Litigation costs shall be borne by the plaintiff.

A. Representative bonus disposition for the plaintiff

Around February 2005, the head of the Defendant △△△ Tax Office found the omission of revenue from sales while filing a corporate tax return for the year 2002 and 2003, and found the omission of revenue from sales. The amount of KRW 29,014,09,000 in the business year 2002, and KRW 1,718,797,571 in the business year 2003, which was the omission of sales, in the business year 2002, shall be included in the corporation's income in the calculation of the corporate tax in the business year 5,63,218, and the corporate tax in 203471,09,700 in the business year 471,09,70 in the corporate tax in 203, which was the substantial representative of the ○○ distribution, and notified the Plaintiff of the income amount to the head of the tax office on April 26, 2005.

B. Disposition imposing global income tax on the Plaintiff

On July 1, 2005, based on the above disposition of income, Defendant ○○ Head of the tax office additionally imposed and notified the Plaintiff of KRW 13,225,370 of global income tax for the year 2003 and KRW 767,850,190 of global income tax for the year 2003 (hereinafter “each disposition of global income tax for the year 2002 and the tax imposition of global income tax for the year 2003”). Defendant ○○ Head of the tax office imposed and notified the Plaintiff of global income tax of KRW 13,225,370 of global income tax for the year 203. Defendant ○○ Head of the tax office imposed and notified the Plaintiff of the tax base and amount remaining after the reduction as follows. Defendant ○○ Head of the tax office imposed global income tax for the year 2002 and the tax amount remaining after the reduction as deductible expenses for the year 203, 2005, 2063.

C. Designation of the secondary taxpayer against the Plaintiff

The head of the Defendant △△ Tax Office, when ○○ Distribution did not pay the value-added tax of KRW 305,606,970 for the first quarter of 2003 (the due date of payment April 30, 2005), deemed the Plaintiff as an oligopolistic shareholder of ○○ Distribution (the oligopolistic shareholder of 100%) and designated the Plaintiff as the secondary taxpayer, and on June 1, 2005, imposed and notified value-added tax of KRW 305,605,970 on the Plaintiff (the “instant disposition imposing value-added tax”).

(d) passed through the pre-trial procedure.

The Plaintiff filed an appeal with the National Tax Tribunal on the instant imposition of global income tax and the instant imposition of value-added tax. However, on February 1, 2006, the Plaintiff received each dismissal decision from the National Tax Tribunal.

2. Whether the disposition of imposition is lawful.

A. The plaintiff's assertion

The Plaintiff is not a substantial representative of ○○ Distribution, but merely owns 40% of the shares of ○○ Distribution in the name of ○○○ and Kim○○, and thus does not constitute an oligopolistic shareholder. Therefore, each imposition of global income tax and the imposition of value-added tax in this case on the premise that the Plaintiff is an oligopolistic shareholder, a substantial representative of ○○ Distribution, is unlawful.

(b) Related statutes;

Article 67 (Disposal of Income)

In filing a report on the corporate tax base on the income for each business year under the provisions of Article 60 or in determining or revising the corporate tax base under the provisions of Article 66 or 69, the amount included in the calculation of earnings shall be disposed of as bonus, dividend, other outflow from the company, internal reserve, etc. according to the person to whom it reverts

Article 106 (Disposition of Income) of the Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 18706, Feb. 19, 2005)

(1) The amount included in gross income pursuant to the provisions of Article 67 of the Act shall be disposed of pursuant to the provisions of the following subparagraphs:

1. Where the amount included in the calculation of earnings has clearly leaked out of the company, the dividends, bonuses from the disposition of profits, other income, and other outflow from the company under each of the following items according to the person to whom they accrue: Provided, That where the accrual is unclear, it shall be deemed as accrual to the representative (where the total number of stocks held by an officer who is not a minority shareholder under the provisions of Article 87 (2) and persons with a special relationship under the provisions of paragraph (4) of the same Article is 30% or more of the total number of stocks issued or total investment amount of the relevant corporation and the officer actually controls the operation of the relevant corporation, he shall be deemed the representative, and where a corporation which has been exempted from withholding taxes under the provisions of Article 46 (12) of the Restriction of Special Taxation Act reports that there is a separate representative among the officers who are stockholders, etc., the reported person shall be the representative, and where there

Article 14 (Real Taxation under Framework Act on National Taxes)

(1) If the ownership of income, profit, property, act or transaction subject to taxation is merely nominal and a person to whom such ownership belongs exists, the tax-related Acts shall apply to such person to whom such person actually belongs as a taxpayer.

