Cho 2017west 4428, 4429 ( December 20, 2017),

It is not reasonable to dispose of the business income, transaction, etc. to the actual business owner because it is not recognized that they belong to the actual business owner.

It is reasonable to make the instant disposition against the Plaintiff who is the nominal owner of the business registration due to lack of recognition that all the income and transactions of the business belong to the actual business operator.

Article 14 of the Framework Act on National Taxes

2017Guhap7114 Revocation of Disposition of Imposition of Value-Added Tax

KimA

BB Head of the Tax Office and one other

on 13, 2018

on January 24, 2018

1. The plaintiff's claim is dismissed.

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

Cheong-gu Office

The disposition of imposition of KRW 00,00,000 (including additional taxes), the value-added tax of KRW 00,000 (including additional taxes), the value-added tax of KRW 1,000,000 (including additional taxes) imposed on the Plaintiff on October 0, 000, and the disposition of imposition of KRW 00,000,000 (including additional taxes) imposed on the Plaintiff on August 1, 2017 by the head of the Defendant CCC head of the tax office on the Plaintiff on August 1, 2007, shall be revoked in entirety.

1. Details of the disposition;

A. On October 0, 000, the Plaintiff registered the business of Defendant BB BB head of the tax office on October 0, 000 as the opening date of the business. On October 0, 000, the Plaintiff reported the closure of the business to the head of Defendant BB head of the tax office on October 00, 2000 by making the business registration of food miscellaneous retail chain. The Plaintiff reported the closure of the business to the head of Defendant BB head of the tax office on October 000.

B. From October 0, 000 to October 0, 000, Defendant BB director of the tax office investigated the value-added tax on DD cases, and confirmed that DD cases received processed tax invoices of KRW 00,000,00 in total from H livestock, for 2 years 00,000 and 1 year 00,000.

C. On October 0, 000, Defendant BB director of the tax office imposed on the Plaintiff the amount of KRW 00,000,000 (including additional taxes), and the amount of KRW 00,000,000 (including additional taxes) of the value-added tax for 2 years 000,000. On the same day, Defendant CCC director imposed global income tax for 0,000,000 (including additional taxes), and global income tax for 00,000,000 (including additional taxes) for 00,000,000 global income tax for 00,000 (including additional taxes) (the sum of all the value-added tax and the comprehensive income tax imposed on the Plaintiff as above).

[Reasons for Recognition] Facts without dispute, entry of evidence Nos. 1, 2, 3, 8 and 9, purport of the whole pleadings

2. Whether the instant disposition is lawful

A. Summary of the plaintiff's assertion

The Plaintiff, upon request by the ICJ through Kim II (her husband of the Plaintiff), lent only the name of business registration to the ICJ, and the actual operation of the DD case was conducted by the ICJ. The instant disposition is unlawful against the principle of substantial taxation.

B. Determination

1) Article 14(1) of the Framework Act on National Taxes provides that "where the ownership of income, profit, property, act, or transaction subject to taxation is nominal and there is another person to whom such income, profit, property, act, or transaction belongs, and there is another person to whom such income, etc. belongs, the person to whom such income, etc. belongs shall be liable for tax payment." Thus, even if the title holder of business registration is merely the title, and the person to whom such income, etc. belongs may escape from the tax burden by proving that he/she has a separate person to whom such income, etc. belongs, the title holder of

A) The purpose of business registration is to facilitate the identification of taxpayers and their business contents and taxation data, thereby promoting the convenience of taxation administration, including the securing of base taxation and taxation data, and further realizing fair taxation. Business registration is an essential element for the effective implementation of the value-added tax system, along with the receipt of tax invoices. If business registration is not properly conducted, it is likely that the failure of tax system, including the value-added tax, income tax, local tax, etc., will occur (Supreme Court Order 2011Hun-Ba168 Decided November 28, 2013).

B) An application for business registration under the former Enforcement Rule of the Value-Added Tax Act (amended by Ordinance of the Ministry of Strategy and Finance No. 662 of March 19, 2018) (attached Form 4) (hereinafter referred to as "application for business registration") may be made available to a person who lends various taxes related to the business to another person in the name of the business, if the person lends the name of the business operator.

(i)a person who permits another person to make his/her business registration using his/her name for the purpose of evading taxes and evading compulsory execution shall be punished by imprisonment for not more than one year, or by a fine not exceeding 10 million won, in accordance with article 11, paragraph 2 of the Punishment of Tax Evaders Act;

2) The increase in income can be paid more national pension and health insurance fees.

3) If a person who lends his/her name is unable to pay taxes, he/she may be subject to disadvantages such as seizure and public sale of the property owned by the delinquent taxpayer, notification of the details of the arrears to the financial company, restrictions on departure, etc., and the State is informed that there is any disadvantage in the case of lending the name to the person who intends to apply for the business registration.

