Where it is difficult to calculate the market price of unlisted stocks, the political party shall calculate the price per stock according to the supplementary evaluation method under the Inheritance Tax and Gift Tax Act.

The stock transaction between the plaintiff and the non-party cannot be deemed to have properly reflected the objective exchange value as it was formed in a transaction related to a specially related party, and thus, it cannot be deemed to be the market price. The provision of wrongful calculation shall apply to the case where the tax burden has been unjustly reduced. The disposition by the method of supplementary evaluation of the market price is legitimate.

Article 101 of the Income Tax Act, Article 60 of the Inheritance Tax and Gift Tax Act

2015Guhap24155 Revocation of Disposition of Imposing capital gains tax, etc.

AA

BB Director of the Tax Office

on 04 April 07, 2016

on 12, 2016

1. All of the plaintiff's claims are dismissed.

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

The Defendant’s imposition of the capital gains tax for the Plaintiff on August 10, 2015, the imposition of the capital gains tax for the year 2012, OOO.O.O.O.O.O.O.O.O.O.O.O.O., and OOO.

1. Details of the disposition;

A. On February 14, 2002, the Plaintiff, an unlisted corporation, HHHH service corporation (hereinafter “Nonindicted company”)

c) On August 28, 2012, when the non-party company acquired and held the shares of the non-party company (O,O, hereinafter referred to as "the shares of this case"), the non-party company sold the shares of this case in KRW 6,153 per share (hereinafter referred to as "transfer of this case") and retired on September 30, 2012.

B. Neither the director of the Central Regional Tax Office nor the director of the Central District Tax Office may change shares against the non-party company from February 25, 2015 to March 26, 2015

After conducting the same investigation, the non-party company acquired the shares of this case from the plaintiff

Considering that the transfer at a low price constitutes a transfer at a low price, the Defendant notified the Defendant of the taxation data that the value per share of the instant shares should be determined as an OO or OOOO pursuant to the supplementary assessment method stipulated in the Inheritance Tax and Gift Tax Act (hereinafter “Inheritance Tax and Gift Tax Act”). On August 10, 2015, the Defendant issued a correction and notification of the capital gains taxO, OO orOO, securities transaction taxO orOOO(hereinafter “instant disposition”).

C. The Plaintiff dissatisfied with the instant disposition and filed a request for review with the Commissioner of the National Tax Service on August 27, 2015, but was dismissed on September 23, 2015.

[Ground of recognition] Unsatisfy, entry of Gap evidence 1 to 4, Eul evidence 1

of each entry, the whole purport of the pleading, including the number

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The Plaintiff, a simple technical employee, who is not an officer of the non-party company, held the instant shares, calculated and sold the value per share based on the net asset value of the statement of financial position of the immediately preceding year pursuant to Article 11(3) of the articles of incorporation of the non-party company. According to Article 10 of the articles of incorporation of the non-party company, the transfer of the shares of the non-party company is restricted, and there is no other way to conduct a transaction other than that prescribed by the articles of incorporation, and other shareholders also have a practice of calculating and trading the value pursuant to Article 11(3) of the articles of incorporation. Accordingly, the Plaintiff’s sale of the shares of this case to the non-party company as a normal transaction based on the market price, but

(b) Related statutes;

It is as shown in the attached Table related statutes.

C. Facts of recognition

In full view of the above evidence, Eul evidence No. 2, and the fact-finding results of this court's fact-finding with respect to HHHH service corporation (non-party corporation)

shall be determined.

1) On June 18, 1999, the non-party company was a company established by KKK Co., Ltd. (former HHHHHH Co.), which was a government-invested institution, by dividing some human resources into a divided company as part of restructuring human resources of public enterprises. The Plaintiff is an employee of the non-party company, who entered the non-party company on February 14, 2002 and was engaged in the business of directly maintaining development facilities at the place of business improvement of the non-party company until retirement on September 30, 2012.

