Where the stocks paid in kind are sold in the course of litigation and the gift tax is revoked, the national tax refund;

The amount paid by the taxpayer shall be considered as the value of donated property at the time of the disposition of permission for payment in kind, but the value of stocks reasonably assessed according to the following following circumstances such as the cancellation of the taxation disposition cannot be interpreted as the national tax refund standard

The contents of the decision shall be the same as attached.

Article 51 (Appropriation and Refund of National Tax Refund)

Article 51-2 (Refund of Property Paid in Kind)

1. The defendant shall pay to the plaintiff 467,980,492 won with 13.7% per day from April 26, 2008 to February 19, 2009, and 20% per annum from the next day to the day of full payment.

2. The plaintiff's remaining main claim and the conjunctive claim are dismissed.

3. The costs of lawsuit shall be borne by the Plaintiff, while the remainder shall be borne by the Defendant, respectively.

4. Paragraph 1 can be provisionally executed.

The defendant shall pay to the plaintiff 966,432,678 won with 5% interest per annum from November 27, 2003 to September 20, 2007, and 20% interest per annum from the next day to the day of full payment (the plaintiff primarily claims the return of unjust enrichment, and the plaintiff claims the return of unjust enrichment).

1. Basic facts

The following facts are not disputed between the parties, or may be acknowledged by considering the whole purport of the pleadings in each entry in Gap evidence 1 through 6, Eul evidence 4 and 5:

A. The Defendant (Korea Asset Management Corporation) opened a public auction on November 27, 1998, with the minimum estimated sale price per share of KRW 571,760 on the non-listed stocks of ○ building Co., Ltd. (hereinafter referred to as the “instant company”) that the heir paid in kind with inheritance tax, on April 8, 1993, following the Plaintiff’s Andones Kim Kim-○ died. However, on June 30, 1999, the Defendant (Korea Asset Management Corporation) sold the said shares paid in kind to the Plaintiff under a negotiated contract with the Plaintiff (hereinafter referred to as the “instant negotiated contract”) at KRW 285,80, the minimum estimated sale price per share in the 7th public auction.

B. On October 22, 1999, the Plaintiff donated 1,507 non-listed shares of the company of this case (hereinafter “the non-listed shares of this case”) from the largest ○○, and calculated 285,880 won, which is the price of the private contract of this case, as the market price per share of the gift shares of this case, and calculated 430,821,160 won (-1,507 shares x 285,880 won) as the gift tax return and payment (the already paid tax amount of KRW 82,092,150) to the head of Yongsan Tax Office on January 20, 200.

C. On October 13, 2003, the director of the Yongsan District Tax Office assessed the value of the instant negotiated contract as the market price of the instant gift stocks, and assessed the value per share of the instant gift stocks as the KRW 1,613,795,062 (=1,507 shares x 1,070,8666 won) by means of the supplementary assessment method under the Inheritance Tax and Gift Tax Act (hereinafter “Inheritance Tax and Gift Tax Act”), and decided and notified the Plaintiff of KRW 539,959,940 of gift tax in 199 (hereinafter “disposition”).

D. On October 16, 2003, the Plaintiff paid 243,470 won in cash, and applied for payment in kind to the director of the Yongsan Tax Office. On November 24, 1999, the director of the Yongsan Tax Office assessed the value per share of the non-listed stocks of the company of this case as 1,070,866 won and granted payment in kind to 504 shares (total value of 539,716,460 won). On November 26, 2003, the Plaintiff paid in kind 504 shares of non-listed stocks of the company of this case (hereinafter referred to as the "stocks paid in kind").

E. On December 3, 2003, while the plaintiff requested for adjudication on the disposition of this case, the National Tax Tribunal dismissed it on April 12, 2004. On June 21, 2004, the Seoul Administrative Court filed a lawsuit seeking revocation of the disposition of this case with the Seoul Administrative Court on October 27, 2004, and Article 60(1) and (2) of the Act provide that the value of the property on which the gift tax is levied shall be based on the market price as of the date of donation, and that the value of the property on which the public auction is levied is recognized as the market price under the conditions as prescribed by the Presidential Decree, such as the public auction price. Article 49(1)3 of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act (amended by Presidential Decree No. 16660, Dec. 31, 199); Article 49(1)3 of the Enforcement Decree of the same Act provides that the value of the property at issue shall not be considered as the market price of this case.

