Actor Yoon Tae-young (49) has won a partial victory in his appeal against the tax authorities’ decision to impose gift tax on shares worth 3 billion won that he inherited from his father스포츠토토.
According to legal sources, the Administrative Division 2 of the Seoul Administrative Court (Presiding Judge Shin Myung-hee) recently ruled in favour of the plaintiff in Yoon’s lawsuit against the Gangnam Tax Office in Seoul, saying, “Cancel the additional tax of 5.44 million won out of the gift tax of 9.84 million won.”
Yoon Tae-young [Image source=Yonhap]
In September 2019, Yoon inherited 400,000 shares of Company A, an unlisted property rental company, from his father. Later that year, he estimated the value of the shares at 3.166 billion won ($3.068 million) and filed and paid the relevant gift tax.
However, the tax authorities pointed out that the value of the shares should have been increased by 180.8 million won. The value of Company A’s assets was higher than Mr Yoon’s calculation.
It imposed a gift tax of 90.4 million won on the increase, plus a surcharge of 5.44 million won, which is imposed when a taxpayer breaches an obligation.
Mr Yoon filed an administrative appeal. At issue in the trial was the valuation of the shares in four other unlisted companies held by Company A. Mr Yoon used the “book value” of each company’s financial statements as the basis, but the tax authorities argued that the value of Company A’s assets would be higher if it were valued at the acquisition price.
Seoul Administrative Court, Seocho-gu, Seoul./Kim Hyun-min reporter kimhyun81@
The Court of First Instance ruled that the ‘book value’ standard should be based on the acquisition cost, not the book value for accounting purposes as interpreted by the tax authorities. “If (the standard) is interpreted as the book value for accounting purposes, it leads to results that vary depending on the accounting policies and accounting estimation methods adopted by the enterprise,” the court said, “which is highly likely to violate tax equity.”
However, it was not fair to impose a surcharge on Mr Yoon. The tribunal considered that there was confusion in the tax authorities’ interpretation of the vote until June 2019, just before Mr Yoon filed his gift tax return, using both book value and acquisition value.
“There were legitimate reasons for Mr Yoon’s lack of knowledge of his obligations, such as conflicting views on the interpretation of tax law,” the tribunal added.
Both Mr Yoon and the tax authorities appealed the first instance decision.