Plaintiff (Law Firm Dakon, Attorneys Seo Jong-ho et al., Counsel for the plaintiff-appellant)

Samsung Head of Samsung Tax Office (Law Firm Namsan, Attorneys Lee Chang-soo et al., Counsel for the defendant-appellant)

June 15, 2018

Seoul Administrative Court Decision 2015Guhap80338 decided March 23, 2017

1.The judgment of the first instance shall be modified as follows:

A. On July 10, 2014, the part exceeding KRW 26,114,329, and the part exceeding KRW 123,303,439, among the disposition imposing gift tax as stated in the separate sheet “the amount of tax after reduction” on the Plaintiff shall be revoked in entirety.

B. The plaintiff's remaining claims are dismissed.

2. 4/5 of the total litigation costs is borne by the Plaintiff, and 1/5 by the Defendant, respectively.

1. Purport of claim

On July 10, 2014, the imposition of each gift tax stated in the “amount of tax after reduction or correction” in the attached list against the Plaintiff shall be revoked.

2. Purport of appeal

The judgment of the first instance is revoked. The plaintiff's claim is dismissed.

1. Partial cite of the reasons for the judgment of the first instance;

The provisions of paragraphs 1, 2-A, b-1, 2 of the reasoning of this judgment are as follows, except for the partial dismissal or addition as follows. Thus, this part of the reasoning of the judgment of the first instance is as follows: (a) pursuant to Article 8(2) of the Administrative Litigation Act; and (b) pursuant to the main sentence of Article 420 of the Civil Procedure Act, this shall be cited.

The sum of the number of shares in the ○ 2 pages [Attachment 1] shall be from “355,912” to “355,921.”

The value of donated property Nos. 43,400,00 in [Attachment 2] shall be raised from “43,300,000” to “43,300,000.”

○ 5 pages 1 to 4 are as follows.

“1) Summary of the party’s assertion

A) The plaintiff's assertion

The Plaintiff purchased the instant SCP shares from Nonparty 1 on its own account and sold them to Nonparty 1, and did not receive title trust on the part of Nonparty 1. In addition, the Defendant, who is the tax authority, must prove that the instant SCP shares were acquired as the selling price of title trust shares, which can be imposed upon being first deemed donation.

B) Defendant’s assertion

The Plaintiff received the instant SCP stocks from Nonparty 1. Moreover, the Plaintiff, a taxpayer, should assert and prove the non-taxation requirement, which is the shares trusted in the same name by re-acquisition as the sale price of the title trust shares.

○ 9 pages 5 (the part inside the Domark is excluded from the number of parallels) “Non-Party 2” shall be regarded as “Non-Party 2 of the first instance trial.”

2. Parts to be used again (not more than 12 pages 11);

【3) Whether the deemed donation of title trust overlaps with the application thereof

A) Relevant legal principles

Article 45-2(1) main text of the former Inheritance Tax and Gift Tax Act (amended by Act No. 1357, Dec. 15, 2015) (hereinafter “instant provision”) provides that “where the actual owner or title holder of the property necessary for the transfer or exercise of rights (excluding land and buildings; hereafter the same shall apply in this Article) is different, the value of the property shall be deemed to have been donated to the actual owner on the day (where the property is subject to the transfer of rights, referring to the day following the end of the year in which the date of acquisition of ownership falls) the title holder registered as the title holder, notwithstanding Article 14 of the Framework Act on National Taxes.” In addition to the instant legal provision, if it is deemed necessary and appropriate to impose gift tax on the same person by deeming that the property is donated to the actual owner, as an exception to the substance over form principle for the prevention of tax evasion, and thus, it is necessary to prevent the first sale of shares under the title trust agreement from being subject to imposition of gift tax, such as the first sale of shares under the title trust agreement.

B) Determination

In light of the following facts and circumstances, the aforementioned quoted evidence, Gap's evidence, Gap evidence Nos. 16, 26, 27, 28, Eul evidence Nos. 28, and Eul evidence Nos. 28, and Eul evidence Nos. 43, the evidence submitted by the plaintiff alone is insufficient to view that the stocks after December 28, 2007 (hereinafter referred to as "stocks of December 28, 2007" and the remaining shares of title trust, which were the object of the first deemed donation, are acquired as the sale price of shares as of November 9, 2007, and again transferred in the name of the plaintiff. Accordingly, the plaintiff's assertion on this premise cannot be accepted.

