Home Plusco Co., Ltd. (Attorney Jeong Byung-chul et al., Counsel for the defendant-appellant)

Head of Seo-gu District Tax Office and one other (Government Law Firm, Attorneys Lee Jae-sin et al., Counsel for the plaintiff-appellant)

September 26, 2011

1. On April 9, 2007, the head of Seo-gu Daejeon District Tax Office revoked each disposition of imposition of KRW 86,533,414,920 on the Plaintiff and KRW 9,065,40 on July 31, 2008 by the head of Seo-gu Daejeon District Office and the head of Seo-gu Daejeon Metropolitan City on July 31, 2008.

2. The costs of lawsuit are assessed against the Defendants.

The same shall apply to the order.

1. Details of the disposition;

A. On August 31, 1982, 1982, Darefour S.A., the head office of which is located in Paris was established in Paris, as the top holding company of Dau Pteu Group, Dau B.V., and CNBV was 10% invested in 100% of August 31, 1982, and changed the Dau Pteu Co., Ltd. (hereinafter “CNBV”), the head office of which is located in the Netherlands Metesen; and CNBV was 10% of March 8, 1994, and changed the Dou Pteu Co., Ltd. (hereinafter “Dauland Co.,, Ltd.”); and the Dou 206, Sep. 30, 2008, 206, 2006, hereinafter “Plaintiffs”) into the Republic of Korea Home Pteler Co., Ltd. (hereinafter “Plaintiffs”).

B. CSSA, around 2000, merged Korea Concode (hereinafter “Korea Concognis”), a French corporation, the parent company of Korea Concognis (hereinafter “Korea Concognis”), which engaged in a discount store business in the Republic of Korea, acquired the shares of Korea Congnis, and acquired 20.56% of the shares of Korea Congnis (hereinafter “Korea Congnis”) on September 29, 2001 by absorbing Korea Congnis (hereinafter “Korea Congnis”). Accordingly, the share ownership ratio of Korea Congnis was changed from CNBV 100% to CNBV 79.44%, and 3SA 20.56%.

C. On September 26, 2006, CNBV and CSA transferred approximately KRW 1.520 billion, each of 50% of the total of 50% to Eland Distribution and KNF Distribution Co., Ltd. (hereinafter collectively referred to as “instant stock acquisition corporation,” and each of them individually referred to as “stock company”).

D. The instant acquisition corporation withheld and paid corporate tax amount of KRW 31,382,29,299,290 on capital gains from sale of 20.56% shares of the CSSA pursuant to Article 98 of the Convention between the Government of the Republic of Korea and the Government of the French Republic for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income (hereinafter “Korea-FF Tax Treaty”) and Article 98 of the former Corporate Tax Act (amended by Act No. 8141 of Dec. 30, 2006; hereinafter “former Corporate Tax Act”), and paid corporate tax amount of KRW 3,138,299,930 on capital gains from sale, and filed an application with the head of the tax office of the Korea-U.S. under Article 179-3 of the former Local Tax Act (amended by Act No. 9924 of Jan. 1, 2010; hereinafter “former Local Tax Act”) for the Avoidance of Double Taxation and the head of the Korea-U Tax Treaty (hereinafter “No 4”).

E. From April 28, 2006 to October 10 of the same year, the Seoul regional tax office conducted a partial investigation and a survey of stock transfer of CNBV’s application for non-taxation and exemption of corporate tax, and on November 9, 2006, notified the results of the tax investigation to the director of the Namcheon District Tax Office and the director of the Ansan District Tax Office, “CNBV is a Doing Company established for tax avoidance, and CSA is an effective owner of the capital gains of this case,” respectively. On November 15, 2006, the Namcheon District Tax Office notified the Republic of Korea Tax Office and the director of the Ansan District Tax Office, respectively. On November 21, 2006, the director of the Ansan District Tax Office notified the NNBV of taxation on the grounds of non-taxation and non-payment of the capital gains of this case.

