Whether a stock title trust can be deemed to have no purpose of tax avoidance, and whether a separate title trust can be recognized for free owners

It is difficult to conclude that there was no other purpose of tax reduction or other tax avoidance in light of the situation at the time when it was anticipated that the stock value increase due to listing would have been predicted.

Article 41-2 of the Inheritance Tax and Gift Tax Act / [Presumption of Donation of Trust Property]

1. The part against the defendant in the judgment of the court of first instance shall be revoked, and the plaintiff's claim corresponding to the above part shall be dismissed;

2. The costs of lawsuit shall be borne by the plaintiff in both the first and second instances.

1. Purport of claim

The Defendant revoked each disposition of KRW 55,529,760, and KRW 2,570,420,710 of the gift tax for the year 2000, each of which belongs to the Plaintiff on May 1, 2004 (2,604,251,70 won for the gift tax for the year 200).

2. Purport of appeal

The same shall apply to the order.

1. Details of taxation; and

A. On May 31, 1999, ○○○○○○○○○○○○○○○○○○ (hereinafter “○○○○○○○○”) transferred KRW 60,000 per share to KRW 30,00 per share, the face value of which was issued by ○○○○○○○○○○○○○○ (hereinafter “○○○○○”).

B. However, upon receiving a request from ○○○ to open a stock consignment account in the Plaintiff’s name, the Plaintiff opened a stock consignment account in the name of △△△△△△, hearing the developments leading up to the transfer of the shares by △△△ and ○○○, and held the passbook and seal of △△△△△△△△. Accordingly, the △△△△△△△△△ was deposited 30,000 shares out of the above 60,000 shares (hereinafter “first shares”) in the stock consignment account in the Plaintiff’s name on May 31, 199, and transferred the ownership of 30,000 shares, and the remaining 30,000 shares were also deposited in the stock consignment account of △△△△△△△△△△△△△△△△△△△.

C. On July 16, 1999, on the ground that the first shares are opened in the name of the Plaintiff, the Plaintiff was allocated an ordinary share of 4,286 shares for free increase of ○○○○○○○○○○○○○○○○○○ (hereinafter “ second shares”) and 27,286 shares for free increase of capital on February 7, 2000, respectively.

라. 그러던 중 원고는 2000. 11.경 이○○으로부터 명의신탁 받은 주식의 실질적인 권리가 이△△에게 있다는 확인서를 써달라는 부탁을 받고, 같은 달 30. 이○○을 통해 이△△에게 '채권'이라는 제목 아래 '박○○(주민번호 : ******-*******)는 ○○○○○○○○의 KOSDAQ 상장 전 취득한 당사의 주식 모두 및 본인의 명의로 된 향후 이로 파생되는 수익과 주식에 관한 일체의 권리가 이△△(주민번호 : ******-*******)에게 있음을 밝힙니다'라는 내용의 서면을 작성해 주었다(그 후 이△△은 무상주를 포함한 위 주식들을 타에 매도하여 회사 차입금 변제 및 운용자금 등에 사용하였다).

E. The Defendant considered that this △△△△△△△△△△△△△△○○○○○ was in title trust with the Plaintiff all of 61,572 shares, and assessed the value of the first shares, which are opened in the name of the Plaintiff pursuant to the main sentence of Article 41-2(1) of the former Inheritance Tax and Gift Tax Act (amended by Act No. 6780, Dec. 18, 2002), on May 26, 199, the gift amount of KRW 6,50 per share traded between this △△△△△△△△△△△△○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○ KRW 65,00; the gift amount of KRW 195,00 per share; KRW 68,576,00 per share for KRW 240; and the amount of the gift tax for KRW 3 shares shall be included in the market value of KRW 6840.0.

F. Accordingly, the plaintiff was dissatisfied with each of the above dispositions and filed an appeal with the National Tax Tribunal on August 11, 2004.

G. Meanwhile, the defendant accepted the plaintiff's assertion that the average value of the third stocks during the hearing of the National Tax Tribunal was 162,426 won, which was 164,200 won, and revoked 33,831,060 won out of the amount of gift tax of 2,604,251,770 won for 200 as of February 14, 2005 and corrected the reduction (hereinafter "each taxation disposition of 2,570,420,710 won for 199 and the amount of gift tax of 55,529,760 won for 199 as of May 1, 200 against the plaintiff and the amount of gift tax of 2,570,420,710 won for 200 won for 200.

H. On March 25, 2005, the National Tax Tribunal also decided and notified that the gift amount related to the gift tax on the donated portion as of February 7, 2000 shall be KRW 4,431,955,836, and the tax base and tax amount shall be corrected.

[Ground of recognition] In the absence of dispute, Gap evidence Nos. 1-2, Gap evidence No. 2, Eul evidence No. 3-1, 2, Eul evidence No. 1-2, Eul evidence No. 1-2, 2, 3, Eul evidence No. 2-1, 2, 3 through 6, and the purport of the whole pleadings.

