Seoul Administrative Court 2007Guhap48254 ( August 22, 2008)

The legitimacy of the assertion that the name was stolen as to the constructive gift of stock nominal trust

In light of the fact that the Plaintiff continued to work as an agent for the company from the time of incorporation to the time of capital increase increase, and there was no ex post facto action such as criminal complaint even after the imposition of gift tax, it cannot be deemed that the Plaintiff unilaterally acquired shares under the Plaintiff’s name

The contents of the decision shall be the same as attached.

Article 41-2 (Presumption of Donation of Title Trust Property)

The plaintiff's appeal is dismissed.

Expenses for appeal shall be borne by the plaintiff.

The judgment of the first instance shall be revoked. Each disposition of the Defendant rendered against the Plaintiff on November 13, 2006, including KRW 3,500,000, and the gift tax of KRW 45,938,190, belonging to the year 2002, shall be revoked.

1. Quotation of judgment of the first instance;

The reasoning of the judgment of this court is as stated in the judgment of the court of first instance, with the exception of adding "a person's own recognition that the shares of this case were trusted to the plaintiff at the time of the tax investigation (record 67 pages)" to "not less than 5 pages 4 of the judgment of the court of first instance", and therefore, it shall be quoted in accordance with Article 8 (2) of the Administrative Litigation Act and the main sentence of Article 420 of the Civil Procedure Act.

2. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and the judgment of the court of first instance is just, and the plaintiff's appeal is dismissed as it is without merit, and it is so decided as per Disposition.

[Seoul Administrative Court 2007Guhap48254, 2008.22]

1. The plaintiff's claim is dismissed.

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

Each disposition of imposition of KRW 3,50,00,00 for the gift tax of 2001 against the Plaintiff on November 13, 2006 and KRW 45,938,190 for the gift tax of 202 shall be revoked.

1. Circumstances of dispositions;

A. At the time of the establishment of ○○ General Cheongdong Co., Ltd. (hereinafter “instant stock company”) for the purpose of wholesale and retail business on February 3, 2001, 300 shares of the instant company, which were 30,000 shares of 30,000 shares of the instant company under the name of the Plaintiff. On September 26, 2002, 300 shares out of 30,000 shares of the instant company at the time of issuing new shares of the instant company at the time of issuing new shares, which were acquired under the name of the Plaintiff (hereinafter “instant shares”). However, on November 13, 2006, the Defendant disposed of KRW 3,000 shares to the Plaintiff on February 3, 2001 and September 26, 2002, based on each of the title trust and gift tax reverted to the Plaintiff (amended by Act No. 200138, Sep. 26, 2002; 2008).

C. On February 8, 2007, the plaintiff appealed to the National Tax Tribunal, but the National Tax Tribunal dismissed the plaintiff's above request on September 27, 2007.

[Reasons for Recognition] Facts without dispute, Gap evidence 1, Gap evidence 2, Gap evidence 3-1, 4, Gap evidence 5, Eul evidence 1, and Eul evidence 2

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The plaintiff asserts that the disposition of this case is unlawful and thus should be revoked for the following reasons.

(i)It was merely to acquire the shares of this case by unilaterally stealing the name of the plaintiff, and there was no agreement between the plaintiff and the regular ○○.

2) Even if the fact of title trust is recognized, this is merely for the acquisition of the number of promoters required by the Commercial Act for the establishment of the instant company, and it does not constitute title trust of the instant shares to the Plaintiff for the purpose of evading taxes.

(b) Related statutes;

(Omission)

(c) Fact of recognition;

(i)personal information;

A) The Plaintiff, the representative director of the instant company, worked as an agent for the instant company from the incorporation to 2005, and Kim Jong-ok was registered as the auditor of the instant company from the incorporation of the instant company to March 31, 2007. The Plaintiff, the representative director of the instant company, worked as the head of the instant company from the date of the instant company’s incorporation to 2004.

B) An investment of KRW 60 million in 00,000 at the time of the incorporation of the instant company, not the relationship of 00 and 00,000.

C) At the time of the incorporation of the instant company, the Plaintiff’s ○○○ book was entered as a promoter in the articles of incorporation.

2) Details of stock change of the instant company

A) At the time of the incorporation of the instant company, the shareholder registry was registered as holding 18,00 shares of 30,000 shares (60%) among the total shares of 30,000 shares, 6,00 shares (20%), 3,000 shares (10%) by Kim Jong-ok, and 3,000 shares (10%) by the Plaintiff.

