Open Decision Ledger · Tax & international taxation
Valuation of market price in below-market leases with specially related persons and the requirements for the deemed gift tax surcharge on trusts of title
Translated from the Korean original. Read the Korean
Supreme Court, July 8, 2021, 2017Du69977 (judgment)
Case name: 종합소득세등부과처분취소
Official text on the National Law Information Center
Question
What is the standard for the market price of a below-market lease of a five-story building and for the surcharge for unjust non-filing of gift tax on shares held in trust of title?
Holding
The Supreme Court held that the market price of a below-market lease is determined by the price of continuous transactions in similar circumstances with persons other than specially related persons, or by the price of ordinary transactions between third parties, and that, where such a price is unavailable or unclear, the price is determined by methods prescribed by statutes and regulations, such as an appraised value by an appraisal corporation. It found that the monthly rent of KRW 50 million for which Plaintiff 1 leased the property to Jinmiseon Development appears to reflect the burden of facility repair and maintenance, taxes and public charges, and responsibility for dispute resolution, so the equivalent amount of sublease rent cannot be immediately determined to be the market price. In the valuation of Jinmiseon Development's shares, the Court upheld the finding of the court below that the principal business type had not changed, because it was subleasing even before the accommodation business was closed down. Documents such as contracts and account transaction records created to give the appearance of a sale in a trust of title arrangement are merely incidental acts that ordinarily follow, and unless there are special circumstances, they do not constitute a fraudulent act. The Court reversed, on the ground of a misapprehension of the legal principle, the part of the judgment of the court below that treated the funding appearance as a fraudulent act and recognized the surcharge for unjust non-filing.
Summary of the holding, verbatim
[1] 소득세법 제41조 제1항, 소득세법 시행령 제98조 제2항 제2호, 구 부가가치세법(2013. 6. 7. 법률 제11873호로 전부 개정되기 전의 것) 제13조 제1항 제4호, 구 부가가치세법 시행령(2013. 6. 28. 대통령령 제24638호로 전부 개정되기 전의 것) 제50조 제1항, 제52조 제1항 등에 따르면, 거주자인 사업자가 특수관계인에게 부당하게 낮은 대가를 받고 부동산을 임대한 경우 소득세법상 부당행위계산 부인의 기준이 되고 부가가치세법상 과세표준이 되는 부동산임대용역의 시가는 거주자인 사업자가 특수관계인 외의 자와 해당 거래와 유사한 상황에서 계속적으로 거래한 가격 또는 제3자 간에 일반적으로 거래된 가격에 의하여야 하고, 그와 같은 가격이 없거나 시가가 불분명한 경우에는 부동산 가격공시 및 감정평가에 관한 법률에 따른 감정평가법인이 감정한 가액 등 법령이 정한 방법으로 계산한 금액에 의하여야 한다
Unofficial English translation
[1] Pursuant to Article 41, paragraph (1) of the Income Tax Act, Article 98, paragraph (2), subparagraph 2 of the Enforcement Decree of the Income Tax Act, Article 13, paragraph (1), subparagraph 4 of the former Value-Added Tax Act (before its complete amendment by Act No. 11873, June 7, 2013), Article 50, paragraph (1) and Article 52, paragraph (1) of the former Enforcement Decree of the Value-Added Tax Act (before its complete amendment by Presidential Decree No. 24638, June 28, 2013), etc., where a resident business operator leases real estate to a specially-related person for an unjustly low consideration, the market price of the real estate leasing service, which serves as the basis for the disallowance of the computation of the tax base by unreasonable accounting under the Income Tax Act and as the tax base under the Value-Added Tax Act, must be determined by the price at which the resident business operator continuously transacted with persons other than specially-related persons in circumstances similar to the relevant transaction, or the price at which transactions are generally conducted between third parties, and where there is no such price or the market price is unclear, it must be determined by an amount calculated by a method prescribed by law and regulations, such as the value appraised by an appraisal corporation under the Act on the Public Notice of Real Estate Prices and Appraisal
Disposition
Partly reversed and remanded Stated in the decision
원심판결 중 원고 1의 패소 부분 및 원고 2, 원고 3, 원고 4, 원고 5, 원고 6, 원고 7의 패소 부분 중 가산세 부과처분 부분을 각각 파기하고, 이 부분 사건을 서울고등법원에 환송한다
Unofficial English translation
