March 23, 2016

Of the instant lawsuit, the part of the claim against Defendant Seocho Tax Office is dismissed.

2. The plaintiff's appeal and the changed plaintiff's claim that are exchanged in the court room are all dismissed.

3. The plaintiff's total costs of litigation incurred after filing an appeal between the plaintiff and the director of the distribution office shall be borne by the plaintiff, and the total costs of the lawsuit incurred between the plaintiff and the director of the tax office of Seocho, respectively.

1. Purport of claim

A. As to the plaintiff by the director of the tax office on distribution of the defendant

1) On April 3, 2013, each disposition of imposition indicated in attached Table 1, stating that the Plaintiff designated the Nonparty (resident registration number omitted) as the secondary taxpayer, and then, the Nonparty (resident registration number omitted) was the secondary taxpayer;

2) The attachment disposition on each claim listed in the separate sheet No. 2, as stated in the separate sheet No. 2, as of June 22, 2015 (the Plaintiff sought revocation of the attachment disposition on each claim listed in the separate sheet No. 2, which was issued by the head of the tax office on April 22, 2013 at the first instance trial, by the head of the tax office on the distribution of claims. The head of the tax office ex officio revokes the attachment disposition after the judgment of the first instance court, and changed the owner of each of the above claims from the Nonparty to the Plaintiff on June 22, 2015, again, the attachment disposition on each of the above claims was defective, and at the first instance trial, the claim was changed in exchange to seek revocation of the attachment disposition on June 22,

3) On April 23, 2013, the attachment disposition of real estate listed in [Attachment 3] Articles 1 and 8 of the “Real Estate List” was revoked (the Plaintiff sought at the first instance trial to revoke the attachment disposition of each real estate listed in [Attachment 3] by the director of the tax office on the distribution of real estate, and the director of the tax office on the distribution of real estate revoked the part of the real estate listed in [Attachment 2 through 7] among the “Real Estate List” listed in [Attachment 3] while the trial is pending, and subsequently reduced the purport of the claim for revocation

B. On June 11, 2013, the head of Seocho District Tax Office’s disposition of seizure on each of the claims listed in the separate sheet No. 2 “mortgage” against the Plaintiff shall be revoked.

2. Purport of appeal

A. The plaintiff

The part against the Plaintiff in the judgment of the court of first instance is revoked. The head of the tax office’s disposition of imposition against the Plaintiff on April 3, 2013, each of the following is revoked: (a) the Plaintiff was designated as the secondary taxpayer of the Nonparty (resident registration number omitted); (b) the disposition of attachment on each of the claims listed in the separate sheet No. 1, 2, 2013; and (c) the seizure disposition of each real estate listed in the separate sheet No. 3, 2013, as stated in the separate sheet No. 2, 2013.

B. The Defendants

The part against the Defendants in the judgment of the first instance is revoked, and the Plaintiff’s claim corresponding to the revocation part is dismissed in entirety.

The court's explanation on this part is identical to the corresponding part of the judgment of the court of first instance, except for the dismissal of some contents as follows. Thus, this part is cited in accordance with Article 8 (2) of the Administrative Litigation Act and the main text of Article 420 of the Civil Procedure Act.

The head of Seocho-gu shall be the head of Seocho-gu as the "head of Seocho-gu" in the 3rd page 6.

The "this Court" in the 3th, 15th, and 16th, shall be regarded as the "Seoul Administrative Court".

On February 18, 2016, in the case of the revocation of imposition of global income tax, etc. by both parties to appeal, the head of the tax office having jurisdiction over the imposition of global income tax for 2006 to 2008 among the part against the plaintiff in the judgment of the court below, the imposition of additional tax on global income tax for 2007 to 2009 by the head of the tax office of the Seocho-gu, the imposition of additional tax on global income tax for 2006 to 2009, and the imposition of resident tax for 2006 to 2009 by the head of the tax office of the Seocho-gu, shall be reversed, and this part of the case shall be remanded to the Seoul High Court. The remaining appeal by the plaintiff and the appeal by the defendants shall be dismissed."