2. Whether the taxation disposition is legitimate

A. The plaintiff's assertion

(1) Claim as to 1 shares

(A) Since this △△△ did not have any tax avoidance purpose in title trust with the Plaintiff on May 31, 1999, it is unlawful for the Defendant to impose gift tax on the title trust with respect to the shares held in title trust with the Plaintiff.

(나) 구 상속세 및 증여세법 시행령(1999. 12. 31. 대통령령 제16660호로 개정되기전의 것) 제49조에 의하면, 매매사례가액으로 증여재산의 가액을 평가할 경우 평가기준일로부터 가장 가까운 날에 해당하는 가액에 의하도록 규정하고 있는데, 제1주식의 평가기준일 전날 이▽▽이 최○○, 이▲▲, 한○, 김○○에게 ○○○○○○○○ 주식을 주당 3,500원에 양도한 사례가 있음에도 불구하고, 이와 달리 피고가 1999. 5. 26.자 매매사례가액인 6,500원을 기준으로 하여 제1주식의 가액을 평가하여 증여세를 부과한 것은 위법하다.

(2) Claim on shares 2 and 3

The Plaintiff’s gratuitous allocation of the second and third shares is based on the fact that the first shares are trusted in the name of the Plaintiff, and thus, was unilaterally allocated by ○○○○○○○○○○○○. Therefore, there is no separate title trust agreement between △△△ and the Plaintiff.

Even if there was a title trust agreement between the Plaintiff and this △△△△△△ on the second and third shares, in the case of capitalizing the excess of the capital gains under the Corporate Tax Act, the acquisition of shares by the capital increase without compensation in light of the legislative intent of excluding the deemed dividend as the capital increase in the capital gains, and thus, the acquisition of shares by the capital increase without compensation is limited to the division of shares and does not actually increase the assets or income, and if the gift tax is imposed, it would be contrary to the principle of substantial taxation. The imposition of the gift tax on the second and third shares allocated without compensation by the Defendant while imposing the gift tax on the title trust of the first shares is contrary to the principle of proportionality. The imposition of the gift tax on the second and third shares allocated by the △△△△△△△△△△△△△△△△△△△△△△

(b) Related statutes;

○ Article 41-2 of the former Inheritance Tax and Gift Tax Act (amended by Act No. 6780, Dec. 18, 2002) (Presumption of Donation of Title Trust Property)

(1) Where the actual owner and the nominal owner are different in property (excluding land and buildings; hereafter the same shall apply in this Article), the value of which is required to be registered, etc. for the transfer or exercise of rights, the nominal owner shall be deemed to have been donated to the actual owner on the date when the property is registered, etc. to the nominal owner, notwithstanding Article 14 of the Framework Act on National Taxes: Provided,

1. Where assets are registered, etc. in the name of another person without the purpose of tax avoidance;

(2) Where property is registered, etc. in the name of another person and the name of stocks, etc. is not converted into the name of the actual owner during the grace period under paragraph (1) 2, it shall be presumed that there exists a

(4) Paragraph (1) shall not apply where a fact that is a trust property under the Trust Business Act or the Securities Investment Trust Business Act is registered, and where a nonresident registers it in the name of a legal representative or administrator.

(5) The term "taxes" in paragraphs (1) 1 and (2) means the national tax and local tax as provided in subparagraphs 1 and 7 of Article 2 of the Framework Act on National Taxes and the customs as provided in the Customs Act.

(6) The scope of persons in special relationship referred to in paragraph (1) 2 shall be prescribed by Presidential Decree.

○ Article 60 of the Inheritance Tax and Gift Tax Act (Principles of Appraisal, etc.)

(1) The value of property on which an inheritance tax or gift tax is levied under this Act shall be the market price as of the date the inheritance commences or the date of donation (hereinafter referred to as the "date of appraisal"). In such cases, the value appraised by the method of appraisal stipulated in Article 63 (1) 1 (a) and (b) (excluding cases falling under the provisions of Article 63 (2))

(2) The market price under the provisions of paragraph (1) shall be the price which is generally deemed to be established in cases of free trade between many and unspecified persons, and shall include the price which is recognized as the market price, such as the price of expropriation and public auction and appraisal

(3) In the application of paragraph (1), where it is difficult to calculate the market price, the value assessed by the methods prescribed in Articles 61 through 65 in consideration of the type, size, transaction status, etc. of the relevant property.

Article 78 of the former Inheritance Tax and Gift Tax Act (amended by Act No. 7010 of Dec. 30, 2003) (Additional Tax, etc.)

