Since it is unclear to whom the withdrawn amount belongs, the representative selection disposition is appropriate.

The fact that the omission in sales of the company in this case was confirmed to have been attributed to anyone actually, and the representative director cannot exercise the authority of the representative director independently, and the 1/2 disposition of bonus shall be appropriate.

Article 67 of the Corporate Tax Act

Suwon District Court 2014Guhap59482 Revocation of Disposition of Imposing Value-Added Tax

AA

00. Head of tax office

on October 28, 2016

on January 23, 2015

1. The plaintiff's claim is dismissed.

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

On March 20, 2014, the decision that the former Defendant issued a tax disposition of KRW 73,445,980 on global income tax belonging to the year 2008 against the Plaintiff was revoked.

1. Details of the disposition;

A. BB Co., Ltd (the trade name at the time of its establishment was CCC, the trade name was changed to DD on March 27, 2009, and the trade name was as of October 14, 2009; hereinafter “BB”) was established on January 23, 1997 and engaged in the development, manufacture, and sale of telecommunications equipment. The Plaintiff was in the position of representative director for each of the periods from March 21, 2003 to March 30, 2009, EE was in the position of supplying the pertinent tax base for each of the periods from July 18, 2008 to September 10, 2009 (hereinafter “FFF”) but the Plaintiff did not provide the instant tax invoice for 00 years to FFF (hereinafter “the instant tax invoice for 200 years”).

C. On December 23, 2009, the director of the Gangnam-gu Tax Office confirmed that BB omitted filed a return on the instant sales, and notified the correction and notification of the two-year value-added tax and corporate tax for the business year 2008, respectively. On December 31, 2009, the Plaintiff and EE, the representative director of BB, who is the representative director of BB, disposed of the amount of income as bonus and notified the change in the amount of income. D. Accordingly, BB filed an objection with the Director of the Tax Office on March 10, 2010, but the Tax Tribunal dismissed the request on July 18, 201.

E. On December 3, 2013, the Defendant confirmed that the global income tax on the issue amount was not reported and paid, and corrected and notified the Plaintiff of KRW 73,445,980 as global income tax for the year 2008 (hereinafter “instant disposition”).

F. The Plaintiff appealed and filed an appeal with the Tax Tribunal on April 17, 2014, but the Tax Tribunal decided to dismiss the appeal on July 24, 2014.

Facts without any dispute arising in recognition, Gap evidence 1, 14-1, 2, 18, Eul evidence 1-1, 2, 3, 2, 4, 7, and 8, and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

1) Since the instant sales proceeds out of the company, etc. were reverted to GGG (hereinafter referred to as “GGG”), HH (hereinafter referred to as “HH”), and JJ (hereinafter referred to as “JJ”), the instant sales proceeds should be disposed of as “other outflow from the company.”

2) Even if not, the ' de facto representative' of BB at the time of the instant sales is not the Plaintiff who already sold all the shares held at that time with KK and EE.

B. Relevant statutes

The entries in the attached Table-related statutes are as follows.

(c) Fact of recognition;

1) Acquisition of CCC stocks and management rights by KK, EE, and LL

A) KK established for the purpose of trade business, etc., MM Co., Ltd. (OM 1, 2005, OOM 1742-7 OOF 204, KK established for the purpose of the main office, solid fuel and related product wholesale business, KK has taken office as the representative director of August 25, 2008), NNN (mutual change from MF Co., Ltd., Ltd.), PPPPP Co., Ltd., GGPP, PPPP Co., Ltd., Ltd., and RR Co., Ltd., Ltd., established for the purpose of trade business, etc. (hereinafter referred to as "KK et al.") determined that KK, EE and PE (the representative director of the company, etc.) borrowed funds for the purpose of the business of acquiring and operating PE Co., Ltd., Ltd., Ltd., with its large amount of stocks purchased and paid for the purpose of MPE Co., Ltd., Ltd. (hereinafter referred to as "K et hereinafter referred to as the representative director of the company").

