National High Court Decision 2002west 2036 (No. 17, 2003)

the substance of notice to the company in which one shareholder holds 100% of equity interest is not a notice to the company operator.

In the case of a company operated by one shareholder holding 100% shares, the delinquent amount of the company is the payable amount of the secondary tax obligor, and the substance of the company’s notice to the company is nothing more than the notification to the operator of the company. Therefore, if the company’s notice to the company is legitimate, it cannot be deemed unlawful on the ground that it did not specify the taxable year and specify the taxable period.

Article 12 of the National Tax Collection Act

208Guhap47487 Revocation of revocation of designation as a person liable for secondary tax payment.

Shin XX

Head of the tax office;

October 26, 2011

November 1, 2011

1. Each disposition taken by the Defendant on February 13, 2008 by designating the Plaintiff as the secondary taxpayer on February 13, 2008, as indicated in the separate sheet Nos. 1 through 5, 7, and 10, shall be revoked.

2. The plaintiff's remaining claims are dismissed.

3/4 of the costs of lawsuit shall be borne by the Plaintiff, and the remainder by the Defendant, respectively.

The disposition imposed on February 13, 2008 by the Defendant designating the Plaintiff as the secondary taxpayer is revoked.

1. Details of the disposition;

A. ○○co Co., Ltd. (hereinafter referred to as “○○co”) is a corporation engaged in the business of wholesale, retail, export and import of precious metals. The Defendant imposed value-added tax and corporate tax as indicated in the [Attachment 1] List of Taxation, on the grounds that ○co was unfairly subject to zero-rate tax or deducted the input tax amount, in relation to the purchase of funds, export of gold-processed products, etc. from 2000 to 2002.

B. Around February 5, 2008, ○co did not pay the value-added tax and corporate tax as stated in the preceding paragraph, the Defendant revealed that the Plaintiff was 100% shareholder of ○co, and determined the Plaintiff as the secondary taxpayer, and imposed the value-added tax and corporate tax light surcharge on the Plaintiff on the 13th of the same month as listed in the attached Table 1 of Taxation.

C. On May 13, 2008, the Plaintiff filed an appeal with the Tax Tribunal on September 1, 2008, but was dismissed on September 1, 2008.

D. Meanwhile, as a result of an appeal by ○○co regarding the amount of value-added tax for the year 200 among the value-added tax listed in the separate sheet No. 1 attached hereto, the part exceeding KRW 673,437,150 for the first period of 200, and in the second period of 2000, the part exceeding KRW 139,847,325 for the second period of 200 was finalized (Seoul High Court Decisions 2005Nu2637 decided August 31, 2007; 2009Nu623 decided November 17, 2009). In accordance with the purport of the above judgment, the Defendant reduced the amount of value-added tax for the year 200, 200, 200, 373,47, 205, 206, 307, 205, 207, 307, 2005, 2016.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1 through 3, Eul evidence No. 20, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The instant disposition is unlawful for the following reasons.

(i) ○○co’s corporate tax in 2000 did not issue a notice of payment to ○co.

2) The plaintiff is not an oligopolistic shareholder of ○○co.

3) The Defendant did not notify the Plaintiff of whether the value-added tax was imposed on the Plaintiff during the pertinent year.

4) Of this case’s suspended disposition, the exclusion period for imposition was imposed on the remainder except the value-added tax for the first period of 2001, the corporate tax for the year 201, the value-added tax for the first period of 2002, and the corporate tax for the year 2002.

(b) Related statutes;

Attached Form 2 shall be as shown in attached Table 2.

C. Determination

1) The notice of corporate tax in 2000 to ○co is a legitimate station.

In addition to the purport of the argument in Eul's evidence No. 19, the defendant, upon application for the installment payment of ○co, issued the installment notice of KRW 108,277,533, corporate tax of KRW 54,216,477 (payment deadline March 31, 2001), and KRW 54,061,056 (payment deadline May 15, 2001), and ○○co, upon application for the installment payment of ○○co's corporate tax of KRW 54,216,47, and KRW 54,06

According to the statement of ○○○ 6th floor (share transfer contract), KimB transferred 3,00 shares of ○○co stock owned by it to ○○ on January 18, 2002. However, KimB was unaware of the fact that ○co stock was owned by ○○ or that ○co stock owned by ○○ was transferred to ○○, and ○A was aware that ○co stock was owned by ○○.

Around October 2002, the Plaintiff asserted that ○○co shares 4,000 shares owned by ○○co shares were transferred to ○○co shares. However, the Plaintiff filed a complaint on the ground that ○co shares owned by ○○co shares 4.00 shares by living together with the Plaintiff, and that ○co’s representative director was not only the developments leading up to ○○co’s operation, but also ○co’s temporary meeting minutes were forged and exercised by ○co’s representative director.

3) Whether there is any defect in the notice of value-added tax on the Plaintiff

According to Article 9(1) of the National Tax Number Act, when a company intends to collect a certain national tax, a notice stating the taxable year, item, tax amount, basis for calculation, deadline for payment, and place of payment of the national tax must be issued to the taxpayer. The amount of national tax to be returned, paid, or corrected by calculating the tax base and amount of tax by each taxable period, such as value-added tax, shall be notified by specifying the taxable period and the basis for calculation of the tax base and amount of tax by each taxable period (see Supreme Court Decision 92Nu8309, Jan. 15, 1993). However, in cases of a company operated by one shareholder who holds 100% shares, when the company imposes the secondary liability for payment of the value-added tax, the company’s delinquent amount is the amount of tax to be paid immediately by the second taxpayer, and the substance of notice to the company is nothing more than the notification to the first company operator. Thus, in light of the aforementioned legal principles, if a notice given to the first company is legitimate, it cannot be deemed an unlawful cause for taxation against the second taxpayer.

