Treatment Industry Development Co., Ltd. (Law Firm Dcaro temperature, Attorneys Seo Ho-ho et al., Counsel for the plaintiff-appellant)

Head of Seocho Tax Office

April 17, 2015

1. The plaintiff's claim is dismissed.

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

The Defendant’s imposition of comprehensive real estate holding tax for the year 2010 on June 23, 2014 by KRW 259,329,90 and special rural development tax for the Plaintiff and KRW 51,278,630 shall be revoked.

1. Details of the disposition;

(a) The establishment of the principal tax liability of the Songinp Co., Ltd. and the status of oligopolistic stockholders prior to the split-off;

1) On January 22, 2008, Songin-ro PFV Co., Ltd. (hereinafter “ Songin-si”) purchased a total of 12 parcels of land in Pyeongtaek-si ○○dong from Nonparty 1, the total of 13 parcels of land in the same Dong from Nonparty 2, and the total of 5 parcels of land in the same Dong from Nonparty 3.

2) On August 24, 2009, Songin-do paid the sales price to Nonparty 1, 2, and Nonparty 3, but did not complete the registration of ownership transfer by June 1, 2010, the assessment basis date of comprehensive real estate holding tax for the year 2010.

3) On December 12, 2012, the Defendant: (a) deemed that Songininavivic owns a total of 28 parcels of land as of the tax base date as of December 12, 2012, the Defendant: (b) designated the due date for payment as of December 31, 2012; and (c) imposed imposition of KRW 259,329,990 of the comprehensive real estate holding tax for the year 2010 and the special rural development tax for which it is principal tax (hereinafter “principal tax liability”).

4) On the other hand, on June 1, 2010, the date on which the consignor’s primary liability to pay taxes was established, Daewoo Automobile Sales Co., Ltd. (hereinafter “Treatment Automobile Sales”) owned 80.46% of the shares issued by Songinin-V (hereinafter “instant shares”).

(b) Division of the company and establishment of the plaintiff prior to the split-off;

1) However, on August 10, 201, the sale of treatment-based vehicles was decided to commence the rehabilitation procedure (hereinafter “instant rehabilitation procedure”) pursuant to the Debtor Rehabilitation and Bankruptcy Act (Seoul Central District Court Decision 2011 Mahap105, supra) pursuant to the Debtor Rehabilitation and Bankruptcy Act (hereinafter “Rehabilitation Act”).

2) In the instant rehabilitation procedure, the rehabilitation plan, which submitted by the administrator of treatment Motor Vehicle Sales prior to the split-off on December 9, 201, was approved (hereinafter the above approved rehabilitation plan “instant rehabilitation plan”).

3) Under Articles 212 and 272(1) of the Debtor Rehabilitation Act, the instant rehabilitation plan includes the following: (a) the sale of treatment-based vehicles by split-off in the form of existence, new establishment, and human division (hereinafter “instant corporate split-off”) (i.e., the corporate split-off due to the extinction and the surviving split-off depending on whether the pre-division is extinguished or not; (b) the division of the company is a newly incorporated company or an existing company depending on whether the acquiring-off company is a newly incorporated company or an existing company; and (c) whether the shares of the company newly incorporated due to split-off are owned by the divided company or the shareholders of the divided company are owned by the divided company).

4) Specifically, the instant corporate division separates bus sales and construction companies from the bus sales and construction companies from the division division’s business sector. The bus sales and construction companies were transferred to each of the relevant business sector, and the surviving corporation continued to engage in the instant development project. The instant corporate division, which is the assets owned by the Daewoo Motor Sales and the construction company in relation to the construction sector, agreed to be transferred to the construction company.

5) The trade name of each of the said new corporations and the surviving corporations are the same as the service car sales company (the trade name is the same as the service car sales company prior to the division. The trade name was changed to the service car sales company again on October 25, 2012; hereinafter referred to as the “service car sales,” regardless of whether it was before or after the change of the trade name; the construction company is the treatment industry development company (the Plaintiff in this case); the remaining corporation was designated as the treatment car development company (the Plaintiff in this case); the treatment car sales and the Plaintiff completed each registration of incorporation on December 19, 201, and the treatment car sales and the registration of change was completed on December 20, 201 to the “Treatment Vehicle Development Corporation” (hereinafter referred to as the “Rehabilitation Company”).

C. Disposition of this case

1) However, the consignor did not perform his/her duty to pay taxes until December 31, 2012, which is the due date for the main tax liability designated by the Defendant.