F. On December 12, 2006, the instant stock acquisition corporation was merged with the Plaintiff. Accordingly, on April 9, 2007, the head of Seo-gu District Tax Office decided and notified the Plaintiff, who succeeded to the tax liability of the instant stock acquisition corporation, of KRW 86,533,414,920 as the withholding agent of the instant stock transfer income for the year 2006 (hereinafter “instant disposition imposing corporate tax”), and upon the disposition imposing the instant corporate tax, the Plaintiff reported and paid KRW 9,065,40,370 as the resident tax to be collected specially pursuant to Articles 176(2) and 179-3 of the former Local Tax Act on July 31, 2008 with the corporate tax as the tax base of the said corporate tax imposed on the head of Seo-gu Daejeon Metropolitan City, Daejeon Special Metropolitan City (hereinafter “instant disposition”).

G. On July 6, 2007, the Plaintiff filed an appeal with the Tax Tribunal on the disposition of imposition of the corporate tax of this case, but was dismissed on March 25, 2010. On July 31, 2008, the Plaintiff filed an appeal with the Tax Tribunal on the disposition of imposition of the resident tax of this case, but was dismissed on May 31, 2010.

[Ground of recognition] Facts without dispute, Gap evidence 1 through 5, 15 through 17, Eul evidence 1, Eul evidence 1, Eul evidence 1 (including each number), the purport of the whole pleadings

2. Whether each of the dispositions of this case is legitimate

A. The plaintiff's assertion

The plaintiff asserts that each of the dispositions of this case should be revoked in an unlawful manner for the following reasons.

1) The tax authority’s interpretation of the administrative convenience based on the substance over form principle, which is merely a legal principle under the domestic law, cannot exclude the benefits of the tax treaty, which is a contract between the countries on allocation of taxation authority. Therefore, notwithstanding the legal form and title of CNBV, the beneficial owner of the instant capital gains cannot be deemed as CSSA by applying the substance over form principle.

2) Even if the substance over form principle can be applied to the attribution of the instant capital gains, it cannot be deemed that CNBV is merely a Do government company. Since the transaction entity and the beneficial owner of the instant capital gains are not CNBV, not CSA, the Defendants are not entitled to impose tax on the instant capital gains of the instant shares, and the Defendants do not have the right to impose tax on CNBV, which falls under Netherlands resident and transferor pursuant to Article 14(4) of the Korea-NBV Tax Treaty.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

1) Whether the substance over form principle can be applied

A)Relation between a tax treaty and a domestic tax law

Article 6 (1) of the Constitution provides that "any treaty concluded and promulgated by the Constitution and any generally accepted international law shall have the same effect as domestic law," so a tax treaty concluded with the consent of the National Assembly shall have the same effect as that corresponding to Acts.

On the other hand, the purpose of the tax treaty is to prevent double taxation and tax avoidance by adjusting the issue of the taxation right between the contracting parties. As a matter of principle, it does not create an independent taxation right, but functions to allocate or restrict the already established taxation right under the tax laws of the contracting state. Matters concerning the occurrence of the taxation right are first governed by the tax laws of each country, and the tax treaty determines the place of final taxation right for matters which are otherwise prescribed by the domestic tax laws. Ultimately, in the legal relationship governed by the tax treaty, the treaty concerned is in the special status of the domestic law, and it can be seen that the treaty concerned is applied

B) Principle of no taxation without law and strict interpretation of tax treaties

Article 38 of the Constitution provides that "All citizens shall have the duty to pay taxes under the conditions as prescribed by Act," and Article 59 provides that "types and rates of taxes shall be determined by Act," thereby declaring the principle of no taxation without the law. In determining the tax requirements, tax exemption requirements, etc. pursuant to the principle of no taxation without the law, the National Assembly, which is the representative body of the citizens, shall be stipulated by the law enacted by the National Assembly, and shall be strictly interpreted and applied to the enforcement of the law. Furthermore, Articles 26, 27, and 31 of the Vienna Convention on Treaties to which the Republic of Korea is a party, provide that "any treaty shall be observed, the domestic law provisions shall not be invoked, and the language of the treaty shall not be interpreted faithfully in accordance with its ordinary meaning." Thus, in any tax treaty having the legal effect, the extension of administrative convenience or analogical interpretation shall not be permitted in accordance with the principle of no taxation without the law."

