Where it is difficult to calculate the market price of unlisted stocks, the supplementary evaluation method under the Inheritance Tax and Gift Tax Act should be applied.

Where it is difficult to calculate the market price of unlisted stocks, the supplementary evaluation method under the Inheritance Tax and Gift Tax Act should be applied.

Legal fiction of donation of title trust property under Article 45-2 of the Inheritance Tax and Gift Tax Act

2013Guhap1012 Revocation of Disposition of Tax Imposition

both AA, HandB

CCC director, DD director

June 11, 2014

4, 2014

1. On June 7, 2012, the imposition of gift tax amounting to KRW 24,705,300, and KRW 313,485,230, and the imposition of gift tax amounting to KRW 255,652,180, and KRW 63,260,660, and each disposition of KRW 255,652,180, as gift tax for the year 2010, which was imposed by the director of the Defendant CCC against Plaintiff YangB on June 1, 2012 is revoked.

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

Cheong-gu Office

The same shall apply to the order.

1. Details of the disposition;

A. On January 2, 2009, 221,00 shares each of the above shares were 13,50 shares of EEE (hereinafter referred to as “EEEE”), 115,90 shares of Y, 58,600 shares of Y Kim H, 33,00 shares of EE, and 221,00 shares each of the above shares were 88,40 shares of EEE (hereinafter referred to as “EE”) between this JJ and 33,00 shares of EE shares, and transfer of ownership to 44,20 shares of EM under the name of this company, such as this case’s sales contract (hereinafter referred to as “sale contract”).

B. The headF that was a shareholder of the NNN (hereinafter referred to as the “NNN”) is 13,000 shares for the NN, the 52,00 shares for the NG, and the 65,000 shares for the Kim H, while the NN was holding each NN shares of the 65,00 shares for the N.

1. 2. A contract for the sale of shares was concluded between theJ, etc. and the saidJ, to transfer 130,000 shares in total to 52,00 shares, KK, L, and KimM respectively (hereinafter “the instant contract”). A contract for the sale of shares was entered into between the saidJ, etc., and transfer was made in the name of theJ, etc. in the name of the register of shareholders of the said company.

C. Since August 5, 2010, LL and KimM entered into a share purchase contract with each of the plaintiffs of 33,150 shares of EE (10,000 won per share) to transfer each of 331,50,000 shares of EE (10,000 won per share), and this JJ entered into a transfer contract with each of the plaintiffs of 19,500 shares of NN (10,000 won per share) to transfer each of 195,00,000 won per share of NN (19,000 won per share; hereinafter referred to as "the sales contract of this case") and accordingly, transfer of each of the plaintiffs' shares to EEE shares of 3,150 shares and NN shares of 19,500 shares of NN (hereinafter referred to as "the shares of this case").

D. On March 15, 2012 through April 11, 2012, a regional tax office conducted a tax investigation on EEE and NN on April 11, 2012 (hereinafter “instant tax investigation”). On August 5, 2010, the instant shares transferred to the Plaintiffs in the future should be returned to the seller, such as EJ, etc.: (i) the instant shares due to nonperformance by EJ, etc.; and (ii) the seller, Ansan, Kim HH, and Ansan II (hereinafter “SG, etc.”) due to the cancellation of the instant sales contract; (iii) the instant sales contract verified that the instant shares were trusted to the Plaintiffs through the instant sales contract; and (iv) on the grounds that there is insufficient evidence of the settlement of accounts due to lack of account books and documentary evidence as of the date of transferring the ownership of the instant shares, the assessment amount per share (EEEE:24,870 won, NNNN/N4, 1450/40) based on the financial statements as of December 31, 2009.

E. According to the above findings, on June 1, 2012, Defendant CCC Head of the tax office rendered a separate decision and notice on KRW 255,652,180, and KRW 63,260,660, and Defendant DD Head of the tax office, on June 7, 2012, Defendant CCC Head of the tax office rendered a separate decision and notice on KRW 24,705,30, and KRW 313,485,230, respectively (hereinafter “each disposition of this case”).