2) On March 20, 2013, the date on which the principal liability for tax payment was established, the Defendant: (a) deemed that the rehabilitation company, a surviving company for the sale of treated Motor Vehicles, which owned the instant stocks as of June 1, 2010, constituted “a person who actually exercises the rights to stocks exceeding 50/100 of the total number of issued stocks or total amount of investment of the relevant corporation” under Article 39(1)2(a) of the former Framework Act on National Taxes (amended by Act No. 11124, Dec. 21, 2011) and imposed a comprehensive real estate holding tax for the year 2010 on the custodian of the rehabilitation company, and imposed a disposition of KRW 259,329,90 for special rural development tax and KRW 51,865,990 for special rural development tax for the year 2010.

3) However, on April 18, 2014, the custodian of the rehabilitation company made a request for review to the Board of Audit and Inspection against the above disposition, and in the above case, the Board of Audit and Inspection decided on April 18, 2014 that the defendant should cancel the above disposition on the ground that the rehabilitation

4) On June 23, 2014, the Defendant: (a) designated the Plaintiff as an oligopolistic shareholder of Songininindo as a secondary taxpayer; and (b) imposed the Plaintiff a comprehensive real estate tax of KRW 259,329,90 for the year 2010 and a special rural development tax of KRW 51,278,630 for the Plaintiff (hereinafter “instant disposition”); and (c) the tax claim indicated in the said disposition as “instant tax claim”; and (d) the corresponding tax liability (hereinafter “instant tax liability”).

5) The Plaintiff dissatisfied with the instant disposition and filed a request for review with the Commissioner of the National Tax Service on September 4, 2014, but was dismissed on October 6, 2014.

[Ground of recognition] Facts without dispute, Gap evidence 1 through 5, Eul evidence 1 and 2, the purport of the whole pleadings

2. Whether the instant disposition is lawful

(a) Related Acts and subordinate statutes;

It is as shown in the attached Form.

B. Determination on the assertion that the disposition constitutes a disposition made after the right to impose tax was extinguished

1) Summary of the Plaintiff’s assertion

Any property claim that accrues before the rehabilitation procedures commence for the debtor constitutes a rehabilitation claim (Article 118 subparagraph 1 of the Debtor Rehabilitation Act).

However, the principal tax liability was established on June 1, 2010 pursuant to Article 21(1)10-4, Article 10-5 of the Framework Act on National Taxes, Article 3 of the Gross Real Estate Tax Act, and Article 114 of the Local Tax Act. The instant tax claim is deemed established on June 1, 2010 following the due date of the principal tax liability. The due date of the principal tax liability is the day following the due date of the statutory due date of payment. The Gross Real Estate Tax Act sets the due date of the comprehensive real estate holding tax from December 1 to December 15 of the relevant year. Thus, the instant tax claim should be deemed established on December 16, 2010, which is the following date of the said due date of payment.

Therefore, the instant taxation claim constitutes a rehabilitation claim based on any property claim arising prior to the commencement date of the instant rehabilitation procedure ( August 10, 201). The Defendant did not file a report on the instant taxation claim by the deadline stipulated under Article 152(3) of the Debtor Rehabilitation Act in the instant rehabilitation procedure, and the instant taxation claim was forfeited according to the authorization of the rehabilitation plan under the main sentence of Article 251 of the Debtor Rehabilitation Act, and the instant disposition constitutes a disposition made after the extinguishment of the right to impose taxes.

2) Determination

First, we examine whether the instant taxation claim falls under the “Rehabilitation Claim”.

Whether a taxation claim constitutes a "property claim arising from the cause prior to the commencement of rehabilitation procedures" under Article 118 of the Debtor Rehabilitation Act shall be determined on the basis of whether the taxation requirements prescribed by the Act have been met before the commencement of rehabilitation procedures (Supreme Court Decision 2012Du23365 Decided February 28, 2013, etc.).

In addition, since the establishment of secondary tax liability requires separate requirements such as the failure of the principal taxpayer to pay taxes in addition to the establishment of the principal tax liability, the establishment time of the secondary tax liability shall be at least after the expiration of the payment period of the principal tax liability (see, e.g., Supreme Court Decisions 2003Du13083, Apr. 15, 2005; 2010Du13234, May 9, 2012). Here, it is reasonable to view that the payment period referred to in the method of imposition (including the case of imposition by the absence of the taxpayer's declaration even in the method of selective tax return) refers to the payment period of a designated tax, not the statutory payment period (see, e.g., Supreme Court Decisions 204Du3656, Nov. 25, 2005; 2005Du8498, Dec. 22, 2006; 201Du13234, respectively).

