2. The Defendant’s disposition of imposition of global income tax of KRW 370,005,200 (including additional tax) for the year 2007 against the Plaintiff on July 1, 2013 shall be revoked.

3. All costs of the lawsuit shall be borne by the defendant.

The reasons for the judgment of this court are as follows: (a) the reasons for the judgment of the court of first instance are not more than 2-C (No. 4, 8)

Inasmuch as the reasoning for the judgment of the first instance is the same as that for the change, it shall be quoted in accordance with Article 8(2) of the Administrative Litigation Act and Article 420 of the Civil Procedure Act.

2. The judgment of this Court

A. Legal doctrine

According to Article 26-2(1)1 of the former Framework Act on National Taxes (amended by Act No. 8830, Dec. 31, 2007; hereinafter the same), where a taxpayer evades, obtains a refund or deduction of national taxes due to “Fraud or other unlawful acts”, the exclusion period of national tax assessment shall be extended to 10 years. Here, “Fraud or other unlawful acts” refers to acts that are deemed to be unfair by social norms as acts allowing the evasion of tax, i.e., acts which make it impossible or considerably difficult to impose and collect taxes impossible or considerably difficult to do so. Therefore, it does not constitute mere failure to file a return under tax law or filing a false return without accompanying other acts, but it does not constitute such act. In addition to such active acts as intentionally failing to file a return or underreporting taxable objects and intentionally failing to enter revenues or sales in the books, the determination of whether the method of imposing and collecting taxes can be made objectively and objectively by taking account of the following factors: (i) whether the pertinent method and method of taxation are false or considerably difficult (see Supreme Court Decision 2000Do14, Jun. 14, 29, etc.).

Meanwhile, even if income is obtained through a disguised name, if it is not related to tax evasion, it does not constitute "Fraud or other unlawful act" under Article 26-2 (1) 1 of the former Framework Act on National Taxes solely on the basis of the nominal name. However, if such act is added to active acts such as the preparation of a false sales contract and false payment for the purpose of tax evasion, false return of capital gains tax, false registration and recording, and preparation and keeping of a false account book, it constitutes "Fraud or other unlawful act which makes it impossible or considerably difficult to impose and collect taxes (see Supreme Court Decision 2013Du7667, Dec. 12, 2013).

B. Whether the case constitutes an unlawful act

In light of the above provisions and legal principles, the Plaintiff’s act does not constitute “Fraud or other unlawful act which makes it impossible or considerably difficult to impose and collect taxes,” and there is no other evidence to acknowledge it.

① As seen earlier on August 3, 2007, the Plaintiff received dividends of KRW 3,130,137,728, including the interest of the instant case, at the auction procedure with respect to the instant land, but did not report the income related to the said dividends at all. However, this alone is merely a mere unreported return (a final return on global income tax in 2007).

② There is a question as to whether the Plaintiff’s act of establishing a collateral security under the name of static constitutes an active act to evade tax, even though the Plaintiff lent KRW 2.4 billion to the owner of the instant land. In light of the above evidence and the overall purport of pleadings, the Plaintiff’s relationship between the Plaintiff and static, occupation or career of static, and the reported amount of revised tax payment, etc., it is difficult to deem that the Plaintiff intended to use the Plaintiff’s name as an insolvent who would not pay taxes, and there is no other evidence to acknowledge otherwise. Furthermore, in comparison with the Plaintiff’s income amount, which forms the basis for global income tax assessment for 2007, excluding the instant interest, the amount of static’s income is too small (Ga evidence 6 and 7). Accordingly, the Plaintiff’s act of establishing a collateral security under the name of static that is not the Plaintiff but the owner of the instant land, and thus, the Plaintiff could not obtain any effect of evading the progressive tax rate or the distribution of income by purchasing the instant land under the name of AO and 150O.4.

③ As seen earlier, on December 2010, the Plaintiff received a explanatory guide on the assessment data of the successful bid price. On the 24th of the same month, the Plaintiff reported and paid the instant interest as other income by applying 80% necessary expenses, not only the interest income expected to be imposed a high amount of tax, but also the interest income, as other income. However, the fact that the Plaintiff reported the interest income as other income is merely a mere underreporting or a false return, and thus cannot be deemed as an active act for tax evasion. Moreover, there is no room to deem that the instant right to collateral security was established in the name of MaO and the interest income was a disguised act for other income. Moreover, deeming the Defendant as an unlawful act at the time of the filing of the global income tax return and payment period for tax evasion for the extension of the exclusion period for global income tax for tax year 2007, and claiming for the extension of the exclusion period for taxation for the global income tax for tax evasion for the purpose of 207, barring any special circumstances.

C. Whether the instant disposition is lawful

Article 26-2 (1) 1 of the former Framework Act on National Taxes cannot be deemed to apply to the global income tax that reverts to the plaintiff for the year 2007, and the exclusion period of five years is applied. Article 12-3 (1) of the former Enforcement Decree of the Framework Act on National Taxes (amended by Presidential Decree No. 21316, Feb. 6, 2009) provides that the date on which a national tax may be imposed shall be the date following the due date of the return or the due date of the submission of the return on the tax base and tax amount of the national tax, and Article 70 (1) of the former Income Tax Act (amended by Act No. 9897, Dec. 31, 2009) provides that a resident who has global income of the year concerned shall file a return on the global income tax base from May 1 to 31 of the year following the due date to the expiration of the exclusion period of 200 years from May 31, 2008.

3. Conclusion

The plaintiff's claim of this case is reasonable, and the judgment of the first instance court different from this conclusion is revoked, and the disposition of this case is revoked.