These Rules are enacted pursuant to the provisions of Article 55 of the Estate and Gift Tax Act (hereinafter the Act).

Where a debtor has been judged bankrupt or made a composition with his or her creditors according to the Bankruptcy Act or undergone rehabilitation and liquidation according to the Consumer Debt Clearance Act or has filed for reorganization according to the Company Act, thereby resulting in his failure to fully settle his or her obligations to creditors, the amount difference therefore exempted shall not constitute as a gift as referred to under Paragraph 1, Article 5 of the Act.

The exemption without consideration from obligation of a guarantor paying debts on behalf of the principal debtor out of his liability as guarantor shall be deemed as a gift. However, if the principal debtor has declared bankruptcy, the guarantor’s assumption of debt shall not be considered a gift.
For debtors undertaking joint and several obligations in debt for the purpose of debt guarantee, the provisions set forth under the preceding paragraph shall apply.

The tax authority’s request for the court’s appointment of an administrator in accordance with Paragraph 2, Article 6 of the Act shall be filed within one (1) month of the due date of tax declaration and may along with it, request the court to issue a public summons in accordance with Article 1178 of the Civil Code. The appointed estate administrator shall then file the declaration pursuant to Subparagraph 3, Paragraph 1 of Article 1179 of the Civil Code with the court within one (1) month of his appointment.
Under circumstances described in Article 1185 of the Civil Code, said estate administrator shall settle the debts, deliver the decedent’s estate, and submit the remaining properties along with all relevant account books, documents, and calculation records to the competent tax authority and the National Property Administration, Ministry of Finance within two (2) months of the due date of the time period specified in the public summons for further processing according to Article 51 of these Rules.

According to Article 7, where the taxpayer is the donee, the tax payable shall be determined using the same rules as applied to the donor when he was a taxpayer.

The properties given away by the decedent within two (2) years before his death as referred to under Paragraph 2, Article 11 of the Act shall include those tax-exempt properties described under Article 22 of the Act given away within said two (2) years.