On the other hand, Article 10-2 subparag. 3 and 4 of the Enforcement Decree of the Framework Act on National Taxes, Article 16(1) and (3) of the Comprehensive Real Estate Tax Act provide the imposition method of comprehensive real estate holding tax in principle, but the so-called selective tax return method allowing the tax payment of taxes is selected, and Article 7 and Article 8 subparag. 1 of the former Act on Special Rural Development (amended by Act No. 10220, Mar. 31, 201) provide the same method by requiring the imposition or report of comprehensive real estate holding tax in the case of special rural development tax, the principal tax of which is the comprehensive real estate holding tax, according to the example of the comprehensive real estate holding tax which is the principal tax.

On December 12, 2012, the Defendant: (a) designated the due date for payment as of December 31, 2012 and imposed a disposition on the principal liability for tax payment with respect to Songin-V on December 31, 2012; and (b) according to the purport of the entire pleadings, it can be acknowledged that Songin-V failed to file a tax return with the tax authority prior to the aforementioned disposition.

In light of the above facts in light of the legal principles as seen earlier, the issue of whether the principal tax liability of this case was delinquent can be proved after December 31, 2012, which is the due date designated by the Defendant, and thus, the secondary tax liability can be established thereafter.

However, the decision on commencing the rehabilitation procedure of this case was rendered on August 10, 201, which was prior to the designated payment deadline, and thus, the tax claim of this case corresponding to the secondary tax liability cannot be deemed to have been established by satisfying the taxation requirements prior to the decision on commencing the rehabilitation procedure, and thus does not constitute rehabilitation claims.

Therefore, without any need to examine the remaining points of view, the Plaintiff’s assertion on a different premise is without merit.

C. Determination as to the assertion that there was no room for exercising shareholders' rights as a shareholder of Songin-manV due to the Plaintiff’s failure to complete the registration of incorporation at the time of establishment

1) Summary of the Plaintiff’s assertion

To be an oligopolistic stockholder prescribed in Article 39(1)2 (a) of the former Framework Act on National Taxes, a person shall be in at least in a position to exercise a shareholder's right with respect to the shares held as at the date of establishment

However, the Plaintiff completed the registration of incorporation on December 19, 201, which was after the date of the establishment of the principal tax liability (the date of June 1, 2011), and thus, at the time of the establishment of the principal tax liability, was unable to exercise the shareholder’s right on the instant shares. Therefore, the Plaintiff cannot be deemed as an oligopolistic shareholder of the Songinin-FV.

2) Determination

The issue of whether the second taxpayer is the oligopolistic shareholder of the corporation should be determined on the basis of the date on which the main tax liability is established (Supreme Court Decision 85Nu405 Decided December 10, 1985), and in the lower case, whether the Plaintiff was the oligopolistic shareholder of Songin FV as of June 1, 201, the date on which the main tax liability is established.

Article 272(4) of the Debtor Rehabilitation Act provides that Articles 237 through 240, 374(2), 439(3), 522-3, 527-5, and 529 of the Commercial Act concerning corporate division shall not apply to corporate split-off under the Debtor Rehabilitation Act.

Therefore, in the case of corporate split-off under the Debtor Rehabilitation Act, the application of the provisions on corporate split-off under the Commercial Act is limited to those listed in Article 272(4) of the Debtor Rehabilitation Act, and it is reasonable to view that all of the provisions on corporate split-off under the Commercial Act, other than those listed in the Commercial Act, are applied.

However, Article 530-10 of the Commercial Act provides that "a company established through division or merger after division or a surviving company shall succeed to the rights and obligations of the divided company in accordance with the written agreement of the division plan or the written agreement of the division." In the case of a division of a company, the rights and obligations of the divided company shall be transferred to the newly incorporated or surviving company due to division, except where transfer is not permitted in accordance with the nature of the division contract, regardless of the relation under private law or public law, regardless of its nature (see Supreme Court Decisions 77Nu265, Mar. 25, 1980; 2010Da44002, Aug. 25, 201; 2012Du1782, Jun. 27, 2013). In the case of a division of a company under the Debtor Rehabilitation Act, the effect of the above comprehensive succession shall accrue as provided for in the rehabilitation plan, which is not the plan for division.

