Whether a contract for investment in kind is cancelled

A third party (joint investors, etc.) who is not a party to a transaction of investment in kind of stocks may not be deemed to have cancelled the contract on the grounds of the default of obligations and the cancellation of the contract.

Article 88 of the Income Tax Act

Cheongju District Court 2015Guhap1900

***

ㅁㅁ세무서장

The second instance decision

National Rotations

June 9, 2015

August 18, 2016

1. The plaintiff's claim is dismissed.

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

Cheong-gu Office

Defendant’s KRW 5,364,739,100 for the transfer income tax of the year 2013 owed to the Plaintiff on September 16, 2014

The part exceeding 185,274,695 won among the dispositions of refusal shall be revoked.

1. Details of the disposition;

A. On June 25, 2013, the Plaintiff: (a) between China, Aa, B and B, c bargaining by the Plaintiff.

58,824 shares (the shares of this case which are owned by the plaintiff) were invested in b in kind in 58,824 shares (the shares of this case which are owned by 58,766 shares) and then acquired 28,824 shares out of b's new shares. A made a share swap and underwriting contract (hereinafter referred to as the "agreement of this case") to the effect that "in return for investing 30,000,000 shares in b in b and making an investment in 29,99 shares out of b's new shares, which are 51% of the shares of this case."

B. On November 27, 2013, the Plaintiff invested the instant shares in kind in BB pursuant to the instant agreement and changed the title to BB in the future.

(C) On March 18, 2014, the Plaintiff entered into a modified agreement with the holding company DD to the effect that “B” becomes an affiliated company of DD and that the existing shareholders of B B shall acquire DD shares in the same proportion as BB’s shares, and acquired 22,858 shares of DD shares (38.9%) instead of the new shares of B B. Meanwhile, on December 18, 2013, separately from the instant agreement, the Plaintiff transferred cma bargaining shares 2,50 shares, and on February 28, 2014, the Plaintiff transferred cma bargaining shares 2,50 shares to 300 shares, and on February 28, 2014, the Defendant transferred 2,50 shares in this case and the transfer value of the shares in this case as 2,50 shares, 28,579, 2975, 297, 2797, 2097, 29757, 2757, 29757

E. The Defendant did not pay the said capital gains tax to the Plaintiff on April 1, 2014.

It notified 5,416,240,600 won without payment for the transfer income tax reverted to year.

F. In relation to the transfer income tax that the Plaintiff scheduled, the Plaintiff filed a request for reduction or correction that the portion exceeding KRW 185,274,695 out of the amount of the said preliminary return tax (the capital gains tax on the investment in kind of stocks of this case except for the capital gains tax on the transfer of stocks of this case to EE) should be reduced to KRW 0,00,000, as a result that aa, the other party to the instant agreement, did not invest USD 30,00,000 in accordance with the agreement, and even if the instant agreement constitutes a transfer for consideration for household affairs, the instant agreement was rescinded.

G. On September 16, 2014, the Defendant rendered a disposition rejecting correction against the Plaintiff (hereinafter “instant disposition”).

H. The Plaintiff filed an objection with SS on November 18, 2014, but the said application was dismissed on December 24, 2014, and the Plaintiff filed a tax appeal with the Director of the Tax Tribunal on March 3, 2015, but the said claim was also dismissed on July 7, 2015.

[Ground of recognition] Unsatisfy, Gap evidence 1 to 7, 9, 10 evidence, Eul evidence 1 to 4

Each entry, the whole purport of the pleading; hereinafter the same shall apply)

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

1) Even if the Plaintiff invested in kind the shares of this case in B and acquired the shares of this case in return, aa does not have any economic value so long as the Plaintiff did not invest USD 30,000,00 in B in accordance with the agreement of this case, so long as the shares of this case are not invested in BB, the Plaintiff is ultimately not entitled to any economic value. Accordingly, the Plaintiff’s disposition of this case based on the premise that the Plaintiff transferred the shares of this case in kind under the Income Tax Act was unlawful [it is not explicitly expressed by the Plaintiff, but this part of the claim for correction is deemed to have asserted the grounds for a claim for correction under Article 45-2(1)1 of the former Framework Act on National Taxes (amended by Act No. 12848, Dec. 23, 2014; hereinafter the same shall apply

