Seoul Administrative Court 201Guhap3098 ( October 21, 2011)

Cho High Court Decision 2010Du3219 ( December 06, 2010)

30% or more of the shares shall be deemed to be a shareholder who actually owns the shares, and thus the disposal of such shares is legitimate.

Since the plaintiff is a de facto shareholder who owns not less than 30/100 of the total number of issued and outstanding shares and actually controls the management of the company, the disposition that is imposed on the basis of recognition is legitimate.

2011Nu42170 global income and revocation of disposition

XX Kim

Head of Seocho Tax Office

Seoul Administrative Court Decision 2011Guhap3098 decided October 21, 2011

November 29, 2012

January 10, 2013

1. The plaintiff's appeal is dismissed.

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

The judgment of the first instance shall be revoked. The defendant shall revoke the disposition of imposition of global income tax of KRW 000 on June 10, 2010 against the plaintiff on June 10, 200.

1. Quotation of judgment of the first instance;

The reasons for the judgment of this court are as follows: (a) the Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 21302 of Feb. 4, 2009) is dismissed by the Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 21302 of Feb. 4, 2009); and (b) the part of the Enforcement Decree of the Corporate Tax Act in the attached Form No. 8-9 of the Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 21302 of Feb. 4, 2009) is as shown in the attached Form No. 8-9; and (c) the reasoning for the judgment of the court of first instance is as follows

2. Judgment on the plaintiff's assertion

A. The plaintiff's assertion

The disposition of this case, which the plaintiff did not hold shares issued by the non-party company as a shareholder of the non-party company, was unlawful, since it did not have any record of being registered as an executive of the non-party company in the corporate register, it was not a member of the non-party company, nor did it have been appointed as a director or a person engaged in duties equivalent thereto, and since there was no actual control over the management of the non-party company, the non-party company cannot be deemed an executive of the non-party company. Thus, the disposition of this case where the defendant regarded the plaintiff as an executive of the non-party company as the "executive of the non-party company, such as a shareholder, etc." under Article 106 (1) 1 of the former Enforcement Decree

B. Determination

(1) The proviso of Article 106(1)1 of the former Enforcement Decree of the Corporate Tax Act provides 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. The proviso of Article 106(1)1 of the former Enforcement Decree provides that where an officer, who is not a minority shareholder, and a person with a special relationship, holds not less than 30/10 of the total number of stocks issued or total amount of investment in the corporation and actually

However, a person who is registered as a shareholder in the register of shareholders is presumed to be a shareholder of the company, but the presumption is reversed if the person who denies his/her shareholder's rights establishes it (see, e.g., Supreme Court Decision 2007Da51505, Mar. 11, 2010). Thus, in order to recognize a certain person as a shareholder, the person does not necessarily have to be registered in the register of shareholders. In light of the above legal principles, it is difficult to deem that there is a special reason to not apply to the disposal system of income under Article 106 (1) 1 of the former Enforcement Decree of the Corporate Tax Act, in order to constitute "shareholders" under the above provision, it should not be interpreted that the person who actually owns shares in the name of another person should be registered as a shareholder in the register of shareholders, etc.

Meanwhile, Article 43(6) through (5) of the former Enforcement Decree of the Corporate Tax Act provides that "executive officers" shall be defined as "executive officers" under Article 43(1) of the former Enforcement Decree of the Corporate Tax Act (hereinafter referred to as "executive officers") who are engaged in duties falling under any of the following subparagraphs: 1. All members and liquidators of the board of directors such as president, president, vice president, representative director, managing director, managing director, managing director, executive director, etc. of the corporation; 2. partnership company, limited partnership company, limited partnership company and limited liability company or director, 3. Auditor, 4. Other duties corresponding to subparagraphs 1 through 3. Thus, "executive officers" under the proviso of Article 106(1)1 of the former Enforcement Decree of the Corporate Tax Act are defined as "executive officers"; 2.1.28 of the former Enforcement Decree of the Corporate Tax Act is not included in "executive officers" under the proviso of Article 106(1)1 of the former Enforcement Decree of the Corporate Tax Act.

(2) In light of the facts duly admitted and the overall circumstances revealed by the judgment of the court of first instance, which cited earlier in this case, (3) c. and d. (3) of the judgment of the court of first instance (the third 10 e.g., the third e., the statement of the evidence of subparagraphs 11 through 15 of the judgment of the court of first instance; and the testimony of leM in the appellate court submitted by the plaintiff at the appellate court is insufficient to reverse the above recognition, and there is no other counter-proof, the plaintiff is a de facto executive who has de facto control over the management of the non-party company, and thus, the plaintiff is a de facto executive who owns not less than 30/10 of the total number of issued and outstanding stocks of the non-party company. Thus, the plaintiff constitutes "executive,

(3) Therefore, the instant disposition premised on this premise is lawful, and the Plaintiff’s assertion to this purport is not acceptable.

3. Conclusion

Therefore, the judgment of the first instance court is justifiable, and the plaintiff's appeal is dismissed as it is without merit.