Article 39 (Secondary Tax Liability of Investors)

(1) Where the property of a corporation (excluding a corporation whose stocks are listed on the Korea Stock Exchange) is insufficient to cover the national tax, additional dues, and disposition fee for arrears that the corporation has imposed on or is to pay, the person who falls under any of the following subparagraphs as of the date on which the liability to pay national taxes is established shall assume secondary tax liability for such shortage: Provided, That in the case of an oligopolistic stockholder under subparagraph 2, the limit shall be the amount calculated by multiplying the amount calculated by dividing the shortage by the total number of stocks issued (excluding non-voting stocks; hereafter the same shall apply in this Article) or total amount of investment of the corporation by the number of stocks owned by the oligopolistic stockholder (excluding non-voting stocks) or investment amount (in the

2. An oligopolistic stockholder who falls under any of the following items:

(a) A person who exercises a substantial right over the stocks or investment shares in excess of 50/100 of the total issued stocks or total investments of the relevant corporation;

(b) An honorary chairperson, chairperson, president, vice president, senior managing director, managing director, director, or any other person who actually controls the management of the corporation, notwithstanding the title thereof;

(2) For the purpose of paragraph (1) 2, the term “excess stockholder” means a person who is a relative or has other special relations with a stockholder or partner with limited liability as prescribed by the Presidential Decree, and the total sum of his stocks or investment is 51/100 or more of the total number of stocks issued or total amount of investment made by the juristic person concerned (hereinafter referred to as “excess stockholder

(c) Fact of recognition;

(1) On January 17, 2002, ○○ Distribution was a juristic person established for the purpose of manufacturing and selling drinking spring water, and the representative director was changed to ○○○○○○ on March 6, 2002, and on June 9, 2004, ○○ Distribution was reported on June 9, 2004. The total number of shares issued by ○○ Distribution was 20,000 (the face value 5,000). According to the National Tax Service’s computerized data on the shareholder registry and the current status of shareholders by each juristic person, ○○○ Distribution was deemed to hold 8,000 shares (40%) from the time of establishment to the time of closure, ○○○○○○○, ○○○, ○○○○, and Kim○○○, each of 4,000 shares (the respective shares 20%).

In contrast to the fact that ○○ and ○○○, who was appointed as a shareholder and a representative director on the register of shareholders of ○○ Distribution, were named as a pre-service and auditor within ○○ Distribution, and the Plaintiff was named as the president. ○○ and ○○○ were registered as a shareholder upon the Plaintiff’s request, and the Plaintiff did not own an actual share of ○○ distribution upon the Plaintiff’s request.

According to the computerized data on the current status of earned income data by the National Tax Service, the plaintiff was paid KRW 40,950,000 in the business year 2002, and KRW 42,000 in the business year 2003, and KRW 24,000,000 in the business year 2002, and KRW 24,000 in the business year 2003.

The plaintiff was investigated by the prosecution on March 23, 2005 under suspicion of tax evasion and violation of the Drinking Water Management Act. At around 1993, the plaintiff was established with "○○○○ 2,00,00, and operated the business of manufacturing and selling aquatic water around 1995, and around December 2002, ○○ 2,000, transferred the entire business rights of ○○ 2,000,000, to ○ 300,000,000,000,000,000,000,000,000,0000,000,000,000,000,000,0000,000,000,000,000,000,000,000,000,000,00,000,00,000,00,00.

D. Determination

(1) The court of first instance reversed the statement made by the prosecutor's office by giving testimony to the effect that ○○○○○○○○○○ invested KRW 1 billion in each of 1 billion in investment in ○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○.

D. Therefore, the Plaintiff is the representative who actually exercises the right to the whole issued shares of ○○ Distribution. Thus, the disposition imposing global income tax and the disposition imposing the value-added tax on the premise that the Plaintiff is the representative of ○○ Distribution is legitimate, and the Plaintiff’s assertion is without merit on the premise that the Plaintiff is the representative of ○○ Distribution.

3. Conclusion

Therefore, the judgment of the court of first instance is justified, and all appeals against the Defendants are dismissed. It is so decided as per Disposition by the assent of all participating Justices.

[Seoul Administrative Court 2006Guu1629, 207. 24)]

Litigation costs shall be borne by the plaintiff.