2) Even if the Plaintiff’s transfer of the instant shares constitutes an investment in kind, the instant agreement was rescinded by the Plaintiff’s exercise of the Plaintiff’s right to rescind the agreement due to the Plaintiff’s nonperformance of the investment obligation under Aa, which constitutes grounds for filing a subsequent claim for rectification under Article 45-2(2)5 of the former Framework Act on National Taxes and Article 25-2 subparag. 2 of the Enforcement Decree of the Framework Act on National Taxes.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

1) Whether the instant shares were transferred at a cost

The term "transfer" in the main sentence of Article 88 (1) of the Income Tax Act, and the term "transfer" shall be registered, etc. of assets.

due to sale, exchange, investment in kind in a corporation, etc., regardless of whether the assets are

As seen earlier, the Plaintiff is actually obligated to transfer the shares of this case to B pursuant to the agreement of this case, and as a result, the Plaintiff invested in kind the shares of this case to B in accordance with the agreement of this case.

28,824 Shares acquired D's shares (38.9%) instead of acquiring 28,824 shares, so that D's shares (38.9%) were held by the holding company of b's holding assets, such as C' bargaining shares, and A's failure to perform its investment obligation does not mean that D's shares do not have any economic value, and there is no other evidence to acknowledge the circumstances as alleged by the plaintiff, contrary to the plaintiff's assertion. Accordingly, the plaintiff's assertion on the premise that D's shares did not have been transferred for consideration is without merit.

2) Whether to recognize a claim for correction due to the rescission of the instant agreement

In the course of economic activities, taxpayers may choose one of the several legal relationships while achieving the same economic purpose, and the tax authority shall respect the legal relationship chosen by the parties, barring any special circumstance (see Supreme Court Decision 2000Du963, Aug. 21, 2001). In addition, if a transaction party has formed a legal relationship by selecting one of the several ways that can achieve a certain transaction objective, the content and scope of taxes arising therefrom shall be determined individually in accordance with the legal relationship. Since the ultimate goal of different transactions is the same, it shall not be deemed that the substance is the same, notwithstanding the difference in the legal form, or that the same is treated under the Tax Act (see Supreme Court Decision 2013Du21670, Mar. 13, 2014).

As to the instant case, the following circumstances are revealed by the purport of the Plaintiff’s statement Nos. 1, 8, and 12 and the entire pleadings. In other words, the Plaintiff, b, and a have the intent to form each legal relationship between the Plaintiff’s investment in kind and the Plaintiff’s acquisition of shares of this case to b in order to achieve the economic purpose of transferring part of the management right of c marina learning to a by transferring the shares of this case to b, and A entered into the instant agreement with b to acquire shares of this case by investing separate funds. Accordingly, as long as the Plaintiff performed the investment in kind of shares of this case to b in b, the investment in kind does not constitute part of the transfer contract of the shares of this case between the Plaintiff and A, unlike the Plaintiff’s assertion, and even considering the whole process of the transaction, including the process of the conclusion of the instant agreement and the progress of the transaction, it is reasonable to view that the Plaintiff and A had the intent to lawfully create the legal relationship between the Plaintiff’s investment in kind and the Plaintiff’s acquisition of shares.

However, ① Investment in kind in a stock company is an investment-in-kind contract under the organization law in which the acquisition of assets and shares is a quid pro quo in the form of investment under the Commercial Act, and thus, the plaintiff is a party to the implementation of the investment in kind to b who is the other party to the

If a change of entry has been made, the cancellation of the contract must also be made about b;

② The Plaintiff’s notice of rescission of an agreement on the investment in kind by itself is directly the other party to the agreement.

India may not be deemed to have exercised the right of rescission against India, and otherwise, the Plaintiff may not be deemed to have separately exercised the right of rescission.

b) The agreement of February 8, 2015 (Evidence. 13) does not seem to have been declared to cancel the shares of this case, and the agreement of February 8, 2015 (Evidence. 13) is a separate agreement that the Plaintiff and a Aa entered into on the premise that the shares of this case remain in the name of B (i.e., investment in kind in B). However, in light of the fact that the investment in kind contract for the shares of this case was cancelled by the exercise of the right to cancel the agreement, and that the shares of this case are not expected to be restored to the Plaintiff, and that the Plaintiff and the Plaintiff did not actually return the shares of D which were received in return for the investment in kind with the Plaintiff and the Plaintiff, it is insufficient to recognize that the investment in kind contract for the shares of this case between the Plaintiff and B was completely rescinded, and there is no other evidence to acknowledge it. Accordingly, the Defendant’s disposition of this case based on this premise is legitimate, and the Plaintiff

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and it is so ordered as per Disposition.

partnership.