Inasmuch as the Plaintiff’s assertion that there was no tax avoidance purpose is insufficient to recognize, taxation based on the title trust donation agenda is reasonable.

It is insufficient to recognize that the title trust of the instant shares had a separate and obvious purpose irrelevant to the tax avoidance, and that there was no tax avoidance at the time of the title trust or at the time of the title trust, and there is no other evidence to acknowledge it.

Donation of trust property under Article 45-2 of the former Inheritance Tax and Gift Tax Act

2015Guhap91 Revocation of Disposition of Imposition of Gift Tax, etc.

AA

Defendant, (P) Appellants

The Director of the Z Tax Office

on January 20, 2015

October 15, 2015

1. The plaintiff's claim is dismissed.

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

The Defendant’s disposition of imposition of KRW 77,171,740, including the gift tax reverted to the Plaintiff in July 7, 2014, shall be revoked.

1. Details of the disposition;

"가. CC지방국세청장은 2012. 9. 6.부터 같은 해 12. 4.까지 XXXX화학 주식회사 (이하이 사건 회사'라 한다)에 대한 법인세 통합조사를 실시하여 KKK이 2004. 12. 31. 그 소유의 이 사건 회사 주식 1,520주를 원고에게 명의신탁한 사실을 확인하고，피고에게 과세자료를 통보하였다.", "나. 이에 피고는 2014. 7. 7. 구 상속세 및 증여세법 (2007. 12. 31. 법률 제8828호로 개정되기 전의 것, 이하구 상속세및증여세법'이라 한다) 제45조의2 명의신탁재산의 증여의제 규정에 따라 원고에게 2004년 귀속 증여세 등 77,171,740원을 결정 고지하였다(이하 '이 사건 처분'이라 한다)",다. 원고는 이에 불복하여 2014. 9. 30. 조세심판원에 심판청구를 제기하였고, 조세심 판원은 2014. 11. 26. 원고의 청구를 기각하였다.

【Facts without dispute over recognition, evidence 1 through 3, evidence 4 through 7, evidence 1 through 2, and the purport of the whole pleadings

2. The legality of disposition.

A. The plaintiff's assertion

The title trust of the shares of the instant company with the Plaintiff, etc. was aimed at satisfying the requirements of promoters under the Commercial Act prior to October 1996, and thereafter, the title trust of the instant company has been changed customarily when there is retirement or death of the employee who is a nominal shareholder. Since its establishment, the instant company faithfully paid all taxes until now, and KK owns 76.3% of the total issued shares on the register of shareholders as of December 31, 2013, and is already registered as an oligopolistic shareholder with secondary liability for tax payment. Since it did not have paid dividends up to the date of its establishment, there is no omission due to the difference in global income tax rate due to the lack of the fact that it had paid dividends up to the date of its establishment, and the name of the instant company has paid transfer income tax and securities transaction tax in good faith. Accordingly, since the title trust of the instant shares constitutes an exception to the provisions on deemed donation of trust property under the former Inheritance Tax and Gift Tax Act due to the lack of the purpose of tax avoidance, the instant disposition should be revoked and revoked.

B. Relevant statutes

Attached Table 2. Relevant Acts and subordinate statutes shall be as stated", and the facts of recognition shall be as follows.

1) The instant company was established in 1974 and engaged in the wholesale business of chemical substances, such as nitrogen, etc., and at the time of its establishment, MM and 9 held a total of 60,000 shares. However, the number of shares issued in 191 was changed from KRW 1,00 to KRW 6,000, and the number of shares was changed to KRW 6,000. Since then, the shares were divided to be changed to KRW 5,00, and the number of shares was changed to KRW 12,00.

2) KK acquired the entire shares of the instant company in the name of itself, its employees and nine (8) persons, including MM, from 1982, and subsequently changed the shareholders’ name on the grounds of retirement, death, etc. of employees who are the nominal holders of the shares.

3) On December 31, 2004, KK entered the title trust agreement with four trustees, including the Plaintiff, in the register of shareholders. The details of stock and shareholders change from 1974 to 2008 of the instant company are as stated in attached Form 1.

"4) At the time of concluding the title trust agreement with KR, the Plaintiff was title trusted by KR, and the Plaintiff exercised its rights as a shareholder, and the exercise of voting rights at a general meeting of shareholders shall be delegated to KR or to a third party designated by KR, and the profits to be received as a shareholder shall be returned to KR, and at any time upon request by KR, the transfer of the shares of this case shall be changed to KR in the future. The Plaintiff prepared and submitted to KR a letter of intent in the course of the integrated corporate tax investigation with KR. On the other hand, the Plaintiff did not have paid the purchase price for the shares acquired in the name of the Plaintiff to the investigating public official in the course of 2004, and the Plaintiff prepared and submitted a letter of intent that the shares will be transferred to KR in the name of the Plaintiff in the course of the integrated investigation with KR, and in fact, prepared and submitted a statement of intent that the shares will be transferred to KR in the name of the Plaintiff.

