The burden of proving the ownership of shares under Article 39 (2) of the former Framework Act on National Taxes

Under Article 39 subparagraph 2 of the former Framework Act on National Taxes (amended by Act No. 4672 of Dec. 31, 1993), to impose secondary tax liability on an oligopolistic stockholder who owns not less than 51/100 of the total amount of issued stocks of a corporation, the submission of materials which can be seen as an oligopolistic stockholder through the data such as the list of stockholders, the list of stock transfer situation, the list of the certified transcript of the company register, etc., by the method of proof shall be deemed to have fulfilled all the burden of proof. However, even in cases where a single stockholder appears to be a single stockholder in light of this data, if there are circumstances such as by using the name of the stockholder or by registering the name in the name other than the real owner, the actual owner shall not be deemed to be a stockholder,

Article 39 subparagraph 2 of the former Framework Act on National Taxes (amended by Act No. 4672 of Dec. 31, 1993); Article 26 of the Administrative Litigation Act / [Burden of proof]

Supreme Court Decision 92Nu1721 delivered on July 23, 1991 (Gong1991, 2264) 92Nu10906 delivered on December 11, 1992 (Gong1993Sang, 486) 93Nu2341 delivered on March 11, 1994 (Gong1994Sang, 1219) 94Nu622 delivered on August 12, 1994 (Gong194Ha, 2314), 94Nu797 delivered on January 20, 195 (Gong195Nu1307 delivered on March 24, 1995)

[Defendant-Appellee] Plaintiff 1 et al., Counsel for defendant-appellee

Director of the tax office

Seoul High Court Decision 93Gu14983 delivered on September 16, 1994

The appeal is dismissed.

The costs of appeal are assessed against the plaintiff.

We examine the grounds of appeal.

In order for a tax authority to impose secondary tax liability on an oligopolistic stockholder who owns not less than 51/100 of the total issued and outstanding stocks of a corporation pursuant to Article 39 subparagraph 2 of the former Framework Act on National Taxes (amended by Act No. 4672 of Dec. 31, 1993), if the tax authority submits data which can be seen as an oligopolistic stockholder based on the list of stockholders, the list of stock transfer situation, the list of the certified transcript of the company register, etc. by means of proof, which can be seen as an oligopolistic stockholder, and thereby prove it once again. However, even if it appears to be a single stockholder in light of this data, if there are circumstances such as by using the name of the stockholder or by registering it in a name other than the name of the real owner, it cannot be deemed to be a stockholder only under such name, but this shall be proved by the nominal stockholder who asserts that he is not a stockholder (see Supreme Court Decision 94Nu1307

In light of the records of this case, it is recognized that the plaintiff was working as a legitimate representative director of the non-party Litop Co., Ltd. or the non-party 1 corporation. At the time of the representative director's employment, the plaintiff has proved that the non-party company was an oligopolistic shareholder as long as the plaintiff entered in the statement of stock movement submitted by the above non-party company to the tax authority at the time of the representative director, and there is no evidence to recognize that the plaintiff was an oligopolistic shareholder, and the plaintiff is merely a shareholder of the borrowed form. Thus, the plaintiff cannot be exempted from liability as the secondary taxpayer of the above non-party company. The decision of the court below is somewhat insufficient, but there is no error in the misapprehension of the rules of evidence, such as the theory of lawsuit, etc.

There is no reason to discuss this issue.

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

Justices Kim Jong-soo (Presiding Justice)