F. On August 5, 2010, the Tax Tribunal confirmed whether the Plaintiff was deemed to have been donated due to the Plaintiffs’ title trust, and decided to re-examine the net asset value of the stocks to re-examine the complementary market price of the stocks by re-auditing the net asset value of the stocks. The 00 regional tax office re-examines according to the above decision and notified the Plaintiffs on February 20, 2013 that the initial investigation was justifiable.

Facts without any dispute, Gap evidence 1, Eul evidence 1 through 4, and 10 (including each number), the purport of the whole pleadings, and the purport of the whole pleadings.

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

A. The plaintiffs' assertion

1) The Plaintiffs delivered a certificate of seal impression to Kim H on the ground that Kim H’s issuance of the certificate of seal impression is necessary for the release of the Ansan, for which Kim H was under detention. Since Kim H had the certificate of the Plaintiffs’ seal impression, Kim H affixed the Plaintiffs’ seal impression in the sales contract (No. 6-1-4) of this case without the Plaintiffs’ consent. Therefore, the conclusion of the sales contract of this case and the transfer of the holders of the shares of this case pursuant thereto, which was made by the unilateral act of Kim H, cannot be deemed as a donation.

2) Even if the title trust of the instant shares was established, the Defendant assessed the instant shares as of December 31, 2009, which was the date of the settlement of the corporate accounts of the immediately preceding year. Since the assets status of EEE and NN has considerably deteriorated on December 31, 2010, the value of the said shares as of August 5, 2010 should be deemed to have been considerably reduced. Therefore, the assessment of the value of the said shares should be based on August 5, 2010, which is the date of deemed donation, even if it should be based on August 5, 2010, which is the date of deemed donation. However, it is unlawful to assess the instant shares as of December 31, 209.

(b) Related statutes;

It is as shown in the attached Table related statutes.

(c) Fact of recognition;

1) The details of stock changes from January 2, 2009 to December 31, 2010 of EE and NN are as follows:

2) On August 3, 2010, Ansan agreed with the JusticeJ on the following:

3) On August 9, 2010, EEE held a provisional general meeting of shareholders on August 9, 2010, decided to appoint the Plaintiffs, Kim HH, Ansan, and headF as its internal directors, and auditor, respectively (Evidence B). On the same day, EE completed the registration of appointment of internal directors and auditor.

4) On December 12, 2011, the Plaintiffs, Kim H, Ansan, and Ansan II drafted a written confirmation (No. 8-1, 2, and 3) confirming that the instant shares were held in title trust by Kim H, Ansan, Ansan, and Ansan II as follows.

director Kim H-H’s answer on April 6, 2012 (No. 11 evidence)

the terms and conditions of the contract have been faithfully fulfilled after the acceptance of shares with the J in January 2009.

The answer: By March 2009, the first time to resolve the guarantee, mortgage on personal property, etc., which was made in the name of Ansan, but did not perform at all.

In the case of the acceptance of shares with the Justice in April 2009, the contract was terminated in accordance with the non-performance of the contract by the Justice of Justice, so why there is no right of the Justice of Justice to the above corporations, why is why we agreed to pay the amount of KRW 300 million to the Justice of Justice.

The answer: This is the absence of the right of theJ, but it is expected that it will take considerable time to resolve it in the civil law. At the time, theJ would not be able to normalize the legal entity when it returns to the management of a company in April 2010 and has passed as a result, such as the disposal of the assets of the legal entity, and therefore, it would not be able to normalize the legal entity. However, thisJ would pay 30 million won as required by theJ, and thisJ would not participate in the above legal entity and would also be able to resolve the transfer of the shares.

The text: According to the letter of the FF, YangA, and BaB submitted by our Office, it is confirmed that all of them are the title trustee and there is no fact that they paid funds with respect to the transfer of shares.

The answer: N. This kind shall be the kind used only in the name.

J. : At the time of the master plan once again for the shares held in title trust.

Note: The shares held in title trust of the FF 32,910 shares, the 23,150 shares, the 33,150 shares, the 14,300 shares, the 19,50 shares, the 19,500 shares among the individual shareholders of the OO, and the 19,500 shares, among the shares held in title by the respective shareholders of the NO.