The National Tax Collection Act (amended by Act No. 12848, Dec. 23, 2014) stipulates that “National Tax Collection Act” shall be “former Framework Act on National Taxes (amended by Act No. 12848, Dec. 23, 2014

○ The 4th page "89,789,479,944 won" shall be "89,798,479,944 won".

○ 5 Parts 12 to 13 are as follows.

“A. The Defendants, on June 15, 2015, revoked ex officio a disposition of seizure of the instant non-party’s title 1 and 2, and on June 25, 2015, the head of the competent tax office revoked ex officio the part on the real estate indicated in [Attachment 3] No. 2 through No. 7 of the Real Estate List with respect to the instant Plaintiff on June 25, 2015 (hereinafter “the seizure disposition of real estate against the instant Plaintiff”).

I. On June 22, 2015, the director of the tax office’s office of distribution seized each of the above claims based on the tax claims against the Plaintiff on the premise that the Plaintiff owned each of the claims listed in the separate sheet of claim indicated in the separate sheet of claim 2 (hereinafter “instant attachment disposition against the Plaintiff”).

[Ground of recognition] Facts without any dispute, Gap's 1 through 7 evidence, Eul's 1, 2, 5, 43, 47 through 52 (including branch numbers; hereinafter the same shall apply), and the purport of the whole pleadings]

2. Whether the part of the lawsuit in this case against the defendant at the Seocho Tax Office is legitimate

When an administrative disposition is revoked, such disposition shall lose its validity and no longer exists, and a revocation lawsuit against a non-existent administrative disposition is unlawful as there is no benefit of lawsuit (see Supreme Court Decision 2009Du16879, Apr. 29, 2010, etc.).

The head of Seocho District Tax Office’s revocation of the attachment disposition on each claim listed in the Attached Table 2 “Bond List” against the Plaintiff on June 11, 2013, ex officio on June 15, 2015 during the trial. As seen earlier, among the instant lawsuit, the part of the claim against the head of Seocho District Tax Office regarding the claim against the Defendant’s Seocho District Tax Office is about an un extinguished disposition, and thus, it became unlawful as there is no interest in the lawsuit.

3. Whether the disposition taken by the director of the tax office on distribution of defendants is legitimate.

A. The plaintiff's assertion

1) Since the Nonparty did not own the Plaintiff’s shares, the disposition of imposition against the Plaintiff of this case and the disposition of seizure based on which the Nonparty held the secondary tax liability on the premise that the Nonparty is an oligopolistic shareholder of the Plaintiff is unlawful.

2) Article 40(1)1 and 2 of the Framework Act on National Taxes recognizes the secondary tax liability of a corporation limited to only “where the Government intends to sell stocks owned or shares contributed by investors by re-auctions or by a private contract but no one applies to purchase,” and “where the transfer of stocks or shares contributed by investors is limited by the law or the articles of incorporation of the juristic person.” The Plaintiff’s stocks do not fall under the foregoing, and thus, the secondary tax liability imposed on the Plaintiff is unlawful.

3) Even if the Plaintiff bears the secondary tax liability for the Nonparty’s tax liability, the Plaintiff’s net asset value is 4,828,295,03 won at the exchange rate on April 25, 2013, which is the date of expiration of the payment period upon the designation of the secondary taxpayer (i.e., KRW 33,757,219HD x 143.03/HKD). The imposition disposition in excess of the above amount and the attachment disposition in excess of the above amount are unlawful. Even if the Plaintiff assessed the total amount of its assets and liabilities as of March 31, 2011, according to the audit report of the Plaintiff Company’s year 2011, the net asset value as of March 31, 2011 -9,411,962HD as of March 31, 2011. Therefore, the Plaintiff is not obligated to bear the secondary taxpayer.

