Cho Jae-2013-Seoul Government-2095 (Law No. 12, 2013)

(b) in the case of transfer of property at a price substantially higher than the market price under the transaction practice without good cause.

The imposition of gift tax is legitimate because the property is transferred to a person other than a person with a special relationship at a price significantly higher than the market price without justifiable reasons.

2013Guhap25306 Revocation of Disposition of Imposition of Gift Tax

Park AA

The Director of the sericultural Tax Office

January 17, 2014

March 14, 2014

1. The plaintiff's claim is dismissed.

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

Cheong-gu Office

The imposition of gift tax OOO on the Plaintiff on January 21, 2013 by the Defendant is revoked.

1. Details of the disposition;

A. The plaintiff had 12,50 shares of BB golf clubs (hereinafter referred to as “B golf clubs”) (the par value per share is O.O.) and b. B golf clubs were merged into CCCC (hereinafter referred to as “CCC”) on April 25, 2008, the plaintiff was issued 1,250 shares of CCCC (the par value per share is O. hereinafter referred to as “the shares of this case”). On the same day, the plaintiff transferred the shares of this case to 30 U.S. 1, 250 shares to 20 U.S. 1, 200, 300 shares and 200 U.S. 1, 200, 3000 shares were sold to 1,000 U.S. 2, 300,000 won, and 1,0000 U.O.O. 2, 200,000

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1 through 4, Eul evidence No. 1, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The plaintiff agreed to sell the new stocks of this case received as the price for the merger withCCCC, to the person designated byCCCN orCCCCC, and accordingly sold the new stocks of this case to DDD construction. The plaintiff actually sold them to DD construction is the stocks and management rights of BB golf clubs.

"BG golf clubs, however, have been a company expected to have a considerable profit because it had all the OO-Gu O-dong O-dong O-dong 4 and 27 parcels, which are the land necessary for the first golf practice range in the Republic of Korea, after obtaining permission to construct the golf practice range above the reservoir in the Republic of Korea. BB golf clubs was established prior to the construction of the golf practice range on the above land by our bank. If the maximum debt amount is assumed to be about 120% of the loan, the Korean bank can be deemed to have extended approximately KRW OOO-O-O-O-O-O-2 (i.e., the O-O-O-O-O-O-O-O-O-O-O-O-O-O-O-O-O-O-O-O-O-O-O-O-O-O-O-O-O-O-O-O-O-O-O-O-O-O-O-O-O-O-O-O-owned."

It is as shown in the attached Form.

(c) Fact of recognition;

1) A BB golf club was established on January 21, 2005 for the purpose of operating a golf driving range, etc. and was promoted to build park facilities, including a golf driving range, on the land outside 4 and 27 parcels of land, OO-Gu OO-dong O-dong O-dong, and dissolved on April 25, 2008. The details of stocks owned by each shareholder prior to the merger are as listed below.

Table 1 see Decision 4 see Decision 1

2) On April 18, 1996,CC was established for the purpose of housing construction business, business facilities, and commercial construction business, etc., and on April 25, 2008, BB golf clubs were merged into 10:1, and issued 5,000 new shares to the shareholders of BB golf clubs including the Plaintiff. On April 25, 2008, the shareholders of BB golf clubs including the Plaintiff were issued new shares of merger, and sold them to DD construction on April 25, 2008. The specific contents are as shown below.

Table 2 see Decision 4

3) DD Construction is a company established for the purpose of housing construction business and sales business on August 16, 2001. At the time of April 25, 2008, the representative director ofCCCC and DD Construction all were EE.

"4) On July 24, 2007,CC entered into an investment contract for acquiring management rights of BB golf clubs and BB golf clubs. Accordingly, it entered into a share sales contract with shareholders of BB golf clubs including the Plaintiff. On September 1, 2007, it entered into a BB golf clubs merger contract with the Plaintiff. The main contents of the share sales contract and merger contract with the Plaintiff are as follows.

On July 24, 2007, the Plaintiff, a shareholder of the BB golf club, andCCC, a person expected to acquire management rights of the company, concluded a share sales contract as follows.

BB golf clubs’s representative KimK’s representative of the shareholders of the BB golf club, who is authorized to transfer management rights from the shareholders of the BB golf club, combined BB golf clubs on July 24, 2007, and the shareholders of the BB golf club enter into a contract to transfer the management rights of the BB golf club toCC CNT by purchasing the new shares issued by the shareholders of the BB golf club as a result of the merger (or a person designated byCCCN).

§ 1. (Transferable Stocks and Prices)

Pursuant to this Agreement, the shares transferred by the Plaintiff toCC pursuant to the Agreement are 1,250 common shares (OOO in the face value of one share) that are new shares issued and delivered to the Plaintiff as a price for the merger, as a result of the merger of CCTV BB golf clubs, and the price shall be OO; hereinafter the same shall apply).

Merger Agreement

Article 1 (Methods of Merger)

CCCCCC shall continue to exist after the merger of BB golf clubs, and BB golf clubs shall be dissolved.

Article 3 (Total Number of Stocks to be Issued)

CCC has no change in the total number of shares to be issued by the company due to merger.

Article 5 (New Stocks Issued at Time of Merger and Delivery Ratio)

CC CNT shall allocate and deliver 5,000 registered common shares ofCC CNT to the shareholders listed in the register of shareholders of BB golf clubs on the merger date at the rate of 10 per share (OOO) per share (OOO) per share (OOO) per share.

Article 8 (Date of Merger)

The merger date ofCCCN and BB golf clubs shall be April 18, 2008: Provided, That if necessary according to the merger process, it may be changed through consultation withCCCC and BB golf clubs.