2) At the time of incorporation of the non-party company, the shareholders of the non-party company were comprised of the former officers and employees in the form of a company’s company. The shareholders of the non-party company, in the same form as the so-called employee prop system, issued a share transaction approval clause stating, “If the shareholders of the non-party company intend to operate the non-party company and transfer the shares of the company to another person without compensation or at a cost pursuant to Article 10 of the articles of incorporation for the purpose of defending management rights from the hostile third party, the approval of the board of directors shall be obtained.” In the case of a shareholder’s claim for purchase of shares with respect to the company, the purchase price of the shares shall be calculated by dividing the

3) The annual transaction details, transaction rates, etc. of the shares of the non-party company are as listed below. The transaction price of shares of the non-party company was the same annual transaction price, except for the transaction with the face value or the immediately preceding evaluation amount before the settlement of accounts on February 22, 2001, and March 22, 2002.

4) Details of stock transactions by Nonparty Company, made in 2012 in which the Plaintiff transferred the instant shares.

For the purposes of the following table:

5) The amount of net profit and loss of the non-party company in 2009 shall be as follows: O,O,O,O, andO(OO) (the amount of net profit and loss per share);

The net profit and loss amount in 2010 is O,OO,OO,OO(O,O)(O, the net profit and loss amount per share), and net profit and loss amount in 2011 is O,OO,O,O, andO(O,O)(O, the net profit and loss amount per share). On April 10, 2012, the net asset value as of April 10, 201 includes the appraised value of the goodwill.

D. Determination

1) Article 101 of the Income Tax Act provides that the director of a regional tax office or the director of a regional tax office having jurisdiction

In a case where a resident’s act or calculation is deemed to unreasonably reduce the tax burden on the resident’s income through a transaction with a related party to the resident, the relevant taxable period’s income may be calculated regardless of the resident’s act or calculation. The provisions of the wrongful calculation under the Income Tax Act stipulate that the resident’s act or calculation is consistent with objective facts and legally effective and lawful, but the act or calculation constitutes a type of transaction in which the tax burden is unfairly reduced between related parties as provided in Articles 167(1) and 98(1) of the Enforcement Decree of the Income Tax Act, if the act or calculation corresponds to the type of transaction in which the tax burden is unfairly reduced between related parties as provided in Articles 167(1) and 98(1) of the Enforcement Decree of the Income Tax Act, it is intended to realize fair taxation by adding the substance over form principle by deeming the income objectively reasonable and reasonable. Thus, the wrongful calculation is sufficient if it is deemed that a reasonable economic person cannot be deemed a transaction to be taken in light of social norms or customs, and thus it is deemed that the tax burden has been unjustly reduced.

According to Article 101(1) and (5) of the Income Tax Act and Article 167(3)1 of the Enforcement Decree of the Income Tax Act, where assets are transferred to a specially related person at a price lower than the market price and where the difference between the market price and the transaction price is at least 300 million won or at least an amount equal to 5/100 of the market price, tax burden shall be determined by applying mutatis mutandis the provisions of Article 60 of the Inheritance Tax and Gift Tax Act. Article 60 of the Inheritance Tax and Gift Tax Act provides that the market price applicable to this case shall be the market price assessed by applying mutatis mutandis the provisions of Article 60 of the Inheritance Tax and Gift Tax Act. Article 60 of the Inheritance Tax Act provides that the market price shall be the current market price, and the market price shall be recognized as the market price as prescribed by Presidential Decree, such as the expropriation price, public sale price, and appraisal price, where it is difficult to calculate the market price, in consideration of the type, scale, transaction situation, etc. of the relevant assets

In the case of unlisted stocks with low market value, the transaction value shall be deemed the market value and the stock value shall not be evaluated in accordance with the supplementary assessment method stipulated in the Inheritance Tax and Gift Tax Act. However, in order to recognize the transaction example as the market value, the objective exchange value formed by the general and ordinary transaction means the transaction example value, and the circumstances that can be seen as properly reflecting the objective exchange value at the time of the transfer date should be acknowledged.

