[1] The exclusion period of imposition of the second tax liability imposed on the oligopolistic stockholder of a corporation and the time when such obligation is established

[2] In a case where: (a) the tax authority ex officio revoked the initial imposition disposition of corporate tax against Company A; (b) imposed a new disposition of imposing corporate tax on Company A; and (c) subsequently, the tax authority designated Company A’s oligopolistic stockholder B as the secondary taxpayer; and (d) imposed the amount equivalent to the share ratio of Company B, the case affirming the judgment below holding that the exclusion period for imposition against Company B’s secondary tax liability expires at the expiration of five years from the date following the payment period for the new imposition disposition of corporate tax; and (b) the previous disposition was lawful

[1] It is reasonable to view that the exclusion period of imposition is five years from the date of establishment of the secondary tax liability on which the secondary tax liability is imposed, unless there are special circumstances. Meanwhile, in order to establish the secondary tax liability, the fact that the secondary tax liability meets the requirements, such as the delinquency of the principal taxpayer, should occur, and the establishment period of the secondary tax liability shall be at least after the expiration of the “payment period of the primary tax liability”.

[2] In a case where the tax authority ex officio revoked the initial imposition disposition of corporate tax against Gap corporation and imposed new corporate tax on Eul company's oligopolistic stockholder Eul as Gap company's oligopolistic stockholder Eul was in arrears, and imposed the tax amount in arrears and the amount equivalent to Eul's share ratio among additional dues and increased additional dues on Eul company's oligopolistic stockholder Eul, the case affirming the judgment below that the initial imposition disposition of corporate tax is lawful on Eul's oligopolistic stockholder Eul, since the imposition disposition of corporate tax was revoked ex officio by the tax authority, it cannot be deemed that the initial imposition disposition of corporate tax is a disposition on the principal tax liability which is the premise of establishing the secondary tax liability, and the exclusion period for imposition of Eul's secondary tax liability expires five years after the date following the payment period for the new imposition disposition of corporate tax expires rapidly.

[1] Articles 26-2 and 39(1)2(a) of the former Framework Act on National Taxes (amended by Act No. 7930 of Apr. 28, 2006); Article 12-3 of the former Enforcement Decree of the Framework Act on National Taxes (amended by Presidential Decree No. 19893 of Feb. 28, 2007) / [2] Articles 26-2 and 39(1)2(a) of the former Framework Act on National Taxes (amended by Act No. 7930 of Apr. 28, 2006); Article 12-3 of the former Enforcement Decree of the Framework Act on National Taxes (amended by Presidential Decree No. 19893 of Feb. 28, 2007)

[1] Supreme Court Decision 2003Du13083 decided Apr. 15, 2005 (Gong2005Sang, 760) Supreme Court Decision 2006Du11750 decided Oct. 23, 2008 (Gong2008Ha, 1612)

Plaintiff

Head of Dong Daegu Tax Office

Daegu High Court Decision 2009Nu2109 decided May 28, 2010

The appeal is dismissed. The costs of appeal are assessed against the plaintiff.

The grounds of appeal are examined.

1. Regarding the imposition disposition of corporate tax

It is reasonable to view that the exclusion period of imposition of the secondary tax liability imposed on the oligopolistic stockholder, etc. of a corporation separate from the primary tax liability, and that the exclusion period of imposition is five years from the date of establishment of the secondary tax liability on which the secondary tax liability is imposed (see Supreme Court Decision 2006Du11750, Oct. 23, 2008). Meanwhile, in order to establish the secondary tax liability, the fact that the secondary tax liability meets the requirements, such as the failure of the principal taxpayer, must occur, and the establishment period of the secondary tax liability is at least after the passage of the “payment period of the primary tax liability” (see Supreme Court Decision 2003Du13083, Apr. 15, 2005).

According to the reasoning of the lower judgment, the lower court determined that: (a) on January 16, 2003, the Defendant’s imposition of KRW 65 million for the business year 2001 to the Gwangju Housing Co., Ltd. (hereinafter “Seoul Housing”); (b) on January 31, 2003 (hereinafter “the initial imposition”); (c) on the grounds that the grounds for calculating the tax amount was inaccurate; (d) on May 18, 2005, when the lawsuit seeking revocation of the initial imposition was pending, the imposition of KRW 65 million for the first 20 years after the lapse of the imposition period; and (e) on the grounds that the Plaintiff’s imposition of KRW 25 million for the first 20 years after the expiration of the imposition period for the second 5 years after the lapse of the imposition period for the second 20 years after the lapse of the imposition period for the second 5 years after the lapse of the imposition period for the second 20 years after the lapse of the imposition period for the second 3 years after the cancellation of the imposition period for the second 20 years after the cancellation.

In light of the above legal principles and records, such judgment of the court below is just and there is no error in the misapprehension of legal principles as to the exclusion period of the secondary tax liability, as otherwise alleged in the grounds of appeal.

2. As to the second taxpayer’s designated disposition

The court of final appeal may investigate and determine only to the extent of filing an appeal based on the grounds of final appeal. As such, the grounds of final appeal should specify the grounds of final appeal and explain specific and explicit reasons as to which part of the judgment below violated the statutes (see Supreme Court Decision 2011Du26015, Feb. 23, 2012, etc.).

However, the petition of appeal in this case does not state the grounds of appeal, and in the appellate brief, the appellate brief does not state specific and explicit grounds on which part of the judgment below dismissed the claim for revocation of the designation of the secondary taxpayer on the grounds that the part of the lawsuit in this case is unlawful. Thus, it cannot be deemed that legitimate grounds of appeal are included. There are no other illegal grounds of appeal subject to ex officio examination in the judgment below.

3. Conclusion

Therefore, the appeal is dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices.

Justices Min Il-young (Presiding Justice)