In light of the above legal principles, the Defendant’s notice of value-added tax for 200 to 202 and notice of tax base and basis for calculation for each taxable period is clearly specified. ○○co is in arrears with all of the value-added tax for the above taxable period. The Defendant, while notifying the Plaintiff of the same content as the notice of the Plaintiff’s notice of value-added tax for the same taxable period, can be recognized as having failed to specify the taxable period, and the Plaintiff’s fact that ○○co is a shareholder of 100% of the real value-added tax. Thus, in light of the above legal principles, even if the Plaintiff’s notice of the imposition of value-added tax for the taxable year is indicated only in the notice of the imposition of value-added tax, it cannot be deemed unlawful to impose value-added tax for this reason.

(iv)whether the exclusion period has lapsed;

According to Article 26-2(1) of the former Framework Act on National Taxes (amended by Act No. 8139, Dec. 30, 2006); the exclusion period of imposition of national taxes, excluding inheritance tax and gift tax, is five years from the date on which national taxes can be imposed. Generally, the date on which national taxes may be imposed is the date on which the liability for tax payment can be established, in principle, unless the period for filing a return on the tax base and amount of national taxes is prescribed (see, e.g., Supreme Court Decision 98Du11250, Apr. 9, 199). As long as a notice of tax payment against the secondary taxpayer has the nature of an independent tax imposition disposition against the principal taxpayer (see, e.g., Supreme Court Decisions 98Du1535, Oct. 27, 1998; 87Nu375, Jun. 14, 1988).

On the other hand, there is no dispute between the parties regarding the instant disposition and the fact that each disposition of imposition Nos. 1 through 5, 7, 10 of the disposition of imposition on the separate sheet No. 1 among the disposition of imposition on the instant case was taken after the lapse of five years from the day following the expiration of the payment period set by the principal tax office (in the case of the instant disposition Nos. 2 and 3, the Defendant did not dispute the fact that it was taken after the lapse of five years in the case of calculation based on the initial payment period, but it is argued that the period of exclusion should be calculated based on the date of the initial disposition of imposition on the amount of reduction. However, as examined below, the above part of the disposition of imposition on the instant case is unlawful, barring any special circumstances.

In regard to this, the Defendant asserts that: (a) the period of exclusion has 10 years since the Plaintiff intended to be exempted from the secondary tax liability by deceiving himself as an oligopolistic shareholder; (b) the Plaintiff led the tax evasion of ○○co by fraudulent or other unlawful acts as an actual operator of ○○co; (c) the period of exclusion has 10 years since the period of exclusion has elapsed; or (d) the Defendant’s rectification of value-added tax for the amount of ○co as the primary taxpayer on January 2, 2000 upon the reduction of value-added tax by the court’s decision on June 8, 201, when the initial disposition of imposition of value-added tax has expired, the date following the payment period of the initial disposition shall not be considered as the starting point for the period

However, as seen above, the Plaintiff was a 100% shareholder of ○co and entrusted the name of shares to other persons. However, the trust in the name of ○co was made since the establishment of ○○co, and the establishment time of ○○co was prior to the taxable period of the corporate tax and the value-added tax, and there is a lack of evidence to recognize ○co as a company established to evade corporate tax and the value-added tax. Thus, it is difficult to view it as the Plaintiff’s fraud or other unlawful act to avoid secondary tax liability solely on the ground that the Plaintiff bought the name of ○co’s shares to another person. Accordingly, the Defendant’s above assertion is without merit.

In addition, Article 26-2(1) of the former Framework Act on National Taxes provides that a taxpayer may not impose national taxes after the lapse of five years from the date on which the relevant national tax may be imposed, in principle, with respect to the exclusion period of imposition of national taxes other than inheritance tax and gift tax, even though Article 26-2(1)3 of the former Framework Act provides that where a taxpayer evades national taxes, or obtains a refund or deduction by fraudulent or other unlawful means, the relevant national tax may not be imposed after the lapse of ten years from the date on which the relevant national tax may be imposed. Even if a taxpayer commits fraud or other unlawful acts in accordance with the form of the provision, legislative purport, and strict interpretation of the provision of this case, if the taxpayer evades national taxes or obtains a refund or deduction, the exclusion period of imposition should be returned to five years in principle. This does not change even if the relevant taxpayer participated in the tax evasion of another taxpayer, etc. (see Supreme Court Decision 2007Du16974, Dec. 24, 2009).

Furthermore, on June 8, 2011, the Defendant’s revised disposition on the reduction of value-added tax on the following day: (a) the period for exclusion from imposition of the secondary liability for value-added tax on the first and second terms portion of 000 ○co should be based on the day following the initial period for payment; and (b) the Defendant’s argument above (c) is without merit.

5) Intermediate conclusion

Therefore, each disposition of imposition Nos. 1 through 5, 7, and 10 in the disposition of imposition on the attached list 1 is illegal because the exclusion period of imposition is too excessive.

3. Conclusion

Therefore, the plaintiff's claim of this case is justified within the above scope of recognition and it is so decided as per Disposition.