(1) Where, with respect to inherited property or donated property, a report is not made within the report deadline under Article 67 or 68, or a report is made short of the tax base to be reported, the head of a tax office, etc. shall add respectively an amount equivalent to 20/100 of an amount calculated by multiplying the sum of the unreported tax base or the ratio occupied by the insufficient amount (excluding the amount short of the tax base to be reported due to the difference of appraised values as prescribed by the Presidential Decree, of the property reported) to the tax base to be reported, pursuant to the provisions of Article 76, by the amount calculated by adding up the amounts calculated by inheritance tax or gift tax and the amounts added

(2) In case where the tax amount to be paid under the provisions of Article 70 is not paid by the time limit for report, or is paid under the tax amount to be paid for the tax base determined under the provisions of Article 76 (in case where an application for payment by annual installments or in kind is not permitted under the provisions of Article 71 or 73, it refers to the case where such payment by annual installments or in kind is not permitted), the amount equivalent to 10/100 of the tax amount not paid or paid under the provisions of Article 76 (excluding the amount short of

○ Article 49 of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act (amended by Presidential Decree No. 16660 of Dec. 31, 199) (Principles of Appraisal, etc.)

(1) "The amount recognized as the market price as prescribed by Presidential Decree, such as the expropriation or public auction price, appraisal value, etc." in Article 60 (2) of the Act means the amount confirmed pursuant to the provisions of the following subparagraphs only where the sale, appraisal, expropriation, auction (referring to an auction under the Civil Procedure Act; hereafter the same shall apply in this paragraph) or public auction is conducted during the period from six months (three months in the case of donated property) before the base date of appraisal to the return on the standards of imposition of inheritance tax or the report on the

1. If any fact of transaction exists with respect to the relevant property, the transaction value: Provided, That the same shall not apply where the transaction value is deemed objectively unreasonable, such as transactions with a person in a special relationship provided for in Article 26 (4);

(2) Where the value deemed the market price referred to in paragraph (1) is two or more, it shall be based on the value corresponding to the date of evaluation.

C. Determination

(1) Determination as to the plaintiff's assertion as to the first shares

(A) The legislative purport of Article 41-2(1) of the former Inheritance Tax and Gift Tax Act is to recognize an exception to the substance over form principle to the effect that the act of tax avoidance using the title trust system is effectively prevented, thereby realizing the tax justice, so the proviso of the same Article can only be applied unless the purpose of tax avoidance is not included in the purpose of the title trust, and the taxes under the proviso cannot be limited to the gift tax, and the burden of proving that there was no purpose of tax avoidance in the title trust shall be the person asserting it (see, e.g., Supreme Court Decision 2003Du4300, Jan. 27, 2005).

However, there is no evidence to acknowledge that there was no tax avoidance purpose in the title trust of the first stock. Therefore, this part of the Plaintiff’s assertion is without merit.

(B) According to Article 60 of the Inheritance Tax and Gift Tax Act, the value of the property on which gift tax is levied shall be, in principle, the market price which is a value generally accepted when a free transaction is made between many and unspecified persons as of the date of donation, but such market price shall be deemed to include the expropriation and public sale price, appraisal price, etc. as prescribed by Presidential Decree. Accordingly, Article 49(1)1 and (2) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act provides that, in the case of donated property, where there is a transaction fact on the pertinent property during the base return period for gift tax assessment from March of the base date for the assessment of gift tax from March of the base date for the assessment of gift tax, the transaction price near the base date for the assessment. In full view of the above relevant provisions, to recognize the market price of transaction example, the relevant value should be the objective exchange price formed by a normal transaction (see, e.g., Supreme Court

돌이켜 이 사건에 관하여 보건대, 제1주식의 평가기준일 전날 ○○○○○○○○의 대표이사인 이▽▽이 최○○, 이▲▲, 한○, 김○○에게 ○○○○○○○○의 주식을 주당 3,500원(이하 '원고 주장의 매매사례가액'이라 한다)에 양도한 사실은 당사자 사이에 다툼이 없으나, 한편 갑 제1호 증의 2의 기재에 의하면, 이▽▽은 ○○○○○○○○의 대표이사이자 최대주주로서 위 최○○, 이▲▲, 한○, 김○○에게 ○○○○○○○○의 주식을 주당 3,500원에 양도함과 동시에 ○○○○○○○○의 이사인 김△△, 조○○에게도 ○○○○○○○○의 주식을 같은 가액에 양도한 사실, 그밖에 제1주식의 평가기준일 전날 ○○○○○○○○의 감사인 이●●이 박△△에게 ○○○○○○○○의 주식을 주당 2,500원에 각 양도한 사실, 피고가 매매사례로 삼은 양수자 □□□□□□는 벤처기업에 대한 투자를 전문으로 하는 투자전문회사인 사실을 각 인정할 수 있는 바, 위 인정사실에 비추어 보면, 원고 주장의 매매사례가액은 정상적인 거래에 의하여 형성된 객관적 교환가격에 해당한다고 보기 어려운 반면, 피고가 평가기준으로 삼은 이 사건 매매사례가액은 정상적인 거래에 의하여 형성된 객관적 교환가격에 해당한다고 할 것이므로, 이와 다른 전제에 선 원고의 위 주장 역시 이유 없다.