C) The substance over form principle and the interpretation of tax treaties

(1) Article 11(1) of the Constitution provides, “All citizens shall be equal before the law, and no person shall be discriminated against in all areas of political, economic, social, and cultural life on account of gender, religion, or social status.” The principle of tax equality can be deemed an expression of the principle of equality under the above Constitution or the principle of prohibition of discrimination. Therefore, in implementing tax legislation, the State must establish laws so that the burden of tax can be equally distributed among the citizens, and have the duty to equally deal with all the citizens in interpreting and applying the tax law. One of the legal systems to realize the principle of tax equality is the principle of substance over form as provided under Article 14 of the Framework Act on National Taxes, Article 4 of the Corporate Tax Act, and Article 4 of the Corporate Tax Act. This is the principle of tax justice in the process of legislative process or enforcement (see, e.g., Supreme Court Decision 2009Hun-Ga38, Jul. 21, 198; Supreme Court Decision 2009Hun-Ga38, supra).

(2) Meanwhile, the OECD established various regulatory measures for the act of tax avoidance using a tax haven place through international discussions in the harmful tax have commenced since 1999. Accordingly, the OECD widely deals with the types and methods of tax avoidance, and the interpretation of the treaty-related treaty in the 2003 Amendment Model Convention, and provides a basis for preventing the act of tax avoidance. Article 1(7) of the Model Convention provides, “The basic purpose of the Convention on the Prevention of Double Taxation is to prevent international double taxation, thereby promoting exchanges between goods and services, and human resources. The purpose of the Convention is also to prevent tax avoidance and the prevention of Fiscal Evasion.” Article 1(2) through (24) of the OECD Model Convention provides, “The Convention on the Prevention of Double Taxation is not an appropriate treaty-related treaty-related treaty-related treaty-related treaty-related treaty-related treaty-related treaty-related treaty-related treaty-related treaty-related treaty-related treaty-related treaty-related general treaty-related treaty-related treaty-related treaty-related treaty-related treaty-related treaty-related treaty-related treaty-related treaty-related treaty-related regulations.”

(3) As such, in light of the fact that the ideology of tax equality under the Constitution ought to be applied to the application of a tax treaty that has the same legal effect as that of a tax treaty, and that the OECD’s note contains the substance of the substance of the substance of the substance of the substance of the substance of the tax treaty, the interpretation of a tax treaty shall comply with the principle of strict interpretation under the no taxation without the law and the principle of faithful interpretation according to the ordinary meaning prescribed in the Vienna Convention, but the interpretation according to the substance of the legal systematic relationship that takes into account the legislative intent and purpose of the relevant provision within the meaning of the language possible according to the substance of the substance of the tax treaty shall not be deemed to go against the principle of strict interpretation, as it is the most accessible interpretation that clearly expresses the ordinary and logical meaning of the relevant provision in light of the substance of the provision of the tax treaty. Ultimately, it is reasonable to deem that the substance of the substance of the substance of the substance over form can be considered as the basis of its interpretation, unless the provision of the substance of the tax treaty itself is not unfairly inferred

D) In the instant case:

In light of the above legal principles, the purpose of the treaty is to facilitate the exchange of goods and services by simply preventing international double taxation, and “prevention of tax evasion” can not be deemed as limited to promoting the exchange of goods and services by simply preventing double taxation, and “the prevention of tax evasion” also constitutes an important purpose of the above treaty like the avoidance of double taxation. ② Article 3(1) of the Korea-Ne Tax Treaty provides, “The term that is not otherwise defined in the application of this Convention shall have the meaning to be known in the law of the Contracting State related to the tax of this Convention unless the context otherwise requires.” (3) The tax treaty does not have a function to allocate or restrict the right to taxation established by the tax law of one Contracting State, as it does not establish an independent right to taxation, and thus, the first determination as to whether a specific tax treaty is applicable is determined in accordance with the tax law of one Contracting State, and in light of this, the concept of substance over form principle can only be deemed as having been applied to only one resident and the transferor of the tax treaty, as provided in Article 14 of the Corporate Tax Act.”

