Seoul High Court 2007Nu30811 (Law No. 24, 2008)

Since the actual representative director is a child, the propriety of the assertion that the bonus disposition is null and void to the representative in the registration

As long as registered as the representative director of a corporation, it can be revealed whether only the fact-finding should be accurately examined is the actual representative. Thus, even if the actual representative was not the actual representative, it cannot be viewed that the defect is apparent from appearance, and therefore, it cannot be viewed that it

The contents of the decision shall be the same as attached.

Article 14 (Real Taxation)

The appeal is dismissed.

The costs of appeal are assessed against the Plaintiff.

We examine the grounds of appeal in comparison with the records and the judgment of the court below. Since it is clear that the grounds of appeal by the appellant fall under Article 4 of the Act on Special Cases Concerning the Procedure for Appeal, it is dismissed under Article 5 of the same Act. It is so decided as per Disposition by the assent

[Seoul High Court Decision 2007Nu30811, 2008.24)]

1. The part of the judgment of the first instance against the plaintiff that confirms the invalidation below shall be revoked.

2. The Defendant’s imposition disposition of global income tax of KRW 40,711,920 on March 1, 2001 exceeds KRW 19,20,108 among the imposition disposition of KRW 40,71,920 on global income tax for the year 199; the imposition disposition of KRW 1,845,360 on global income tax for the year 199; the imposition disposition of KRW 830,412 among the imposition disposition of KRW 1,845,360 on global income tax for the year 199; the imposition disposition of KRW 48,05,380 on global income tax for the year 199; the imposition disposition of KRW 2,722,200 on global income tax for the year 198; and the imposition disposition of KRW 48,380 on global income tax for the year 199; the imposition disposition of KRW 59,646,385,205; the imposition disposition on global income tax for the year 198.

3. The plaintiff's remaining appeal is dismissed.

4. The total costs of the lawsuit shall be divided into two parts, and one part shall be borne by the plaintiff, and the remainder shall be borne by the defendant.

The judgment of the court of first instance is revoked. The defendant's disposition of imposition of global income tax of 4,087,10 won on August 1, 1996, global income tax of 1999, global income tax of 40,711,920 won on March 1, 2001, global income tax of 1999, global income tax of 1,845,360 won on July 1, 2001, global income tax of 48,05,380 won on global income tax of 1999, global income tax of 1999, global income tax of 2,722,200 won on October 1, 202, and global income tax of 559,64,720 won on global income of 199, global income tax of 199, global income tax of 195,720 won on April 1, 195, and global income tax of 195.

1. Details of taxation; and

A. From May 27, 1999 to December 2, 2004, the Plaintiff was registered as the representative director of ○○○-dong ○○○○○-dong, Seoul, as ○○○-dong ○○○○-dong ○○○-dong Co., Ltd. (hereinafter referred to as “○○-dong ○○ Construction Machinery”).

B. After the head of Yeongdeungpo-gu Tax Office included ○ Construction Machinery’s purchase amount in the deductible expenses for the business year of 1998 and the business year of 1999 and discovered the fact that the amount was leaked out of the company, on the premise that the Plaintiff is the actual representative of ○ Construction Machinery, and on the ground that the person to whom the above processing purchase amount was leaked out of the company is unclear, he deemed the Plaintiff as the Plaintiff, and notified the Plaintiff of the change in the amount of income as follows and notified the Defendant of the data

Date and time of notification

Taxation Period

Amount of income;

Types of disposal of income;

Jinay

October 200

199

11,225,500 won

Bonuses

○ Concerning gas stations

March 2001

199

3,300,000 won

Bonuses

○ Energy-Related

December 2001

1998

16,470,300 won

Bonuses

July 2001

199

847,028,600 won

Bonuses

January 2002

199

78,266,100 won

Bonuses

July 2002

199

13,200,000

Bonuses

December 2002

1998

51,865,00 won

Bonuses

C. Accordingly, the defendant decided 40,711,920 won as global income for the year 199 on March 1, 2001, and 1,845,360 won as global income for the year 1999, and 48,05,380 won as global income for the year 1999 as global income for the year 1999, and 2,722,200 won as global income for the year 198 as well as 559,64,720 won as global income for the year 1999, and 16,5120 won as global income for the year 198 as well as 196,5120 won as global income for the year 198 as well as 198 as global income for the year 199, respectively (hereinafter referred to as the "instant disposition imposing global income tax").

D. Meanwhile, on August 1, 1996, the Defendant decided and notified the Plaintiff of KRW 4,087,110 as capital gains tax (hereinafter “instant disposition of imposition of capital gains tax”), and together with the disposition of imposition of capital gains tax and the disposition of imposition of global income tax in this case (hereinafter “instant disposition of taxation”).