In addition, the status of shareholders, including shareholders' rights, does not fall under the rights and obligations or legal relations that are bound to be transferred in its nature.

Meanwhile, the division of a company takes effect upon the completion of the registration of incorporation at the place of the principal office (Articles 530-11 and 234 of the Commercial Act), but succession to the rights and obligations of the divided company arising prior to the date of registration of incorporation is natural interpretation of Article 530-10 of the Commercial Act (see Supreme Court Decisions 2010Da44002, supra; 2012Du11782, supra). The Plaintiff’s assertion that the rights and obligations and legal relations of the divided company prior to the registration of incorporation are excluded from those subject to succession is nonexistent, and the purport of legislation of Article 530-10 of the Commercial Act is de facto nonexistent as there is no rights and obligations and legal relations that are subject to succession.

In the instant case, the Plaintiff’s succession to the instant shares, which are assets related to the construction business sector of treatment vehicle sales prior to partition, under Articles 212 and 272(1) of the Debtor Rehabilitation Act, Article 530-10 of the Commercial Act, and the rehabilitation plan of this case, is as seen earlier. In light of the legal principles seen earlier, the Plaintiff’s succession to all judicial and public rights and duties and legal relations as a shareholder derived therefrom, and the rights and duties and legal relations so succeeded are naturally included in the status as an oligopolistic shareholder of treatment vehicle sales prior to partition as of June 1, 2010.

Therefore, the Plaintiff is deemed to have been in the position of oligopolistic shareholders at the time of June 1, 2010, and the Plaintiff’s above assertion on a different premise is without merit.

D. Determination as to the assertion that no agreement was reached by the Plaintiff to succeed to the pertinent taxation claim, and that such agreement was null and void even if so agreed.

1) Summary of the Plaintiff’s assertion

Although the Defendant rendered the instant disposition on the premise that the Plaintiff agreed to succeed to the instant tax obligation with the Daewoo Motor Sales prior to the split-off, the Plaintiff did not make such agreement.

In addition, the tax liability can only be succeeded pursuant to the provisions of Article 23 and Article 24 of the Framework Act on National Taxes, and it does not include the nature of succession by private agreement.

2) Determination

As seen earlier, the Plaintiff succeeded to the status of oligopolistic shareholders as of June 1, 2010, which had been possessed by the Daewoo Motor Sales Co., Ltd., and the aforementioned succession to the status of oligopolistic shareholders should be deemed not by private agreement between the Plaintiff and the Daewoo Motor Sales, but by the statutory provisions, namely, Articles 212 and 272(1) of the Debtor Rehabilitation Act, and Article 530-10 of the Commercial Act (see Supreme Court Decision 2001Da44352, Nov. 26, 2002).

Therefore, the plaintiff's assertion on the different premise is without merit.

E. Determination as to the assertion that the instant taxation claim is not included in the list of rehabilitation claims, rehabilitation security rights, and public interest claims that are transferred to the Plaintiff

1) Summary of the Plaintiff’s assertion

The taxation claim of this case constitutes rehabilitation claims, rehabilitation security rights, and public interest claims, which are not included in the list stating rehabilitation claims, rehabilitation security rights, and public interest claims that are transferred to the plaintiff in the instant rehabilitation plan

2) Determination

According to the statement No. 3-1 of the evidence No. 3, it is recognized that separate lists of rehabilitation claims, rehabilitation security rights, and public-interest claims that are transferred to the plaintiff from the sale of treatment Motor Vehicles before division in the rehabilitation plan of this case are not entered in the above list.

However, we examine whether the taxation claim of this case constitutes rehabilitation claims, rehabilitation security rights, and public-interest claims.

First of all, the taxation claim of this case cannot be deemed to have been established by satisfying all the taxation requirements before the commencement of rehabilitation procedures. Thus, the taxation claim of this case does not constitute rehabilitation claims and rehabilitation security rights.

Next, we examine whether the instant tax claim constitutes a public-interest claim. It is reasonable to view that the instant tax claim falls under any of the subparagraphs of Article 179(1) and Articles 58(6), 59(2), 108(3)2 and 4, 121(2), 177, and 256(2) of the Debtor Rehabilitation Act as the type of public-interest claims, and it is limited to the instant tax claim. However, with regard to the establishment of the instant tax claim, it is only the fact that the instant tax claim is the primary tax liability of a third party (devotionV), who is not the custodian, after the commencement of the instant rehabilitation procedure. As such, the instant tax claim cannot be deemed to fall under the public-interest claim under Article 179(1)5 of the Debtor Rehabilitation Act, namely, the claim arising from the act after the commencement of the rehabilitation procedure by the custodian, and the instant tax claim does not fall under any of the types of public-interest claims provided for in other provisions.