① 2007. 10. 16.부터 2012. 9. 3.까지 이 사건 SSCP 주식 거래에 이용된 증권계좌는 원고 명의로 된 △△△△△△증권(2007. 5. 15. 개설되어 2007. 10. 16.부터 주식 거래에 이용됨, 이하 ‘△△△△ 계좌’라 한다), □□□□(2008. 7. 29. 개설되어 2009. 5. 7.부터 주식 거래에 이용됨), ◇◇◇◇◇◇(2009. 6. 25. 개설되어 2009. 7. 1.부터 주식 거래에 이용됨), ☆☆☆☆☆☆(2011. 9. 29. 개설되어 2011. 10. 7.부터 주식 거래에 이용됨) 계좌이고, 특히 △△△△ 계좌는 이 사건 SSCP 주식의 매매 이외에도 수시로 현금 등을 입출금하는 용도로 사용되었다. 그리고 원고 명의의 예금계좌인 ▽▽▽▽(계좌번호 1 생략), ◎◎◎◎[(계좌번호 2 생략), (계좌번호 3 생략), (계좌번호 4 생략)] 계좌 등 사이에서 또는 위 각 예금계좌와 위 각 증권계좌 사이에서 연도별로 수시로 입출금 거래가 이루어졌으며, 위 각 예금계좌나 증권계좌로 소외 1, 소외 1이 자본을 100% 출자하여 설립한 STM 및 소외 1이 운영하는 회사의 직원 또는 소외 1의 지인인 소외 3, 소외 4, 소외 5, 소외 6, 소외 2, 소외 7, 소외 8, 소외 9 등 명의로 여러 차례에 걸쳐 현금이나 계좌이체를 통한 입출금 거래가 이루어졌다.

② Since cash is mixed with other cash deposits in the Plaintiff’s account, it is impossible to specify the sales price of the instant SCP shares by mixing them with other funds. From November 9, 2007, the securities account continuously traded with the instant SCP shares since then on several occasions by Nonparty 1, etc., as seen above. Furthermore, the instant SCP shares were purchased or sold more than 20 times a day and a total number of 10,000 won a day, as seen in the following table. Accordingly, the Plaintiff purchased and sold the instant shares more than 10,000 won a year, and accordingly, deposited the purchase price and the sales price were deposited in the Plaintiff’s account under the Plaintiff’s name. Nevertheless, the Plaintiff did not consider the relationship with the new funds deposited by Nonparty 1, etc., and the amount deposited in the process of repeated purchase, sale, and sale of the shares, without considering the characteristics of the Plaintiff’s first 208 shares purchase price within 10,710,000 shares.

(1) The number of 207 43,15,4615,462, 207, 207, 207, 461, 879, 257, 249, 207, 259, 207, 249, 207, 257, 3629, 257, 297, 257, 297, 257, 297, 257, 297, 257, 297, 257, 297, 257, 297, 257, 297, 257, 297, 257, 364, 297, 257, 297, 297, 209, 346, 207, 07, 097, 289, 25167, 1978

③ In particular, the instant SCP shares were purchased and sold again, and the volume became zero on February 22, 2008 and March 7, 2008 and June 19, 2008, respectively, and again came to reach KRW 7,800 on December 28, 2008. Therefore, it is evident that the instant SCP shares issued after December 28, 2008 were cut off due to the nature of the first donated SCP shares issued on November 9, 2007.

C. Among each disposition of this case, related parts such as apartment acquisition fund and credit card use fee, etc.

1) Summary of the Plaintiff’s assertion

① The Plaintiff’s portion exceeding KRW 49,029,949 out of the credit card use proceeds in 2008, the Plaintiff’s three pages of the first instance judgment [Attachment 2] Nos. 2 (hereinafter “net 2”) 2008, and ② KRW 3,632,196, and ③ KRW 40,534,00 of the acquisition fund of 9 ○○○ apartment was not actually disbursed, and thus, the disposition imposing gift tax is unlawful.