The portion of the judgment of the court below in which Plaintiff 1 lost, and the portion of the judgment of the court below in which Plaintiff 2, Plaintiff 3, Plaintiff 4, Plaintiff 5, Plaintiff 6, and Plaintiff 7 lost, insofar as it concerns the disposition imposing additional tax, are each reversed, and this part of the case is remanded to the Seoul High Court
Form of the test
Elements stated Stated in the decision
[1] 소득세법 제41조 제1항, 소득세법 시행령 제98조 제2항 제2호, 구 부가가치세법(2013. 6. 7. 법률 제11873호로 전부 개정되기 전의 것) 제13조 제1항 제4호, 구 부가가치세법 시행령(2013. 6. 28. 대통령령 제24638호로 전부 개정되기 전의 것) 제50조 제1항
Unofficial English translation
[1] Article 41, paragraph (1) of the Income Tax Act, Article 98, paragraph (2), subparagraph 2 of the Enforcement Decree of the Income Tax Act, Article 13, paragraph (1), subparagraph 4 of the former Value-Added Tax Act (before its complete amendment by Act No. 11873, June 7, 2013), Article 50, paragraph (1) of the former Enforcement Decree of the Value-Added Tax Act (before its complete amendment by Presidential Decree No. 24638, June 28, 2013)
Factors
- 그와 같은 가격이 없거나 시가가 불분명한 경우에는 부동산 가격공시 및 감정평가에 관한 법률에 따른 감정평가법인이 감정한 가액 등 법령이 정한 방법으로 계산한 금액에 의하여야 한다
- 적극적 은닉 의도가 나타나는 사정이 덧붙여지지 않은 채 단순히 세법상의 신고를 하지 않거나 허위의 신고를 함에 그치는 것은 여기에 해당하지 않는다
- 명의신탁자가 명의수탁자에게 주식을 명의신탁하면서 주식의 매매 등이 있었던 것과 같은 외관을 형성하여 그 형식에 따른 계약서나 계좌거래내역 등을 토대로 과세관청에 신고하는 것은 주식의 명의신탁에 통상 뒤따르는 부수행위에 불과하다고 볼 수 있다
Unofficial English translation
• Where there is no such price or the market price is unclear, it must be determined by an amount calculated by a method prescribed by law and regulations, such as the value appraised by an appraisal corporation under the Act on the Public Notice of Real Estate Prices and Appraisal
• Merely failing to file a report under tax laws or filing a false report, without any further circumstance evincing an affirmative intent to conceal, does not fall under this
• Where a name trustor entrusts shares to a name trustee while forming an appearance as though there had been a sale and purchase of shares or the like, and files a report with the tax office on the basis of a contract or account transaction records, etc. prepared in accordance with that form, such act cannot be regarded as other than an incidental act that ordinarily follows the name trust of shares
Relation to precedent
Follows earlier decisions Stated in the decision
[2] 대법원 2017. 4. 13. 선고 2015두44158 판결(공2017상, 1023)
Unofficial English translation
[2] Supreme Court Decision 2015Du44158 decided April 13, 2017 (Gong 2017 Sang, 1023)
Decisions referred to
[2] 대법원 2017. 4. 13. 선고 2015두44158 판결(공2017상, 1023), 대법원 2018. 12. 13. 선고 2018두36004 판결
Burden of proof
Not addressed Not in the decision
Open question and revisit condition
Where sublease rent and agreed burdens diverge and the appearance of a trust of title exists, where are the boundaries between market price and surcharge?
If a price of similar transactions is newly confirmed, or an intent of active concealment is revealed, the determinations of market price and surcharge need to be examined again.
Cross-family AI independent reading & axis check
8 of 8 axes matched Gemini 3.1 Pro · 2026-10-16
As a result of an independent reading by a cross-family AI, all eight axes agree with the first reading. The disposition, the quoted original text of the Summary of Decision, Form of the test, Factors, Relation to precedent, and Burden of proof classifications match the wording of the original text.
Lower-court contrast & scope of application
Lower-court reading vs. Supreme Court holding
Lower-court context: The court below found that, even before Jinmiseon Development closed down its accommodation business, its principal business type was subleasing and therefore had not changed, and accordingly held that each imposition of gift tax computed by determining net income value as the weighted average of net income and loss amounts for the most recent three years was lawful. The court below held that the market price of the lease services of the building in this case that Plaintiff 1 provided to Jinmiseon Development was the equivalent amount of sublease rent received by Jinmiseon Development, and therefore each imposition of Value-Added Tax and Comprehensive Income Tax on Plaintiff 1 was lawful. The court below held that the fund transactions at the time of the trust of title constituted a fraudulent act as provided in Article 47-2 (2) of the former Framework Act on National Taxes, and therefore the surcharge portion of each imposition of gift tax on Plaintiff 2, Plaintiff 3, Plaintiff 4, Plaintiff 5, Plaintiff 6, and Plaintiff 7 was lawful.