(see, e.g., Supreme Court Decision 2010Du26988, Apr. 26, 2012). Moreover, the denial of wrongful calculation by wrongful act is denied.

The tax authority's responsibility for assertion and certification of the market price (Supreme Court on September 27, 2013) is applicable to the tax authority.

See Supreme Court Decision 2013Du10335, supra.

(2) The case holding that the transfer of shares between the Plaintiff and the non-party company cannot be deemed as a normal transaction in light of the above legal principles, on the ground that the Plaintiff’s transaction of shares between the Plaintiff and the non-party company cannot be deemed as a reasonable transaction, and the objective exchange value cannot be deemed as the market price on the ground that the Plaintiff’s transaction of shares was formed through a general and normal transaction, and that the Defendant did not directly reduce the transfer of shares between the non-party company and the non-party company’s non-party company’s employees by the method of supplementary assessment stipulated in Articles 54 through 56 of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act (amended by Presidential Decree No. 25195, Feb. 21, 2014; Presidential Decree No. 25195, Feb. 21, 2014; Presidential Decree No. 12,5222 of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act).

② Trading price when Nonparty Company’s shares are traded is also determined according to the net asset value assessment regulations under Article 11(3) of the Articles of incorporation, and cannot be deemed as freely formed price through ordinary and ordinary transactions.

③ The net profit of the non-party company has continuously increased for three years prior to the transfer of this case, and the ratio of net profit per share in the immediately preceding business year (201) compared to the value per share of the stock of this case as stipulated in the transfer of this case (O,O,O, O, and minority members; hereinafter the same shall apply) is O,O(O,O,O, O, O,O, andO). The ratio of net profit, including the debt of the above business year, to the total amount of assets (O,O,O, O, O, O,O, andO) is considerably high investment value of the stocks. However, if the net asset value of the non-party company is assessed based on the net asset value as stipulated in Article 11(3) of the articles of incorporation of the non-party company, it shall not be considered that the continuous corporate value of the above corporation is not properly reflected, and thus, it shall not be considered that the objective exchange value is reflected in the ordinary market value.

④ Under Articles 54 through 56 of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act, the net asset value, including the appraised value of non-party company’s goodwill as of April 10, 2012, around the time of transfer of the instant case.

The net asset value is the amount of O, O, O, or OO (the net asset value includes the appraised value of the goodwill ± the total number of issued stocks ± O, O, O, or O, or less than won). The amount is confirmed to be the same amount as at the time of the transfer of this case. The above net asset value is O.O.O.% (O. ±O. ±O. ±O. ) of the net asset value per share as at the time of the transfer of this case. In addition, according to the above provision, the defendant calculated the net value of the shares in this case by weighted average of 3 and 2 of the net asset value per share and the net asset value per O, O.O. , the above appraised value is higher than the value in this case.

⑤ In cases where it is difficult to calculate the market price of non-listed stocks the same as the stocks of this case, the average weighted value of net profit and loss and net asset value per share in accordance with Articles 60(3) and 63(1)1 (c) of the Inheritance Tax and Gift Tax Act, and Articles 54 through 56 of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act shall be deemed the market price. The non-party company continuously continued to operate the business for more than 12 years prior to the date of the establishment of this case, and continued to operate the business for the previous three years. Article 49(1)2 of the Enforcement Decree of the Inheritance Tax and Gift Tax Act explicitly excludes the appraisal value of stocks and investment shares from the value recognized as the market price, and any non-listed stocks that are not traded among many and unspecified persons are difficult to derive the market price by the appraisal, etc., the market price of the stocks of this case shall not be deemed the market price by the appraisal,

3) Therefore, it is reasonable that the Defendant calculated the transfer value of the instant shares by applying the provision regarding the wrongful calculation panel, with the value per share of the instant shares as O or OO. The Plaintiff’s assertion is without merit.

3. Conclusion

If so, the plaintiff's claim is without merit, and all of the claims are dismissed. It is so ordered as per Disposition.

partnership.