C) On May 15, 2008, KK, etc. acquired 11,295,985 shares of CCC (41.71%) from the Plaintiff, who was the largest shareholder and representative director of CCC, in KRW 13.5 billion, and entered into a contract with CCC to obtain management right transfer. The main contract is as follows.

D) On May 21, 2008, KK was appointed as a manager of CCC on or around May 21, 2008 under the above contract. EE was appointed as a joint representative director at a temporary general meeting of shareholders on July 18, 2008 from the Plaintiff and the joint representative director on the same day. On the same day, EE, LL, KK, and bond company, SSS fund representative director, as the director of TT, UU, a private partnership of TT, was appointed as a director.

E) KK et al. embezzled 3,740,442,50 won in total under the pretext of insurance premiums, operating expenses, etc. of MM and GG on May 29, 2008 or June 5, 2008 while working for the CCC in collusion with offering new stocks and issuing convertible bonds.

F) On July 16, 2013, KK was sentenced to 13 years of imprisonment with prison labor for a violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Embezzlement, etc.) (Korean Government District Court 2010Gohap218). On February 16, 2015, KK was sentenced to 8 years of imprisonment with prison labor at Seoul High Court (Seoul High Court 2013No2560), and on June 24, 2015 (Supreme Court 2015Do4174). On the other hand, on January 28, 2011, KK was sentenced to dismissal of the appeal by the Government District Court of the Republic of Korea on the grounds of violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Embezzlement), EE was sentenced to imprisonment with prison labor for 3 years and 4 years, and the Seoul High Court 2010No2714 decided March 21, 2015 (Seoul High Court 201).

2) Transaction details, etc. of BB

A) On July 10, 2008, the Plaintiff did not hold the CCC’s shares. Since then, CCC established NA on December 30, 2008 by dividing the business part of network communication equipment into the business part of the business part of the network communication equipment, thereby establishing NACO as the Plaintiff. On July 23, 2010, NACO Co., Ltd was merged with CCC Korea and dissolved.

B) The details of the transaction account (CCC) include the following entry and withdrawal details.

C) On July 23, 2008, the Plaintiff and EE entered into a contract with the FF to sell approximately 200MT under the name of the CCC. On July 23, 2008, EE issued a certificate of commodity transfer to the FF, the transferee of the instant goods, which was scheduled to be deposited into the prior bonded warehouse in the name of CCC, to transfer the instant goods to the FF.

D) According to the results of the fact-finding conducted by the Director of the sericultural Tax Office of this Court, HH had no sales details about CCC in addition to the sales of KRW 1,210,650,000 in supply price to MM Co., Ltd during the reporting period of value-added tax for the second half of 2008. According to the fact-finding conducted on September 23, 2015 by the Director of the OO of this Court, MM Co., Ltd purchased KRW 1,210,650,000 from HH supply price during the reporting period of value-added tax for the second half of 2008.

E) According to the result of the fact-finding conducted on June 8, 2016 to the head of the O's office of this court, GG had no sales and purchase details between CCC during the taxable period of value-added tax in 2008. Moreover, according to the result of the fact-finding conducted on February 19, 2016 to the head of O's office of this court, the fact-finding conducted by JJ as to CCC and FF during the taxable period of value-added tax in 2008.

In fact that there is no dispute over recognition basis, Gap evidence 2 through 10 (including paper numbers), Gap evidence 14-3, 4, 5, Gap evidence 15, Gap evidence 19-1, 2, Eul evidence 5, and 6, each fact inquiry into the director general of this court, the director general of the OO tax office, the director general of the OO tax office, and the director general of the OO tax office, the purport of the whole pleadings.

D. Determination

1) Determination on the first argument

In a case where a corporation did not enter its sales in the account book despite the fact of sales, the total amount omitted from sales, including the cost, shall be deemed to have been leaked to a private company, barring any special circumstances. The revenue of the corporation that was released from the account shall not be disposed of as a bonus to the representative unless the ownership of the revenue is clear. In such a case, the special circumstance that the omitted amount of sales was not leaked to a private company or the ownership of the revenue is clear is against a taxpayer who asserts it (see, e.g., Supreme Court Decision 2007Du3855, Jun. 26, 2008). Considering the following circumstances revealed in light of the above facts and the above facts, the sales amount in this case was leaked to a private company of the CCC, but it is difficult to view that the transaction details of entry and departure were actually attributed to GG, HH, JJ and JJ because it is unclear between the GG, H, and JJ.