(2) Determination as to the plaintiff's assertion on the second and third shares

(A) ① Stock division is a procedure to increase the total number of shares issued by a company without changing its capital or property, and is similar in that there is no substantial increase in the company’s property and the number of shares increases between the capital stock allocated by capitalizing the reserve fund. However, in the latter case, there is no increase in the company’s capital, while in the former case, there is no increase in the capital. In addition, in the case of capitalizing the reserve fund, a shareholder with 20,000 won (1,000 won per share) has been allocated 10 shares free of charge (1,000 won per share) by capitalizing the capital reserve of the company, and retires after having received 30,000 won from the company, the shareholder would have income of 10,000 won per share. Therefore, the purport of the fictitious dividend is not to be imposed, but to be excluded from the fictitious dividend where the capital reserve fund is allocated without compensation until it later is disposed of, and not to be considered as the object of the Plaintiff’s tax imposition and exemption.

② Although there is a mere division of shares in the aspect of accounting and economic substance, in view of legal and formal aspects, the newly issued shares are issued due to the increase of capital, as well as capital increase through the issuance of new shares. As such, the shares issued as above shall be deemed as a unit of capital, independent of the old shares, and thus, the shares are deemed as having been donated to the Plaintiff pursuant to Article 41-2(1) of the former Inheritance Tax and Gift Tax Act. Thus, the shares are deemed as having been donated to the Plaintiff pursuant to the provision of Article 41-2(1) of the former Inheritance Tax and Gift Tax Act, and the shares are not deemed as owned by the Plaintiff as a matter of course,

③ The provision on deemed donation under Article 41-2(1) of the above Act is an independent provision that imposes gift tax according to the method of accounting for a person who has acquired new shares or the economic value of new shares related to the old shares, where it differs from the actual owner and the nominal owner, depending on the independent property that requires registration, etc. for the transfer or exercise of rights.

In light of the above points, even if the shares 2 and 3 were allocated to the Plaintiff, who is the title holder of the shares 1, the actual owner of the shares 2 and 3, is the title truster, and the actual owner of the shares 2 and 3 did not return the title of the shares 2 and 3 to the Plaintiff and left them in the name of the Plaintiff, and as long as the Plaintiff confirmed on November 30, 200 that the △△△△△△, after the new shares were allocated, all of the rights related thereto were in the instant △△△△△△△, it is reasonable to deem that the Plaintiff and the △△△△△△△△△△△△ have made a new title trust agreement on the shares 2 and 3 at the time of the new shares allocation, and therefore, it

Furthermore, the legislative intent of the above provision is to recognize an exception to the principle of substantial taxation in order to prevent tax avoidance due to fictitious acts by deeming the alteration of rights as shown in the registration, etc. by reflecting the actual situation of tax administration that imposes tax on the basis of the transfer or exercise of rights, etc. (see, e.g., Supreme Court Decisions 88Nu3925, May 23, 1989; 89Hun-Ma38, Jul. 21, 1989; 89Hun-Ma38, Jul. 21, 1989). In light of the fact that it is impossible to deny that a person who cooperates in tax avoidance has a punitive character against the person who actually donated the snow company, even if more unfavorable than the case of actual donation, it cannot

(B) The following circumstances, which are acknowledged by ○○○○○○○○○○○○○○○○○○○○○○○○○○○○○ issued shares on July 1, 199 and July 3, 199, based on comprehensively taking account of the overall purport of the pleadings as to the capital increase in subparagraph 11, 2, and 12, as seen above, ○○○○○○○○○○○○○○○○○○○ issued shares on the following grounds: (a) ○○○○○○○○○○○ issued shares on the one hand; (b) ○○○○○○○○○○○○○○ issued shares on the one hand; and (c) ○○○○○○○○○○○○○○ issued shares on the one hand; and (d) ○○○○○○○○○ issued shares on the other hand on the other hand, 199 if there was a lack of value in excess of KRW 300,50,000.

(C) If so, there was no title trust agreement with respect to the shares 2 and 3. Even if there was a title trust agreement with respect to the shares 2 and 3, it is against the principle of substantial taxation that there was no purpose of tax avoidance, or that gift tax is imposed separately therefor, and the Plaintiff’s assertion that it was unlawful against the principle of proportionality, etc.

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed in its entirety as it is without merit. Since the judgment of the court of first instance is unfair with some different conclusions, the defendant's appeal is accepted, and the plaintiff's claim corresponding to the above cancellation part of the judgment of the court of first instance is revoked, and it is so decided as per Disposition.