Suwon District Court 201Guhap1455, 201109.27

National Tax Service Review Income 2010-0092 ( December 23, 2010)

It is not a representative on the corporate register, but a shareholder who can be deemed to have been recognized as a representative on the corporate register, so tax disposition is illegal.

The plaintiff is not registered as a representative on the corporate register, and since the plaintiff cannot be deemed an officer who is a shareholder under the Enforcement Decree of the Corporate Tax Act deemed to be a member on the corporate register, it is illegal to impose tax on the plaintiff.

2011Nu37857 Revocation of imposition of global income tax

XX

Head of the High Tax Office

District Court Decision 2011Guhap1455 Decided September 27, 2011

July 13, 2012

August 17, 2012

1. Revocation of a judgment of the first instance;

2. The Defendant’s disposition of imposition of global income tax 000 on April 12, 2010 against the Plaintiff on April 12, 2010 is revoked.

3. All costs of the lawsuit shall be borne by the defendant.

The same shall apply to the order.

1. Global income tax:

The following facts are recognized in full view of the purport of the entire pleadings in the statements in Gap evidence Nos. 1, 2, Eul evidence Nos. 1, 2, and 1, 2.

[1]

O The plaintiff was registered as a director and a shareholder of 00 Doo 000-0, Inc. (hereinafter referred to as '00 Doo-dong') located in the Jeonbuk-gu, Jeonbuk-si.

As for the omission of 00 won from the first period of 1, 2006, the director of the tax office of Jung-Eup converted the omitted amount of sales revenue by type of business into the omitted amount of sales revenue rate, and issued a decision to revise the corporate tax and the value-added tax on the remaining 00 conduct after converting the omitted amount of sales revenue by type of business. The plaintiff considered the plaintiff as the actual representative of 00 conduct, and disposed of 00 won of the omitted amount of sales revenue as admitting the plaintiff, and notified the change in the amount of income.

[2]

O The defendant decided and notified 00 won of global income tax for the year 2006 to the plaintiff on April 12, 2010 in accordance with the above notice of change in income amount (hereinafter referred to as "the disposition of this case").

O The Plaintiff dissatisfied with the instant disposition and filed an objection on May 20, 2010, and filed a request for examination on September 27, 2010, but received each dismissal decision.

2. The assertion and judgment

A. The plaintiff's assertion

The actual representative of the 00-school administration is 00, and the plaintiff is not the plaintiff, so the disposition of this case imposing the income tax on the plaintiff by considering the plaintiff as the actual representative of the 00-school administration is unlawful.

(b) Fact of recognition;

The following facts are acknowledged in full view of Gap evidence 1 to 7, Eul evidence 1 to 5, and the testimony of 00 witness of the trial court as a whole.

[1]

The plaintiff was registered as a director on August 24, 2005. The plaintiff was registered as a director on February 16, 2004 to September 10, 2005, from September 23, 2005, from September 10, 2005 to February 23, 2006, respectively.

O 00 shares were registered as the plaintiff's ownership of 20%, 00%, 37%, 23%, 20%, and 20%.

[2]

O On June 29, 2006, the Plaintiff was convicted of having been convicted of having committed an offense, in collusion with Cho 00 and Lee 00, that the Plaintiff manufactured and sold pseudo petroleum products over 189 times from August 19, 2005 to May 17, 2006, by storing and mixing raw materials, such as Sobens, tactenenenenenen, and merium, and by being in charge of managing passbooks and books.

In the investigation process of the above case, the Plaintiff stated that he managed the proceeds from the operation of 00 parallels from October 1, 2005 to 00, and that this 00 and 00 also stated to the same effect as the Plaintiff. The free savings account (**********-***************************************************)) deposited a total of 00 won from August 1, 2005 to March 9, 2006, which deposited money into the above account, and the purchaser of the above pseudo petroleum products.

O) In the ordinary deposit account (***********-**************)*****) on September 28, 2005 to May 8, 2006, the entry and withdrawal was made in the name of the plaintiff several times from November 28, 2005 to May 2, 2006.

[3]

Pursuant to the above 00 No. 100 branch accounts in the Plaintiff’s name, there are many persons registered as directors, representative directors, etc. of 00 parallels such as 00, 000, 000, 000, 000, and 00, and 00-10,000 won deposited on November 7, 2005, and 00 won deposited to 00,000 won on November 15, 2005, 8.00 won on December 8, 2005, 300 won on December 30, 200, 2000, 00 won on January 27, 2006, and 00-20,0000 won on July 7, 2006, and 200-6.

Pursuant to the details of transactions of 00 accounts (********-*****************) from September 9, 2005 to September 29, 2007, there are many persons registered as directors, representative directors, etc. of 00 parallels such as 00, 000, 00, 000, 000, 00, and 00, and 00 parallels.

