상속세 및 증여세법상 개별예시규정의 해석

Abstract

Article 2(3) of the Inheritance and Gift Tax Act (amended on 30 December 2003 by act no. 7010) (“IGTA”) is a general catch-all provision which stipulates that any transfer of property without consideration shall be subject to gift tax (also known as “the comprehensive gift taxation principle”). Despite the introduction of this provision in 2003, the tax authority has seldom used this provision as a basis for taxation. For more than ten years, scholars and practitioners have discussed the applicability of the newly introduced comprehensive gift taxation principle, for more than ten years. In its recent judgment 2013Du13266 rendered on 15 October 2015 (the “2015 Judgment”), the Supreme Court interpreted the general catch-all provision (article 2(3)) of the IGTA for the first time. The Supreme Court held that even if a transaction or action falls under the concept of a "gift" stipulated in the general catch-all provision (article 2(3)) of the IGTA, if such a transaction or action fails to satisfy the specific requirements set out in the individual example provisions, provided that such individual example provisions limits the types and scope of the taxable transaction or action, then a gift tax cannot be levied. According to the 2015 Judgment, articles 33 to 42 of the IGTA provide the valuation method for transferred gifts depending on the types of the transaction or action. These individual example provisions are construed to limit the scope of a gift tax. As a result, the scope of taxation effectively remains the same as the taxation scope under the previous regime without the general catch-all provision. By this interpretation, introduction of the general catch-all provision and the comprehensive gift taxation principle to the IGTA would not have any legal implication. This paper aims to analyze the adequacy of the 2015 Judgment and to study how to better reflect the legislative intent of the comprehensive gift taxation principle through interpretation and/or legislation. The interpretation provided in the 2015 Judgment is inconsistent with (i) the comprehensive gift taxation principle that any transfer of property without consideration shall be subject to a gift tax, and (ii) the legislative intent to convert the individual provisions into example provisions for valuation of the gifts in line with the comprehensive gift taxation principle. If a certain transaction or action is determined to be subject to gift tax under article 2(3) of the IGTA, the next step should be calculating the value of the taxable gifts in accordance with the individual example provisions, rather than determining again whether such transaction or action is subject to a gift tax. Individual example provisions do not provide separate requirements for taxation, but only provide example for valuation of the gifts. Therefore, if the transaction at issue falls under one of the individual example provisions or is fundamentally same or similar to the transactions listed under the individual example provisions, value of the gift should be calculated accordingly. If there is no individual example provision on which to rely for the valuation, it can be calculated according to other objective and reasonable methods such as alternative valuation method. If calculating the value of the gifts objectively and reasonably is impracticable, then it would lead to cases where tax authority cannot levy tax even under the regime of comprehensive gift taxation. In order to prevent potential invasions of taxpayer's privacy and the tax authority's abusive use of its right, to guarantee predictability and legal stability, and to minimize the potential unconstitutionality of the general catch-all approach to the gift tax, the following legislative improvements are needed: (i) supplement the relevant laws to consider further a taxpayer's realistic taxable capacity, (ii) provide tools to alleviate the risk of double-taxation on the same income, (iii) provide tools to adjust for situations where the asset value decreases while in possession, (iv) ensure that the same amount of gift tax is levied on a gift of equal value regardless of whether the party is specially related or non-related, and (v) unify the deductible limit to the transferred gifts.