Therefore, the Defendants, as the tax authorities, can determine whether to exercise their taxation right by recognizing the actual trader and the beneficial owner of the income as CNBV, the residents of the Netherlands, or whether to exercise their taxation right by deeming the CNBV as a superior holding company of CNBV, which is a French resident, as a French resident. The Plaintiff’s assertion in this part is without merit.

2) The person to whom the transfer income of the instant shares belongs

A) Legal principles

As seen earlier, comprehensively taking into account the constitutional principles of no taxation without law and the interpretation standards of tax treaties, Article 14 of the Framework Act on National Taxes, Article 4 of the Corporate Tax Act, the purpose and content of substance over form principle, the purpose and purpose of Article 14 of the Korea-Ne Tax Treaty, and the purport of Article 14 of the Korea-Ne Tax Treaty, etc., determination of the meaning of “transferor” under Article 14(4) of the Korea-Ne Tax Treaty shall conform to the purport of double taxation

Therefore, when a person, who is not a resident of the Netherlands, establishes a legal entity in the Netherlands with the purpose of taking benefits under the Korea-Ne Tax Treaty, and performs legal acts in the name of the legal entity in the Republic of Korea, the legal entity is not a normal business activity in the Netherlands, and the legal act in the Republic of Korea is limited to the role of a transaction partner in the form for a person who is not a resident of the Netherlands without independent economic benefits and business purposes, and the actual transaction partner is not a resident of the Netherlands, and the status of the legal entity as a resident of the Netherlands is recognized to be solely for the purpose of tax avoidance by a person who is not a resident of the Netherlands, the legal entity shall not be deemed a "transfer agent" under the Korea-N Tax Treaty, and in such a case, the legal entity shall not be deemed a "transfer agent" under the Korea-Ne Tax Treaty, on the ground that a person, other than the Netherlands resident of the Netherlands, is the principal agent of the transaction. Accordingly, in accordance with the substance over form principle, the actual party of the transaction and the person liable for tax payment between the Republic of Korea and the beneficial owner.

On the premise of such a legal doctrine, the following is about whether the subject of the transaction of the transfer of the shares of this case and the subject of actual attribution of the transfer income resulting therefrom are the subject of the burden of proof.

First of all, it is reasonable to view that the Defendants asserted that the Defendant’s main office is “transfer agent” under Article 14(4) of the Korea-NBV, and that there is only a person who asserts that there is a person who actually obtains income (see Supreme Court Decision 84Nu505, Dec. 11, 1984). Therefore, the Defendants are not obligated to prove that CNBV is not a “transfer agent” under Article 14(4) of the Korea-NBV Tax Treaty. Therefore, the Defendants are obliged to prove that CNBV is a foreign corporation with the burden of proof as to the transfer of the instant shares to CBB, which is the residents of the Netherlands (see Supreme Court Decision 2006Nu981, Apr. 1, 2006). However, the Defendants are not obligated to prove that CNBV is a “resident of the Netherlands,” and that CNBV is not a foreign corporation with the burden of proof under Article 98(1) of the Korea-NBV tax treaty.

C) Determination

(1) On the other hand, the evidence submitted by the Defendants alone is insufficient to recognize that the transaction subject of the transfer of the instant shares and the actual subject of the transfer income accrued therefrom are not CNBV, but CNBV, and as a result, CNBV is not a “transferr” under Article 14(4) of the Korea-NBV Tax Treaty, and there is no other evidence to acknowledge it.

(2) Rather, the following facts may be acknowledged in full view of the respective descriptions and videos stated in Gap evidence Nos. 6, 7, 10, 11, 13, 22, 26, 28 through 36, 40, 42 through 55, 63, 66 through 68, Eul evidence Nos. 3, 4, 15, 20, 21, 24 (including each number), and the overall purport of the pleadings.

(A) Details and progress of the establishment of CNBV

① On July 12, 1982, as the top holding company of the Daur Food Group, approved an overseas investment plan from the Ministry of Finance and Economy of France on July 12, 1982, and established CNBV, an intermediary holding company for overseas business investment under the Netherlands Act, in the form of a private limited liability company (BSoman Vennoot Capital) under the Netherlands Act on August 31, 1982, by investing approximately 170,000,000 paths in the aggregate of 10,000 French Francs, and in the form of an intermediary holding company for overseas business investment.

