Busan District Court 2012Guhap2147 (No. 28, 2012)

Cho High Court Decision 2012 Deputy0644 (2012.04.04)

title trust with the purpose of tax avoidance

(1) In full view of the fact that the Plaintiff’s failure to participate in the operation of the company at all cannot be seen as the form of a controlling shareholder, it constitutes a title trust, and thus, it constitutes a title trust, and the dividend income of unlisted stocks is subject to comprehensive taxation, and thus, the purpose of tax avoidance is to achieve tax avoidance.

2012Nu3385 Revocation of Disposition of Imposition of Gift Tax

KimAAAA

Head of Eastern Tax Office

Busan District Court Decision 2012Guhap2147 Decided September 28, 2012

April 5, 2013

April 19, 2013

1. The plaintiff's appeal is dismissed.

2. The plaintiff's claim that is changed in exchange in the trial is dismissed.

3. The costs of the lawsuit after the appeal shall be borne by the plaintiff.

1. Purport of claim

① The Defendant’s imposition of KRW 00, KRW 00, KRW 200, KRW 00, KRW 200, KRW 200, KRW 200, and KRW 000, KRW 200, KRW 2006, as stated in the complaint, appears to be a clerical error) on the Plaintiff, and ② ② the imposition of penalty tax on the gift tax for 2005, KRW 00, KRW 200, and KRW 000 on the gift tax for 2005, and KRW 00 on the gift tax for 2006, was revoked (the Plaintiff’s imposition of penalty tax from the first instance to October 4, 201) on the gift tax for 206, and each of the above imposition of penalty tax for 200, KRW 200,00 on the gift tax for 205, respectively, was revoked ex officio by the Defendant, and the above imposition of penalty tax was revoked.

2. Purport of appeal prior to the modification thereof.

The judgment of the first instance shall be revoked. On October 4, 201, the defendant revoked the imposition of the gift tax of KRW 000 (including additional tax of KRW 000), the gift tax of KRW 000 (including additional tax of KRW 000), the gift tax of KRW 000 (including additional tax of KRW 000) for the year 2005, and the gift tax of KRW 000 for the year 2006 (including additional tax of KRW 000) (However, the plaintiff changed the claim to exchange in exchange for the above island).

1. Details of the disposition;

A. BB Living Health Co., Ltd. (hereinafter “instant company”) was an unlisted corporation established on April 25, 2005 and engaged in multi-level distribution business of health, cosmetics, household life, etc.

B. On August 25, 2005, the Plaintiff received 300,000 shares of the company in this case from YellowCC, and on September 8, 2005, received 000,000 shares of the company in this case, and received 2,000,000 shares of the company in this case on February 18, 2006, and received 000 shares in this case (hereinafter “the shares in this case”).

C. However, on October 4, 201, the Defendant: (a) determined that EEE, the representative director of DDD (hereinafter “DD”) operating the same multi-level distribution business, acquired the instant shares in the name of the Plaintiff by bearing the funds; and (b) imposed the gift tax on the Plaintiff on October 4, 201 by applying the provision on the constructive gift of title trust property under the Inheritance Tax and Gift Tax Act (hereinafter “the first disposition of this case”), as follows.

D. On December 28, 201, the Plaintiff dissatisfied with the instant first disposition, filed a request with the Tax Tribunal for adjudication on December 28, 201, and the said request for adjudication was dismissed on April 4, 2012.

E. On the other hand, on February 1, 2013, when the lawsuit in this case was pending, the defendant revoked each additional tax of the first disposition of this case on the ground of the defect in the notification procedure, and attached the calculation details, and imposed 000 won for the portion of the first disposition of this case on August 25, 2005, and 000 won for the portion of the donation of this case on September 8, 2005, and 000 won for the portion of the donation of February 18, 2006 (hereinafter "the second disposition of this case").

[Grounds for Recognition] The non-speed facts, Gap evidence 1, 2, 4, 8, 16, 18, and 1 Eul evidence 1 (if there is a natural disaster, each number included, and hereinafter the same shall apply), and the purport of the whole pleadings.

2. Whether the disposition is lawful;

A. The plaintiff's assertion

1) The instant company was a corporation established after the withdrawal of the officers and employees framework of DD, and 0E, the representative director of DD, recommended the Plaintiff to make investments in the instant company as the Plaintiff was unable to invest in the instant company due to its non-competitive obligation. The Plaintiff received 300,000 shares from YCC, a shareholder of the instant company, from 19 August 25, 2005, and on September 8, 2005, 80 billion won and 000 shares from 00,000 shares from PEF, which were 300,000,000 shares with new shares issued, and 00,000 shares issued on February 18, 2006, and 200,000 shares were actually acquired from EF and 100,000 shares with new shares acquired from EF, and 200,000 shares with new shares acquired from EF.

2) Even if 0EE under title trust the instant shares to the Plaintiff, and 0EE was unable to acquire the shares of the instant company under its name due to the obligation not to engage in the competitive business, only acquired the shares in its name, and did not have the purpose of tax avoidance. Therefore, the provision on the constructive gift of the instant shares cannot be applied to the acquisition of the shares under the name of the Plaintiff, and the Defendant’s first and second dispositions are unlawful.

B. Relevant statutes

Paper in the Appendix

C. Determination

1) Determination on whether title trust is held

According to the evidence No. 15, No. 3, and No. 2, the Plaintiff’s 00,000 won were 0.0,000 won were 5,000 won were 0,000 won were 20,000 won were 0,000 won were 0,000 won were 20,000 won were 0,000 won were 0,000 won were 20,000 won were 0,000 won were 0,000 won were 0,000 won were 0,000 won were 20,000 won were 0,000 won were 0,000 won were 20,000 won were 0,000 won were 0,000 won were 0,000 won were 20,000 won were 0,000 won were 20,000 won were 3,000 won were 20.

2) Judgment on the non-existence of the purpose of tax avoidance

The legislative purpose of Article 45-2(1) of the former Inheritance Tax Act is to recognize the exception to the substance over form principle of taxation by effectively preventing the Plaintiff’s tax avoidance and realizing the tax justice. Therefore, it is possible to apply the proviso of the same paragraph only if the purpose of the title trust is not included, and it cannot be deemed that there was any intention of tax avoidance (see Supreme Court Decision 2007Du17175, Sept. 8, 201). The burden of proof on the fact that the Plaintiff did not have any objective of tax avoidance, and that the nominal owner had no objective of tax avoidance, for the purpose of this case 200, 2000, 2000, 2000, 2000, 3000,000,000,000,000,000,000,000,000,000,000,000,000,000.

3. Conclusion

Therefore, the plaintiff's claim concerning the first disposition (excluding the portion of additional tax) of this case is dismissed as it is without merit, and the judgment of the court of first instance is just, and thus, the plaintiff's appeal is dismissed as it is without merit, and the plaintiff's claim concerning the second disposition of this case which is changed in exchange from the court of first instance is also dismissed as it is without merit and it is so decided as per Disposition