B) On September 26, 2002, the instant company issued new shares with capital increase with additional 30,000 shares issued. After capital increase, the shareholders, other than the ○○ shareholder registry, purchased new shares in proportion to each of the shares held, and then registered 36,000 shares (60%) with regular ○ 36,00 shares (10%), 6,000 shares (10%), 6,000 shares (10%), and 6,000 shares (10%) by the Plaintiff. However, the ○○ book refused to accept new shares as above, and 6,000 shares (10%) with regular 0 shares (10%) in the name of ○○.

3) Financial status, etc. of the instant company

A) The annual earned surplus of the instant company is as follows.

Year

Surplus

Year

Surplus

201

142,289,163

205

1,741,960,602

202

419,678,104

206

2,047,83,289

2003

734,919,624

2007

2,323,524,374

204

1,291,617,913

B) However, the instant company did not pay dividends once from the time of its incorporation until now.

(iv)other:

A) After the instant disposition, the Plaintiff did not file a complaint by forging private documents, etc.

B) At the time of the tax investigation prior to the disposition of this case, the Masan borrowed money from the Plaintiff, etc. with respect to the process of acquiring the stocks of this case under the name of the Plaintiff, etc., and stated that the Plaintiff acquired the stocks of this case

C) At the time of 2002, the global income tax rate reaches 36%, the highest tax rate.

[Reasons for Recognition] Evidence No. 2, Evidence No. 6, Evidence No. 7, Evidence No. 1 through 7, Evidence No. 3, Evidence No. 6, Evidence No. 7, Evidence No. 8-1 through 6, and the purport of the whole pleadings

D. Determination

1) Whether a title trust was made

A) The provision on deemed donation under Article 41-2(1) of the Act shall apply where, in property requiring a registration for the transfer or exercise of rights, etc., the actual owner and the nominal owner enter into an agreement or communication, and thus, registration, etc. has been made in the future of the nominal owner, regardless of the intent of the nominal owner. In such a case, the tax authority may not apply where it unilaterally proves that the actual owner is different from the nominal owner, and where it proves that the registration, etc. of the nominal owner was made in the unilateral act of the actual owner regardless of the intent of the nominal owner, the nominal owner who asserts such act should be the nominal owner (see, e.g., Supreme Court Decision 2007Du

B) In light of the above legal principles, the following circumstances that can be examined by the above facts of recognition: (i) according to the Plaintiff’s assertion, (ii) borrowed money from the Plaintiff, etc. with close relatives, etc., or (iii) took over the shares of this case under the name of the Plaintiff as collateral against extremely, considering the frequent possibility of having the Plaintiff offer his or her property as collateral; (iv) there is no reason to notify the Plaintiff of such fact; and (ii) the Plaintiff continued to work as an agent for the instant company from the time of the establishment of the instant company to the time of the company’s incorporation, and did not take any follow-up measures, such as criminal complaint, against ○ after the disposition of this case, there is insufficient evidence to acknowledge that ○ was unilaterally taking over the shares of this case in the name of the Plaintiff regardless of the Plaintiff’s intent, and there is no other evidence to acknowledge this otherwise.

C) Therefore, this part of the Plaintiff’s assertion is without merit.

2) Whether there was an objective of tax avoidance or not

A) The legislative purport of Article 41-2(1) of the 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 can be applied only if the purpose of tax avoidance is not included in the purpose of title trust, and in this case, it may be proven by means of proving that there was a purpose of tax avoidance other than the purpose of tax avoidance. However, the nominal owner who bears the burden of proof has a clear and unrelated purpose with the tax avoidance to the extent that it is recognized that there was no purpose of tax avoidance in the title trust, and that there was no tax avoidance at the time of the title trust or there was no tax avoidance at the time of the title trust (see, e.g., Supreme Court Decision 2004Du11220, Sept. 22, 2006).

B) In light of the aforementioned legal principles, the Plaintiff asserted that the Plaintiff acquired the instant shares in the name of the Plaintiff to meet the requirements of promoters required in the Commercial Act when establishing the instant company, namely, (i) the Plaintiff had made a statement regarding the process of acquiring the instant shares in the name of the Plaintiff, etc. at the time of the tax investigation prior to the instant disposition; (ii) there was no statement consistent with the Plaintiff’s assertion as above; (iii) even though the Plaintiff’s two or more promoters and shareholders have to continue to maintain until the instant company was incorporated, the requirements of promoters were mitigated by the amendment of the Commercial Act on July 24, 201, and there was no difference between the Plaintiff’s global income tax and the amount of global income tax at the time of the instant company’s incorporation and the amount of global income tax at the time of the instant transfer of shares, which would have been difficult to be readily concluded that the Plaintiff did not have any other evidence to acknowledge the global income tax evasion rate than the amount of global income tax at the time of the instant transfer of shares (see, e.g., Supreme Court Decision 20000Du3).

C) Therefore, other Plaintiff’s assertion on this part is without merit.

3. Conclusion

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