② As of the end of 2005, CNBV amounts to approximately KRW 4.6 billion capital ( approximately KRW 8.3 billion capital). Since its establishment, CNBV expands its business with loans, etc. from subsidiaries, etc., and expands its business with loans, etc. from affiliates, etc., it currently remains a general holding company holding 52 subsidiaries in total in the world around 25 countries around the world.

(B) Business activities of CNBV

(1) According to CNBV’s annual annual report from 1994 to 2006, CNBV annually received equities from 1994 to 2006, 205 to 2005 to 30, 205 to 206 to 30, 206 to 205 to 30, 306 to 205 to 196 to 196 to 196, 205 to 196 to 196 to 196, 30 to 205 to 206 to 206 to 30 to 205 to 206 to 30 to 206 to 196 to 196 to 30 to 196 to 1975 to 1,759, 81 to 195 to 300 to 197, French, 209 to 209 to 309 to 2962, 196305 to 197

② Since its establishment, CNBV has been paid dividends and collected investment profits in excess of the funds re-investment in the country concerned, as the business of discount stores was successfully conducted in large scale, lease, Indonesia, Switzerland, and Egyuri. The amount of withholding tax on the dividend income shall be approximately KRW 3,150,000,000 in total from around 195 to around 2006.

③ CNBV merged with three companies in 2001 Soca B.V., Fracof B.V. and CNBV., NNBV merged with NE B.V., PND International B.V. and Haxun B.V., around May 2003, CNBV had borrowed approximately KRW 500 million amount from the bank of BNP-Pbaba S.A., and guaranteed the principal and interest of the PNBBS S.C. 9 on the PNBV’s account, and it had been established for the PNBS 2000, which was the above Guarantee Bank to pay for the PNBA’s deposit in the name of the PNBBS S. and the Guarantee Bank, and the amount of the PNBV’s deposit in the name of the PNBA and the Guarantee Bank for the PNBV 970, which was the one of the above Guarantee Bank.

(C) Business and employment details of CNBV

① At around 1993, CNBV did not separately employ employees other than court directors and supervisory directors. At 194, 1994, 1995, 1996, 201, 2001, and 1 other employees of 2003.

② CNBV concluded a lease agreement with the term of lease of a building (including six parking spaces omitted) of 244 square meters, which is a corporation located in the Netherlands, from November 1, 2000 (it is possible to extend five years at the lessee’s option after the expiration of the term of lease), the standard rent of 109,700 road, 32,212.80 road rates for three months, and the said office is established in the said building. Accordingly, at the tax office located in the Netherlands, CNBV issued a certificate to the effect that it constitutes a resident under Article 4 of the Korea-NB Treaty, and the executive officers and employees of the NBV, who are the director general of the National Tax Service or the director general of the National Tax Service, are not residents of the Netherlands or the Netherlands, and are not residents of the Netherlands, and are not residents of the Republic of Korea.

③ The income statement prepared by CNBV each year includes expenses, such as the pay, rent, management expenses, etc. of the employees.

(D) the structure and operational status of the Darur Food Group;

1. Dau Group's activities, beginning with the opening of 1969 Belgium, enter the international market for 1973 Spanish, Brazil in 1975, and Luxembourg in 1982, constitute an overseas affiliate with an objective of continuing operation of discount businesses in each country. On December 31, 2005, 200 affiliated companies in each country and 200 affiliated companies located in all the world. The most functional unit, which serves as the basis for the Dau Group's 25 affiliated companies, is the unit of business (BU; hereinafter referred to as "BU"), and the regional headquarters belonging to Asia, takes effect as the top concept of BU, and the regional headquarters of Gau Group's new management decision-making and decision-making at each of the Committee's new management and decision-making at each of the Committee's own investment groups, and the Committee's new management and decision-making and decision-making at each of the Committee's own investment groups.