[Ground of recognition] Facts without dispute, entry of Eul's evidence Nos. 1 through 7, purport of the whole pleadings

2. Whether the taxation disposition is invalid

A. The plaintiff's assertion

It was true that the Plaintiff was registered as the representative director of ○ Construction Machinery from May 1999. However, this was voluntarily conducted by Kim○, the Plaintiff’s children, and the actual operator of ○○ Construction Machinery was Kim○, and thus, the Defendant’s taxation based on the premise that the Plaintiff was the actual representative of ○ Construction Machinery, which was based on the premise that the Plaintiff was the actual representative of ○○ Construction Machinery, is in violation of the principle of substantial taxation

B. Determination

(1) As to the imposition of transfer income tax of this case

In a lawsuit seeking the invalidation of an administrative disposition, the plaintiff has the responsibility to prove that the defects existing in the administrative disposition are significant and apparent, and it is not sufficient to recognize that there are significant and apparent defects in the disposition imposing the transfer income tax of this case only with the entries in the evidence Nos. 4 and 5, and there is no other evidence to acknowledge them. Thus, the plaintiff's assertion on this part cannot be

(2) On the instant disposition imposing global income tax

(A) Generally, a taxation disposition made on a person who does not have any factual basis, such as the legal relation or income or act subject to taxation, shall be deemed to be significant and apparent, but in a case where there are objective circumstances that could mislead him to believe that it is subject to taxation with respect to certain legal relations or factual relations which are not subject to taxation, if it is possible to accurately investigate the factual basis, then it cannot be deemed to be apparent even if the defect is serious, and thus, it cannot be deemed to be an unlawful taxation disposition that misleads the fact subject to taxation cannot be deemed to be void as a matter of course (see, e.g., Supreme Court Decision 2001Du7268, Sept. 4, 2002

(B) However, according to the above facts, since the Plaintiff’s name as the representative director of ○○ Construction Machinery was on May 27, 1999, the part that deemed ○○ Construction Machinery to belong to the Plaintiff as to the processed purchase amount leaked before the instant global income tax disposition is a tax disposition imposed on a person who does not have any factual relation which is subject to taxation, and its defect is significant and obvious, and thus, is deemed to be null and void a year. However, as long as the Plaintiff was registered as the representative director of ○○ Construction Machinery for the said period, the part regarding the processed purchase amount after May 27, 1999 among the disposition imposing global income tax in this case, it can be clearly found that the Plaintiff was the actual representative only after the Plaintiff was registered as the representative director of ○○ Construction Machinery for the said period. Thus, even if the Plaintiff was not the actual representative, it cannot be deemed null and void a year since its defect cannot be deemed to be apparent.

(C) Furthermore, it is reasonable to view that the scope of the disposition imposing global income tax of this case, which is automatically null and void, is specifically examined; the amount of income to be disposed of as bonus of the representative, which is deemed to have accrued during the entire period of the pertinent business year; and the amount calculated proportionally according to the number of days of the changed representative’s tenure of office (Supreme Court Decision 82Nu229 delivered on December 28, 1982). If the amount of income to be deemed to have accrued to the Plaintiff in the year 1999 is calculated proportionally according to the number of days of the Plaintiff’s tenure of office (the part of global income tax belonging to the year 1998 is null and void as the whole is null and void, and it is not separately calculated); in the case of the disposition imposing global income tax of March 1, 200, as indicated in the attached tax calculation table, the amount exceeding 19,200,108 won,412 won, and in the case of the disposition imposing global income tax of this case, 36.386.

3. Conclusion

Therefore, since the portion of the instant tax assessment pertaining to global income tax for 198 and the portion exceeding the above reasonable tax amount among the global income tax for 1999, the Plaintiff’s claim seeking the confirmation is null and void as it is reasonable within the above scope of recognition, and the remainder of the claim is dismissed as it is without merit. As such, the judgment of the court of first instance is unfair based on a different conclusion, and the part against the Plaintiff, which constitutes the part seeking nullification under the judgment of the court of first instance, is partially accepted by the Plaintiff’s appeal and the part against the Plaintiff’s claim for nullification under the judgment of the court of first instance, is revoked, and the part exceeding the above legitimate tax amount among the global income tax for 198 and the global income tax for 199, which belongs to the global income tax for

[Attachmentcheon District Court 2006Guhap3227 ( October 18, 2007)]

1. The plaintiff's claim is dismissed.

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

The Defendant’s disposition of imposition of global income tax of KRW 4,087,10 as of August 1, 1996 against the Plaintiff and KRW 40,71,920 as of March 1, 2001, global income tax of KRW 1,845,360 as of July 1, 2001, global income tax of KRW 48,05,380 as of April 1, 2002, global income tax of KRW 2,72,200 as of October 1, 1998, and global income tax of KRW 559,64,720,720 as of August 1, 199, and KRW 199 as of April 1, 200, is null and void, respectively.

