Whether the purpose of title trust is tax avoidance purpose

Unless the purpose of title trust is included in the purpose of tax avoidance, a deemed donation cannot be applied by applying the proviso of the above provision. Therefore, if it is deemed that there was an intention of tax avoidance as well as the main purpose of other provisions, it cannot be said that there was no purpose of

Article 41-2 (1) of the Inheritance Tax and Gift Tax Act

2014Guhap50263 Revocation of Disposition of Imposition of Gift Tax

MaAA

port of origin

May 30, 2014

July 4, 2014

1. The plaintiff's claim is dismissed.

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

Cheong-gu Office

The Defendant’s disposition of imposing gift tax on the Plaintiff on January 7, 2013 is revoked.

1. Details of the disposition;

(1) “A company BB Tourism Co., Ltd. (hereinafter “instant company”) was established at PO on August 18, 198. The total number of shares issued at the time of the establishment of the instant company was 5,000 shares, 00 shares per share, OOO of par value, OOO of total capital was OO, and its business purpose was 2,00 shares on the register of shareholders at the time of its establishment.” (2) At the time of its establishment, the instant company shares were held by PCC 2,00 shares on the register of shareholders, 500 shares, DoD 300 shares, MaD 300 shares, MaE 300 shares, MaF 200 shares, MaG 200 shares, HaG 750 shares, and Ha H Kim II was held by the Plaintiff’s family members (the Plaintiff’s family members).

(3) On June 26, 200, the instant company issued 15,000 shares by offering capital increase (hereinafter “instant capital increase”). The 10,000 won per share of shares and the amount of capital increase to OOO, and Kim II and HaH were allocated shares of 2,250 shares (hereinafter “each of the instant shares”) to Kim II and HaH according to the equal allocation among the shareholders.” (4) On November 27, 2007, the Plaintiff filed a lawsuit against Kim II and HaH under the jurisdiction of the court of 2007 KOOOOO to confirm the shareholders’ rights. (2) On November 27, 2007, the judgment of the court below affirmed the entire shares of the instant company (2, 3,00 shares each of the instant shares each of the instant shares each of the instant shares each of the instant shares each of the instant shares each of the instant shares and confirmed on May 28, 2008.

(5) On December 7, 2012, the Director of the Central Tax Office: (a) deemed that each of the instant shares was nominal by the Plaintiff; (b) calculated the value as a supplementary assessment method; (c) notified the pertinent disposition authority (the head of the relevant tax office, the head of the relevant tax office, and the Defendant) to determine and notify each of the gift tax (OO) to the Plaintiff; and (d) accordingly, the Defendant notified the Plaintiff of the disposition authority (the head of the relevant tax office, the head of the relevant tax office, the head of the relevant regional tax office, the head of the relevant regional tax office, and the head of the relevant Si/Gun/Gu of the imposition of the gift tax (OO) on the shares issued on June 26, 2003; and (e) notified the Plaintiff of the determination of the gift tax on the shares issued by the Plaintiff as the ground for tax evasion on the shares issued by the former Inheritance Tax and Gift Tax Act (amended by Act No. 7010, Dec. 30, 2003).

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

Article 288 of the former Commercial Act (amended by Act No. 5053 of Dec. 29, 1995, and enforced on Oct. 1, 1996) requires at least seven promoters to establish a stock company. Accordingly, the Plaintiff initially transferred the shares of the instant company to Kim II and HaH in order to meet the conditions for the establishment of the stock company, and only distributed shares to the title trustee according to the existing shares ratio in practice at the time of capital increase with capital increase. The shares of the instant case were already reverted to the Plaintiff’s name, and since there was no tax actually avoided after the title trust, each of the instant shares should be deemed to be “title trust with no purpose of evading taxes under Article 41-2(1)1 of the former Inheritance Tax and Gift Tax Act.” Accordingly, the instant disposition made on another premise that the Defendant was unable to impose gift tax on the Plaintiff is unlawful,” and the relevant Act and subordinate statutes.

It is as shown in the attached Table related statutes.

(c) Fact of recognition;

(1) Article 288 of the former Commercial Act (amended by Act No. 5053 of Dec. 29, 1995 and enforced on Oct. 1, 1996) was amended, and there was no limitation on the number of promoters at the time of issuing new shares, and even if the Plaintiff’s age was 75 years old at the time of offering new shares, the Plaintiff maintained the title trust state and allocated each of the instant shares to the title trustee.

