early 2012 Middle 0619 (2012.05.09)

the definition of a household business does not require a separate requirement to be owned;

When the gift tax is reduced or exempted for the purpose of family business succession, the definition of family business shall be 10 years or longer, and it is not a separate requirement that the business should be 'owned', but it is difficult to regard the 'owned' as a naturally accompanying concept.

2012 disposition of revocation of imposition of gift tax, 100

CHAPTER A

port of origin

December 28, 2012

January 18, 2013

1. The Defendant’s disposition of imposing gift tax of KRW 000 on the Plaintiff on July 18, 201 shall be revoked.

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

The same shall apply to the order.

1. Details of the disposition;

A. Nonparty B, the father of the Plaintiff, completed the register of business operators, etc. with the trade name of the CCC industry around December 1992, and operated the pertinent place of business, and around May 1995, Nonparty DD&C Co., Ltd (hereinafter “DDB”) was established by converting the said business into a corporation and converting the said business entity into a corporation, and was working as the representative director for 15 years.

B. On December 24, 2009, the headB donated the entire shares of the non-party company owned by himself (hereinafter referred to as “the instant common shares”) to the Plaintiff. On January 4, 2010, the Plaintiff reported and paid KRW 000 to the Defendant by deducting KRW 000 from the taxable value of gift tax by deducting KRW 100 from the tax amount of gift tax under Article 30-6(1) of the former Restriction on Special Taxation Act (amended by Act No. 9921, Jan. 1, 2010; hereinafter referred to as the “former Restriction on Special Taxation Act”).

C. Along with the ten-year period prior to the Plaintiff’s donation of the instant shares, the details of changes in the ownership of those who have a special relationship under Article 15(3) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act (amended by Presidential Decree No. 22042, Feb. 18, 2010; hereinafter the same) and Article 18(2)1 of the former Inheritance Tax and Gift Tax Act (amended by Act No. 9916, Jan. 1, 2010; hereinafter referred to as “former Inheritance Tax and Gift Tax Act”) are as follows.

(Omission of Entry in the following table)

D. On July 18, 201, the Defendant issued a correction and notification of gift tax of 00 won (including additional tax) against the Plaintiff on the ground that “B did not hold more than 50% of the total number of shares issued by the non-party company in addition to the shares issued by the non-party company at the time of donation for not less than 10 consecutive years, and that the donation of the instant shares does not constitute “the donation for the purpose of succession to family business” under Article 30-6(1) of the former Restriction of Special Taxation Act.

E. On May 9, 2012, the Plaintiff appealed against the instant disposition and filed an appeal with the Tax Tribunal, but the said claim was dismissed.

[Grounds for Recognition] The non-contentious facts, Gap evidence 1 and 2, and the whole purport of the pleading

2. Whether the instant disposition is lawful

A. The parties' assertion

(1) The plaintiff's assertion

Article 30-6 (1) of the former Restriction of Special Taxation Act provides that a resident shall be granted tax reduction or exemption if he/she receives stocks, etc. from his/her parents who have engaged in a family business under Article 18 (2) 1 of the former Inheritance Tax and Gift Tax Act for the purpose of succeeding such family business for at least 10 years. Article 18 (2) (i) of the former Inheritance Tax and Gift Tax Act provides that a small and medium enterprise prescribed by Presidential Decree shall be subject to the definition of "family business for at least 10 consecutive years." The headB is the largest shareholder of the non-party company and the representative director of the non-party company, and has been running the non-party company for at least 10 consecutive years retroactively from the date of donation of the stocks. Thus, the donation of this case constitutes "a donation for the purpose of succeeding to the family business" under Article 30-6 (1) of the former Restriction of Special Taxation Act, and this does not constitute the gift tax for the purpose of succeeding to the non-party company for at least 50 percent (10%).

(2) The defendant's assertion

In full view of the contents and purport of Article 30-6(1) of the former Restriction of Special Taxation Act, Article 18(2)1 of the former Inheritance Tax and Gift Tax Act, and Article 15(3) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act, in order for a donor to be a gift for the purpose of succeeding to a family business, the donor must continue to operate the relevant corporation for at least 10 years at the time of donation, and the donor must continue to hold at least 50% of the total number of issued stocks of the said corporation for at least 10 consecutive years on the ground that the gift of this case does not constitute a gift for the purpose of succeeding to a family business on the ground that the headB and its specially related persons did not hold at least 50% of the total number of issued stocks of the said corporation for at least 10 consecutive years. Thus, the disposition of this case for which the increase in the gift tax was corrected against the Plaintiff is legitimate.