1. Details of the disposition;

A. The Plaintiff was registered as the representative director of the Construction Machinery Co., Ltd. (hereinafter referred to as “Construction Machinery”) (hereinafter referred to as “Construction Machinery”) located in Article 8-57 from May 27, 1999 to December 2, 2004.

B. On August 1, 1996, the head of the competent tax office notified the Defendant of the notification of change in the amount of income to the Plaintiff listed as the representative director of the construction machinery, and the Defendant notified the Plaintiff of the notification of the determination of KRW 4,087,110 of the transfer income tax on August 1, 1996, and the amount of KRW 40,71,920 of the global income tax on March 1, 1999 and KRW 1,845,360 of the global income tax on July 1, 1999, and KRW 48,05,380 of the global income tax on April 1, 1999, and KRW 2,272,200, and KRW 1,920 of the global income tax on October 1, 199 (the notification of KRW 1,845,360 of the global income tax on April 1, 205, 209).

[Evidence Evidence] Uncontentious Facts, Entry B in Evidence Nos. 1 to 7, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

Although the Plaintiff was registered as the representative director on the corporate register of the construction machinery, it is true that the Plaintiff was registered as the representative director on the corporate register of the construction machinery, which is the Plaintiff’s children? The Plaintiff’s children are registered as the representative director of the said construction machinery, and the actual operators of the said construction machinery are the said Articles. As such, the Defendant’s disposition based on the premise that the Plaintiff was the actual representative of the construction machinery, is null and void because it violates the principle of substantial taxation, and is contrary to significant and apparent defects. In particular, the disposition imposing capital gains tax on August 1, 1996, based on the fact that the Plaintiff was registered as the representative director on May 27, 1999, and the disposition imposing capital gains tax on the Plaintiff on August 1, 199, as the Plaintiff was liable to pay the Plaintiff,

B. Determination

(1) As to the disposition of imposition of capital gains tax on August 1, 1996

In a lawsuit seeking the invalidation of an administrative disposition, the plaintiff has the responsibility to prove that the defects existing in the administrative disposition are significant and apparent, and it is not sufficient to recognize that the entries in the evidence Nos. 4 and 5 alone are significant and apparent in the disposition imposing the transfer income tax of this case, and there is no other evidence to prove this otherwise, the plaintiff's claim seeking the invalidity of the disposition imposing the transfer income tax of this

(2) On each disposition imposing global income tax

(A) In order for a taxation to be null and void as a matter of course, the mere fact that there is an illegality in the taxation disposition is insufficient. It is objectively clear that the defect is in violation of important laws and regulations, and it is necessary to determine whether the defect is significant and obvious. At the same time, it is necessary to reasonably consider the purpose, meaning, function, etc. of the laws and regulations, which serve as the basis for the taxation disposition, and at the same time, about the specificity of the specific case itself. From this perspective, a taxation disposition by a person who does not have any factual basis for the taxation, is significant and obvious, but if there is objective circumstance that makes it possible to find that the legal relation or factual basis, which is not subject to taxation, is subject to taxation, and it is not clear that the factual basis is apparent even if the defect is serious, and thus it cannot be said that the taxation disposition that misleads the fact, cannot be deemed null and void as a matter of course (see, e.g., Supreme Court Decisions 201Du7268, Sep. 4, 2002>

(B) Regarding the instant case, even though the Plaintiff was not the actual representative of the construction machinery, as alleged by the Plaintiff, the Defendant imposed the comprehensive income tax on the Plaintiff, who is the representative director under the name of the Plaintiff, and even if the Plaintiff imposed tax on the period which was not registered as the representative director on the register of the Plaintiff, the fact that the Plaintiff was registered as the representative director of the construction machinery under the name of the Plaintiff for a certain period as seen earlier is the fact that the Plaintiff was registered as the representative director of the construction machinery. Thus, in rendering the instant disposition against the Plaintiff, it can be deemed that the Defendant could only be found to have been aware of the fact-finding due to objective circumstances that could be mistaken as being subject to taxation on the legal relation or fact which is the premise. Therefore, it cannot be said that the defect is apparent. Therefore,

3. Conclusion

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