Note: What is the reasons why the transfer of shares was made under the name of FF, HandB, and DuA, who is not the actual owner, while transferring shares in August 2010.

The answer: When the company faces difficulties since 2008 and was returned to the ownership by the JJ in August 2010, it was so held in title trust that it would escape from oligopolistic shareholders due to difficulties among them.

4. Around April 5, 2012, the answer note of the Ansan (No. 12)

Note: How is the relationship with the forum Kim HH, Ab II, and the F;

The text: Kim H is the husband of the lower, and The AII is the husband of the lower, and the headF is aware of the lower portion of the self-living of Kim H, the husband of the lower.

Note: EEEE, NN NN’s stocks acquired for the forum are owned by a real owner.

The answer: Understanding, handB, etc. is not the actual owner, but the ownership of Ansan and Kim H, which should be deemed to be the ownership of Ansan and Kim H. It is very important that the former shareholder is the FF, and HII at all at the time of re-purchase of shares from Justice Justice.

sentence: The answer was made to the Ba, which is a new shareholder, the BaB, and the twoA, and the statement was made at all as to the share sale and purchase contract. This second part is essential to merely borrow the name.

The answer: N.S. :

Note: MagF, BaB, and both AA are not all real owners.

Answer: N, formal trade, entry of change in the register of shareholders is made only in the register of shareholders.

5) Kim H/G stated as follows at the time of the instant tax investigation.

6) The assets and liabilities on the balance sheet of each EE and NNN submitted at the time of the declaration of corporate tax for the year 2009 and 2010 are as follows (Evidence B No. 13 and 14), and the profit and loss on January 1, 2010 through December 31, 2010, the net profit and loss on January 1, 201 through December 31, 2010, the EE is KRW 417,385,304, NNN-347,079,730 (Evidence B).

7) EE and NN are virtually in a state of business closure due to frequent replacement of management due to business depression and managerial dispute, etc. due to construction competitions after 2008. NN was liable to pay 80,81,950 won in total as of January 9, 2014, including value-added tax of 79,754,250 won, Class A earned income tax of 1,057,700 won, and EE was liable to pay 138,509,030 won in value-added tax of 739,141,680 won in corporate tax of 739,141,680, Class A earned income of 377,647,740, 597,740 won in total, and 1,25,896,300 won in the auction procedure of 200,000 EE-owned land of 200,201.

Facts without any dispute, Gap's evidence 2, 3, 8, Eul's evidence 5, and Eul's evidence 6 (a sales contract and the plaintiffs' assertion that the whole document was forged by Kim HH, but it is difficult to believe that Gap's evidence 2 and 3 and some testimony of Kim H's evidence 8, 9, 11 through 17 (including separate numbers), each of the statements and part of Eul's evidence 8, 9, and 11 through 17 (including separate numbers), the purport of the whole pleadings, and the purport of the whole pleadings.

Dismissal Evidence Evidence Nos. 2 and 3, Evidence Nos. 2 and 3, witness Kim H’s testimony

D. Determination

1) The provision on deemed donation under Article 45-2(1) of the Inheritance Tax and Gift Tax Act (amended by Act No. 10411, Dec. 27, 2010; hereinafter “former Inheritance Tax and Gift Tax Act”) concerning the first argument is applicable in cases where the actual owner and the nominal owner enter into a registration, etc. in the future by entering into an agreement or communication with the nominal owner in order to transfer or exercise the right, and thus, registration, etc. is not applicable in cases where the actual owner and the nominal owner unilaterally enters into a registration, etc. in the name of the nominal owner regardless of the intent of the nominal owner. In such cases, if the tax authority proves only that the actual owner is different from the nominal owner, and if the tax authority proves that the registration, etc. of the nominal owner was conducted by a unilateral act of the actual owner regardless of the intent of the nominal owner, the nominal owner who asserts it shall be the nominal owner (see, e

As to the instant case, although the actual owner of the instant shares was Ansan, Kim HH, and Ansan II, the fact that the instant sales contract was concluded in the name of the Plaintiffs with respect to the instant shares and that the transfer of ownership was made in the front of the Plaintiffs is as seen earlier, it shall be deemed that the actual owner of the instant shares and the titleholder are different.