5) On June 2005, BB golf clubs were borrowed from the Military Mutual Aid Association with 14% interest per annum, and agreed to repay the principal and interest of the loan to OO members (=OOO members + interest OOO members) by December 31, 2013.

See 6 pages of the judgment

"6) On April 21, 2008,CC Co., Ltd. entered into an agreement with the Military Mutual Aid Association on the BG golf clubs and the actual details of the implementation plan were considerably different, and there were not only two issues such as authorization and permission of implementation plan, and industrial matters such as purchase of additional land.CC Co., Ltd obtained an implementation plan authorization for additional land ownership acquisition for the creation of subsidiary facilities such as children park, construction of uwegs, construction of steel tower, installation of sewage purification facilities, and construction of dynamic prevention facilities, etc., and it is too big that it is difficult forCC Co., Ltd to develop PAR, which is the only profit-making, and thus, it is difficult for it to reduce the amount of PAF loans on the land under the name of 4.4.4.4.4.08.208.4.7.4.4.208.7.4.

8) On May 20, 2008,CC purchased OF-Gu O-dong O-dong 48-1 and 8 parcels of land from OF from OF, OOOO-dong 48-3 and 2 parcels of land from OO-dong O-dong 48-3 and 48-3 of OG from OG to OO-dong.

9) According to the report (Evidence No. 5) prepared byCC CNT around May 201, 201, among park facilities, the remaining field, landscaping resting area, children’s playgrounds, physical training area, etc. among park facilities is within 4 to 6 years after the implementation plan is authorized, and the golf driving range is every 30 years after being used. As for part of the land outside 44 land of OO-dong OO-dong 44 and 27 land, the provisional registration of the right to demand ownership transfer was completed under the name of OO-si for the reason of promise of donation.

[Ground of recognition] Facts without dispute, Gap evidence 3, 4, 5 (including paper numbers; hereinafter the same shall apply), Eul evidence 2 to 5, the purport of the whole pleadings

D. Determination

Article 35(2) of the former Inheritance Tax and Gift Tax Act provides that where a property is transferred to a person other than the person having a special relationship without any justifiable reason at a price significantly higher than the market price, the transferor of the property shall be presumed to have received a donation of the amount equivalent to the difference between the price and the market price, and the amount equivalent to the profits prescribed by the Presidential Decree shall be deemed to be the value of the property donated to the person who has acquired such profits. Article 26(6) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act (amended by Presidential Decree No. 21292 of Feb. 4, 2009) provides that "the former Enforcement Decree of the Inheritance Tax and Gift Tax Act (amended by Presidential Decree No. 21292 of Feb. 4, 2009)" provides that "if the market price is 30/100 or more of the market price at the price of the transferred property, the legislative purport of Article 35(2) of the former Inheritance Tax and Gift Tax Act is to cope with an unlawful gift act.

2) In light of the following circumstances, it is reasonable to view that the Plaintiff’s sale of the instant stocks to DD Construction in total to OO Won at a price significantly higher than the market price without justifiable grounds under transactional practice. Accordingly, the Plaintiff’s above assertion is without merit.

① The Plaintiff asserts to the effect that the instant disposition is unlawful since the Plaintiff’s actual sale of the shares and management rights of BB golf clubs is not the instant shares but the shares and management rights of BB golf clubs. However, as seen earlier, the Plaintiff’s sale of the instant shares to DD Construction to OO won per share is deemed as having been completed the assessment of the value of the shares of BB golf clubs by CCCC’s acquisition of new shares of 10 shares of BB golf clubs without payment of a separate merger subsidy, while it is intended to merge BB golf clubs. Therefore, the Plaintiff’s aforementioned assertion is without merit.

② The Plaintiff did not submit a detailed basis for calculation regarding the sale of the instant shares to OO won per share (the Plaintiff appears to have not received an assessment of the value of the instant shares based on objective data from an accounting firm and other reliable institutions when selling the instant shares to DD Construction).

③ The five shareholders of BB golf clubs, including the Plaintiff, sold new shares to DD Construction on the date on which the new shares were issued byCCC. The sales price per share is different from those of OOOO(H), OOOOO(B), the Plaintiff, OOOOO(J), and OOOK(K). The Plaintiff did not explain this.

④ On April 25, 2008,CC Co., Ltd. was obligated to repay approximately KRW OOOOOE to the Military Mutual Aid Association as a consequence of the merger of BB golf clubs on April 25, 2008. Moreover, it was difficult to additionally disburse approximately OOOOOE for securing land ownership necessary for park facilities, purification facilities of sewage, and installation of dynamic preventive facilities ( de facto CCCE). On April 29, 2008, OOOO-Gu OO-dong land and 44 lots of land outside 27 lots of land and repaid PF loans to the Military Mutual Aid Association upon receiving a loan of money from the maximum amount, and around May 208, 2008, OOO-dong and 48-1 and other land than 48-3 parcels of land at the time of the construction of the OE and 48-3 parcels of land at the time of the implementation plan, each of the OEEE is required to purchase more than 3OOE.

⑤ Even if the Plaintiff’s transfer to the DD Construction is the shares and management rights of the BB golf club, considering the following: (a) the obligation for PF loans to the Military Mutual-Aid Association of the BB golf club; (b) the profitability for the establishment of park facilities; and (c) the Plaintiff’s sale of the shares and management rights of the BB golf club to the total OO members, it is reasonable to deem that the transfer of the property constitutes a case where the property is transferred at a price significantly higher than the market price without

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and it is so decided as per Disposition.