The legality of imposing gift tax in consideration of stock title trust.

Unless there are special circumstances, the instant disposition based on the confirmation cannot be readily denied only by the evidence of the confirmation. Thus, the instant disposition is legitimate.

Donation of trust property under Article 45-2 of the Inheritance Tax and Gift Tax Act

Cheongju District Court-2019-Gu Partnership-5699 ( August 29, 2019)

전@@ 외 1

Head of Dong Tax Office

2, 2019.08

208.29

1. All of the plaintiffs' claims are dismissed.

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

The imposition of gift tax of April 9, 2018, which the former Cheong-gu Defendant filed with the Plaintiffs on April 9, 2018, shall be revoked.

1. Details of the disposition;

A. AASC Co., Ltd. (hereinafter referred to as the “instant company”) is a company established on December 6, 2016 for the purpose of real estate sale by proxy, and the total number of issued stocks is 2,000 shares and the per share is 5,000 won.

B. The articles of incorporation of the instant company and the status of changes in shares, etc. in 2016 and 2017 of the instant company

The holding status of the shares of the instant company from the time of incorporation to December 31, 2017 is as follows.

C. The Seoul regional tax office conducted a tax investigation on the instant company from January 18, 2018 to March 20, 2018, and the facts were as follows: (a) even though Plaintiff BB acquired 1,200 shares of the instant company, Plaintiff CC entered cc as promoters in the articles of incorporation of the instant company (hereinafter referred to as “first title trust”); (b) around December 2016, the Seoul regional tax office notified the Defendant of the instant title trust (hereinafter referred to as “second title trust”) by allowing Cccc to transfer 60 shares among ddd s (hereinafter referred to as “second title trust”) by allowing Cc to transfer 600 shares to d d d s (hereinafter referred to as “the instant title trust”); and (c) considering that the instant title trust was reported to the Defendant of the instant title trust (hereinafter referred to as “the instant title trust”) by allowing CC to transfer 600 shares again to e e on November 14, 2017.

D. Accordingly, on April 9, 2018, the Defendant decided and notified Plaintiff e of KRW 362,970 of the gift tax in 2017 pursuant to Article 45-2 of the former Inheritance Tax and Gift Tax Act (wholly amended by Act No. 16102, Dec. 31, 2018; hereinafter referred to as the “Act”), and notified Plaintiff bB as a joint obligor pursuant to Article 4-2(5) of the same day (hereinafter referred to as the “each of the instant dispositions”).

E. The Plaintiffs were dissatisfied with each of the instant dispositions and filed an objection with the Director of Daejeon Regional Tax Office on May 2, 2018. However, on June 28, 2018, the said objection was dismissed, and on September 12, 2018, filed a request for a trial with the Tax Tribunal on September 12, 2018, but the said request for a trial was also dismissed on January 4, 2019.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 4, 5, 7, 8, 9, Eul evidence No. 1 (including additional numbers) and the purport of the whole pleadings

2. Determination on the legitimacy of each of the dispositions of this case

A. The plaintiffs' assertion

At the time of incorporation of the company in this case withfff, the plaintiffs subscribed to 800 shares issued by the company in this case, bbb 60 shares, 60 shares by plaintiffs e and 600 shares by the company in this case, and the shareholders' names are assigned to gg, bb c and e are entrusted to ddd, respectively. For convenience, the articles of incorporation of the company in this case stated c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c e, so there is no title trust against the plaintiff e e.

(b) Related statutes;

It is as shown in the attached Form.

(c) Fact of recognition;

The following facts can be acknowledged in full view of the contents of evidence Nos. 2 through 6 and the purport of the whole pleadings.

1) On February 20, 2018, Plaintiff BB stated that “A public official in charge of investigation is gg (gg (gg (800 shares, 40%) and c (1,200 shares, 60%) at the time of incorporation of the instant company. However, gg is 4,00,000 shares (i.e., 80 shares x 500 won per share) with the establishment fund, and the principal was 6,00,000 won per share (i.e., 1,200 shares x 500 won) at each of the initial tax investigation conducted by the Seoul Regional Tax Office. Nevertheless, the shareholder registered cc on behalf of the principal, and thereafter ccc was transferred to d and e., 600 shares held by ccc and 300 shares after ccc was transferred to d and e.

2) After that, on March 14, 2018, Plaintiff BB prepared and submitted to the Seoul Regional Tax Office a written vindication of the main food change as follows.

3) Meanwhile, c on April 16, 2018, drafted a factual confirmation (Evidence B No. 4) with the following content.

4) Meanwhile, on April 2, 2018, pursuant to Article 45-2 of the Act on April 2, 2018, the head of the Kunsan Tax Office decided and notified ccc as to the first title trust of KRW 780,060 of the gift tax year 2016 and designated Plaintiff BB as a joint and several tax obligor. Plaintiff Bbb and CC did not object to the first title trust, and each of the said dispositions became final and conclusive as they were.

D. In full view of the following circumstances, it is reasonable to view that Plaintiff bB was the actual owner of 1,200 shares of the instant company and the title trust of 600 shares among them to Plaintiff e, in view of the facts acknowledged prior to the lawfulness of each of the dispositions in this case, based on the witness Hh and 3’s written testimony and the purport of the entire pleadings. Accordingly, the prior Plaintiffs’ assertion on a different premise is without merit.

1) Unless there exist special circumstances, such as that if a tax authority received a certain written confirmation from a taxpayer in the course of conducting a tax investigation, it is difficult to readily deny the evidence of the written confirmation that the written confirmation was drafted compulsorily against the will of the originator, or that it is difficult to use it as evidentiary materials for the specific facts due to lack of the content thereof, etc. (see, e.g., Supreme Court Decision 2001Du2560, Dec. 6, 2002). As arranged, Plaintiff BB, as well as Plaintiff B, in the course of the tax investigation conducted by the Seoul Regional Tax Office, voluntarily stated that it acquired 1,200 shares of the instant company in the process of the tax investigation conducted by the Seoul Regional Tax Office, and prepared and submitted a written vindication of stock change (No. 2) to the same purpose on March 20, 2018. As such, it is possible to grant credibility to Plaintiff B

2) The plaintiffs asserted to the effect that the statements or the explanation of changes in their shares in the course of the tax investigation by plaintiffs BB are made by the investigator in charge of the Seoul Regional Tax Office, but there is no material to support them. Rather, according to each written testimony, such as witnesses Hhh, etc., and the written evidence No. 3 (written reply) of Eul, the plaintiffs BB may recognize the fact that they had signed and sealed not only the tax agent's assistance at the time of the investigation but also the fact that they had received the confirmation from the tax agent at the time of the investigation, and that they had not prepared the statement and the written statement after the completion of the investigation. Thus, the plaintiffs' above assertion cannot be accepted.

3) As seen earlier, c has prepared a confirmation document stating that c has permitted c to register itself as a shareholder of 1,200 shares of the instant company upon the Plaintiff’s request by bB, and that its content not only conforms to the Plaintiff’s statement in the course of the tax investigation by bB, but also would have made an unfavorable statement even if cc is subject to the imposition of gift tax in accordance with Article 45-2 of the Act, it may also be granted credibility in the confirmation of the relevant facts.

3. Conclusion

If so, all of the plaintiffs' claims are without merit, they are dismissed. It is so decided as per Disposition.