Open Decision Ledger · Tax & international taxation
Substance over form in a sham share transfer and who proves the tax facts
Supreme Court, Dec. 24, 2025, 2025Du34044 (judgment)
No holding summary · checked against points at issue. The official text publishes no summary of the holding for this decision. The quotation and factors in this record are copied verbatim from the points at issue; the evidence for each axis is taken from the points at issue, the order and the reasons.
Case name: 상속세부과처분취소청구
Official text on the National Law Information Center
Question
May the substance-over-form principle in Article 14(1) of the Framework Act on National Taxes apply where a share transfer stops short of a sham lacking civil-law effect but is an irrational form adopted for tax avoidance, and who must prove the tax-requirement facts?
Holding
Yes. The principle reaches a tax-avoidance arrangement that is not quite a sham but adopts an irrational form or appearance diverging from substance. The tax authority must prove the tax-requirement facts, including any divergence between nominal and real holding; where indirect facts supporting them appear under ordinary experience, the assessment is not unlawful unless the opposing party proves special circumstances excluding that experience, and the court may decide facts a party has not asserted so far as they appear in the record.
Points at issue, verbatim
이러한 실질과세 원칙은 사법상 효력이 인정되지 않는 가장행위에 해당하는 정도에는 이르지 못하지만 실질과 괴리되는 비합리적인 형식이나 외관을 취하였다고 볼 만한 조세회피행위의 경우에도 적용될 수 있는지 여부(적극)
Unofficial English translation
whether such principle of taxation in accordance with substance may also apply to a tax avoidance act which, although it does not amount to a sham act to which no effect in private law is recognized, may be regarded as having taken an irrational form or appearance divergent from the substance (affirmative)
Disposition
Partly reversed and remanded Stated in the decision
원심판결 중 피고 패소 부분을 파기하고, 이 부분 사건을 서울고등법원에 환송한다. 원고들의 상고를 기각한다.
Unofficial English translation
The judgment of the court below is reversed in the part where the defendant lost, and this part of the case is remanded to the Seoul High Court. The plaintiffs' final appeal is dismissed.
Form of the test
Elements stated Stated in the decision
재산의 귀속명의자가 지배·관리할 능력이 없고 명의자에 대한 지배권 등을 통하여 실질적으로 지배·관리하는 자가 따로 있으며 명의와 실질의 괴리가 조세 회피 목적에서 비롯된 경우
Unofficial English translation
where the nominal holder of the property has no capacity to control and manage it, another person separately exercises substantial control and management through rights of control over the nominal holder, and the discrepancy between the name and the substance arises from a tax avoidance purpose
Factors
- 명의와 실질의 괴리가 조세 회피 목적에서 비롯된 경우
- 실질과 괴리되는 비합리적인 형식이나 외관을 취하였다고 볼 만한 조세회피행위의 경우에도 적용될 수 있는지 여부(적극)
- 과세요건사실에 관한 증명책임의 소재(=과세권자)
- 구체적인 소송과정에서 경험칙에 비추어 과세요건사실을 인정할 수 있는 간접사실이 밝혀진 경우, 해당 과세처분이 과세요건을 충족시키지 못한 위법한 처분인지 여부(원칙적 소극)
- 법원은 행정소송에서 기록상 자료가 나타나 있다면 당사자가 주장하지 않더라도 판단할 수 있는지 여부(적극)
Unofficial English translation
• Where the discrepancy between the name and the substance arises from a tax avoidance purpose
• Whether it may also apply to a tax avoidance act which may be regarded as having taken an irrational form or appearance divergent from the substance (affirmative)
• The allocation of the burden of proof as to the facts of the tax liability requirements (= the taxing authority)
• Where indirect facts from which the facts of the tax liability requirements may be inferred in light of experience are revealed in the course of the specific lawsuit, whether the relevant tax disposition is an unlawful disposition that fails to satisfy the tax liability requirements (in principle, negative)
• Whether the court may make a determination in administrative litigation even without a party's assertion where the material appears in the record (affirmative)
Relation to precedent
Follows earlier decisions Stated in the decision
대법원 2012. 1. 19. 선고 2008두8499 전원합의체 판결(공2012상, 359), 대법원 2015. 12. 15. 선고 2015두2611 판결(공2017상, 164), 대법원 2025. 3. 27. 선고 2023두37896 판결(공2025상, 77)
Unofficial English translation
Supreme Court en banc judgment 2008Du8499 decided January 19, 2012 (Gong 2012 Sang, 359), Supreme Court Decision 2015Du2611 decided December 15, 2015 (Gong 2017 Sang, 164), Supreme Court Decision 2023Du37896 decided March 27, 2025 (Gong 2025 Sang, 77)
Decisions referred to
[1] 대법원 2003. 5. 13. 선고 2002두12458 판결(공2003상, 1353) / [2] 대법원 2012. 1. 19. 선고 2008두8499 전원합의체 판결(공2012상, 359), 대법원 2015. 12. 15. 선고 2015두2611 판결(공2017상, 164), 대법원 2025. 3. 27. 선고 2023두37896 판결(공2025상, 77) / [3] 대법원 2002. 11. 13. 선고 2002두6392 판결(공2003상, 98), 대법원 2006. 9. 22. 선고 2006두6383 판결, 대법원 2018. 6. 28. 선고 2018두35025 판결(공2018하, 1511) / [4] 대법원 2006. 9. 22. 선고 2006두7430 판결, 대법원 2010. 2. 11. 선고 2009두18035 판결(공2010상, 578)
Burden of proof
The party asserting Stated in the decision
세금부과처분 취소소송에서 과세요건사실에 관한 증명책임의 소재(=과세권자) 및 이는 소득의 귀속 명의와 실질 귀속의 괴리 여부가 다투어지는 경우에도 마찬가지인지 여부(적극)
Unofficial English translation
the allocation of the burden of proof as to the facts of the tax liability requirements (= the taxing authority) in an action for revocation of a tax assessment disposition, and whether the same holds true where a discrepancy between the nominal attribution of income and the actual attribution is disputed (affirmative)
Open question and revisit condition
Once the tax authority has shown indirect facts supporting the tax-requirement facts, how thoroughly must the opposing party prove special circumstances excluding the ordinary experience rule?
