Supreme Court Decision 2008Du6813 ( October 14, 2011)

Seoul High Court Decision 2007No. 2007

Gift tax is levied if property is donated to a shareholder of a specific corporation with losses.

In case of a donation of property to a shareholder of a specific corporation with loss, the gift tax is levied, and the loss is also included in the business year of the donation date.

2011Nu1310 Revocation of Disposition rejecting to correct gift tax

OAA 1 other

Head of Sungnam Tax Office

Seoul High Court Decision 2007Nu24410 Decided April 8, 2008

October 5, 2011

October 26, 2011

1. All appeals filed by the plaintiffs are dismissed.

2. The plaintiffs are responsible for total costs of the lawsuit after the filing of the appeal.

The judgment of the first instance shall be revoked. The defendant shall revoke all the disposition rejecting correction of each gift tax made to the plaintiffs on May 25, 2005.

1. The part citing the judgment of the court of first instance

The reasoning of the judgment of this court is as follows: (a) whether the disposition in this case is legitimate; (b) whether the plaintiffs' assertion is legitimate; (b) not applying the "Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 18174 of Dec. 30, 2003)" to the "Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 19328 of Feb. 9, 2006)" to the "Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 19328 of Feb. 9, 2006)" to the "Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 19328 of Feb. 1, 2006). The corresponding part is cited in accordance with

2. Determination

Article 41(1) of the Inheritance Tax and Gift Tax Act (amended by Presidential Decree No. 7010, Dec. 30, 2003; hereinafter referred to as the "Act") provides that losses shall be calculated on the basis of the donation of property to shareholders or investors of a specific corporation for the specific business year under Article 41(1) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act that such losses shall be calculated on the basis of the donation of property belonging to the specific business year no. 1 of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 1814, Dec. 30, 200; hereinafter referred to as the "Enforcement Decree of the Corporate Tax Act") that such losses shall be calculated on the basis of the donation of property belonging to the specific business year no. 1 of the Act that would otherwise be included in the gift of property belonging to the specific business year no. 3 of the Corporate Tax Act. It shall be deemed that such losses shall be included in the donation of property pursuant to Article 18(1)4 of the Enforcement Decree of the Corporate Tax Act.

The judgment of the first instance is justifiable. All appeals filed by the plaintiffs are dismissed.