A. Representative bonus disposition for the plaintiff

Around February 2005, the head of the Defendant △△△ Tax Office found the omission of revenue from sales while filing a corporate tax return for the year 2002 and 2003, and found the omission of revenue from sales. The amount of KRW 29,014,09,000 in the business year 2002, and KRW 1,718,797,571 in the business year 2003, which was the omission of sales, in the business year 2002, shall be included in the corporation's income in the calculation of the corporate tax in the business year 5,63,218, and the corporate tax in 203471,09,700 in the business year 471,09,70 in the corporate tax in 203, which was the substantial representative of the ○○ distribution, and notified the Plaintiff of the income amount to the head of the tax office on April 26, 2005.

B. Disposition imposing global income tax on the Plaintiff

On July 1, 2005, the head of ○○ Tax Office additionally imposed and notified the Plaintiff of global income tax of KRW 13,225,370 for the year 203 and global income tax of KRW 767,850 for the year 2003 (hereinafter referred to as “each disposition imposing global income tax for the year 2002 and the tax amount remaining after the reduction or correction as follows in the disposition imposing global income tax for the year 2003). The head of △△△△△△ Tax Office imposed and notified the Plaintiff of global income tax of KRW 13,225,370 for the year 203 on the basis of the above disposition of income (hereinafter referred to as “each disposition imposing global income tax for the year 202 and the global income tax for the year 2003). The head of ○○ Tax Office, upon the filing date of the objection on June 14, 2005 to reduce the tax base and amount of tax for the year 2005.

C. Designation of the secondary taxpayer against the Plaintiff

The head of the Defendant △△ Tax Office, when ○○ Distribution did not pay the value-added tax of KRW 305,606,970 for the second period of 2003 (the due date of payment April 30, 2005), deemed the Plaintiff as an oligopolistic shareholder of ○○ Distribution (the value-added share of KRW 100%) and designated the Plaintiff as the secondary taxpayer, and on June 2, 2005, imposed and notified value-added tax of KRW 305,605,970 on the Plaintiff (the “instant disposition imposing value-added tax”).

(d) passed through the pre-trial procedure.

The Plaintiff filed an appeal with the National Tax Tribunal on the instant imposition of global income tax and the instant imposition of value-added tax. However, on February 1, 2006, the Plaintiff received each dismissal decision from the National Tax Tribunal.

2. Whether the disposition of imposition is lawful.

A. The plaintiff's assertion

The Plaintiff is not a substantial representative of ○○ Distribution and does not own 1% shares of ○○ Distribution, and thus does not constitute an oligopolistic shareholder. Therefore, each imposition of global income tax and the imposition of value-added tax in this case on the premise that the Plaintiff is an oligopolistic shareholder, a substantial representative of ○ Distribution, is unlawful.

(b) Related statutes;

Article 67 (Disposal of Income)

In filing a report on the corporate tax base on the income for each business year under the provisions of Article 60 or in determining or revising the corporate tax base under the provisions of Article 66 or 69, the amount included in the calculation of earnings shall be disposed of as bonus, dividend, other outflow from the company, internal reserve, etc. according to the person to whom it reverts

Article 106 (Disposition of Income) of the Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 18706, Feb. 19, 2005)

(1) The amount included in gross income pursuant to the provisions of Article 67 of the Act shall be disposed of pursuant to the provisions of the following subparagraphs:

1. Where the amount included in the calculation of earnings has clearly leaked out of the company, the dividends, bonuses from the disposition of profits, other income, and other outflow from the company under each of the following items according to the person to whom they accrue: Provided, That where the accrual is unclear, it shall be deemed as accrual to the representative (where the total number of stocks held by an officer who is not a minority shareholder under the provisions of Article 87 (2) and persons with a special relationship under the provisions of paragraph (4) of the same Article is 30% or more of the total number of stocks issued or total investment amount of the relevant corporation and the officer actually controls the operation of the relevant corporation, he shall be deemed the representative, and where a corporation which has been exempted from withholding taxes under the provisions of Article 46 (12) of the Restriction of Special Taxation Act reports that there is a separate representative among the officers who are stockholders, etc., the reported person shall be the representative, and where there

Article 14 (Real Taxation under Framework Act on National Taxes)

(1) If the ownership of income, profit, property, act or transaction subject to taxation is merely nominal and a person to whom such ownership belongs exists, the tax-related Acts shall apply to such person to whom such person actually belongs as a taxpayer.