The Seoul High Court's remand judgment in 2024Nu35066, once it clarifies the sham claim and examines the economic rationality of the transfer, will show how the test works in practice. A later decision changing the scope of Article 14(1) of the Framework Act on National Taxes would require a fresh reading.
Cross-family AI independent reading & axis check
6 of 8 axes matched GPT-6 Astra (OpenAI, codex CLI) · 2026-10-24
A reader from another model family (GPT-6 Astra), given the official text but not the primary reading, agreed on 6 of the 8 axes; the readings differed on axis 5 (factors), axis 8 (open question and revisit condition).
Axis 5 (Factors): Primary “명의와 실질의 괴리가 조세 회피 목적에서 비롯된 경우 / 실질과 괴리되는 비합리적인 형식이나 외관을 취하였다고 볼 만한 조세회피행위의 경우에도 적용될 수 있는지 여부(적극) / 과세요건사실에 관한 증명책임의 소재(=과세권자) / 구체적인 소송과정에서 경험칙에 비추어 과세요건사실을 인정할 수 있는 간접사실이 밝혀진 경우, 해당 과세처분이 과세요건을 충족시키지 못한 위법한 처분인지 여부(원칙적 소극) / 법원은 행정소송에서 기록상 자료가 나타나 있다면 당사자가 주장하지 않더라도 판단할 수 있는지 여부(적극)” vs Independent “재산의 귀속명의자가 지배·관리할 능력이 없고 / 명의자에 대한 지배권 등을 통하여 실질적으로 지배·관리하는 자가 따로 있으며 / 명의와 실질의 괴리가 조세 회피 목적에서 비롯된 경우 / 경험칙에 비추어 과세요건사실을 인정할 수 있는 간접사실”
Although both include tax-avoidance purpose and indirect facts, the primary centers on evidentiary and procedural rules, while the independent centers on nominal and actual control of the property.
재산의 귀속명의자가 지배·관리할 능력이 없고Axis 8 (Open question and revisit condition): Primary “Once the tax authority has shown indirect facts supporting the tax-requirement facts, how thoroughly must the opposing party prove special circumstances excluding the ordinary experience rule?” vs Independent “Will further examination establish that the transferred shares remained substantively attributable to the decedent and therefore formed part of the taxable estate?”
The primary asks how strongly the taxpayer must rebut an inference, while the independent asks whether further examination will establish that the shares belonged to the taxable estate.
이러한 실질과세 원칙은 사법상 효력이 인정되지 않는 가장행위에 해당하는 정도에는 이르지 못하지만 실질과 괴리되는 비합리적인 형식이나 외관을 취하였다고 볼 만한 조세회피행위의 경우에도 적용될 수 있는지 여부(적극)Raw responses and comparison record: Protocol · Blind readings (JSONL) · Axis comparison (JSONL) · SHA-256 (JSON)
Lower-court contrast & scope of application
Lower-court reading vs. Supreme Court holding
Lower-court context: The Seoul High Court, in its judgment of 16 May 2025 (2024Nu35066), held that Company O's success-contingent loan debt was unconfirmed at the date the inheritance opened, so it could not be deducted in computing the net asset value of its shares, and that the transfer of the △△ shares to JOVIAL was neither forged nor signed without capacity, rejecting the defendant's claim that it was a sham for want of proof.
Supreme Court standard: On the loan debt the Supreme Court found no error and dismissed the plaintiffs' appeal. On the △△ shares it held that rejecting the sham claim without clarifying whether it asserted the substance-over-form principle was a failure to exercise the clarification power, and that the court below had not examined why the contract was written while the decedent was in hospital in Japan, why a paper company set up in the Seychelles with capital of USD 1 bought a Malaysian company's shares, why the price was USD 1 per share, whether the plaintiffs were involved in later transfers from △△'s account, and whether the defendant had proved the indirect facts. It reversed that part and remanded it.