O 00 was convicted of a criminal fact committed in the Jeonju District Court on October 8, 2009 that manufactured and sold pseudo petroleum products from November 2005 to November 26, 2006, from November 2, 2006 to October 26, 2007, from September 1, 2007 to October 2007, and from August 26, 2008 to Police Officers from August 2008 to Police Officers from August 26, 2008.

O The Plaintiff operated a private taxi or operated a game room prior to being registered as a director of the 00th parallel parallel. After the closure of 00 parallels, the Plaintiff was engaged in a wholesale and retail business related to automobiles, and this0 operated a gas station such as 00 gas stations,00 energy from July 2005 to November 7, 2008.

C. Determination

(1) Article 106 (1) 1 (proviso) of the Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 19891 of Feb. 28, 2007) recognizes the representative of the income disposal system as a bonus for the representative of the unconditioned representative without relation to the substance of the system, not based on the fact that such income has accrued to the representative, but rather on certain facts that can be recognized as such act in order to prevent unfair conduct under the tax law by the corporation. In such a case, the representative of the corporation subject to the bonus disposal should be strictly interpreted as a strict interpretation (see Supreme Court Decision 92Nu3120, Jul. 14, 1992).

The proviso of Article 106 (1) 1 of the Enforcement Decree of the above Act stipulates that "where the accrual of the amount of outflow from the company is unclear, it shall be deemed that it has been reverted to the "representative", and exceptionally in the overall title, "where an executive who is not a minority shareholder or a shareholder who is not a minority shareholder or any other person with a special relationship holds not less than 30/100 of the total number of issued stocks or total amount of investment in the corporation and actually controls the operation of the corporation, he/she shall be the representative if the executive actually controls the operation of the corporation." In light of the above provision, where a representative or a person who is not a representative can be deemed a de facto representative, he/she shall be a representative on the corporate register, or a person who actually controls the operation of the corporation among the executive officers, such as shareholders who meet the requirements under the above overall title, even if he/she actually controls the operation of the corporation (see, e.g., Supreme Court Decision 201Du18108, Dec. 18, 20108).

(2) Examining the Plaintiff’s assertion in light of the overall purport of the aforementioned facts and relevant legal principles, as follows.

① The Plaintiff did not have been registered as a representative director on the corporate register, and was registered as a director on the 00 chines, and owned 20% of the shares in the 00 chines. There is no evidence to support that the Plaintiff and a person with a special relationship together owned 30% or more of the shares in the 00 chines. Thus, the Plaintiff cannot be deemed as an “executive in the event that the sum of shares owned by an officer who is not a minority shareholder and a person with a special relationship with the Plaintiff owns 30% or more of the total number of shares issued or total amount of shares invested in the relevant corporation” under the above Enforcement Decree.

② In the course of the investigation into the case of manufacturing and selling pseudo petroleum products, the Plaintiff stated that pseudo petroleum products have been managed by 00 won from October 1, 2005 to March 9, 2006, the Plaintiff stated that 00 and 00 also were the same as the Plaintiff, and that the free savings account (***********-**********************************************************************)) was involved in the fund management of 00 parallels.

However, prior to the involvement in the operation of the 00th parallel, the Plaintiff did not have experience in engaging in the business related to petroleum, while the Plaintiff continued to manufacture and sell pseudo petroleum products from around July 2005 to around 2008 while engaging in the business of operating the 00th parallel parallel, and transacted a considerable amount of money with the Plaintiff and others. The Plaintiff claimed that △△△△△△ was the actual representative of the 00 parallel parallel, and considerable amount of money was remitted to 00,000, 000, 000, and 00, which were involved in the operation of the 00 parallel parallel, as the directors or the representative director, etc., were engaged in considerable financial transactions with 00. In light of the above circumstances, it appears that the Plaintiff’s assertion that △△△△△ was the actual representative of 00 parallel, and that △△△△△△ was the actual representative of 000 parallel.

(3) If so, the Plaintiff is not registered as the representative on the △△ Corporation registry, but the Plaintiff and its related parties owned more than 30/10 of the total number of shares issued and outstanding at 00 shares. Thus, even if the Plaintiff actually controlled the management of 00 shares, it shall not be deemed that the Plaintiff failed to meet the requirements under the proviso of Article 106(1)1 of the Enforcement Decree. Furthermore, it shall not be readily concluded that the Plaintiff actually controlled the management of 00 shares.

④ Therefore, the instant disposition that imposed the Plaintiff’s comprehensive income tax on the Plaintiff according to the notice of change in the amount of income, as the actual representative of the Plaintiff’s 00 behaviors, is deemed unlawful.

3. Conclusion

Therefore, the plaintiff's claim seeking the cancellation of the disposition of this case is justified, and the judgment of the court of first instance is unfair, and it is so decided as per Disposition by cancelling the judgment of the court of first instance and accepting the plaintiff's claim.