(b) Related statutes;

It is as shown in the attached Form.

C. Determination

(1) Under the principle of no taxation without law, or the interpretation of tax laws and regulations shall be interpreted as the law, barring any special circumstance, barring any special circumstance, and shall not be extensively interpreted or analogically interpreted without reasonable grounds (see, e.g., Supreme Court Decision 2003Du7200, Mar. 12, 2004). Article 30-6(1) of the former Restriction of Special Taxation Act provides that “where a resident continues to engage in a family business under Article 18(2)1 of the former Inheritance Tax and Gift Tax Act for the purpose of succeeding to the pertinent family business by a parent who has been engaged in the pertinent family business for 10 years or longer, the total number of shares or equity shares (which shall be limited to 00 won of the taxable value of gift tax; hereinafter referred to as “stocks”) shall be donated on or before December 31, 2010, and where a resident succeeds to the family business as prescribed by Presidential Decree, gift tax shall be imposed at least 10/100 of the total shares issued by the corporation.

(2) In light of the above legal principles and the provisions of the law, it is reasonable to view that the health team, and the funeralB, for about 15 years after establishing the non-party company on May 1995, continued to operate the non-party company and continued to operate the non-party company, and on December 24, 2009, the fact that the stocks of this case were donated to the plaintiff who was the plaintiff on December 24, 2009 was seen earlier, and the donation of this case constitutes "the donation for the purpose of succeeding to the family business" under Article 30-6 (1) of the former Restriction of Special Taxation Act.

① Article 18(2)1 of the former Inheritance Tax and Gift Tax Act, which defines the concept of ‘family business' under Article 30(1) of the former Restriction of Special Taxation Act, provides that the definition of ‘business' shall be defined as ‘business that has been continuously operated for ten years or longer by the decedent', and only requires the establishment of ‘business' for ten years or longer, and does not require any separate requirement for ‘owned' during the above period. In addition, it is difficult to see that the ‘business' under Article 18(2)1 of the former Inheritance Tax and Gift Tax Act is a concept naturally accompanying ‘owned' of the shares of the decedent.

② Article 15(3) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act, and Article 18(2)1 of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act include cases where the largest shareholder, etc. of the decedent holds 50% or more of the total number of outstanding shares of the relevant corporation; and Article 15(3) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act does not stipulate that the scope of "family business" includes cases where the largest shareholder, etc. of the decedent, who is a related person, holds 50% or more of the total number of outstanding shares of the relevant corporation, together with shares, etc. of the decedent, and does not include cases where the largest shareholder, etc. of the surviving corporation holds 10% or more of the total number of outstanding shares of the relevant corporation. In addition, Article 15(2)1 of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act does not stipulate that "the parent corporation shall hold shares continuously for 10 years or more" unlike those of Article 18(2)1 of the former Inheritance Tax and Gift Tax Act.

③ On the contrary, the Defendant asserts that Article 15(3) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act provides that the scope of “family business” under Article 18(2)1 of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act is limited to the case where the largest shareholder, etc. holds not less than 50% of the total number of shares issued by the pertinent corporation by aggregating shares, etc. of the specially related persons with him and not less than 10 years. However, in light of the overall contents, structure, and purport of the former Inheritance Tax and Gift Tax Act and its Enforcement Decree, the concept of “family business” is defined as “family business succession” under Article 18(2)1 of the former Inheritance Tax and Gift Tax Act, and if the Defendant’s assertion is based on the Defendant’s assertion, Article 15(3) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act limits it to a corporation subject to

④ Article 15(3) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act (amended by Presidential Decree No. 22579, Dec. 30, 2010); and Article 18(2)1 of the former Inheritance Tax and Gift Tax Act (amended by Presidential Decree No. 22579) defines the concept of “family business” under Article 18(2)1 of the former Inheritance Tax and Gift Tax Act (amended by Presidential Decree No. 18(2) of the same Act (amended by Presidential Decree No. 22579) as more restrictive and specific scope of “family business” under Article 18(2)1 of the former Inheritance Tax and Gift Tax Act (amended by Presidential Decree No. 2010, Dec. 30, 2010). Therefore, the amended provisions of the Enforcement Decree of the instant case should not be applied to the disposition of the instant shares after the amendment.

(3) Therefore, the Defendant’s disposition that corrected the pertinent gift tax against the Plaintiff by deeming that the donation of the instant shares does not constitute “the donation for the purpose of succeeding to the family business” under Article 30-6(1) of the former Restriction of Special Taxation Act is unlawful.

3. Conclusion

Thus, the plaintiff's claim of this case is reasonable, and it is decided as per Disposition.