The judgment below

The part concerning the imposition of corporate tax and value-added tax and notice of change in income amount is reversed.

The grounds of appeal are examined.

1. As to the grounds of appeal Nos. 1 through 3

A. Prior to the amendment by Act No. 8830 of Dec. 31, 2007 of the former Framework Act on National Taxes

(a) The same shall apply;

The substance over form principle under Article 14(1) of the Act refers to a person to whom such income, profit, property, transaction, etc., belongs, if there is another person to whom such income, profit, property, or transaction, etc., belongs differently from the person to whom such income, etc., belongs, and the person to whom such income, etc., belongs is not the person to whom such income, etc., belongs, but the person to whom such income, etc., belongs, is not the person to whom such income, and the person to whom such income, etc., actually controls and manages the property through the control, etc., over the nominal owner, exists, and the disparity between the nominal owner and the substance arises from the purpose of tax evasion (see, e.g., Supreme Court en banc Decision 2008Du8499, Jan. 19, 2012). This principle applies to the interpretation and application of a tax treaty having the same effect as the Act (see, e.g., Supreme Court Decision 2010Du1948, Apr. 26, 20130).

(a) The same shall apply;

In the case of a profit-making organization that receives domestic source income and distributes it to the members, if a foreign corporation under the former Corporate Tax Act can be seen as a foreign corporation, the organization shall be liable to pay corporate tax on domestic source income. If a foreign corporation under the former Corporate Tax Act cannot be seen as a foreign corporation, the members of the organization shall be liable to pay taxes and distributed to each of them.