2. The costs of lawsuit shall be borne by the Plaintiff.

Cheong-gu Office

The disposition of imposition of corporate tax for the business year 2013 and earned income tax for the business year 2013 against the plaintiff on September 17, 2014 shall be revoked.

A. AAAOOO (hereinafter referred to as "AAO") was established on July 9, 2010 and is engaged in real estate sales business, and at the time of its establishment, BB and CCC held 50% each of the shares issued by AAA during the business year of 2013.

B. After conducting a tax investigation with respect to AA from May 29, 2014 to June 24, 2014, the Defendant notified the AA of KRW 2,19,114,400 corporate tax for the business year 2013 (the date when the tax liability is established is December 31, 2013) and earned income tax for January 31, 2013 (the date when the tax liability is established), but the AA did not pay it.

C. Accordingly, the Defendant: (a) deemed that the Plaintiff, who held shares of AAB and CCC each under title trust, constitutes “a person holding more than 50/10 of the total number of shares issued by AAA as of the date of the establishment of the tax liability as prescribed by Article 39 Subparag. 2 of the former Framework Act on National Taxes (amended by Act No. 12848, Dec. 23, 2014; hereinafter the same shall apply) and exercising a substantial right thereto; (b) deemed that the Plaintiff was the secondary taxpayer on September 17, 2014; (c) designated the Plaintiff as the secondary taxpayer on September 2, 2014; (d) at the time, the amount of delinquent tax of AAA’s KRW 65,973,430; and (d) the amount of wage and salary income tax of KRW 42,309,000 and additional dues KRW 1269,270 (hereinafter referred to as “instant disposition”).

D. On November 2014, the Plaintiff filed an objection with the Director of the Regional Tax Office against the instant disposition, and filed an appeal with the Director of the Regional Tax Office on March 16, 2015, but was dismissed on June 5, 2015.

[Ground of recognition] Facts without dispute, Gap evidence 1, 2, Eul evidence 2 and 9 (including each number; hereinafter the same shall apply), the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The Plaintiff is not a shareholder of AAA, and the title of the instant shares to BB and CCC.

A. A beneficial shareholder is not a trust-based beneficial shareholder. AAA’s management or substantial exercise of shareholder’s rights after the custody of a criminal case was completed on May 11, 2012. Therefore, the instant disposition based on the premise that the Plaintiff is an oligopolistic shareholder as a beneficial shareholder of the instant shares is unlawful.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

1) The meaning of Article 39 subparagraph 2 of the former Framework Act on National Taxes is that the persons falling under oligopolistic shareholders who actually exercise the rights to shares exceeding 50/100 of the total number of issued and outstanding shares among oligopolistic shareholders shall bear the secondary tax liability: Provided, That it is reasonable to view that the scope of liability is limited within the scope of their own shares. It does not require that one shareholder falling under oligopolistic shareholders actually exercise the rights to shares exceeding 50/100 (see, e.g., Supreme Court Decisions 2006Du19105, Jan. 10, 2008; 2006Du19105, Oct. 15, 2004; 2003Du8418, Jul. 28, 2003). Here, the exercise of rights to shares exceeding 50/100 does not necessarily require that the exercise of shareholders' rights must have actual results, and it is sufficient that the shareholder is in a position to exercise shareholders' rights to the shares owned as of the date of establishment of tax liability (see, etc.

2) Each entry of evidence and evidence set forth earlier, Nos. 1, 3 through 8, 11, the whole purport of the pleading is final.

Examining the following facts in light of the aforementioned legal principles, it is reasonable to deem that the Plaintiff constitutes an oligopolistic shareholder of the AAA as a person who held title trust with the PPP and CCC, holding all the shares issued by the said company at the time when the liability to pay delinquent tax was established, and thereby exercising a substantial right to the shares.

A) On June 26, 2014, the Plaintiff: (a) established AAA with the Plaintiff’s funds in the process of responding to DD’s question, a national tax official of the Seoul District Tax Office; and (b) thereafter, the Plaintiff took overall control of the Plaintiff’s business affairs and funds; (c) employment of the Plaintiff was in charge of the Plaintiff; and (d) shares held by BB and CCC were all the Plaintiff.

B) Both CCC and BB, which are the shareholders of AAA, made a statement to the effect that the AAA was established at the Plaintiff’s expense from the literature response process (CCC, June 19, 2014; and BB, June 24, 2014) with the Plaintiff’s funds, and only lent the Plaintiff’s name at the Plaintiff’s request, and that the Plaintiff did not exercise its rights as a shareholder, and that the Plaintiff was practically operating the AAA through the General Director, etc. even after the detention was granted on May 11, 2012.

C) According to the Plaintiff’s meeting recording (Evidence 1 through 216) submitted by the Defendant from May 14, 2012 to December 21, 2013, the Plaintiff’s meeting recording (Evidence 6-1 to 216), even during the period of detention, appears to be disadvantageous to the Defendant’s employees, such as GG, HH affairs, and TT, who are general directors of the Visits, which are directors of the Myeondo-to-house, in the detention house, in the name of the Chairperson, who is the head of the Myeong, HH affairs, and TT, during the period of detention, and ordered the said employees to provide a solution to the problem of AAAA, which is a main business of the said employees.

D) On August 1, 2014, the E-Tax Office notified the Plaintiff to pay gift tax of KRW 904,000 on the ground that BB and CCC was held in title trust, and BB and CCC did not raise any objection thereto.

3) Therefore, the instant disposition is lawful, and the Plaintiff’s assertion disputing this is eventually without merit.

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and it is so decided as per Disposition.