Furthermore, according to the following circumstances, i.e., the Plaintiffs, Kim H, Ansan, and Ansan II, as to whether or not Kim H forged forged the instant sales contract without the Plaintiffs’ consent, and entry of a change of entry in the future, based on the above facts and the evidence as seen earlier: (i) on December 12, 2011, Ansan, etc. prepared a written confirmation that the instant shares were trusted to the Plaintiffs (No. 8-1 or 3 of evidence No. 8); (ii) during the instant tax investigation, Kim H and HG stated that the title trust of the instant shares was appropriate for the Plaintiffs; (iii) on August 9, 2010, it is difficult for the Plaintiffs to appoint the EEE and NNN as internal directors, and completed the registration of transfer; and (iv) on August 9, 2013, it is difficult for the Plaintiffs to accept that the Plaintiffs’ testimony was made to the public interest of the Plaintiff in title trust without the Plaintiffs’ consent to the title trust of the instant shares; and therefore, there is no reason to acknowledge the Plaintiffs’s assertion that the Plaintiff’s testimony was made the title trust of this case.

2) Second, when the market value per share is difficult to be calculated based on the non-listed stocks as stipulated in Article 63(1)1 (c) of the former Inheritance Tax and Gift Tax Act, the value shall be assessed based on the supplementary assessment method stipulated in Article 54 of the Enforcement Decree of the same Act. Article 54(2) of the same Act provides that the value per share shall be assessed by dividing the net asset value of the relevant corporation by the total number of issued and outstanding stocks. Article 55(1) provides that the net asset value of the relevant corporation as of the base date of appraisal shall be the amount obtained by subtracting liabilities from the value of the assets of the relevant corporation as of the base date of appraisal under Articles 60 through 66 of the same Act. Thus, if the above supplementary assessment method provides that the value per share is assessed based on the net asset value of the relevant corporation at a time other than the net asset value as of the base date of appraisal, the tax authority must prove that there was no change in the net asset value per share between the base date of appraisal and that the tax amount shall be assessed lawfully by the court.

With respect to the instant case, the Defendants calculated the net asset value of EE and NN as of December 31, 2010, rather than August 5, 2010, based on the supplementary evaluation method stipulated in Article 54(2) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act, on the ground that there is no transaction example of the shares issued by EE and NN, which are non-listed stocks as of the date of deemed donation, and thus, it is difficult to calculate the market price.

Therefore, the defendant should prove that there was no change in net asset value of EE and NN between December 31, 2009 and August 5, 2010, which is the date of deemed donation of the shares of this case. However, it is insufficient to recognize the fact that there was no change in net asset value between EE and NN as of August 5, 2010 and December 31, 2009, which is the date of deemed donation, and there is no evidence to prove otherwise.

Rather, as seen earlier, the net assets of the EE are approximately KRW 8.9 billion from December 31, 2009 to KRW 8.3 billion from December 31, 2010; the net assets of the NE have decreased from approximately KRW 3.1 billion on December 31, 2009 to KRW 2.7 billion on December 31, 2010; the EE and NNN are now in de facto discontinuance of business; the NN are 80,811,950 won on January 9, 201; the EE are 2.3 billion from the net assets of the EE are 1,25,896,300 won on December 31, 201; the EN are 30.3 billion from the net assets of the EE are 5.3 billion from the net assets of the EN on December 13, 2012; and the EN were 1,307.3 billion from the date of the auction procedure.

On the other hand, only the litigation materials revealed in the argument of this case cannot calculate the objective tax base of the stocks of this case and the amount of legitimate gift tax accordingly, so the entire disposition of this case shall be revoked.

3. Conclusion

Therefore, the plaintiffs' claims against the defendants are justified, and all of them are accepted. It is so decided as per Disposition.