Seocho 2010 Swiss0796 (Law No. 9.10, 2010)

The disposition imposing value-added tax on the Plaintiff, a real estate trustee, by applying 10 years of exclusion period for imposition is legitimate.

Since it is recognized that a building was used for his own rental business after completing the registration of ownership transfer of the building under the name of another person according to the title trust agreement, it is reasonable to deem that the Plaintiff constitutes a person liable to pay value-added tax, which is the title trustee, to have been conducted with the intent to evade national taxes. Therefore, the disposition imposed by applying 10

Article 14(1) of the Framework Act on National Taxes

Article 26-2 (1) of the Framework Act on National Taxes

2010Guhap45682 Revocation of Disposition of Imposition of Value-Added Tax

United StatesA

○ Head of tax office

February 17, 201

March 24, 2011

1. The plaintiff's claim is dismissed.

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

The imposition of value-added tax of KRW 103,214,740 on August 1, 2009 by the Defendant against the Plaintiff on August 1, 2009 shall be revoked.

1. Details of the disposition;

A. On December 21, 1999, the Plaintiff purchased the instant real estate in the voluntary auction procedure with regard to ○○○○○○-dong, 78-7, and 423.2 square meters and its ground (hereinafter referred to as “land”) owned by the Plaintiff’s mother, the Plaintiff’s mother, and UBB, ○○○○-dong, 78-7, and 423.2 square meters and its ground (hereinafter referred to as “instant land,” and “the instant building collectively referred to as “the instant real estate”), and the registration of transfer of ownership was completed in the name of the headCC in accordance with a title trust agreement with the headCC. The Plaintiff thereafter leased the instant building to the instant building, and the ownership of the instant real estate was transferred to DoD due to voluntary auction on February 27, 2001.

B. Around August 2003, the Defendant issued a disposition imposing value-added tax of KRW 61,841,260 for the first term portion of 2001, including the penalty tax, on the ground that he did not file a return of value-added tax even though he/she transferred the instant building through a voluntary auction to the headCC, who was the owner of the instant real estate. On April 20, 2009, the headCC filed a civil petition to the effect that the said value-added tax was not paid from that time to April 20, 209, which was the first term portion of 2001.

C. On August 1, 2009, the Defendant revoked the imposition of value-added tax on the headCC ex officio after undergoing an investigation on civil petition applications filed by the headCC, and on the grounds that on February 27, 2001, on the grounds of the volume of the instant building, the Defendant imposed value-added tax of KRW 103,214,740, including the penalty tax (hereinafter “instant disposition”).

[Ground of recognition] Facts without dispute, Gap 1 to 4 evidence, Eul 1 to 6 evidence (including paper numbers), the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

(1) The title trust agreement between the plaintiff and the headCC is a so-called contract title trust, and the agreement is null and void pursuant to Article 4(1) of the Act on the Registration of Real Estate under Actual Titleholder’s Name (hereinafter “Real Estate Real Name Act”), but where the other party to the transaction was unaware of the existence of a title trust agreement, the title trustee completed the registration of ownership transfer of the building of this case on December 11, 1999, thereby acquiring the complete ownership of the building pursuant to the proviso of Article 4(2). Accordingly, the value-added tax obligor following the transfer of the building of this case is not the plaintiff but the headCC.

(2) Even if the Plaintiff is a legitimate taxpayer, the Defendant issued the instant disposition after the seven-year exclusion period of imposition elapsed.

(b) Related statutes;

It is as shown in the attached Form.

C. Determination

(1) Whether the title truster is a value-added tax obligor

Article 14(1) of the former Framework Act on National Taxes (amended by Act No. 9911, Jan. 1, 2010; hereinafter referred to as the "State technique") provides that when the ownership of income, profit, property, act or transaction subject to taxation is merely nominal and there is a person to whom such income, profit, act or transaction belongs, the person to whom such income, profit, or transaction belongs shall be liable for tax payment and the former Value-Added Tax Act shall apply to such person. Article 2(1) of the former Value-Added Tax Act (amended by Act No. 9268, Dec. 26, 2008) provides that the person to whom value-added tax is liable for tax

In light of the contents and purport of the above provisions, the Plaintiff’s use of the pertinent building for its own leasing business after completing the registration of ownership transfer under the name of the ChapterCC pursuant to a title trust agreement with the headCC, and then again supplied it to Dodddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddd

(2) Whether the exclusion period has expired

Article 26-2(1) of the State technique provides for the exclusion period of national taxes. Article 26-2(1) of the National Tax Act provides that "if a taxpayer evades, obtains a refund or deduction of national taxes by fraudulent or other unlawful means, it shall be for 10 years from the date on which the national tax can be imposed," subparagraph 2 provides that "if a taxpayer fails to file a return of tax base within the statutory due date of return, it shall be for 7 years from the date on which the national tax can be imposed." However, "Fraud and other unlawful acts" referred to in subparagraph 1 of the above refers to "Fraud and other unlawful acts that make it impossible or remarkably difficult to impose and collect taxes as a means of tax evasion."

Comprehensively taking account of the following reasons, the evidence Nos. 1, 2, and 4, where the purport of the entire pleadings is recognized as follows, the Plaintiff acquired the building of this case under the name of the headCC upon entering into a title trust agreement with the headCC who has no ability to pay taxes on December 11, 1999, and did not restore the title to the Plaintiff’s future, and later transferred the building to DoD, the Plaintiff’s act of operating a leasing business on the building of this case without returning the title to the Plaintiff’s future. As long as the Plaintiff’s act of imposing and collecting value-added tax, such as value-added tax, was deemed as an act of evading national taxes, such as value-added tax, even though it is not the sole intention, is reasonable to regard it as an act of having the intent to evade national taxes, such an act constitutes “Fraud or other unlawful act” under Article 26-2(1)1 of the State technique, and the exclusion period of imposition of value-added tax can be imposed under the above subparagraph 1. Therefore, the Plaintiff’s assertion on other premise is without merit.

(A) The fact that the Plaintiff acquired the instant building is practically impossible or considerably difficult to find out the fact that the Plaintiff acquired the instant building to a third party other than the Plaintiff and the title truster, the title truster, and in particular, the tax authority did not reveal the fact that the Plaintiff voluntarily reported and paid the value-added tax to the tax authority before the Plaintiff voluntarily reports and pays the Plaintiff’s value-added tax.

(B) Unlike ordinary cases where both a title truster and a title truster pay taxes imposed on the title trustee upon the acquisition of real estate and transaction, the Plaintiff did not pay value-added taxes imposed on the headCC. In addition, the Plaintiff did not make business registration under the name of the headCC. In addition, the Plaintiff did not report and pay taxes on the lease business during the period of possession of the instant building, as well as the acquisition tax following the acquisition of the instant real estate on the ground of voluntary auction on December 21, 199.

(C) In addition, in light of the fact that the Defendant imposed a value-added tax on the headCC on August 2003 and six years have passed thereafter, on May 20, 2009, and that the headCC applied for a civil petition for the national newspaper with “the amount of the value-added tax has been imposed on the headCC, and the headCC has no amount of credit for about ten years since it failed to pay the tax (see evidence 2)” (see, e.g., evidence 2), it appears that the headCC had no financial capability to pay the tax since the date of the title trust agreement between the Plaintiff. In addition, the headCC filed a civil petition with the content that it did not become a taxpayer merely because it was a title trustee, after seven years have passed since the imposition of value-added tax was first imposed on the headCC, and seven years have passed since the exclusion period of the value-added tax under Article 26-2(1)2 of the National Techniques was imposed on April 20, 2009.

3. Conclusion

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