B. Relevant statutes

The court's explanation on this part is the same as the corresponding part of the judgment of the court of first instance (from No. 18 to No. 19). Thus, this part is cited in accordance with Article 8 (2) of the Administrative Litigation Act and Article 420 of the Civil Procedure Act.

(c) Fact of recognition;

The court's explanation on this part is identical to the corresponding part of the judgment of the court of first instance (Article 8 (2) of the Administrative Litigation Act and Article 420 of the Civil Procedure Act, since it is the same as the corresponding part of the judgment of the court of first instance (Articles 6, 13 through 8, 17).

D. Determination

1) As to whether the Nonparty constitutes an oligopolistic shareholder of the Plaintiff

According to the above facts, the Plaintiff was actually established with the Nonparty’s funds, and only the Plaintiff’s shares were owned without any human and physical facilities, i.e., the Plaintiff’s 100% shareholder, and the Nonparty owns 100% of the Plaintiff’s shares in the title trust to Dyna, a corporation Lyna, and the Nonparty actually operates the Plaintiff and the Plaintiff’s subsidiaries. In light of the substance over form principle, it is reasonable to deem that the Nonparty is a shareholder holding 100% of the Plaintiff’s shares in the light of the substance over form principle. Such multi-level investment structure and title trust are difficult to be seen differently even if the Plaintiff’s international practices in the ship

2) As to whether the Plaintiff’s secondary tax liability is recognized

A) With respect to the secondary tax liability of a corporation, Article 40(1)2 of the Framework Act on National Taxes provides that “When the ownership or equity share of an investor is restricted by law or the articles of incorporation of the corporation.” The Nonparty is insufficient to collect national taxes in arrears with his/her property as his/her delinquent taxpayer, and the fact that the Nonparty is an oligopolistic shareholder of the Plaintiff, the Plaintiff’s shares are deemed as limited by law.

B) Generally recognized international law has the same effect as domestic law (Article 6(1) of the Constitution of the Republic of Korea), and generally accepted international law provides that the enforcement authority of a certain country is limited to its territory, etc., and that a treaty or other country consents to exercise compulsory execution rights with respect to property located in a foreign country, or the approval of a foreign judgment is required, etc., and that it is not permitted to immediately exercise compulsory execution rights on the property located in a foreign country without the permission of the other country without the permission of the other country. In this regard, the general rule of the National Tax Collection Act states that the property subject to seizure should be the property within the area where the National Tax Collection Act has its effect (Common Rule 24-04 of the National Tax Collection Act).

C) The fact that the Plaintiff has not yet issued the share certificates is the Plaintiff. As long as the Plaintiff did not issue the share certificates, the tax authority may seize the Plaintiff’s shares owned by the Nonparty as the method of transferring nominative claims and liquidate the Plaintiff’s realization thereof. However, as seen earlier, it is reasonable to view that the Plaintiff’s shares constitute property located in an area where the tax authority does not impose a tax on the Plaintiff’s national taxes (the Hong Kong is not a country to which the Tax Cooperation Convention and the amended Protocol apply). Accordingly, with respect to the Plaintiff’s shares located outside the territory of the Republic of Korea, the tax authority may not seize or dispose of the Plaintiff’s shares by exercising its right to enforce compulsory execution, and this constitutes a case where the transfer of the Plaintiff’s shares is limited under the customary international law having the same effect as that of a domestic law. Ultimately, the Plaintiff should bear the duty to pay taxes to the Nonparty’s oligopolistic shareholder in arrears pursuant to Article 40(1)2 of the Framework Act on National Taxes.