Ultimately, the instant taxation claim does not fall under any one of the rehabilitation claims, rehabilitation security rights, and public-interest claims, and does not fall under any other claims after the commencement prescribed in Article 181 of the Debtor Rehabilitation Act (Article 181(1) of the Debtor Rehabilitation Act defines any other claims as property claims arising from causes arising after the commencement of rehabilitation procedures, which are not public-interest claims, rehabilitation claims, or rehabilitation security rights after the commencement of rehabilitation procedures.)

Therefore, the plaintiff's assertion on different premise is without merit.

F. Determination as to the assertion that the instant taxation claim is not specified in the instant rehabilitation plan as transfer to the Plaintiff

1) Summary of the Plaintiff’s assertion

The instant rehabilitation plan provides that the newly incorporated company shall not be succeeded to the remainder of its obligations other than those specified as transferred by the company before the division. The instant tax obligations are not specified as transferred to the Plaintiff in the instant rehabilitation plan.

2) Determination

As seen earlier, the Plaintiff’s obligation to pay the instant tax is not due to the Plaintiff’s transfer of the said obligation itself to the Plaintiff, but due to the incidental effect therefrom, and the Plaintiff succeeded to the status of oligopolistic shareholders as of June 1, 2010 of the judgment of the Board of Audit and Inspection (in the above decision of the Board of Audit and Inspection, it is reasonable to deem that the taxation requirement of the said taxation claim was not yet satisfied until the date of the approval decision of the said rehabilitation plan, and that the status of oligopolistic shareholders was succeeded to, instead of the secondary tax obligation itself).

Therefore, the issue of whether the instant tax claim itself was transferred in the instant rehabilitation plan is beyond the nature of the case.

However, the plaintiff's above assertion is also judged as to the legitimacy of the plaintiff's above assertion at home.

According to the above evidence, the judgment of the court below is justified in light of the above facts. The plaintiff referred to as Gap company's new company Gap and Eul company's new company's new company company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's company

However, if the purport of the entry in the rehabilitation plan is not clear, the purport thereof shall be clarified by the method of interpreting the juristic act. The interpretation of the juristic act clearly establishes the objective meaning that the parties gave to the act of expression. Where the objective meaning is not clearly expressed by the language and text expressed by the parties, it shall be reasonably interpreted in accordance with logical and empirical rules, general common sense of society, and common sense of transaction, by comprehensively taking into account the following factors: (a) the form and content of the language and text; (b) the motive and background leading up to the juristic act; (c) the purpose and genuine intent to be achieved by the juristic act by the parties; and (d) transaction practices; and (e) the parties shall reasonably interpret it in accordance with the principles of social justice and equity (see Supreme Court Decisions 206Da7197, Jun. 26, 2008; 2013Da9707, Sept. 4, 2014).

The instant rehabilitation plan provides that the instant shares shall be transferred to the Plaintiff; ② the secondary tax liability attached to the instant shares shall not be transferred even if the said rehabilitation plan provides that the Plaintiff shall transfer the instant shares to the Plaintiff; ③ ordinarily, shares shall refer to the entire rights and obligations of shareholders incorporated into the share certificates; ④ The instant tax claim falls under other claims after the commencement of the instant rehabilitation plan without any provision regarding the transfer of other claims; ⑤ The date of the designation of the principal tax liability payment deadline (as of December 9, 201), which is the effective date of the said rehabilitation plan (as of December 31, 201), has not yet arrived, and the said tax claim does not meet the taxation requirements, should be interpreted to the effect that the aforementioned rehabilitation plan does not deny the succession of the status of oligopolistic shareholders, which is derived from the transfer of the instant shares from the pre-division sale of the instant shares to the Plaintiff (other than whether such provision remains effective).

Therefore, it is difficult to accept this part of the Plaintiff’s assertion.

3. Conclusion

Therefore, the plaintiff's claim is dismissed as it is without merit. It is so decided as per Disposition.

[Attachment]

Judges Kim Byung-soo (Presiding Judge) et al.;

Note 1) Eul evidence 3-1 (Plan), 134 pages