Cheong-gu Office

On October 7, 2016, the Defendant revoked the imposition of global income tax of KRW 000 and penalty tax of KRW 000 for the year 201, global income tax of KRW 000 and penalty tax of KRW 000 for the year 2012, and global income tax of KRW 100 for the year 2013 and penalty tax of KRW 00 for the global income tax of KRW 100 for the year 2013.

A. AA Industry Co., Ltd. (hereinafter referred to as “AA”) was established at ○○ on November 6, 2002 for the purpose of running the automobile maintenance and parts manufacturing business, etc. < Amended by Act No. 6793, Nov. 6, 2002>

B. As a result of the tax investigation conducted with respect to A (hereinafter “tax investigation of this case”) from February 26, 2015 to March 29, 2015, the head of the ○○ Tax Office confirmed that A failed to report the amount of 00 won (00 won for each business year, 2011, 000 won for each business year, 200 won for each business year, and 000 won for each business year, 2013) using a borrowed account and included it in the gross income. The head of the ○○ Tax Office notified the change in the amount of income that 00 won was disposed of as the bonus of the Plaintiff and the insideB recorded as the representative director in the corporate register of AA, and the details thereof are as follows.

[Attachment 1] Omission of Disposition of Income (Contributory)

C. Accordingly, on October 7, 2016, the Defendant notified the Plaintiff of each correction and notification of the global income tax of 000 won (including additional tax of 000 won), global income tax of 2012 (including additional tax of 000 won), global income tax of 2012, and global income tax of 000 won (including additional tax of 00 won) for the year 2013 (hereinafter “each disposition of this case”).

D. On December 13, 2016, the Plaintiff filed an appeal with the Tax Tribunal seeking the revocation of each of the dispositions of this case, but the Tax Tribunal dismissed the Plaintiff’s appeal on June 29, 2017.

Facts that there is no dispute over the basis of recognition, Gap evidence 1 to 3, Eul evidence 1 to 2

statement of each chapter, including branch numbers, hereinafter the same shall apply), the purport of the whole pleading

2. Whether the instant disposition is lawful

A. The parties' assertion

The Defendant asserts that each disposition of this case is lawful on the grounds of the grounds of the disposition and the relevant statutes. Accordingly, the Plaintiff asserted that each disposition of this case on the ground that the Plaintiff is the representative director of AA is unlawful, even though the Plaintiff was registered as the representative director in the corporate register of AB during each taxable period, the Plaintiff was not actually involved in the management, and the Plaintiff was merely engaged in the management of AB independently, and the Plaintiff was merely a nominal and formal representative director.

(b) Related statutes;

It is as shown in the attached Form.

C. Determination

1) The purpose of the Corporate Tax Act is not to provide the representative with the basis of the fact that such income has accrued to him/her, but to allow him/her to consider certain facts that can be recognized as such act as bonus to a de facto representative regardless of their substance in order to prevent unfair conduct under the tax law (see, e.g., Supreme Court Decision 2010Du1108, Oct. 28, 2010). In such cases, the representative is liable to pay the global income tax regardless of whether the amount is actually attributed to himself/herself. In order for the representative to be exempted from the obligation to pay global income tax, the representative must prove that not only the amount of income he/she has disposed of as recognized but also the person to whom the income has accrued is clearly attributed by the method of indicating that the amount has not been attributed to himself/herself (see, e.g., Supreme Court en banc Decision 2006Da49789, Sept. 18, 2008; 2010Du20805, Mar. 28).

In addition, in full view of Article 67 of the Corporate Tax Act and the proviso of Article 106(1)1 of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 26981, Feb. 12, 2016), the representative is to be a de facto representative operating the company (see, e.g., Supreme Court Decision 2008Du10461, Dec. 23, 2010). However, since a person who is registered as the representative on the corporate register can be presumed to have been actually operating the company, the representative on the corporate register must prove that he/she actually failed to operate the company (see, e.g., Supreme Court Decision 2006Du187, Apr. 24, 2008).

2) As to the instant case, the following facts are acknowledged in full view of the purport of the entire pleadings in the descriptions of health class, Gap evidence 2, Gap evidence 4, Eul evidence 1, Eul evidence 3, and Eul evidence 5.

① On November 6, 2002, the Plaintiff, with a license for the maintenance business, established AA to take office as the representative director, and operated the said legal entity solely until August 12, 2009.

② Around August 12, 2009, the Plaintiff transferred an amount equivalent to 55% of the shares issued by ACC to thisCC, and entered thisCC in the corporate register as a representative director of AA with the Plaintiff.

③ At around 2011, AB acquired all the shares issued by ACC owned, and was registered as the representative director of AB on September 14, 201 with the Plaintiff on the corporate register. The Plaintiff transferred the shares issued by AB to AB in addition to 5% of the shares issued by AB in around 2012, and the Plaintiff came to own 40% of the shares issued by AB and 60% of the shares issued by AB. After the instant tax investigation, the Plaintiff resigned on March 31, 2015.

④ The Plaintiff received benefits of KRW 000 from A in 2002, KRW 000 from 2003 to 2014, and KRW 000 in 2015.

3) In full view of the following circumstances, the Plaintiff was registered as a representative director of the AA’s corporate register from 2011 to 2013, a taxable period of each of the instant dispositions, and the evidence submitted by the Plaintiff alone is insufficient to recognize that the Plaintiff did not actually operate the AA as a representative director on the nominal and formal basis, and there is no other evidence to support this. Thus, the Plaintiff’s assertion is without merit.

① The Plaintiff received the same amount of benefits from August 12, 2009 to August 12, 2009, which was registered as a representative director with thisCC and AB, from August 12, 2002 to August 12, 2009, from the date when the Plaintiff was registered as the sole representative director of the AA, until March 31, 2015, and thereafter, transferred only part of the shares of thisCC and AB, and retained the remainder, and even after resignation from the office of the representative director, the Plaintiff still holds 40% of the shares of AA.

② On July 5, 2012, the Seoul East Regional Labor Relations Commission protocol (Evidence A7), etc. submitted by the Plaintiff, written only BB as the representative of AA, and written agreement (Evidence A) on the number of insurance related to vehicle repairs entered into with the insurance company, etc. after September 14, 2011, which was entered in the corporate register by AB as the representative director. Since September 14, 2011, each written confirmation (Evidence A10 through 14), including the tax agent contract (Evidence A17), the tax agent contract (Evidence A18), the parts supplier's confirmation document (Evidence A18), etc. are mainly written. However, in light of the fact that the Plaintiff and AB and the representative director have each power of representation, the Plaintiff appears to have been in possession of the name, address, telephone number, etc. of AA's president and the head of AB's office, and the Plaintiff appears to have been externally involved in the operation of AB without the above evidence No. 90 and No. 18.

3. Conclusion

Thus, the plaintiff's claim seeking revocation on the ground that each disposition of this case is illegal is dismissed as it is without merit.