Article 39 (Secondary Tax Liability of Investors)

(1) Where the property of a corporation (excluding a corporation whose stocks are listed on the Korea Stock Exchange) is insufficient to cover the national tax, additional dues, and disposition fee for arrears that the corporation has imposed on or is to pay, the person who falls under any of the following subparagraphs as of the date on which the liability to pay national taxes is established shall assume secondary tax liability for such shortage: Provided, That in the case of an oligopolistic stockholder under subparagraph 2, the limit shall be the amount calculated by multiplying the amount calculated by dividing the shortage by the total number of stocks issued (excluding non-voting stocks; hereafter the same shall apply in this Article) or total amount of investment of the corporation by the number of stocks owned by the oligopolistic stockholder (excluding non-voting stocks) or investment amount (in the

2. An oligopolistic stockholder who falls under any of the following items:

(a) A person who exercises a substantial right over the stocks or investment shares in excess of 50/100 of the total issued stocks or total investments of the relevant corporation;

(b) An honorary chairperson, chairperson, president, vice president, senior managing director, managing director, director, or any other person who actually controls the management of the corporation, notwithstanding the title thereof;

(2) For the purpose of paragraph (1) 2, the term “excess stockholder” means a person who is a relative or has other special relations with a stockholder or partner with limited liability as prescribed by the Presidential Decree, and the total sum of his stocks or investment is 51/100 or more of the total number of stocks issued or total amount of investment made by the juristic person concerned (hereinafter referred to as “excess stockholder

(c) Fact of recognition;

(1) On January 17, 2002, ○○ Distribution was a juristic person established for the purpose of manufacturing and selling drinking spring water, and the representative director was changed to ○○○○○○ on March 6, 2002, and on June 9, 2004, ○○ Distribution was reported on June 9, 2004. The total number of shares issued by ○○ Distribution was 20,000 (the face value 5,000). According to the National Tax Service’s computerized data on the shareholder registry and the current status of shareholders by each juristic person, ○○○ Distribution was deemed to hold 8,000 shares (40%) from the time of establishment to the time of closure, ○○○○○○○, ○○○, ○○○○, and Kim○○○, each of 4,000 shares (the respective shares 20%).

In contrast to the fact that ○○ and ○○○, who was appointed as a shareholder and a representative director on the register of shareholders of ○○ Distribution, were named as a pre-service and auditor within ○○ Distribution, and the Plaintiff was named as the president. ○○ and ○○○ were registered as a shareholder upon the Plaintiff’s request, and the Plaintiff did not own an actual share of ○○ distribution upon the Plaintiff’s request.

According to the computerized data on the current status of earned income data by the National Tax Service, the plaintiff was paid KRW 40,950,000 in the business year 2002, and KRW 42,000 in the business year 2003, and KRW 24,000,000 in the business year 2002, and KRW 24,000 in the business year 2003.

On March 23, 2005, the plaintiff stated that "○○ Distribution was investigated by the prosecution due to suspicion of tax evasion and violation of the Drinking Water Management Act" and "○○ Distribution is the plaintiff and all shares in the distribution are owned by the plaintiff, but the former ○○ also made a statement to the same effect in the prosecutor's office on October 14, 2004. Accordingly, the plaintiff was prosecuted on October 14, 2005 as criminal facts such as "the former ○○ Distribution was omitted sales amount and evaded the value-added tax, etc. for the first time in 2003 because it was omitted sales amount as the actual operator of ○○ Distribution." The above judgment of the appellate court became final and conclusive through the sentence of "○○ High Court 2005Da277, 2005Mo30 (combined)" and the above judgment became final and conclusive through a declaration of April 205, 2006.

D. Determination

(1) In light of the overall circumstances revealed in the above facts and the facts acknowledged as the reason for a criminal judgment, it is reasonable to view that the Plaintiff is an oligopolistic shareholder with the entire shares in ○○ Distribution and has de facto control over ○○ Distribution as an oligopolistic shareholder with the entire shares in ○○ Distribution.

D. Therefore, the Plaintiff is the representative who actually exercises the right to the whole issued shares of ○○ Distribution. Thus, the disposition imposing global income tax and the disposition imposing the value-added tax on the premise that the Plaintiff is the representative of ○○ Distribution is legitimate, and the Plaintiff’s assertion is without merit on the premise that the Plaintiff is the representative of ○○ Distribution.

3. Conclusion

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