early 2014 Heavy2120 ( September 2, 2014)

Cases of transaction that do not reflect general and normal exchange values shall not be deemed the market price.

Cases of business that can not be seen as properly reflecting "general and normal exchange value" can not be deemed as the market price.

2014Guhap6136 Revocation of Disposition of Imposition of Gift Tax

Park ○

○ Head of tax office

August 12, 2015

September 17, 2015

1. The Defendant’s disposition imposing gift tax amounting to KRW 989,867,130, which was imposed on the Plaintiff on January 9, 2014, is revoked.

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

Cheong-gu Office

The same shall apply to the order.

1. Details of the disposition;

A. On June 28, 2009, the Plaintiff acquired 57,000 shares of ○○○ Co., Ltd. (hereinafter “○○○”) (hereinafter “instant shares”) from ○○○○ Co., Ltd. at KRW 500 per share.

B. The Defendant applied Article 35(2) of the Inheritance Tax and Gift Tax Act (hereinafter “Inheritance Tax and Gift Tax Act”) to the Plaintiff on January 9, 2014, on the ground that the Plaintiff acquired the instant shares of KRW 500 per share, even though the transaction example example amounting to KRW 39,00 per share was the market price of the instant shares, and issued a disposition imposing gift tax amounting to KRW 989,867,130 (including additional tax) (hereinafter “instant disposition”).

C. On March 18, 2014, the Plaintiff appealed and requested an inquiry to the Tax Tribunal, but was dismissed on September 2, 2014.

Grounds for Recognition

Facts without dispute, Gap evidence 5, Eul evidence 1 and 2, and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

In the disposition of this case, the defendant cannot be seen as the market price at the price formed by the transaction example, 39,000 won per share of the market price of this case at the price established by the transaction between the person with a special relationship, such as the largest shareholder, etc., and the possibility of listing ○ stocks at the time of the plaintiff's acquisition of the stocks of this case cannot be easily understood as having taken over the stocks of this case without any justifiable reason.

(b) Related statutes;

It is as shown in the attached Form.

C. Determination

1) Article 35(2) of the Inheritance Tax and Gift Tax Act provides that where assets are acquired by transfer between persons other than those having a special relationship without any justifiable reason, an amount equivalent to the difference between the price and the market price shall be presumed to be donated to the person who has acquired such profits as the value of donated property. Article 26(5) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act (hereinafter referred to as the "Enforcement Decree of the Inheritance Tax and Gift Tax Act") provides that the amount calculated by subtracting the price from the market price of the transferred assets shall be deemed to be 30/10 or more of the market price. Article 60(1) of the Inheritance Tax and Gift Tax Act provides that, in principle, the value of the assets on which the gift tax or gift tax is levied under this Act shall be deemed to be the market price as of the date of commencing the inheritance or donation, and Article 60(2) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act provides that the sale price of the assets shall be deemed to be the market price at least before and after the date of appraisal, and after the sale price as prescribed by Presidential Decree.

2) In light of the above legal principles, the Defendant’s disposition of this case, based on the premise that the market price per share of this case is 39,000 won per share, is 39,000 won, in light of the following circumstances: (a) in rendering the disposition of this case, 39,000 won, which is the example of business example, ○○○’s market price per share of ○○’s ○○, cannot be deemed to properly reflect the “general and normal exchange value; and (b) thus, the Defendant’s disposition of this case is unlawful.

A) ○○ was an unlisted corporation established for specific telecommunications business, mobile communications device leasing and sales business, etc. as its business purpose; ○○’s sales at the time of June 2009 were KRW 70 billion; and 1.7 billion in operating income; and around that time, ○○ was not planned to disclose its business.

B) On May 27, 2009, Kim ○ acquired 100,000 shares of ○○ from ○○ Bank Co., Ltd. (hereinafter “○○ Bank”) in KRW 39,000 per share.

C) On May 27, 2009, ○○ obtained a loan of KRW 7.5 billion from ○○○ Bank. On the same day, ○○○○, which is the largest shareholder of ○○○○○ and the second shareholder, submitted his name to the said Savings Bank as a joint guarantor by entering his name in the column of joint and several surety with respect to the above loan obligations. Interest on the above loan obligations was paid by ○○○○ Company with the representative director, ○○ Company with the father of ○○○○ as the representative director, ○○ Company with the representative director, and ○○○ Company with the same birth of ○○○○○○○○.

D) On May 27, 2009, ○ bank transferred ○○○ and ○○, a stock company, with 39,000 won per share on and around May 27, 2009. This was based on an agreement that ○○ and ○○○ sold ○○’s shares to ○○ Bank around 30,00 won per share on and around May 2007, to re-purchase 39,000 won with 130% of the above purchase price after 2 years, and in the case of ○○, ○○, a member of the family of ○○○, a member of the society, becomes an oligopolistic shareholder, so that ○○ may purchase the said shares.

E) At present, ○○ issue is being traded on the trading site of unlisted stocks, and the value per share is two to three thousand won.

3) On the other hand, in a lawsuit seeking revocation of a tax disposition, whether the disposition is lawful or not is determined depending on whether it exceeds a legitimate tax amount. The parties can submit objective tax bases and materials supporting the legitimate tax amount until the closing of argument in the fact-finding court. When a legitimate tax amount to be imposed lawfully is calculated based on such materials, only the portion exceeding the legitimate tax amount should be revoked. However, if not, the entire tax disposition should be revoked, and in such a case, the court does not have the duty to actively calculate the legitimate tax amount to be imposed by finding a reasonable and reasonable method of calculating ex officio (see, e.g., Supreme Court Decision 94Nu13527, Apr. 28, 1995)

In this case, it is difficult to calculate the reasonable tax amount to be imposed lawfully because the data submitted by the parties alone cannot calculate the reasonable market price of the stocks of this case, and the entire disposition of this case is revoked.

3. Conclusion

Therefore, the plaintiff's claim is reasonable, and it is decided as per Disposition.