Supreme Court standard: The Supreme Court found that the finding of the court below that the principal business type had not changed was proper, and rejected this ground for final appeal. However, the Court pointed out the misapprehension of the legal principle by the court below, holding that the equivalent amount of sublease rent cannot be immediately determined to be the market price without taking into account the costs and responsibilities borne by Jinmiseon Development, and that incidental acts that ordinarily follow a trust of title of shares cannot be deemed to constitute a fraudulent act. The Supreme Court respectively reversed the judgment of the court below in the part concerning Plaintiff 1's losing portion and, among the losing portions of Plaintiff 2, Plaintiff 3, Plaintiff 4, Plaintiff 5, Plaintiff 6, and Plaintiff 7, the part concerning the imposition of surcharges, and remanded these cases to the Seoul High Court. It dismissed all of the remaining final appeals of Plaintiff 4, Plaintiff 5, Plaintiff 6, and Plaintiff 7.
Distinguishing conditions
- Where circumstances indicating an intent of active concealment are added, going beyond a mere failure to file
- Where there are special circumstances reaching a degree that makes the imposition and collection of gift tax impossible or markedly difficult as a result of the trust of title
- Where the market price can be determined by the price of continuous transactions in similar circumstances with persons other than specially related persons, or by the price of ordinary transactions between third parties, so that the case does not require methods prescribed by statutes and regulations, such as an appraised value
Record verification notes
When applying the legal principle of Supreme Court Decision 2017Du69977 to another case, it first needs to be checked whether the market price of lease services can be determined by the price of continuous transactions in similar circumstances or by the price of ordinary transactions between third parties, and whether the requirements for methods prescribed by statutes and regulations, such as an appraised value, are satisfied. It also needs to be examined whether there are special circumstances, going beyond the incidental acts that ordinarily follow the formation of the appearance of a trust of title, that make imposition and collection impossible or markedly difficult.
From the official text
Points at issue
[1] 거주자인 사업자가 특수관계인에게 부당하게 낮은 대가를 받고 부동산을 임대한 경우, 소득세법상 부당행위계산 부인의 기준이 되고 부가가치세법상 과세표준이 되는 부동산임대용역의 시가를 산정하는 방법 [2] 구 국세기본법 제47조의2 제2항 등에 규정된 ‘사기나 그 밖의 부정한 행위’ 또는 ‘부정행위’의 의미 / 명의신탁재산 증여의제의 경우 주식을 명의신탁하면서 주식의 매매 등이 있었던 것과 같은 외관을 형성하여 그 형식에 따른 계약서나 계좌거래내역 등을 토대로 과세관청에 신고하는 것이 증여세 부당무신고가산세의 요건인 ‘사기나 그 밖의 부정한 행위’ 또는 ‘부정행위’에 해당하는지 여부(원칙적 소극)
Unofficial English translation
[1] Where a resident business operator leases real estate to a specially-related person for an unjustly low consideration, the method of determining the market price of the real estate leasing service, which serves as the basis for the disallowance of the computation of the tax base by unreasonable accounting under the Income Tax Act and as the tax base under the Value-Added Tax Act [2] The meaning of 'fraud or other deceptive act' or 'deceptive act' as provided in Article 47-2, paragraph (2), etc. of the former Framework Act on National Taxes / Whether, in the case of the deemed gift of property held in a name trust, filing a report with the tax office on the basis of a contract or account transaction records, etc. prepared in accordance with the form created by forming an appearance as though there had been a sale and purchase of shares or the like at the time the shares were entrusted to the nominee, falls under 'fraud or other deceptive act' or 'deceptive act', which is a requirement for the additional tax for an unjust failure to file a return (in principle, negative)
