Whether the person falls under the actual income belonging to the amount of outflow from the company

The bonus disposition on the amount that was discharged from the company merely because it was involved in the accounting of the corporation is deemed the actual representative director of the corporation, but it does not fall under the officer of the corporation, and the bonus disposition is illegal.

Article 52 (Dispudiation of Wrongful Calculation)

Article 67 of the Corporate Tax Act

1. Revocation of a judgment of the first instance;

2. The Defendant’s disposition of imposition of global income tax of KRW 1,457,786,540 against the Plaintiff on November 13, 2003 is revoked.

3. All costs of the lawsuit shall be borne by the defendant.

The same shall apply to the order.

1. Details of the disposition;

A. Transfer of shares by the plaintiff et al.

(1) On June 4, 1999, the Plaintiff was a major shareholder and a representative director holding 564,630 shares of 60,000 shares issued by ○○○○○ Co., Ltd. (hereinafter referred to as “○○○○○○”). On behalf of the shareholders of ○○○○○○○ (other than the Plaintiff, ○○○ was holding 10,920 shares, and 24,450 shares, which are the Plaintiff’s wife; hereinafter referred to as “the Plaintiff et al.”) on behalf of ○○○○○ Co., Ltd. (hereinafter referred to as “the Plaintiff et al.”) to transfer the entire shares of ○○○○○○○○ Co., Ltd. (hereinafter referred to as “the agreement”). (However, the purchaser’s name under the contract was a type of Na○○○○○”).

(2) According to the agreement, on June 1, 1999, the share transfer price is paid to KRW 2 billion, KRW 500 million, KRW 500,000,000,000,000,000,000 won in total, and KRW 500,000,000,000,000,000,000 won in total, and KRW 3 billion,000,000,000,000,000,000,000,000 won in total, and the cash assets held by ○○○○○ shall be withdrawn to the Plaintiff, and the real estate assets held by ○○○○ shall be transferred

(3) The Plaintiff received 3 billion won of share transfer price by August 16, 1999, and transferred all ○○○○○○’s shares owned by the Plaintiff, etc. to Na○○○○○ and 13 others on the 18th of the same month. On the same day, the Plaintiff resigned from office as ○○○○’s representative director, and Kim○○ was appointed as ○○○○ representative director, and registered as such.

(4) However, the Plaintiff et al. reported the total transfer value to the National Tax Service as KRW 2.4 billion. Meanwhile, on October 30, 2000, the Plaintiff et al. agreed to reduce the share transfer value to KRW 2.6 billion and return KRW 400 million.

(b) Cash withdrawal and transfer of real estate by ○○○○○;

(1) The amount of KRW 1,025,787,59, which is the remainder after deducting the amount of KRW 41,883,312, such as the classification corporation tax from KRW 1,045,660,645, and interest income accrued from KRW 22,010,266, which was deposited on August 19, 199 (hereinafter referred to as “the first amount for dispute”) and KRW 1,025,787,59, which is the remainder after deducting the amount of KRW 41,83,312, such as the classification corporation tax, from KRW 1,952,00,000, which was deposited on August 23, 199, the amount of KRW 160,865,09,093, which was deducted from the amount of KRW 1,791,134,907,00 for the general deposit of KRW 00,000,00.

(2) On August 23, 1999, ○○○○○○○, ○○○○, ○○○, and 332-1, and 8 parcels of land, 11,455 square meters and 420 square meters of a building (on the basis of 829,963,480 square meters and hereinafter referred to as “the instant real estate”) in the form of selling 400 million won to ○○ (on the Plaintiff’s sales system, only the Plaintiff could have borrowed 829,963,480 square meters) and received KRW 400 million in the purchase price (the above three amount is the amount deposited in the purchase price; hereinafter referred to as “the instant real estate transaction”). The ownership was transferred on the 31st day of the same month (However, the contract date attached to the sales contract was prepared on August 1, 199).

C. Disposition of this case

(1) On July 13, 2003, the head of ○○○ Tax Office conducted a consolidated investigation of corporate tax for 1999 on ○○○○○○○○, and then disposed of the amount of 1 through 3 as bonus to the Plaintiff, who is reverted for the reason that there is no possibility to recover in the future. The real estate transaction in this case was denied by wrongful calculation of 429,963,480 won, which is the difference between the standard market price and the transfer value, on the ground that it constitutes a low-price transfer between related parties, and was included in the gross income, but deemed the Plaintiff as the actual owner, and accordingly disposed of the Plaintiff as bonus, and notified the change in the amount of income to the Plaintiff. (2) On November 13, 2003, the Defendant notified the Plaintiff of the taxation data above from the head of ○○○○ Tax Office to impose and notify the Plaintiff of global income tax for 1,457,786,540 won.

[Reasons for Recognition] Each entry of Gap evidence of Nos. 1 through 3, 6, 7, 9, 10, 15, 21, Eul evidence of Nos. 1 through 12, and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The parties' assertion

(1) Defendant (see preparatory documents dated October 4, 2007)

① The Plaintiff is not a representative director on the corporate register at the time of attribution of the issues 1 to 3 amount, but falls under the “executive officer” under Article 106(1)1(b) of the Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 17457, Dec. 31, 2001; hereinafter “Enforcement Decree”), and thus, it is lawful to dispose of the issues 1 to 3 amount as bonus.