F. On the other hand, on June 14, 2005, the appellate court's decision on the instant disposition was in progress, Defendant (Korea Asset Management Corporation) concluded a share sales contract that sells 1,171 shares of the instant company, including shares paid in kind, to the Plaintiff at KRW 811,620,000 ( KRW 693,09.1 per share), and the said shares were sold to the Plaintiff.

G. Upon the final judgment of the Supreme Court, on April 16, 2008, the director of the tax office (the tax office having jurisdiction over the Plaintiff’s domicile changed to the tax office for distribution) sent to the Plaintiff a notice that the appraised value of the shares paid in kind was changed from KRW 1,070,86 to KRW 285,880 as follows, and the Plaintiff was refunded KRW 161,467,850 (the refund KRW 136,526,970 + additional refund KRW 24,940,880) on the 25th of the same month.

H. If the assessment value of the shares paid in kind is calculated as KRW 1,070,866, Apr. 16, 2008, the sum of KRW 628,792,189 as follows (i.e., national tax refund 532,159,930 + additional dues 96,632,259) to be refunded to the Plaintiff on April 27, 2008 (the base date for additional payment on November 27, 2003). In fact, if the Defendant paid the Plaintiff the national tax refund to the Plaintiff as of April 25, 2008, the national tax refund and additional dues to be paid by the Defendant to the Plaintiff is KRW 629,48,342.

I. The Plaintiff requested the director of the tax office to refund 504 shares issued by the company of this case instead of the shares paid in kind. However, the director of the tax office asked the National Tax Service to determine whether the cause of the payment in kind can be refunded to the shares of the same company when the payment in kind is made in kind. If the property paid in kind is sold by the National Tax Service, the director of the tax office received a reply to the effect that the proviso of Article 51-2(1) of the Framework Act on National Taxes should be applied, and rejected the Plaintiff’s request.

(j) The interest rate on the additional payment on the refund of national taxes publicly notified by the Commissioner of the National Tax Service pursuant to Article 52 of the Framework Act on National Taxes, Article 30 (2) of the same Enforcement Decree, and Article 13-2 of the Enforcement Rule of the same Enforcement Decree, shall be 13.7/100 per day from October 15, 2007 to the date

(k) Related Acts;

Article 51 (Appropriation and Refund of National Tax Refund)

Article 51-2 (Refund of Property Paid in Kind)

2. The parties' assertion

A. The plaintiff's assertion

1) Since the Supreme Court judgment revoking the instant disposition became final and conclusive on September 20, 207, the Defendant shall refund the instant shares paid in kind to the Plaintiff. However, since the Defendant disposed of the shares paid in kind during the appellate trial on the instant disposition, it was in cash on the basis of the market price at the final and conclusive judgment of the Supreme Court in lieu thereof. On January 11, 2008, the Korea Asset Management Corporation assessed the instant company’s unlisted shares as KRW 2,188,412 per share ( January 1, 2007 as the base date for appraisal of the unlisted shares paid in kind on January 1, 2007). Thus, the Defendant is obligated to refund the Plaintiff’s unjust enrichment of KRW 996,432,678, u300 (i.e., KRW 1,102,959,648 (=504 shares x 2,188,412) - 136,526,970 won.

2) Even if the Defendant did not take unjust enrichment, the Defendant could have sufficiently predicted the possibility of a judgment of the first instance court that revoked the instant disposition, and thus, even in the higher court, the lower court also rendered a judgment that lost the shares paid in kind. Despite the duty to suspend the public auction procedure for the shares paid in kind, the Defendant sold the shares paid in kind by gross negligence and suffered damages equivalent to KRW 996,432,678 from the Plaintiff. The Defendant is obliged to pay the Plaintiff KRW 996,432,678 as compensation for damages.

