Hanjin Family Gift Tax Lawsuit Partially Won in 2nd Trial…Court Cancels 2.3 Billion KRW of 14 Billion KRW

A court ruling has ordered the cancellation of approximately 2.3 billion KRW of the 14 billion KRW in taxes imposed on Cho Won-tae, chairman of Hanjin Group, and his family members for 'illegal inheritance tax evasion.'

Chairman Cho Won-tae of Hanjin Group (Photo by Yonhap News)

The Seoul High Court Administrative Division 1-2 (Presiding Judges Kim Jong-ho, Lee Seung-han, Shim Jun-bo) ruled on the 17th in favor of the plaintiffs in part in the lawsuit filed by Chairman Cho, former Korean Air Vice President Cho Hyun-ah, Hanjin President Cho Hyun-min, and their mother Lee Myung-hee, advisor of Jungseok Enterprise, against the heads of Namdaemun, Jongno, Yongsan, and Banpo tax offices, seeking cancellation of imposed gift taxes and other tax assessments. In the first trial, the plaintiffs lost and were required to pay the full amount, but the second trial partially overturned that decision.

The court held that the tax authorities' imposition of gift tax and comprehensive income tax on the Hanjin Group's controlling family in 2018 was lawful. However, it ruled that applying a high additional tax rate due to 'active fraudulent acts' and extending the statute of limitations for taxation (the assessment period) was illegal, ordering the cancellation of about 2.35 billion KRW out of the total 14 billion KRW.

The court stated, "It is difficult to conclude that the late Cho Yang-ho, former chairman of Hanjin Group, and the plaintiffs engaged in active concealment acts that significantly hindered tax collection," and judged that "the statute of limitations for comprehensive income tax on the deceased should be five years, not ten, and a lower additional tax rate should be applied to the plaintiffs."

In 2018, the Seoul Regional Tax Office conducted a tax investigation on the Hanjin Group's controlling family and imposed a total of 14 billion KRW in gift tax and comprehensive income tax. This was based on the claim that the family established personal businesses mediating the supply of goods related to the aviation industry and registered family members as joint business operators to distribute company profits, constituting illegal inheritance tax evasion. The Cho family filed a lawsuit in February last year challenging this.

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