Whether there was a tax avoidance purpose in the title trust should be determined at the time of the title trust.

The burden of proving that there was no tax avoidance purpose in the title trust is the nominal holder who asserts it.

Unless there are special circumstances, whether there was an object of tax avoidance or not shall be determined at the time of the title trust of the pertinent property at issue, and it shall not be determined as at the time of the title trust, and as at the time of the actual evasion of any tax after the title trust.

Article 41-2 of the Inheritance Tax and Gift Tax Act

2012Revocation of revocation of imposition of gift tax, 40629

1.A 2.B 3.CC

1.The Director of the Gangnam-gu Tax Office 2.3. Mancheon Tax Office

July 18, 2013

September 12, 2013

1. All of the plaintiffs' claims are dismissed.

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

On March 2, 2012, the head of Gangnam-gu Tax Office revokes the imposition of each gift tax on Plaintiff AA on March 2, 2012 by the head of Gangnam-gu Tax Office, and the head of Sungnam Tax Office, on March 2, 2012, on the part of Plaintiff BB, and on March 5, 2012 by the head of the Defendant Netcheon Tax Office, the imposition of each gift tax on Plaintiff CCC is revoked.

1. Circumstances of dispositions;

A. From November 1, 201 to January 18, 2012, the director of the Seoul Regional Tax Office: (a) conducted an investigation of stock change with respect to EE Co., Ltd. (hereinafter referred to as “E Co., Ltd”); (b) made on March 19, 2001, FF, the representative director and major shareholder of the non-party Co., Ltd, to Plaintiff BB on March 19, 2001; (c) notified Plaintiff AA of the total number of 19,580 shares (267,000 shares issued by the non-party Co., Ltd. at that time) (60,000 shares issued by the non-party Co., Ltd. at that time) 60,00 shares (8.61% shares issued by the non-party Co., Ltd. at that time); and (d) notified the Defendants of the total number of shares issued by the non-party Co., Ltd at 30,000 shares at that time, 3000 shares issued by the non-party Co.

B. Accordingly, the Defendants based on the provisions of Article 41-2 of the former Inheritance Tax and Gift Tax Act (amended by Act No. 6780, Dec. 18, 2002) (hereinafter referred to as the “instant provisions”), and the head of Gangnam Tax Office (hereinafter referred to as the “instant disposition”), on March 2, 2012, on which the Plaintiff AA, and the head of the Defendant Sung Nam Tax Office (hereinafter referred to as the “instant disposition”) imposed an OOOOOO on the Plaintiff BB on March 2, 2012, and the head of the Defendant CCC imposed each gift tax on the Plaintiff CCC (hereinafter referred to as the “instant disposition”).

C. On May 31, 2012, the Plaintiffs filed a request for a trial with the Tax Tribunal, but all were dismissed on August 31, 2012.

[Based on recognition] The evidence 1, 2, and 3 (if household number is included, hereinafter the same shall apply), and evidence 1 to 7, and the whole purport of the pleading

2. Whether the instant disposition is lawful

A. The plaintiffs' assertion

FF, which is a major shareholder of the non-party company, has title trust to the plaintiffs in order to meet the listing requirement, which is one of the listing requirements, in order to list the non-party company on the Korea Exchange, so it does not have title trust to the shares of this case for the purpose of tax avoidance. In addition, there is no tax (the second tax liability under the Framework Act on National Taxes, the constructive acquisition tax of oligopolistic shareholders under the Local Tax Act, and the global income tax reduction effect on dividend income) avoided from title trust of the shares of this case, and the disposition of this case imposing gift

B. Relevant statutes

It is as shown in the attached Table related statutes.

C. Determination

1) Relevant legal principles

The legislative intent of the instant provision (the deemed donation of title trust property) is to recognize exceptions to the substance over form principle in the purport that tax justice is realized by effectively preventing the act of tax avoidance using the title trust system. Therefore, if the title trust was recognized to have been conducted for any reason other than the purpose of tax avoidance, and it is merely a minor tax reduction incidental to the said title trust, it cannot be readily concluded that there was such a purpose of tax avoidance in the title trust. However, in light of the above legislative intent, only when the purpose of the title trust is not included in the purpose of tax avoidance, it cannot be determined as a deemed donation by applying the proviso of the above provision, and if it is deemed that there was an intention of tax avoidance in addition to the other main purpose, it cannot be said that there was no purpose of tax avoidance, and in this case, the burden of proving that there was no intention of tax avoidance exists no purpose of tax avoidance (see, e.g., Supreme Court Decisions 2007Du1931, Apr. 9, 2009; 207Du175, Sept. 8

In addition, as the nominal owner who bears the above burden of proof, there was an obvious objective irrelevant to the tax avoidance to the extent that there was no tax avoidance purpose in the title trust, and there was no tax avoidance in the future at the time of the title trust or in the future, so long as there is no doubt if ordinary person is based on objective and reasonable evidence (see, e.g., Supreme Court Decisions 2004Du11220, Sept. 22, 2006; 2010Du23569, Feb. 24, 2011).

Furthermore, it is reasonable to view that whether there was a purpose of tax avoidance or not as to whether there was a legal fiction of gift under the title trust should be determined at the time of the title trust, and that it should not be determined as to which tax has been actually evaded after the title trust (see, e.g., Supreme Court Decisions 2003Du4300, Jan. 27, 2005; 2004Du11220, Oct. 29, 2009; 2009Du11348, Oct. 29, 2009).

2) Determination as to the assertion that one of the listing requirements would meet the decentralization requirement

According to the Securities Market Listing Regulations, FF, a major shareholder of the non-party company, claimed that the plaintiffs were in title trust in order to meet the listing requirement in advance to list the non-party company to the Korea Exchange, but the following circumstances recognized by these facts and evidence are stated. ① According to the Korea Exchange's new listing review requirement, the total number of shares owned by the non-party shareholder is 25 percent or more of the total number of common shares." Under these regulations, the "Petty shareholder" means a shareholder who owns less than 1 percent of the total number of common shares in the securities market (see Articles 2 and 32 of the Listing Regulations, and ② the shares held by the FFF to the plaintiffs, and the shares held by the non-party company should not be considered to meet the listing requirement, and the shares held by the non-party company are more than 10% of the total number of shares in title trust and not more than 331% of the total number of the shares so that they can not be considered to meet the listing requirement.

3) Determination on the assertion that there is no tax actually evaded or to be avoided

The plaintiffs asserts that, even if the title trust of the shares of this case was made, there are no secondary tax liability of oligopolistic shareholders, deemed acquisition tax and dividend income tax, and other taxes are merely a simple possibility of tax avoidance or a minor reduction of tax exemption.

It is difficult to conclude that the non-party company is not liable to pay global income tax on the secondary tax liability and dividend income of oligopolistic stockholders due to the holding of the shares in this case, as of the time of title trust, even though the non-party company did not actually pay corporate tax, etc. and did not pay dividends after the title trust of the shares in this case, it is difficult to conclude that the non-party company is not liable to pay global income tax on the holding of the shares in this case ( particularly in light of the payment of corporate tax and value-added tax ( evidence No. 6), and the net asset value and net profit and loss (Evidence No. 6) of the non-party company (Evidence No. 6), and the earned surplus of the non-party company seems to have been at least KRW 00 million, and it is difficult to deem that the non-party company has no possibility to distribute such earned surplus).

3. Conclusion

The plaintiffs' claims are dismissed in entirety because they are without merit.