, the Defendant’s disposition that deemed that the first acquired shares pursuant to Article 162(5) of the Enforcement Decree of the Income Tax Act was unlawful on the ground that the acquiring time of the non-party’s shares transferred by the Plaintiff is unclear.

3. Conclusion

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

Authority to create a judge