Whether a secondary taxpayer can be deemed a secondary taxpayer solely based on the fact that a shareholder is registered as a shareholder in the register of shareholders (negative)

In order to have a shareholder of a corporation bear the secondary tax liability, it is essential that the person is an oligopolistic shareholder who can substantially control the operation of the corporation, and in the form of a shareholder registry of the corporation, only the reasons registered as a shareholder in the shareholder registry of the corporation cannot be said to be an oligopolistic shareholder.

Article 39 (2) 11 of the Framework Act on National Taxes

Supreme Court Decision 80Nu403 Delivered on January 13, 1981, 82Nu8 Delivered on September 28, 1982

[Judgment of the court below]

The director of the tax office

Seoul High Court Decision 81Gu591 delivered on June 17, 1982

The appeal is dismissed.

The costs of appeal shall be borne by the defendant.

The grounds of appeal are examined.

In order to impose secondary tax liability on the shareholders of a corporation pursuant to Article 39 subparagraph 2 of the Framework Act on National Taxes, it is required that the oligopolistic shareholder is in a position to substantially control the operation of the corporation as an oligopolistic shareholder, and the shareholder registry of the corporation cannot be held liable to pay tax on the sole ground that the shareholder registry of the corporation is registered as a shareholder. (See Supreme Court Decision 80Nu403 delivered on January 13, 1981; Supreme Court Decision 82Nu8 delivered on September 28, 1982.)

According to the judgment of the court below, at the time when the liability for the payment of value-added tax amounting to KRW 3,211,049 in the judgment of the court below was established, the plaintiff was registered as a shareholder in the register of shareholders of the company, but the disposition of this case based on the premise that the plaintiff was a major shareholder of the company of this case is illegal. In light of the records, the above fact-finding and the judgment of the court below are just and there is no error of law by misunderstanding the rules of evidence or the legal principles on the substance over form principle, such as the theory of lawsuit, and thus,

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

Justices Lee Chang-chul (Presiding Justice)