B. Defendant’s assertion

1) Through a judgment revoking the instant disposition, not only the donation value of the instant gift shares, but also the receipt value of the shares paid in kind, which is 285,880 won per share, not only KRW 1,070,866 won per share, so the Defendant’s tax amount paid at the time of payment in kind is not KRW 539,716,464, but also KRW 144,083,520, and accordingly, the Defendant did not make unjust enrichment since it returned the refund money to the Plaintiff.

2) The instant disposition of payment in kind does not become null and void or revoked in itself, and since the ownership of the instant shares received by the Defendant pursuant to the disposition of payment in kind was fully transferred to the Defendant, it cannot be deemed unlawful even if the Defendant sold the instant shares of payment in kind during the appellate trial on the instant disposition, and there is no obligation to suspend the procedure of public sale to the Defendant.

2. Determination

1) First of all, according to the above facts, the plaintiff paid shares in kind to the defendant in accordance with the disposition in the instant case, and the judgment on revocation of the disposition in the instant case became final and conclusive, the defendant is obligated to pay gift tax received in accordance with the disposition in the instant case and additional dues on the refund thereof to the plaintiff.

Furthermore, according to the above facts, Article 51 of the Framework Act on National Taxes applies to the refund of unjust enrichment that the Plaintiff paid according to the Defendant’s disposition of permission for payment in kind. Article 51-2(1) of the same Act provides that the amount of overpaid or erroneously paid national taxes shall be immediately determined as a national tax refund, and the Defendant shall determine the national tax refund based on the amount paid. In this case, since it was confirmed that the calculation criteria for the value of donated stocks of this case was erroneous through the judgment of cancellation of the disposition in this case, the standard for the value of the received stocks of this case shall also be 285,80 won per share which was confirmed as the legitimate value of the donated stocks of this case by the judgment of revocation of the disposition in this case, and the 1,070,866 price per share which was the basis for calculation of the permission for payment in kind at the time of the disposition in kind.

First, Article 73 (2) of the Inheritance Tax and Gift Tax Act and Article 75 of the Enforcement Decree of the same Act provide that the value of real estate and securities to be appropriated for payment in kind shall be the value of donated property. In addition, the above provision prohibits the taxation requirements, non-taxation requirements, or tax reduction or exemption requirements under the principle of no taxation without law, and the interpretation of tax laws and regulations shall not be interpreted in accordance with the legal text unless there are special circumstances (see Supreme Court Decision 2003Du7200, Mar. 12, 2004). In full view of Article 75 (1) of the Enforcement Decree and Article 20-2 (1) of the Enforcement Decree of the same Act, when a corporation which issued the relevant stocks issues new stocks or reduces stocks during the period from the donation date until the donation date, the value of stocks to be appropriated for payment in kind under Article 75 of the Enforcement Decree of the same Act shall be the value of donated property, and thus, the above provision shall not apply to cases where there is no justifiable change in the value of stocks after the donation date.

In principle, the provision of the Framework Act on National Taxes provides that Article 51-2(1) shall apply mutatis mutandis to the Plaintiff’s duty to pay in kind. However, if the duty to pay in kind is faithfully interpreted as “amount paid by the taxpayer at the time of the disposition of permission for payment in kind,” barring any special circumstance, it shall not be interpreted as “amount paid by the taxpayer at the time of the disposition of payment in kind.” Thus, the Defendant’s duty to pay in kind cannot be interpreted as “amount of payment in kind,” 1,070,866 won per share, which is the amount of receipt value calculated at the time of the disposition of permission for payment in kind, 1,000 won, 280 won per share, 280 won per share, 30% of the total amount to be paid in kind, 40% of the total amount to the Plaintiff from the day after the date of the disposition of payment in kind, 40% of the total amount to 285,880 won per share, 2016.

3. Conclusion

Therefore, the plaintiff's primary claim is justified within the scope of the above seal, and the remaining primary claim and conjunctive claim are dismissed as it is without merit. It is so decided as per Disposition.