2. The Lere de Co., Ltd., which is a LAC’s Fund Management Center (hereinafter “CC”) shall conduct negotiations with each country countries over the world relating to physical movement of funds and exchange rates. An affiliate company of a LAC group shall enter into a general agreement with CCC for financial management, open a current account through CCC, and lend surplus funds to other affiliate companies or CCC or borrow funds for temporary shortage from other affiliate companies or CCC by using the Fund Integration Management System operated by CCC. However, the current account of an affiliate company managed by CCC is limited to an affiliate company. Accordingly, if CCC regularly issues a statement of transactions to the current account to an affiliate, employees in charge of the affiliate company were to prepare a financial report on the current account, bank account, loans, and loans on the basis of each month, and then to notify CCC of the amount of funds borrowed through comparison and examination of the financial report and the statement of transactions, and then, to obtain approval from CCC at least 206’s request for the CCC’s investment and management order.

(E) The circumstances and process of the establishment of Korea Dazur and the progress of the project, the process of sale of the instant shares, and the progress after sale

① On September 12, 1993, CNBV made the first resolution by the board of directors concerning the Korea Daz Investment, and was established on March 8, 1994, which was about six months thereafter.

② The CNBV continuously invested approximately KRW 877.2 billion in 51 capital increase from March 8, 1994 to November 12, 2001 with funds accumulated as cumulative interest, dividend income, and sales amount of some investment assets. The CNBV re-investment in the CNBV’s business without dividends to CNBA, which was conducted by the resolution of the board of directors and CNBV’s representative directors, and was later reported as business activities.

③ The transfer of the shares of the Republic of Korea is led by the Asian Team among the M&A teams within the Daz group. At the time, the CSSA and the CNBV, which were the shareholders of the Korea Daz., respectively, delegated the authority for the transfer of shares to the executives of the Daz Group and to the members of the Daz Group. The CSSA separately delegated the authority for the transfer of shares to Nonparty 2, 3, 4, and 5, and CNBV to Nonparty 6, 7, 8, and 9, respectively.

④ Around April 13, 2006, Ireland was selected as a priority negotiation subject of the Korea Daz shares. From April 20, 2006, Nonparty 3, a trustee of CNBV, and Nonparty 9 and CSA, a trustee of CNBK, and the representative director of CNBK, led the negotiations. The negotiations were concluded with the approval of the CNBV, the board of directors, and the representative director of CSSA, and Nonparty 9 notified thisland of the final sales decision. In other words, around April 28, 2006, the CNBV and CSSA signed a sales contract on behalf of Nonparty 9, a trustee of CNV, and the revised sales contract on behalf of Nonparty 36, a sales contract (for shares owned by CNV, Nonparty 9 signed the revised sales contract on behalf of Nonparty 3, a mandatory, and Nonparty 200, a sales contract.)

⑤ On September 26, 2006, CNBV received approximately KRW 1 billion from the acquisition corporation of the instant shares, 71,049,464 shares of the instant shares, at the sale price of 71,049,464 shares, and thereafter, it used approximately KRW 797,379,000 of the sales price to make an investment in the subsidiaries located in the CNBV and China from January 26, 2007 to April 2007.

6) The Doynsan&Leff N.V., the Netherlands pumps, and the legal office of the Kim & K&P, the Korean law firm, and the Korean accounting firm Erni&Young directly claimed legal advisory costs related to the transfer of the instant shares to CNBV, and CNBV directly shared such costs.

(f) The common points and differences between the CSS and CNBV.

① Both the Company and the CNBV are all included in the Daz Group, and the Company are the same as the Company that does not directly participate in the business operation of the Company through personnel facilities, other than equity participation. However, the CNBV is a subordinate holding company of the CSSA.

② As of December 31, 2005, the CSS and CNBV employed 6 employees, excluding directors, respectively.

(3) The fact that the supervisory board and the management board are composed of each legal entity in the SSA and the CNBV is the same. However, the fact that the CNBV exercises the power of a representative director, who is a single member of the management board, to independently determine and proceed with all matters related to the business is different from the CSSA.

(3) Based on the above facts, we examine who is the actual subject of the transfer income of the instant shares.