(2) The company of this case at the time of offering new shares with respect to BB Tourism's capital increase and transfer of shares

BB Tax issues and measures related to the increase of tourism capital;

Paid-in capital increase by forfeited disposal

The title "The transfer income tax at the time of the transfer of HaH Kim II's shares" was reviewed various tax issues ( gift tax, acquisition tax, transfer income tax, etc.) at the time of capital increase in various methods. As a result, if the assessed value per share at the time when one person other than Ha HH acquired shares is significantly less than the present, there was a tax measure such as "the transfer of shares by another person Ha HH and one other Ha H is deemed to have been nominal than the reporting and payment of the transfer income tax, and thus, it is reasonable to report and pay the gift tax" (hereinafter referred to as "in this case"). (3) The earned surplus in 2004 reached OO for 205, OOO for 206, OOO for 207, OOO for 2008, OOO for 2009, OOO for 2009, O2010, O2010, 2010.

[Ground of recognition] Facts without dispute, entry of Eul 5 to 8, 9 evidence (including paper numbers), the purport of the whole pleadings

D. Determination

(1) The legislative purport of Article 41-2(1) of the former Inheritance Tax and Gift Tax Act is to recognize an exception to the principle of substantial taxation in the purport that the act of tax avoidance by using the title trust system is effectively prevented, thereby realizing the tax justice. Thus, if it is recognized that the title trust was made 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 had been the purpose of tax avoidance. However, in light of the legislative purport as seen above, only if the purpose of the title trust is not included in the purpose of tax avoidance, it cannot be deemed that there was the purpose of tax avoidance by applying the proviso of the said provision, and thus, it cannot be said that there was no purpose

In addition, the burden of proof on the absence of the purpose of tax avoidance lies in the person who asserts it (see, e.g., Supreme Court Decision 2013DuOO, Oct. 17, 2013).

(2) On the other hand, the fact that the Plaintiff held the title trust of the instant shares at the time of capital increase offering is as seen earlier (i.e., whether the purpose of tax avoidance exists or not shall be determined based on the time of capital increase offering). Article 41-2(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), the value of the relevant property shall be deemed to have been donated from the actual owner on the date when the actual owner and the nominal owner are registered as the nominal owner (where the property requires a transfer of title, referring to the day following the end of the year following the year in which the date on which the date of acquisition of the ownership falls) and thus, the act of the Plaintiff holding the title trust of the instant shares to Hah is deemed to have been deemed to have been donated. Accordingly, the Plaintiff should pay gift tax to the Defendant, barring special

(3) In light of the following circumstances revealed based on the above facts, the evidence submitted by the Plaintiff alone cannot be readily concluded that there was no tax avoidance purpose in the title trust of the instant shares, and there is no other evidence to acknowledge otherwise. Accordingly, the Plaintiff’s assertion is not acceptable.

① Even if there was no reason to maintain title trust due to the lack of the number of promoters due to the amendment of the former Commercial Act, the Plaintiff held title trust of the instant shares to HaH, etc. (in light of the internal review, etc. of the instant case, it is difficult to view that the Plaintiff was unaware of the amendment of the said Act).

② At the time of capital increase with respect to the instant case, the Plaintiff had already been aged, and the Plaintiff maintained the title trust relationship, even though it was naturally considered that there may arise a problem of inheritance on which taxes are imposed due to the considerable amount of stocks of the instant company due to the value of the instant company’s stocks (if the Plaintiff died, the heir could not pay the enormous inheritance tax through the name trustee’s salt price, fraudulent transaction, low cumulative tax rate, etc., and there is no room for the Plaintiff to know.)

③ Furthermore, in substance, the shares of the instant company held by the Plaintiff, a shareholder of the instant company, are less than 10% of the total shares (in addition, there is a possibility that only a lower percentage of shares were held in consideration of inheritance tax, etc.). In light of the enormous earned surplus of the said company, if dividends are made, there was a considerable amount of global income tax, etc.

④ Meanwhile, Article 41-2(1)2 of the former Inheritance Tax and Gift Tax Act provides that the provision on deemed donation shall not apply to a case where the stocks held in title trust are converted into the actual owner’s name during the period from January 1, 1997 to December 31, 1998. However, the Plaintiff did not return the stocks held in title trust during that period to its own name.

3. Conclusion

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