Open Decision Ledger · Tax & international taxation
Special relation covering a controlled corporation's employee for gift tax on new shares
Supreme Court, Apr. 30, 2026, 2025Du35812 (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: 증여세부과처분취소
Official text on the National Law Information Center
Question
Under Article 39(1)(i)(b) of the former Inheritance and Gift Tax Act, does the 'special relation' cover an employee of a corporation in which the person who forwent the new share subscription holds 30 percent or more of the shares or capital, and must the alignment of legal or factual interests between them be considered in deciding that?
Holding
Yes and no. Reading the words and structure of former Article 2(10) of the Act and Article 2-2(1)(ii) of its former Enforcement Decree, the Supreme Court held that an employee of a corporation in which the forgoing shareholder holds 30 percent or more of the shares or capital falls within the 'special relation' for this provision, and that, absent special circumstances, the alignment of legal or factual interests is not a matter to be weighed. The provision does not make the motive for forgoing the subscription, or the parties' interest alignment or influence over the decision, a condition of taxation.
Points at issue, verbatim
구 상속세 및 증여세법 제39조 제1항 제1호 (나)목이 적용되는 국면에서의 ‘특수관계인’에 신주 인수를 포기한 자가 발행주식총수 또는 출자총액의 100분의 30 이상을 출자하고 있는 법인의 사용인이 포함되는지 여부(적극) 및 위 사용인이 특수관계인에 해당하는지를 판단할 때 신주 인수를 포기한 자와 그가 위와 같이 출자하고 있는 법인 또는 그 사용인 간 법률적·사실적 이해관계의 일치 여부를 고려하는지 여부(원칙적 소극)
Unofficial English translation
Whether an employee of a corporation in which the person who has renounced subscription to new shares holds 30/100 or more of the total number of issued shares or the total amount of contribution is included among the 'special related persons' in the context to which Article 39 (1) 1 (b) of the former Inheritance Tax and Gift Tax Act applies (affirmative), and whether, in determining whether such employee falls within the special related persons, the consistency of legal or factual interests between the person who has renounced subscription to new shares and the corporation in which he or she holds such contribution, or its employee, is taken into consideration (in principle, negative)
Disposition
Dismissed Stated in the decision
상고를 기각한다. 상고비용은 원고가 부담한다.
Unofficial English translation
The appeal is dismissed. The costs of the final appeal shall be borne by the plaintiff.
Form of the test
Elements stated Stated in the decision
이 사건 법률 규정이 적용되는 국면에서의 ‘특수관계인’에는 신주 인수를 포기한 자가 발행주식총수 또는 출자총액의 100분의 30 이상을 출자하고 있는 법인의 사용인이 포함되고
Unofficial English translation
In the context to which the statutory provisions at issue in this case apply, the 'special related persons' include an employee of a corporation in which the person who has renounced subscription to new shares holds 30/100 or more of the total number of issued shares or the total amount of contribution, and
Factors
- 조세법규의 해석 기준
- 구 상속세 및 증여세법 제39조 제1항 제1호 (나)목의 입법 취지 및 과세요건
- 신주 인수를 포기한 자가 발행주식총수 또는 출자총액의 100분의 30 이상을 출자하고 있는 법인의 사용인이 포함되는지 여부
- 신주 인수를 포기한 자와 그가 위와 같이 출자하고 있는 법인 또는 그 사용인 간 법률적·사실적 이해관계의 일치 여부를 고려하는지 여부
Unofficial English translation
• Criteria for interpretation of tax statutes
• Legislative intent and requirements for taxation under Article 39 (1) 1 (b) of the former Inheritance Tax and Gift Tax Act
• Whether an employee of a corporation in which the person who has renounced subscription to new shares holds 30/100 or more of the total number of issued shares or the total amount of contribution is included
• Whether the consistency of legal or factual interests between the person who has renounced subscription to new shares and the corporation in which he or she holds such contribution, or its employee, is taken into consideration
Relation to precedent
Follows earlier decisions Stated in the decision
대법원 2004. 5. 28. 선고 2003두7392 판결(공2004하, 1096)
Unofficial English translation
Supreme Court Decision 2003Du7392 decided May 28, 2004 (Gong 2004 Ha, 1096)
Decisions referred to
[1] 대법원 2004. 5. 28. 선고 2003두7392 판결(공2004하, 1096)
Burden of proof
Not addressed Not in the decision
Open question and revisit condition
What special circumstances would make the alignment of legal or factual interests relevant when deciding whether an employee of the controlled corporation is a special relation?
An amendment to Article 39(1)(i)(b) of the Inheritance and Gift Tax Act or to Article 2-2 of its Enforcement Decree would require this entry to be read again. So would a later Supreme Court decision that reads the motive for forgoing the subscription, or the alignment of interests, as a condition of taxation.
