Actor Yoon Tae-young, 49, has won a partial victory in a gift tax case over 3 billion won worth of stock he received from his father, former Samsung Electronics vice chairman Yoon Jong-yong, 79.
The court ruled that Yoon was at fault for underestimating the value of the shares and should pay an additional 90 million won in taxes. However, it did not go so far as to impose a punitive surcharge.
According to legal sources, the Administrative Division 2 of the Seoul Administrative Court (Deputy Chief Judge Shin Myung-hee) recently ruled to “cancel the additional tax of 5.44 million won of the 95.84 million won in gift tax” in a lawsuit filed by Yoon against the Gangnam Tax Office in Seoul.
In September 2019, Mr. Yoon received 400,000 shares of Company A, an unlisted corporation, from Mr. Yoon’s former vice chairman.
Mr. Yoon is the protagonist of the “salaryman myth” who built Samsung Electronics into a global company by successfully developing the first VCR in Korea. In 2007, Yoon’s wedding was attended by political and business figures.
Ms. Yoon valued the shares of Company A she received from her father at 3.16 billion won ($3.068 million) and reported and paid gift taxes based on this안전놀이터.
However, after an investigation, the tax authorities determined that the value of Company A’s assets was higher than Yoon’s calculation, and that the value of the shares Yoon received should be increased by 180.8 million won.
Accordingly, the tax authorities charged Mr. Yoon 90.4 million won in gift tax and 5.44 million won in additional tax for the increase.
Additional tax is a tax imposed when a taxpayer violates obligations such as reporting and paying taxes. It was added as a sanction for Mr. Yoon’s initially incorrect declaration.
Mr. Yoon’s lawsuit challenged the value of the shares of four other companies held by Company A. The issue was how to value the shares.
Mr. Yoon used the “book value” of each company’s financial statements as the basis, while the tax authorities used the acquisition value, which he argued increased the value of Company A’s assets.
The court found that the tax authorities’ calculation was correct.
Court logo
[Image by Lee Yulip].
“If (the standard) is interpreted as the book value for accounting purposes, the result will vary depending on the accounting policy adopted by the enterprise and the method of accounting estimation,” the court said, “which is highly likely to violate tax fairness.”
However, the tribunal concluded that it would be unfair to impose a surcharge on Mr. Yoon.
The tribunal reasoned that there was confusion in the tax authorities’ interpretation of the vote until June 2019, just before Mr. Yoon filed his gift tax return, as they used 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 tax law interpretation,” the tribunal explained.