Summary of the holding
[1] 소득세법 제41조 제1항, 소득세법 시행령 제98조 제2항 제2호, 구 부가가치세법(2013. 6. 7. 법률 제11873호로 전부 개정되기 전의 것) 제13조 제1항 제4호, 구 부가가치세법 시행령(2013. 6. 28. 대통령령 제24638호로 전부 개정되기 전의 것) 제50조 제1항, 제52조 제1항 등에 따르면, 거주자인 사업자가 특수관계인에게 부당하게 낮은 대가를 받고 부동산을 임대한 경우 소득세법상 부당행위계산 부인의 기준이 되고 부가가치세법상 과세표준이 되는 부동산임대용역의 시가는 거주자인 사업자가 특수관계인 외의 자와 해당 거래와 유사한 상황에서 계속적으로 거래한 가격 또는 제3자 간에 일반적으로 거래된 가격에 의하여야 하고, 그와 같은 가격이 없거나 시가가 불분명한 경우에는 부동산 가격공시 및 감정평가에 관한 법률에 따른 감정평가법인이 감정한 가액 등 법령이 정한 방법으로 계산한 금액에 의하여야 한다. [2] 구 국세기본법(2013. 6. 7. 법률 제11873호로 개정되기 전의 것) 제47조의2 제2항은 납세의무자가 ‘부정행위’로 법정신고기한까지 세법에 따른 국세의 과세표준 신고를 하지 아니한 경우에는 산출세액 등의 100분의 40에 상당하는 금액을 가산세로 하도록 규정하고 있다(2011. 12. 31. 법률 제11124호로 개정되기 전의 구 국세기본법 제47조의2 제2항도 같은 취지이다. 이하 위 각 국세기본법을 구분하지 않고 ‘구 국세기본법’이라 통칭한다). 구 국세기본법 제47조의2 제2항 등에 규정된 ‘사기나 그 밖의 부정한 행위’ 또는 ‘부정행위’란 조세의 부과와 징수를 불가능하게 하거나 현저히 곤란하게 하는 위계 기타 부정한 적극적인 행위를 말하고, 적극적 은닉 의도가 나타나는 사정이 덧붙여지지 않은 채 단순히 세법상의 신고를 하지 않거나 허위의 신고를 함에 그치는 것은 여기에 해당하지 않는다. 또한 명의신탁재산 증여의제의 경우 명의신탁자가 명의수탁자에게 주식을 명의신탁하면서 주식의 매매 등이 있었던 것과 같은 외관을 형성하여 그 형식에 따른 계약서나 계좌거래내역 등을 토대로 과세관청에 신고하는 것은 주식의 명의신탁에 통상 뒤따르는 부수행위에 불과하다고 볼 수 있다. 따라서 이와 같은 경우에는 명의신탁의 결과 명의수탁자가 부담할 증여세의 부과와 징수를 불가능하게 하거나 현저히 곤란하게 하는 정도에 이르렀다는 등의 특별한 사정이 없는 한, 증여세 부당무신고가산세의 요건인 ‘사기나 그 밖의 부정한 행위’ 또는 ‘부정행위’에 해당한다고 볼 수 없다.
Order
원심판결 중 원고 1의 패소 부분 및 원고 2, 원고 3, 원고 4, 원고 5, 원고 6, 원고 7의 패소 부분 중 가산세 부과처분 부분을 각각 파기하고, 이 부분 사건을 서울고등법원에 환송한다. 원고 4, 원고 5, 원고 6, 원고 7의 나머지 상고를 모두 기각한다.
Unofficial English translation
The portion of the judgment of the court below in which Plaintiff 1 lost, and the portion of the judgment of the court below in which Plaintiff 2, Plaintiff 3, Plaintiff 4, Plaintiff 5, Plaintiff 6, and Plaintiff 7 lost, insofar as it concerns the disposition imposing additional tax, are each reversed, and this part of the case is remanded to the Seoul High Court. All remaining final appeals of Plaintiff 4, Plaintiff 5, Plaintiff 6, and Plaintiff 7 are dismissed.
Provisions referred to
[1] 소득세법 제41조 제1항, 소득세법 시행령 제98조 제2항 제2호, 구 부가가치세법(2013. 6. 7. 법률 제11873호로 전부 개정되기 전의 것) 제13조 제1항 제4호(현행 제29조 제1항, 제4항 제2호, 제3호 참조), 구 부가가치세법 시행령(2013. 6. 28. 대통령령 제24638호로 전부 개정되기 전의 것) 제50조 제1항(현행 제62조 참조), 제52조 제1항(현행 부가가치세법 제29조 제4항 참조) [2] 구 국세기본법(2011. 12. 31. 법률 제11124호로 개정되기 전 것) 제47조의2 제2항 제1호(현행 제47조의2 제1항 제1호 참조), 구 국세기본법(2013. 6. 7. 법률 제11873호로 개정되기 전의 것) 제47조의2 제2항(현행 제47조의2 제1항 제1호 참조), 구 국세기본법 시행령(2012. 2. 2. 대통령령 제23592호로 개정되기 전의 것) 제27조 제2항 제6호(현행 제12조의2 제1항 및 조세범 처벌법 제3조 제6항 참조)
Read 2026-10-15 · Cross-read 2026-10-16. All quotes matched against the official text. The Chinese-character placeholders the court used for anonymised parties are given in their Korean readings, and parenthetical Chinese-character glosses are omitted.
Every entry is published only after all quotes have been matched character by character against the official text, and audited by an independent second reading from a different model family across all eight axes. Both agreed axes and text-grounded interpretive divergences are recorded openly. The ledger is a research record, not an assessment of the court or advice on any matter.
Back to the ledger