MB Brother-in-law's Wife Wins Gift Tax Lawsuit Related to Das, 910 Million Won → 6 Million Won

[Asia Economy Reporter Choi Seok-jin, Legal Affairs Specialist] Kwon Young-mi, the wife of the late Kim Jae-jung, brother-in-law of former President Lee Myung-bak, has effectively won a gift tax lawsuit related to DAS.

According to the legal community on the 4th, the Administrative Court of Seoul, Administrative Division 4 (Presiding Judge Han Won-kyo) recently ruled partially in favor of the plaintiff, ordering the cancellation of all but 6 million won of the initially imposed gift tax of about 91 million won in the lawsuit filed by Kwon against the Gangnam Tax Office chief seeking cancellation of the gift tax imposition.

The Seoul Regional Tax Office began a gift tax investigation on Kwon, the major shareholder of Geumgang, a DAS partner company, in February 2018, shortly after the prosecution's "DAS embezzlement and related allegations investigation team" announced its interim investigation results.

As a result of the investigation, the National Tax Service concluded that Kwon avoided gift tax by entrusting Geumgang shares to others and imposed a total gift tax of about 910 million won on Kwon in February 2019.

The basis for taxation was that Geumgang, which had a 100% transaction ratio with DAS, benefited from DAS's "preferential subcontracting," and since Kwon and DAS were special related parties, gift tax should be imposed on the benefits conferred.

In response, Kwon filed a tax appeal with the Tax Tribunal, which was dismissed, and then filed an administrative lawsuit.

In court, Kwon argued that she had already undergone a tax investigation by the Daegu Regional Tax Office in 2016 for the same purpose, and that the Seoul Regional Tax Office's tax investigation constituted an illegal "re-investigation" prohibited by law.

On the other hand, the tax authorities countered, "The previous tax investigation was merely an integrated corporate tax audit of Geumgang and was not a tax investigation on Kwon's gift tax."

However, the court concluded, "Considering the contents of the previous tax investigation, it can be seen as an investigation to verify whether the plaintiff (Kwon), a shareholder of Geumgang, evaded gift tax," and "this constitutes an illegal re-investigation prohibited by the Framework Act on National Taxes."

However, the court judged that among the tax investigations conducted in 2018, the portion from 2013 to 2015 could be considered a duplicate tax investigation overlapping with the 2015 tax investigation in terms of taxpayer, tax item, and taxation period, as Kwon claimed, but the gift tax of about 6 million won for 2016, which was not subject to the previous tax investigation, was deemed a legitimately imposed tax.

This content was produced with the assistance of AI translation services.