② In view of the income level of ○○○ and the economic activity size, new ○○○ does not have the capacity to acquire the instant real estate, the actual transferee of the instant real estate is the Plaintiff. Meanwhile, the Plaintiff was the major shareholder of ○○○○○○○○ at the time of the acquisition of the instant real estate, and thus, the Plaintiff constitutes “shareholders under Article 87(1)2 of the Enforcement Decree,” as the “shareholders under Article 87(1)2 of the Enforcement Decree, and thus, the instant real estate transaction is subject to the avoidance of unfair

(ii)the plaintiff

① The Plaintiff’s resignation from the position of the representative director of ○○○○○ at the time when the issues 1 through 3 accrue and did not hold the position of “executive officer of ○○○○○○.” Therefore, the Plaintiff’s bonus disposition against the Plaintiff is unlawful.

② At the time of the instant real estate transaction, the Plaintiff was not in the position of a special related party, who is a shareholder between ○○○ and the Plaintiff. As such, the instant real estate transaction is not subject to the avoidance of wrongful calculation.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

(1) Facts of recognition

Considering the overall purport of the statements and arguments in Eul evidence Nos. 6, 7, and 12 (including each number), the plaintiff transferred all the shares of ○○○○ on August 18, 199 and resigned from the representative director, and then withdrawn the issues 1 through 3, Dogsan Kim○, a director in charge of the accounting of Dogsan in accordance with the written agreement (the plaintiff approved on the relevant accounting protocol), and the fact that the plaintiff acquired the real estate of this case on the ground of Dogsan as a purchaser in the form of Dogsan (the plaintiff acquired the real estate of this case without compensation since 40 million won was reverted to 3,00 won again at issue, the plaintiff actually acquired the real estate of this case). The Na○○○ did not participate in the process and contents thereof, and supported this by the fact that the amount of 1 to 3,000 won was treated as the accounts of Dogsan Kim○ through ○ in charge of its accounting without involvement in the process and contents thereof, and that the plaintiff's cash withdrawal and transfer of real estate under the agreement terminated around August 30, 30.

(2) Whether the bonus disposition is lawful

As to whether the plaintiff constitutes "executive officer" under Article 106 (1) 1 (b) of the Enforcement Decree at the time of attribution of the 1 to 3 amount, according to the above facts of recognition, the plaintiff does not fall under any subparagraph of Article 43 (6) of the Enforcement Decree which provides for "executive officer" as the representative director at the time of attribution of the above amount. Thus, the disposition of this case where the plaintiff deemed the plaintiff as the executive officer at the time of attribution of the 1 to 3 amount belonging to the 000's office is illegal.

The defendant asserts that the plaintiff was a de facto representative of ○○○ until August 30, 199. However, since Kim○○, a new representative director of ○○○○○, is not a formal representative director under the direction of the plaintiff, the plaintiff, who is not a representative director on the corporate register, cannot be deemed a de facto representative of ○○○○○○, unless it is the formal representative director under the direction of the plaintiff, and there is no evidence to recognize that Kim○○ is a formal representative director under the direction of the plaintiff (According to the evidence mentioned above, Kim○ appears to be the substantial representative director, who takes over ○○○○○○, and appointed by ○○○○). On the other hand, the plaintiff cannot be deemed the actual representative of ○○○○○○ for the reason that the plaintiff involved in the accounting of ○○○○○○ for withdrawal of cash assets stipulated in the agreement, the defendant's argument is not accepted (However, the defendant may dispose of the plaintiff as other income by applying Article 106 (1) 1 (d) of the Enforcement Decree)).

(3) Whether the denial of wrongful calculation is legitimate

The real estate transaction of this case was conducted in the form of sale and purchase between ○○○ and ○○○○ in the process of acquiring the real estate of this case from ○○○○○○ in accordance with the agreement after the Plaintiff transferred all of the shares of ○○○○○○○○○○○, as recognized above. Thus, the real estate transaction of this case was conducted around August 23, 1999 after the Plaintiff transferred all of the shares of ○○○○○○○○○ on the ground of registration (the date August 1, 1999), and it was conducted around August 23, 1999 when the real estate purchase price was deposited (the Plaintiff still transferred the real estate on the major shareholder of ○○○○○○○○○○○○○ before the execution of the stock transfer contract). Thus, the real estate transaction of this case was conducted after the Plaintiff was not a shareholder of ○○○○○○○○, and thus did not have any special relation.

Therefore, the wrongful calculation panel of this case, which reported the Plaintiff as the shareholder of ○○○○○ at the time of the instant real estate transaction, is unlawful, and furthermore, the bonus disposal to the Plaintiff is also unlawful.

3. Conclusion

Therefore, the plaintiff's claim of this case is justified, and the judgment of the court of first instance is unfair with different conclusions, so the plaintiff's appeal is accepted and the judgment of the court of first instance is revoked, and the plaintiff's claim is accepted and it is so decided as per Disposition.