Cross-family AI independent reading & axis check
8 of 8 axes matched GPT-6 Astra (OpenAI, codex CLI) · 2026-10-25
A reader from another model family (GPT-6 Astra), given the official text but not the primary reading, agreed on all 8 axes.
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 30 October 2025 (2024Nu74481), found that Company A held 30 percent or more of the total issued shares of Company B at the time Company B resolved on 19 December 2018 to issue new shares by shareholder subscription, and that the plaintiff, then a director of Company B, was an employee of Company B, a corporation controlled by Company A through its investment, so he fell within the special relation defined in the Enforcement Decree. It rejected the plaintiff's arguments that Company A's voting rights were restricted by a shareholders' agreement at the time, that the plaintiff had no real economic connection with Company A, and that 'the person who forwent the new share subscription' must be limited to one who did so voluntarily.
Supreme Court standard: The Supreme Court found no error. It held that the words and structure of the tax provision and the Enforcement Decree supported reading the special relation to include an employee of a corporation in which the forgoing shareholder holds 30 percent or more, and that neither the motive for forgoing the subscription nor the alignment of interests is a condition of taxation. Since the court below had neither misunderstood those provisions nor left anything unexamined, the Justices unanimously dismissed the appeal and put the costs on the plaintiff.
Distinguishing conditions
- A share subscription forgoing in which neither the forgoing person alone nor that person jointly with the persons listed in items (a) to (e) of Article 2-2(1) of the former Enforcement Decree holds 30 percent or more of the total issued shares or capital contribution amount of the corporation, so that no controlled corporation and thus no employee of it is in issue.
- A case resting on a ground other than former Article 39(1)(i)(b), since the Court confined its reading to the situation in which that provision is applied.
- A person who is not an officer, commercial employee or person under a contract of employment with the controlled corporation, since only such a person is an employee within Article 2-2(1)(ii) of the former Enforcement Decree.
Record verification notes
Set out the shareholding ratios held by the forgoing person and by those persons listed in items (a) to (e) of Article 2-2(1) of the former Enforcement Decree on the resolution date, alone and jointly, and confirm whether the 30 percent threshold is met. Then confirm the position held by the recipient of the new shares within the controlled corporation, since only an officer, commercial employee or employed person counts. Keep the arguments on voting rights restricted by a shareholders' agreement and on the absence of an economic connection separate, because the Court treated neither as a condition of taxation.
From the official text
Points at issue
[1] 조세법규의 해석 기준 [2] 구 상속세 및 증여세법 제39조 제1항 제1호 (나)목의 입법 취지 및 과세요건 [3] 구 상속세 및 증여세법 제39조 제1항 제1호 (나)목이 적용되는 국면에서의 ‘특수관계인’에 신주 인수를 포기한 자가 발행주식총수 또는 출자총액의 100분의 30 이상을 출자하고 있는 법인의 사용인이 포함되는지 여부(적극) 및 위 사용인이 특수관계인에 해당하는지를 판단할 때 신주 인수를 포기한 자와 그가 위와 같이 출자하고 있는 법인 또는 그 사용인 간 법률적·사실적 이해관계의 일치 여부를 고려하는지 여부(원칙적 소극)
Unofficial English translation
[1] Criteria for interpretation of tax statutes [2] Legislative intent and requirements for taxation under Article 39 (1) 1 (b) of the former Inheritance Tax and Gift Tax Act [3] Whether an employee of a corporation in which the person who has renounced subscription to new shares holds 30/100 or more of the total number of issued shares or the total amount of contribution is included among the 'special related persons' in the context to which Article 39 (1) 1 (b) of the former Inheritance Tax and Gift Tax Act applies (affirmative), and whether, in determining whether such employee falls within the special related persons, the consistency of legal or factual interests between the person who has renounced subscription to new shares and the corporation in which he or she holds such contribution, or its employee, is taken into consideration (in principle, negative)
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
상고를 기각한다. 상고비용은 원고가 부담한다.
Unofficial English translation
The appeal is dismissed. The costs of the final appeal shall be borne by the plaintiff.
Provisions referred to
[1] 국세기본법 제18조, 지방세기본법 제20조 [2] 구 상속세 및 증여세법(2020. 12. 22. 법률 제17654호로 개정되기 전의 것) 제39조 제1항 제1호 (나)목 [3] 구 상속세 및 증여세법(2020. 12. 22. 법률 제17654호로 개정되기 전의 것) 제2조 제10호, 제39조 제1항 제1호 (나)목, 구 상속세 및 증여세법 시행령(2019. 2. 12. 대통령령 제29533호로 개정되기 전의 것) 제2조의2
Read 2026-10-25 · Cross-read 2026-10-25. 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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