(A) Whether CNBV is merely a Docit Commonpa company

In order for a company established in a specific country to be deemed as a Do government company, the fact that there is a tax haven (Tax Heaven) element, such as low-rate taxation or non-taxation on overseas source income by the country in which the company is located, is insufficient. The fact that the company was formally created in accordance with the investment structure and governance designed solely for the purpose of tax avoidance through treaty flight. Furthermore, the issue of whether a company is merely an intermediate medium for the sole purpose of tax avoidance and making profits under the treaty can be determined through all indirect facts, such as the company’s business purpose and activity details, the entity raising and collecting funds, the details of profit distribution, and the duration of the company.

Based on the above facts, CNBV, which is merely an independent corporation of the Netherlands’s domestic law and its corporate entity for the purpose of financing and investment, is not a separate accounting and tax return, such as holding of shares and financing for investment in the companies that engage in retail business, under the Dutch’s accounting supervision regulations. The Dutch’s board of directors, the supervisory committee, and the general meeting of shareholders under the Dutch’s corporate law, can only be deemed to have been established for the purpose of distributing dividends to the companies for 30 years prior to the establishment of the KNB and thus, it can only be deemed to have been established for the purpose of distributing dividends to the companies for 194, and it can only be deemed that CNBV had an independent corporation of the Netherlands’s corporate entity for the purpose of financing and investment risk.

(B) Whether the SSA constitutes so-called beneficial owner

(1) The impact on decision-making and the distinction between the ownership of the right to control, manage and dispose of income.

The matter of who actually belongs to the right to control, manage, and dispose of income resulting from a juristic act, i.e., who is the nominal owner of the juristic act causing income; who is the nominal owner and the person who exercises the right to control, manage, and dispose of income; who is the nominal owner and the person who exercises the right to control, manage, and dispose of income; who is determined through any process to whom the nominal owner and the person to whom the effect of the juristic act is attributed; who is the principal of the movement and management of income in the event the transfer of income is accompanied by a juristic act; and who is the nominal owner and the person to whom the effect of the juristic act is attributed, if the juristic act is a juristic person, the decision-making or the exercise of the right to exercise the right to control, manage, and dispose of income; and, in other words, whether the right to control, manage, and dispose of income belongs to any person who exercises the right to exercise the right to control, or dispose of income in the process of making a decision on the juristic act.

(b) In the context of the provisions of Article 2(1) of the Act, even if a shareholder exercises influence as a shareholder on the appointment and dismissal of directors, auditors, matters concerning the supervision of management, profit dividends, division and merger of a company, transfer of stocks, transfer of business, and acquisition by transfer, etc. of the relevant corporation, the effect of the relevant corporation’s legal act in accordance with the decision-making is still attributed to the relevant corporation, which is recognized as a legal independent entity, and all income from the transaction is attributed to the relevant corporation and cannot be deemed as belonging to the relevant corporation. The same applies to cases where the shareholder is not an individual but a corporation.

(2) Reversion of the characteristics, profits and losses of a prop company.

On the other hand, the principal element of the holding company is a company with the objective of acquiring substantial control over the company by holding its shares to the extent that it controls another company, and exercising the influence as a shareholder. The purpose of the holding company’s existence, “actual acquisition of control by stock holding,” is not immediately connected to the direct management control over the company’s management, and the holding company’s system is also used for the purpose of cutting down risks arising from the aggravation of business performance, etc. by allocating its business responsibility to the company. The holding company is characterized by having human and material organizations necessary to exercise its influence over the decision-making of the subsidiary as a controlling shareholder of the subsidiary, and performing the role of controlling the subsidiary from an integrated and long-term perspective. Ultimately, the holding company has the status of exercising its influence over the decision-making that resulted from the legal act of the subsidiary in doing so.

(B) (1) In the event that a holding company, which is a controlling shareholder, establishes a subsidiary and engages in independent business activities through its independent corporate personality, profits and losses arising from its business activities are, in principle, attributed to the subsidiary, and only when the holding company receives dividends from its subsidiary’s shareholder as a shareholder of the subsidiary, the profits and losses may accrue to the holding company’s interests. Likewise, as in the case of losses, losses arising from its subsidiary’s business activities occur, and is not immediately connected to the holding company’s losses. In other words, since the holding company is blocking from its subsidiary’s profits and losses first, it cannot be said that its income directly belongs to the holding company on the grounds of the characteristics of the holding company’s system that the holding company exercises its influence on the decision-making of the subsidiary, as it is based on the characteristics of the holding company’s system. The holding company’s corporate act does not deny the holding company’s system without any particular grounds on the grounds that it is subordinate to the holding company’s intent.

