Hyosung's Cho Seok-rae and Cho Hyun-joon Win Final Victory in 20 Billion Won Tax Lawsuit

[Asia Economy Reporter Heo Kyung-jun] Cho Seok-rae, Honorary Chairman of Hyosung Group, and Cho Hyun-joon, Chairman of Hyosung Group, won the final victory in a lawsuit to cancel a tax assessment worth over 20 billion KRW against the tax authorities. The total tax imposed on the father and son amounts to approximately 21.71 billion KRW.

According to the legal community on the 13th, the Supreme Court's 2nd Division (Presiding Justice Cheon Dae-yeop) confirmed the lower court's ruling yesterday, which partially ruled in favor of the plaintiffs in the appeal trial of the lawsuit filed by the Cho family against the Seongbuk Tax Office to cancel the gift tax and other tax assessments.

Previously, in September 2013, the National Tax Service (NTS) imposed taxes after determining that Honorary Chairman Cho and others evaded gift tax and capital gains tax during the acquisition and sale of stocks through a Hong Kong Special Purpose Company (SPC) account. The NTS imposed gift tax of approximately 16.47 billion KRW and capital gains tax of approximately 3.74 billion KRW on Honorary Chairman Cho, and gift tax of approximately 1.48 billion KRW on Chairman Cho.

The following year, the prosecution also indicted the two on charges of tax evasion under the Act on the Aggravated Punishment of Specific Crimes, but the Supreme Court confirmed their acquittal.

The same judgment was made in the administrative lawsuit filed by the two. The first and second trials held that it was difficult to consider that Honorary Chairman Cho actually owned the stocks solely based on the fact that he substantially controlled and managed the SPC. Regarding the capital gains tax, the tax assessment was made nine years after the taxable year 2006, exceeding the statute of limitations of seven years, and was therefore deemed invalid.

The first and second trials ruled to cancel approximately 21.17 billion KRW of the total gift tax and capital gains tax of approximately 21.71 billion KRW imposed on the Cho family, excluding about 530 million KRW of gift tax. The Supreme Court upheld the lower court's ruling as is.

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