In addition to the money borrowed from Nonparty 1 from around 2007 to around 2013, the Plaintiff is sufficiently capable of acquiring or repaying property, such as KRW 729,590,831, and KRW 31,00,000, and the balance of repayment of existing loans out of new loans ( KRW 40,781,000, and KRW 157,781,782, out of the loans of June 21, 201, and KRW 157,781,782, among the loans of September 19, 2012, and KRW 47,589,70, and KRW 455(1) of the former Inheritance Tax Act, and thus, the gift tax should not be imposed by applying the presumption of donation of stocks under the former Inheritance Tax Act to the amount of the first sale of stocks subject to taxation by applying Article 45(1)5 of the same Act to the amount of sale of stocks under title trust.

2) Relevant legal principles

Article 45(1) of the former Inheritance and Gift Tax Act provides that "where it is difficult to recognize that a person acquired a property by his/her own means in view of his/her occupation, age, income, property condition, etc., as prescribed by Presidential Decree, the acquisition fund of the property shall be presumed to have been donated to the person who acquired the property at the time of the acquisition of the property, and shall be deemed to have been donated to the person who acquired the property." Article 34(1) of the Enforcement Decree of the former Inheritance and Gift Tax Act provides that "Where the sum of the amounts verified pursuant to Article 45(1) and (2) of the Enforcement Decree of the former Inheritance and Gift Tax Act falls short of the value of the acquired property or the amount of repayment of debts: Provided, That where the amount not verified falls short of the smaller of the amount equivalent to 20/100 of the value of the acquired property or the amount of debts repaid or 200 million won, it shall be deemed that the person who acquired the property in question or received directly in return for the acquisition or disposal of the property concerned property."

As a matter of principle, the fact of donation of property, which is a requirement for the imposition of gift tax, is proved by the tax authority. Thus, even if the tax authority establishes a certain occupation at the time of the acquisition of the property and there is a person who has a substantial income from the same, it cannot be presumed that the portion of the fund required for acquiring the property was donated to another person, barring special circumstances, unless there is a special circumstance, to the extent that the portion of the fund required for acquiring the property was not clearly presented to the person who has no occupation or income, and where the lineal ascendant, etc. has a financial ability to make a donation, it is reasonable to presume that the fund for acquiring the property was donated from the person who has a financial power (see, e.g., Supreme Court Decisions 96Nu7205, Apr. 8, 1997; 2003Du10732, Apr. 16, 2004; 2003Du10732, Apr. 16, 2004).

3) Determination

A) Prior to applying Article 45(1) of the former Inheritance and Gift Tax Act, the Defendant, who is the tax authority, must prove the Plaintiff’s value of acquired property or the amount of debt repayment.

However, in relation to Nos. 2, the Plaintiff recognized that the amount actually used was KRW 49,029,949, and the Defendant asserted that the Plaintiff paid KRW 27,266,640 in cash, in addition to the above amount, but it is insufficient to recognize the Plaintiff’s statement of No. 41. Therefore, the Defendant’s assertion on this part cannot be accepted.

As to the Nos. 9, the Plaintiff entered into a contract with Nonparty 10 to purchase KRW 670,00,00,00 with the Plaintiff, on June 6, 2011, when the purport of the entire pleadings is added to the statements in the Evidence Nos. 7 and 44. Nevertheless, on the premise that the Defendant paid KRW 40,534,00 in total, including the acquisition tax, registration tax, etc. of ○○○ apartment prior to the conclusion of the contract, on April 29, 2011, the Defendant imposed gift tax on the Plaintiff on the premise that the Plaintiff spent KRW 40,534,00,00 in total, including the acquisition tax, registration tax, etc. of ○○○ apartment. The evidence alone submitted by the Defendant alone is insufficient to acknowledge that the Plaintiff spent incidental expenses

As to Nos. 6 and 10-3, 4, and 5, the Plaintiff’s payment of KRW 3,632,196, in aggregate, of acquisition tax, registration tax, and expenses for purchasing national housing bonds around January 28, 2010 when acquiring a egratory apartment in light of the overall purport of the pleadings. Accordingly, the Plaintiff’s assertion that this part of expenses was recognized is without merit.