Relevant statutes

○ Denial of wrongful calculation under Article 52 of the Corporate Tax Act

(1) Where the head of the district tax office having jurisdiction over the place of tax payment or the Commissioner of the competent Regional Tax Office deems that the tax burden of a domestic corporation has been unjustly reduced through transactions with persons with a special relationship as prescribed by the Presidential Decree (hereinafter referred to as "person with a special relationship"), he/she may calculate the amount of income for each business year of the relevant corporation without regard to the act or calculation of the amount of income of the relevant corporation (hereinafter referred

(2) In the application of the provisions of paragraph (1), the standard for determination shall be the prices applied or to be applied in sound and generally accepted practices and normal transactions between persons without a special relationship (including rates, interest rates, rents, exchange rates and other equivalent rates; hereafter referred to as "market price" in this Article).

(4) In applying paragraphs (1) through (3), matters necessary for the types of wrongful calculation, assessment of market price, etc. shall be prescribed by Presidential Decree.

Article 67 of the Corporate Tax Act

In filing a report on the tax base of corporate tax on income for each business year under the provisions of Article 60, or in determining or revising the tax base of corporate tax under the provisions of Article 66 or 69, the amount included in the calculation of earnings shall be disposed of to the person to whom it belongs as prescribed by Presidential Decree, such as bonus, dividend, and other outflow

Article 43 (Non-Inclusion of Bonuses, etc. in Calculation of Losses)

(6) Officers under the provisions of paragraphs (1) through (5) (hereinafter referred to as "executives") shall mean persons performing the duties under the provisions of each of the following subparagraphs:

1. All members of the board of directors, such as the chairperson, president, vice president, chief director, representative director, managing director, executive director, etc. and liquidator;

2. Executive partners or directors of unlimited partnerships, limited partnerships and limited companies;

3. Auditor.

4. Other persons performing duties similar to those under subparagraphs 1 through 3.

Article 87 of the Enforcement Decree of the Corporate Tax Act

(1) "Person with a special relationship prescribed by Presidential Decree" in Article 52 (1) of the Act means a person with a relationship falling under any of the following subparagraphs with a corporation (hereinafter referred to as a "person with a special relationship"):

1. Persons recognized as exercising real influence over the operations of the concerned corporation, such as exercising the right to appoint officers or determining the course of business (including persons to be treated as directors under Article 401-2 (1) of the Commercial Act) and their relatives;

2. Stockholders, etc. (excluding minority shareholders; hereafter the same shall apply in this Sub-section) and their relatives;

3. Officers and employees of a corporation, or employees of a stockholder, etc. (referring to the officers in case of a profit-making corporation, and the director and founder in case of a non-profit corporations) or other persons whose livelihood depends on the money and other assets of the corporation or stockholder, etc., and their relatives who depend upon them

Article 88 of the Enforcement Decree of the Corporate Tax Act: The type of wrongful calculation

(1) "Where it is deemed that the tax burden has been unjustly reduced" in Article 52 (1) of the Act means cases falling under any of the following subparagraphs:

3. Where assets are transferred or invested in kind with no compensation or at a price below the market price;

(2) The provisions of paragraph (1) shall apply to transactions between a corporation and a special related person (including transactions made through persons other than the special related persons) based on standards as at the time of such acts.

Article 106 of the Enforcement Decree of the Corporate Tax Act

(1) The amount included in the calculation of earnings under the provisions of Article 67 of the Act shall be disposed of pursuant to the provisions of the following subparagraphs. The same shall also apply to non-profit domestic corporations

1. Where the amount included in the calculation of earnings has clearly leaked out of the company, the dividends, bonuses from the disposition of profits, other income, and other outflow from the company under each of the following items according to the person to whom they accrue: Provided, That where the accrual is unclear, it shall be deemed as accrual to the representative (where the total number of stocks issued by the relevant corporation and the stocks, etc. owned by an officer who is not a minority shareholder under the provisions of Article 87 (2) and persons in a special relationship under the provisions of paragraph (4) of the same Article is 30% or more of the total number of stocks issued or total investment amount of the relevant corporation and the officer actually controls the operation of the corporation, he shall be deemed the representative, and where a corporation which has been exempted from withholding taxes under the provisions of Article 46 (12) of the Restriction of Special Taxation Act reports that there is a separate representative among the officers who are stockholders, etc.,

(a) Where the person to whom benefits accrue is a stockholder, etc. (excluding a stockholder, etc. who is an executive officer or employee), the dividends to such person;

(b) If the person to whom it belongs is an officer or employee, the bonus to the person to whom it reverts;

(c) Where the person to whom it belongs is a corporation or an individual operating the business, other outflow from the company: Provided, That it shall be limited to where the distributed profit constitutes the income for each business year of a domestic corporation or a domestic business place of a foreign corporation under the provisions of Article 94 of the Act or the business income of a resident or a non-resident under

(d) Other income of the person to whom the income accrues, in cases where the person to whom the income accrues is a person other than items (a) through