3) As to the calculation of the Plaintiff’s net asset value

A) According to Article 21 of the Enforcement Decree of the Framework Act on National Taxes, the assessment of total amount of assets and total amount of liabilities under Article 40(2) of the Framework Act on National Taxes shall be at the market price as of the date on which the payment period of the relevant national tax (if there are at least two national taxes, the national tax that comes after the payment period) ends. According to the overall purport of the statement and pleadings, the payment period of global income tax assessment against the Nonparty can be acknowledged as of April 25, 201 and the payment period of the gift tax can be acknowledged as of April 30, 201, since the assessment date of the Plaintiff’s assets and liabilities shall be deemed as of April 30, 201, the payment period of the gift tax that became due after the payment period of the relevant national tax (if there are two or more national

B) According to the evidence Nos. 6-1 through 29 and evidence Nos. 10-1 of the evidence Nos. 6-29 and the evidence Nos. 10-1 of the evidence Nos. 4, the Plaintiff owned shares of City/Do merchant lines, leading sea transportation, target heavy industries, and D.S. A. (previous Western Industries) and real estate located in Jongno-gu Seoul Metropolitan Government, Jongno-gu as of April 30, 201, the total market price of the above assets as of April 30, 201 is KRW 123,516,946,944, and the total amount of the Plaintiff’s liabilities is KRW 33,718,479,944 (=123,516,946,946,9446, 3718,467,000). Therefore, it is clear that the Plaintiff’s net assets are calculated as KRW 89,798,479,944.

C) As to this, the Plaintiff asserted that the Plaintiff’s net asset value of the Plaintiff around March 31, 201, based on the respective statements in Gap evidence Nos. 8, 13, 26, and 29, is merely -9,411,962HD. However, the above evidence presented by the Plaintiff only contains the total value of individual assets, but does not contain a specific calculation standard. Therefore, the above evidence alone lacks to reverse the recognition of Paragraph B).

In addition, in the case of the Plaintiff’s net asset value calculation table, the Plaintiff asserted that the Plaintiff’s assets were assessed as of April 30, 201 in accordance with Article 40(2) of the Framework Act on National Taxes, Article 21 of the Enforcement Decree of the Framework Act on National Taxes, and Article 21 of the Enforcement Decree of the Framework Act on National Taxes is lawful, and that the Plaintiff’s assets are assessed as of April 30, 201 in the same manner as 151,98 won and 578,508 shares of the Heavy Industries, which were acquired on December 31, 2010. However, the Plaintiff’s above assertion is without merit, on the grounds that the value should be assessed differently depending on the time of acquisition of the target Heavy Industries shares acquired by the Plaintiff.

E. Sub-committee

Therefore, the disposition of imposition by the director of the tax office on the Plaintiff of this case and the disposition of seizure and seizure of real estate against the Plaintiff of this case are lawful.

4. Conclusion

As such, the part of the lawsuit of this case against the director of the Seocho Tax Office is unlawful. As such, the part of the lawsuit of this case against the director of the Seocho Tax Office in the judgment of the court of first instance concerning the defendant is revoked and the part of the claim against the director of the Seocho Tax Office among the lawsuit of this case is dismissed. The part between the plaintiff and the director of the Seocho Tax Office among the total costs of the lawsuit shall be borne by the

The plaintiff's claim against the director of the tax office on the distribution of real estate against the plaintiff in this case on April 3, 2013 is dismissed for all reasons, including a claim for exchange change in the trial. The decision of the court of first instance on the disposition of imposition against the plaintiff in this case on April 23, 2013 and the disposition of seizure on real estate against the plaintiff in this case on April 23, 2013 is legitimate. Thus, the plaintiff's appeal is dismissed, and the plaintiff's claim for change in exchange in the trial (the part on the disposition of seizure against the plaintiff in this case on June 22, 2015 by the director of the tax office of the distribution of real estate) is dismissed (the decision of the court of first instance on April 22, 2013 as the lawsuit seeking the cancellation of each disposition of seizure on the claim stated in attached Form 2 "the list of claims" was withdrawn due to the exchange change in the trial at the court of first instance, and this part is invalidated).

(attached Form omitted)

Judges Sung Pung-tae (Presiding Judge)