① On July 23, 2008, the CCC received 120,000,000 won from FF, and remitted 120,000,000,000 won from FF to HH on the same day as seen earlier. However, HH had no record of sales in relation to CCC except for the sales of KRW 1,210,650,00 in value-added tax return period for the 2008 total value-added tax return period, and there was no clear evidence to acknowledge otherwise.

② The CCC received a total of KRW 80,000,000 from FF on July 29, 2008 to 30.30, and transferred the total amount to GG for the same period as seen earlier. However, GG had not any sales and purchase details between the CCC during the taxable period of value-added tax in 2008, and there was insufficient evidence to acknowledge that the person to whom the said amount was remitted was transferred as GG, solely with the evidence No. 2-1, No. 4-3, and No. 16.

③ On July 30, 2008, the CCC received 90,000,000 won from FF on the same day, and the JJ transferred the full amount to FJ on the same day as seen earlier. However, the fact that the JJ did not issue tax invoices to CCC and FF during the period of value-added trade in 2008, and there was no record that it issued tax invoices to CCC and FF during the period of value-added trade in 2008, and the evidence No. 14-7, A, No. 17-1, 17-1, 2, and 18 alone is insufficient to recognize that the said remittance was reverted to the JJ, and there is no other clear evidence to prove otherwise.

2) Judgment on the second argument

The recognition contribution system for the representative is not based on the facts that such income has accrued to the representative, but it is intended to have certain facts that can be recognized as such in order to prevent unfair conduct under tax laws by the corporation be considered as bonus for the representative without substance. The representative is substantially the representative who operates the company. Thus, even if the representative is registered as the representative on the corporate register of the company, if the company did not actually operate the company, the income of which the company is missing cannot be imposed on him/her (see Supreme Court Decision 87Nu1238, Apr. 12, 198).

However, a person who actually exercises the authority as a representative director and actually participates in the management falls under the representative subject to the disposition after being recognized as a representative (see Supreme Court Decision 2005Du8030, Jan. 18, 2008). The fact that the person constitutes the representative director of a corporation which is subject to the disposition of income by being recognized as a representative is proved by the data, such as the certified transcript of corporate register, etc. The fact that the person constitutes the representative director of a corporation who is subject to the disposition of income by being recognized as the representative director. Despite being registered as the representative director on the corporate register, the person who is not the actual representative shall prove the fact that is not the representative (see Supreme Court Decision 2010Du1816, Dec. 23, 2010). In light of these legal principles, in light of the following circumstances recognized as a whole, it is difficult to acknowledge that the Plaintiff did not exercise the right of representation in the name of the representative at the time of the sales, and there is no other evidence to acknowledge the Plaintiff’s assertion.

① On May 15, 2008, the Plaintiff: (a) transferred CCC’s shares 11,295,985 shares (share 41.71%) to KK, etc. in KRW 13.5 billion; (b) entered into a contract with CCC to acquire management rights; and (c) entered into a contract with CCC to acquire management rights; and (d) recognized each of its representative directors until the company becomes a spin-off as one of the main contractual terms.

② On July 23, 2008, the Plaintiff and EE had direct relations with FF under the name of CCC by entering into a contract for selling approximately 200MT of the instant goods.

③ On December 30, 2008, after the physical division of the CCC’s network communication equipment business part, the ZZ was established as a corporation with business purposes such as electricity, electronic, telecommunications, and computer products manufacturing and marketing after the above goods contract. The representative director of the ZZ was the Plaintiff, and even thereafter, the Plaintiff continued to be the EE and CCC’s representative director until March 30, 2009. (iv) In light of the above circumstances, the Plaintiff appears to have exercised the right of management related to BB’s representative director before escaping from the position of the representative director.

3. Conclusion

Therefore, the plaintiff's claim is dismissed as it is without merit. It is so decided as per Disposition.