B) In light of the facts acknowledged earlier, the aforementioned quoted evidence, and the overall purport of the pleadings, the Plaintiff’s assertion that Article 45(1) of the former Inheritance and Gift Tax Act cannot be applied to the Plaintiff, considering the following circumstances, with sufficient financial resources.

(1) The Plaintiff cited profits from the sale of the instant SCP stocks as the source of the funds. However, as recognized earlier, it is difficult to conclude that the instant SCP stocks were the Plaintiff’s income unless there is any evidence to prove that Nonparty 1 agreed to withhold the sales profits from the stocks held in title by Nonparty 1 to the Plaintiff. Moreover, as recognized earlier, the Tax Tribunal decided to exclude the Plaintiff’s total amount of KRW 160,480,000 (the amount exceeding twice the total amount of the above income) from the value of donated assets after 2010, considering the Plaintiff’s income and the probability of being used for common use with Nonparty 1 and Nonparty 1, the amount of KRW 7,589,70 from the sales revenue and insurance manager’s income after 2010 may not be deemed as the source of the said apartment 20,480,000 (the amount exceeding two times the sum of the above income) and the Defendant’s disposal of the gift tax on credit card sales amount after 2010.

(2) We examine Nos. 6

In addition to the statements in Gap evidence 3, 16, and Eul evidence 10-1, and Eul evidence 43, the △△△△△△△△△△ was transferred to the △△△△△△△△△△△△△ on December 1, 2009 in its entirety. At the time, the balance of the △△△△△△△△△△△△ was KRW 274,482,477, and the △△△△△△△△△△△△△△△ was purchased from the △△△△△△△△△△△△△△△△ on December 13, 2009 on December 3, 209 through December 28, 2009. The fact that no separate sale or purchase was made until January 20, 2010; the fact that the △△△△△△△△△△ was transferred from the △△△△△△△△△ account to the △△△ account to the 1 million account.

In light of the above facts, since the balance of the account at △△△△△△△△ account on December 1, 2009 and KRW 100 million transferred from the name of Nonparty 6 are mixed, part of the amount used to purchase shares and the remaining amount and the sales price of shares deposited thereafter were successively mixed, and part of the amount deposited thereafter was collected. Thus, it cannot be concluded that KRW 100 million of the acquisition fund of the △△ apartment deposited with Nonparty 11 on January 20, 2010 is the sales price of the SSCP stocks of this case. Accordingly, the Plaintiff’s above assertion is without merit.

(3) We examine Nos. 12 and 16.

갑 제7호증, 갑 제50호증의 1, 2, 3, 갑 제55호증, 을 제43호증의 각 기재에 변론 전체의 취지를 더하여 보면, 원고는 2011. 6. 6. 소외 10으로부터 ○○○○○아파트를 매수하면서 소외 10의 ▷▷중앙회(이하 ‘▷▷’이라 한다)에 대한 2011. 4. 29.자 근저당채무(피담보채무 3억 원)를 인수한 사실, 원고는 2011. 6. 21. ▷▷에서 ○○○○○아파트를 담보로 340,000,000원을 대출받아 같은 날 그 중 3억 원으로 2011. 4. 29.자 근저당채무를 변제하고 40,000,000원을 원고 명의 ▷▷ 계좌(계좌번호 5 생략)에 입금하였다가 2011. 6. 28. 합계 35,000,000원을 출금한 사실, 이후 원고는 2011. 7.경부터 2012. 8.경까지 매월 ▷▷ 계좌에 15,000,000원 내지 20,000,000원 가량의 현금을 입금하거나 ☆☆☆☆ 계좌 또는 ◎◎◎◎ 계좌(계좌번호 2 생략)를 통하여 이체하여, 매월 21.경 ▷▷ 계좌에서 대출원금 14,170,000원 및 그 이자 상당액이 인출되어 2011. 6. 21.자 대출원리금 변제에 사용된 사실, 원고는 다시 2012. 9. 19. ▷▷에서 ○○○○○아파트를 담보로 300,000,000원을 추가로 대출받아 같은 날 그 중 141,620,000원으로 2011. 6. 21.자 대출금 잔액을 변제하고 같은 날 ▷▷ 계좌에 157,781,782원을 이체하였다가 2012. 9. 24. 합계 157,700,000원을 출금한 사실, 원고는 2012. 10. 8. ▷▷ 계좌에 합계 1,200,000원을 입금하여 2012. 10. 15. ▷▷ 계좌에서 대출금 이자 888,986원이 출금되었고, 원고의 ◎◎◎◎ 계좌에서 2012. 11. 6. 1,300,000원이 ▷▷ 계좌로 이체되어 2012. 11. 15. 대출금 이자 1,059,945원이 출금되었으며, 2012. 12. 10. ▷▷ 계좌로 1,460,000원이 입금되어 2012. 12. 17. 대출금 이자 1,025,753원이 출금된 사실, 그리하여 원고는 2011. 7. 21.부터 2011. 12. 21.까지 대출원리금 합계 92,187,608원(=15,480,630원+9,567,847원+5,904,876원+15,411,431원+15,316,762원+15,298,545원+15,207,517원)을 변제하였고, 2012. 1. 25.부터 2012. 12. 17.까지 대출원리금 합계 122,794,564원(=15,192,155원+15,135,351원+15,019,931원+15,021,742원+14,939,295원+14,906,570원+14,819,573원+14,785,263원+888,986원+1,059,945원+1,025,753원)을 변제한 사실을 인정할 수 있다.