③ Persons who have de facto reverted to the transfer income of the instant shares

In light of the above legal principles and the following circumstances revealed in light of the facts acknowledged as seen earlier, it cannot be deemed as a so-called “profit-making owner” who has the right to control, manage, and dispose of capital gains by the CSSA to substantially exclude CNBV in relation to the transfer of the instant shares and by leading the transaction in all aspects, such as the decision to sell the instant shares and the transfer of funds. Meanwhile, as seen earlier, CNBV is only an independent holding company structurally independent from CSSA, and is not an incorporated company. Accordingly, it is reasonable to deem that the transaction entity of the instant shares transfer and the person who is the actual owner of the capital gains, who is a party to whom the right to control, manage, and dispose of the said capital gains, is a CNBV.

In light of the fact that the CNBV, as well as the CNBV, directly selected persons to perform its duties and delegates their duties to them, and the negotiation was completed with the approval of the representative director and the board of directors of CNBV, CNBV and CSA with respect to the transfer of the shares of this case, all of the persons who delegated their authority to negotiate and conclude the contract with respect to the transfer of the shares of Darur Food are not deemed to belong to CSSA, and the CNBV voluntarily bears the legal advisory cost with respect to the transfer of the shares of this case, it cannot be deemed that CNBV excluded CNBV and led exclusively to the decision to sell or negotiate the shares of this case.

(b) In light of the current operational situation of the Darur Food Group, it is deemed that there was an influence on the officers of the Darur Group on the Darur Food Group’s investment committee, executive committee, management committee, and its members in relation to the transfer of shares of Dorur Food, but the exercise of such influence does not have any legal effect in itself, and it cannot be deemed that the Darur Food Group’s officers and the Committee were subordinate to Darur Food Group’s Darur Group’s officers and the Committee did all acts by fully reflecting the intent of SSA.

The sales price received as a result of the transfer of the instant shares to a CNBV was reserved to CNBV (the CNBV’s fund transfer via CNBV was made according to the operation of the CNBV fund integration management system, and it cannot affect the ownership of the assets owned by CNBV and the decision-making authority on the disposal thereof. As such, the flow of the funds was made through CNBV with respect to the transfer of the instant shares, and it cannot be deemed that the funds were not reserved to CNBV), and there was no circumstance that CSSA and CNBV were transferred with respect to the said sales price, and there was no distribution of the profits to CSSA in any form, such as dividends.

Before the transfer of the instant shares, CNBV established CNBV after the lapse of about six months following the resolution by the board of directors on its own, and there was approximately KRW 8,77.2 billion in total with funds accumulated by it after its establishment. The profits from the investment were not distributed to CSSA but invested in CNBV’s business as a holding company of CNBV. Since CNBV’s establishment of CNBV, it seems that CSSA had already decided that the person to whom the income accrued in relation to the implementation of CNBV’s business was not CSA, but CNBV. As a result, CNBV had been first interrupted from income acquired in relation to CNBV, and there was no room to exercise the right to control, manage, and dispose of such income. Accordingly, CNBV’s stocks were not originally reverted to CNBV’s stocks, i.e., the transfer of the instant stocks.

Unlike at the Gu rate, it seems that there is no separate agreement between the CNBV and CNBV between the CSS and the CNBV that the CSS recovers from CNBV.

(4) Ultimately, even if applying the substance over form principle, it is reasonable to deem that the transaction subject with respect to the transfer of stocks of this case and the actual owner of the transfer income are CNBV. Accordingly, each of the dispositions of this case on the premise that the actual owner of the transfer income of this case is CSSA should be revoked in its entirety.

3. Conclusion

Therefore, the plaintiff's claim of this case is with merit, and all of them are accepted, and it is so decided as per Disposition.

[Attachment Omission of Related Acts]

Judges Embryon (Presiding Judge)