C) If a person satisfies the requirements prescribed by tax-related Acts, a taxpayer is obligated to pay taxes, and the State is entitled to receive taxes. In this respect, the tax law relationship also comes into an obligation and obligation. In addition, it is common to allow a person who lends a business name to a third party with knowledge that he/she may be liable for a debt owed by a business entity that actually engages in the business and lend a business

2) According to the facts acknowledged earlier, the statements in Gap 3 through 6, 7, 9 and 10, and the purport of this KR's testimony and the entire pleadings, the following facts can be acknowledged:

A) The Plaintiff worked in LL Development (State) from October 0, 000 to October 00, 000 (the period during which the Plaintiff was registered as a DD case’s trade name from October 0, 000 to October 00).

B) On October 00, 000, the Plaintiff and the Plaintiff’s husband Kim II asserted that “the Plaintiff lent the Plaintiff’s name of business registration upon the request of the ICJ, and the ICJ operated the DoD case.”

C) The Plaintiff, on October 00, 00, provided only the name necessary for business registration, and denied suspicion that the Plaintiff did not perform the business operation or the business related to the tax invoice, and the Plaintiff’s husband Kim II’s statement complies with this, and worked for LLL Development (States) like the Plaintiff’s above A, the Plaintiff was subject to a non-prosecution disposition as to the violation of the Punishment of Tax Evaders Act on the ground that the Plaintiff’s statement appears credibility and there is no evidence to acknowledge the suspected facts.

D) On October 00, 000, KimmM (the operator of PPP company dealing with DD case) entered into a confirmation document stating that the Plaintiff was not able to take any action. This document was prepared to the effect that KR was working at the DD office on October 000, 200, and the president of DD case was the ICJ, and the Plaintiff was able to take any action on the part of the Plaintiff. This document was prepared to the effect that KR was present at this court, and both the final decision-making of DD case, and the contact with the trader was made by the ICJ. During that day, KR testified to the effect that the Plaintiff was not able to take any action.

3) In full view of the aforementioned legal principles and the facts acknowledged earlier, the entries in the evidence Nos. 6, 7, 10, and 11, and the following facts or circumstances, which may be recognized by the purport of the entire pleadings, are insufficient to recognize the Plaintiff only as having only the name and having both the income, transaction, etc. of the business as belonging to the competent JJ. Therefore, the Defendant’s disposition of this case against the Plaintiff, the title holder of the business registration, is justifiable.

A) The Plaintiff, at his own will, registered its business with DDR and reported its closure. The Plaintiff seems to have been well aware of the fact that there was any disadvantage, such as tax burden, if he lends his name of business registration, on the grounds that: (a) the Plaintiff was working in a tax accounting corporation from September 000 to December 1000; and (b) the Plaintiff entered the same as that of the said Item (b) in the business registration application.

It is difficult for the Plaintiff to see that the Plaintiff borrowed the name of business registration only with the request of the ICJ, which is not a family member, without any reason (Article II states that, while investing KRW 050 million in the ICJ and failing to recover KRW 35 million at the time of closure of business (Article 10-6, April 11, 2018). Considering the fact that the Plaintiff was registered as an auditor in the Doo Trade Co., Ltd. under the representative of the ICJ during the period from October 0, 000 to October 0, 2000 (Evidence 7), it appears that there was a partnership or investment relationship between the Plaintiff, Kim II and the ICJ).

B) The time when DDR receives the processing tax invoice is from October 0, 000 to October 00, 00. The value-added tax investigation on DD cases is conducted from October 0, 000 to October 0, 000, and there is an interval of about four years between the time of receipt of the tax invoice and the time of investigation.

In addition, the ICJ’s assertion that the Plaintiff is liable to pay taxes cannot find out its position due to the death on or around October 00, 000 (if the Plaintiff or Kim II was involved in a part of the project, the ICJ did not dispute that there was no duty to pay taxes).

C) Examining the details of transactions of DD case’s business account, the Plaintiff and Kim II’s entry and withdrawal transactions appear to be KRW 00,000,000 ($ 50,000,000,000, and KRW 000,000,000) on the other hand, the details of transactions conducted by the ICJ do not appear to have been.

DD Cases submitted the processing tax invoice and received 00,000,000,000 won in total, and 00,000,000,000 won in value-added tax for 2 years,000 as listed below (the table). However, around that time, the amount was transferred from the business account to the Plaintiff’s account or deposited in cash.

[Report] Details of payment and withdrawal of refund money

Date of transaction

Classification

Jinay

Refund (won)

Transfer (Deposit)

January 8, 000

5,967,960

January 12, 000

3,100,000

Plaintiff’s account

February 7, 000

6,374,240

February 10, 000

4,000,000

Plaintiff’s account

February 28, 000

6,210,770

March 9, 000

1,300,000

Plaintiff’s account

March 10, 000

2,800,000

Plaintiff’s account

May 8, 000

6,183,180

May 8, 000

6,000,000

Cash withdrawals

June 12, 000

65,280

July 12, 000

13,436,250

July 12, 000

11,400,500

Plaintiff’s account

3. Conclusion

The claim of this case is dismissed as it is without merit, and it is so decided as per Disposition.