1) Article 45-2(1) of the former Inheritance Tax and Gift Tax Act provides that, where the actual owner and the nominal owner are different from the property (excluding land and buildings) which requires a registration for the transfer or exercise of rights, the value of the property shall be deemed to have been donated to the actual owner on the date when the registration, etc. is made to the actual owner (where the property is a property requiring a transfer of rights, the end of the year following the year in which the date of acquisition of ownership falls), notwithstanding the provisions of Article 14 of the former Inheritance Tax and Gift Tax Act, the title holder shall not be deemed to have been donated to the actual owner, but where the property is registered, etc. under another person’s name or the transfer of ownership is not made under the name of the actual owner who acquired the ownership without any purpose of tax avoidance, the title trust property shall not be deemed to have been donated to the actual owner (Article 45-2(2) main sentence of the same Act provides that, where the actual owner fails to make a transfer of ownership under another person’s name, the term “tax” means any national tax prescribed in Article 2 subparag.

2) The legislative purport of Article 45-2(1) of the former Inheritance Tax and Gift Tax Act is to effectively prevent the act of tax avoidance using the title trust system and realize the tax justice. As such, the proviso of the same Article is applicable only if the purpose of the title trust is not included in the purpose of the tax avoidance, and the tax prescribed in the proviso is not prescribed in the gift tax, and the person asserting that there was no purpose of the tax avoidance in the title trust. Therefore, the burden of proving that there was no purpose of the tax avoidance can be proved by the method of proving that there was a purpose other than the purpose of the tax avoidance. However, the nominal owner who bears the burden of proving that there was no objective of the tax avoidance in the title trust has no objective of the tax avoidance, and that there was no tax avoidance at the time of the title trust or in the future, to the extent that it is not superior to the tax avoidance, and that there was no objective and objective evidence supporting that there was no tax avoidance at the time of the title trust (see, e.g., Supreme Court Decision 2012Du1414.

3) In light of the following circumstances acknowledged by comprehensively taking account of the overall purport of the facts of recognition and the entire arguments as to the instant case, it is insufficient to acknowledge that the Plaintiff’s assertion and submitted evidence alone had a separate and obvious purpose irrelevant to the avoidance of tax evasion in the title trust of the instant shares, and that there was no tax evasion at the time of the title trust or at the time of the title trust, and there is no other evidence to acknowledge otherwise. Accordingly, the Plaintiff’

① The Plaintiff asserted that KK initially held the title trust of the shares of the instant company was to meet the requirements for the number of promoters under the Commercial Act, and thereafter, that it would have customarily changed the name in the event of retirement or death of employees who are nominal shareholders, but the requirements for the number of promoters of the instant company under Article 288 of the former Commercial Act (at least seven persons prior to October 1, 1996, at least three persons prior to July 24, 2001) were abolished on July 24, 2001, the transfer of title trust of the instant shares. In addition, the aforementioned requirements are applicable to the establishment of the instant company. In addition, since KK acquired the entire shares of the instant company in 1982 after its incorporation, the said provisions are not used, it cannot be said that there was a need for title trust for the first reason.

② Despite the fact that an employee or a person who has already entrusted the existing name resigns or dies, even if he/she could simply return the relevant shares in the name of KK, the actual owner of the relevant shares, there is no evidence to acknowledge that there was a separate reason or objective to undergo a cryptive procedure, such as preparing a letter, by finding a new title trustee.

③ The Plaintiff, and KR continued to be in the position of oligopolistic shareholders of the instant company from the date of title trust of the instant shares until the date, regardless of whether the instant shares were held in title trust, the Plaintiff asserted that the secondary liability for tax payment or deemed acquisition tax under the National Tax Basic Act and the Local Tax Act was imposed, and thus, it cannot be deemed that the purpose of evading this is not to have been established. As seen earlier, KR belonged to the position of oligopolistic shareholders holding 50% or more of the shares issued by the instant company from 1991 to 2008, and as seen earlier, KR was in the position of oligopolistic shareholders holding 50% or more of the shares issued by the instant company. However, the secondary liability for tax payment by the occupying shareholders under the former Framework Act on National Taxes (amended by Act No. 7930, Apr. 28, 2006) is determined based on the shareholder’s shareholding ratio (Article 39). In the event that the Plaintiff is the nominal owner of the instant shares, the secondary liability for tax payment rate of KR may be reduced to the Plaintiff.

(4) The holding of shares cannot take into account the occurrence of dividend income that is merely the existence of actual dividends by a corporation or the occurrence of dividends in excess of the amount possible. The dividend income of non-listed shares under the current income tax taxation system is subject to cumulative taxation, and accordingly, if the Plaintiff pays dividends under the status of the nominal owner of the shares in this case, the omission tax amount may accrue due to a difference in the global income tax system.

⑤ In fact, since the surplus from the business year 2004 to the business year 2012 has been continuously increasing, it may be said that shareholders could have been distributed in the future. In addition, each letter submitted by the Plaintiff to KK at the time of title trust of the instant shares also includes that “the profits that the Plaintiff would become the nominal owner of the instant shares, and all dividends shall be refunded to K.”

3. Conclusion

Therefore, the plaintiff's claim is dismissed as it is without merit. It is so decided as per Disposition.

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