According to the above recognition, the Plaintiff’s rent and insurance manager’s income were used as credit card bills, etc., and there is no evidence to prove that the Plaintiff had a substantial re-payment and that there was a substantial income, whereas Nonparty 1, who had maintained close relations with the Plaintiff at the time, had a re-payment to the Plaintiff, so in such a case, it is necessary to clarify the source of the property acquisition fund separate from the funds presumed to have been donated by Nonparty 1 in order to reverse the presumption that the Plaintiff received property acquisition fund from Nonparty 1, and to prove that the fund was used as the acquisition fund of the pertinent property.

In this regard, the Plaintiff asserts that, among new loans, the amount of KRW 197,781,782 (40,00,000 out of loans as of June 21, 201, and KRW 157,781,782 out of loans as of September 19, 201) may be KRW 214,982,172 (=92,187,609 + KRW 122,794,564) of the total amount of loans as above.

그러나 위 인정사실에 의하면, 두 차례에 걸쳐 ▷▷ 계좌에 입금된 대출금 잔액은 입금된 날로부터 열흘 이내에 그 중 상당액이 현금 또는 대체의 방법으로 인출되었는데, 원고는 위와 같이 인출된 대출금 잔액을 어떠한 방식으로 보관하다가 매월 나누어서 ▷▷ 계좌에 입금하였는지에 관하여 분명하게 주장하고 이에 관한 증거를 제출하고 있지 않다. 또한 2011. 6. 21.자 대출금 잔액은 40,000,000원에 불과한데, 그 이후 2012. 9. 19.자 대출금 잔액이 발생할 때까지 대출원리금 변제액은 약 200,000,000원을 초과함에도 이를 변제한 자금의 출처에 대한 주장, 입증 역시 제대로 하고 있지 않다. 그러므로 원고가 재산 취득자금을 소외 1로부터 증여받았다는 추정은 번복되지 않았다고 봄이 타당하다. 따라서 원고의 이 부분 주장 역시 이유 없다.

(d) Calculation of, and theory on, the fair tax amount;

As acknowledged earlier, the dispositions related to the instant SCP stocks are recognized as legitimate. Of the acquisition fund of apartment and the use price of credit card in 2008, the number of years 2008 (Attached Nos. 5) exceeds 49,029,949 won and only the amount exceeding 49,029,949 won, and where the gift tax is calculated again by recognizing 40,534,000 won (Attached No. 12) as each donated property and the remainder as all of the donated property, it is as indicated in the column of “political tax amount” in the attached list. Accordingly, the attached list No. 5 and 12 of each of the dispositions in this case, which exceed the above legitimate tax amounts, should be revoked illegally, and all of the dispositions are justifiable.”

3. Conclusion

Thus, the plaintiff's claim shall be accepted within the above scope of recognition, and the remaining claims shall be dismissed as it is without merit. Since the judgment of the court of first instance is unfair with some different conclusions, the judgment of the court of first instance shall be modified as above.

[Attachment]

Judges Lee Jae-young (Presiding Judge)