Distinguishing conditions
- A transfer backed by economic reasons and motives other than tax avoidance, such as a genuine commercial reason for the acquiring company's purchase.
- A case in which the party opposing the assessment proves special circumstances excluding the application of ordinary experience.
Record verification notes
Separate the two points: the Court upheld the confirmed-debt test for the success-contingent loan and reversed only on the sham claim. For the △△ shares, gather the record on the contract's date and circumstances, the acquiring company's formation and funding, the basis of the USD 1 price, and the later movement of funds, and set each against the indirect facts the tax authority relies on.
From the official text
Points at issue
비상장주식의 가액을 평가하기 위하여 순자산가액을 산정할 때 자산가액에서 공제되는 부채의 범위 국세기본법 제14조 제1항에서 정한 실질과세 원칙의 의미 및 재산의 귀속명의자가 지배·관리할 능력이 없고 명의자에 대한 지배권 등을 통하여 실질적으로 지배·관리하는 자가 따로 있으며 명의와 실질의 괴리가 조세 회피 목적에서 비롯된 경우, 재산에 관한 소득의 납세의무자(=재산의 실질적 지배·관리자) / 이러한 실질과세 원칙은 사법상 효력이 인정되지 않는 가장행위에 해당하는 정도에는 이르지 못하지만 실질과 괴리되는 비합리적인 형식이나 외관을 취하였다고 볼 만한 조세회피행위의 경우에도 적용될 수 있는지 여부(적극) 세금부과처분 취소소송에서 과세요건사실에 관한 증명책임의 소재(=과세권자) 및 이는 소득의 귀속 명의와 실질 귀속의 괴리 여부가 다투어지는 경우에도 마찬가지인지 여부(적극) / 과세요건사실에 관한 증명 정도 및 구체적인 소송과정에서 경험칙에 비추어 과세요건사실을 인정할 수 있는 간접사실이 밝혀진 경우, 해당 과세처분이 과세요건을 충족시키지 못한 위법한 처분인지 여부(원칙적 소극) 법원은 행정소송에서 기록상 자료가 나타나 있다면 당사자가 주장하지 않더라도 판단할 수 있는지 여부(적극)
Unofficial English translation
The scope of liabilities deducted from the amount of assets when calculating the net asset value in order to evaluate the value of unlisted shares the meaning of the principle of taxation in accordance with substance prescribed in Article 14, paragraph (1) of the Framework Act on National Taxes, and where the nominal holder of the property has no capacity to control and manage it, another person separately exercises substantial control and management through rights of control over the nominal holder, and the discrepancy between the name and the substance arises from a tax avoidance purpose, the taxpayer liable for income from the property (= the person who substantially controls and manages the property) / whether such principle of taxation in accordance with substance may also apply to a tax avoidance act which, although it does not amount to a sham act to which no effect in private law is recognized, may be regarded as having taken an irrational form or appearance divergent from the substance (affirmative) the allocation of the burden of proof as to the facts of the tax liability requirements (= the taxing authority) in an action for revocation of a tax assessment disposition, and whether the same holds true where a discrepancy between the nominal attribution of income and the actual attribution is disputed (affirmative) / the degree of proof as to the facts of the tax liability requirements and, where indirect facts from which the facts of the tax liability requirements may be inferred in light of experience are revealed in the course of the specific lawsuit, whether the relevant tax disposition is an unlawful disposition that fails to satisfy the tax liability requirements (in principle, negative) whether the court may make a determination in administrative litigation even without a party's assertion where the material appears in the record (affirmative)
Summary of the holding
The official text publishes no summary of the holding for this decision. The quotation and factors in this record are copied verbatim from the points at issue; the evidence for each axis is taken from the points at issue, the order and the reasons.
Order
원심판결 중 피고 패소 부분을 파기하고, 이 부분 사건을 서울고등법원에 환송한다. 원고들의 상고를 기각한다.
Unofficial English translation
The judgment of the court below is reversed in the part where the defendant lost, and this part of the case is remanded to the Seoul High Court. The plaintiffs' final appeal is dismissed.
Provisions referred to
[1] 구 상속세 및 증여세법(2016. 12. 20. 법률 제14388호로 개정되기 전의 것) 제63조 제1항 제1호 (다)목(현행 제63조 제1항 제1호 (나)목 참조), 구 상속세 및 증여세법 시행령(2016. 2. 5. 대통령령 제26960호로 개정되기 전의 것) 제54조 제1항, 제2항, 제55조 제1항, 제2항, 구 상속세 및 증여세법 시행규칙(2019. 3. 20. 기획재정부령 제719호로 개정되기 전의 것) 제17조의2 제3호 (나)목 / [2] 국세기본법 제14조 제1항 / [3] 행정소송법 제26조[증명책임] / [4] 행정소송법 제26조
Read 2026-10-24 · Cross-read 2026-10-24. 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.
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