Whether a disposition of designating the secondary taxpayer by an oligopolistic stockholder is legitimate

In light of the fact that the non-party company received benefits equivalent to KRW 18 million from the non-party company and considerable portion of the money deposited to Do○○○ was deposited into the Plaintiff’s account, etc., it is difficult to deem that the Plaintiff was merely a next shareholder of the non-party company.

Article 14 of the Framework Act on National Taxes

Article 39 (Secondary Tax Liability of Investors)

1. All of the plaintiff's claims are dismissed.

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

The defendant's imposition of value-added tax against the plaintiff on January 5, 2006 of 82,396,290 won for the second term of 2003, for the first term of 2004, for the first term of 343,924,450 won for the second term of 204, for the second term of 358,030,120 won for the second term of 204, for the first term of 2005, for the first term of 95,16,280 for the first term of 205, and each imposition of corporate tax of 10,47,370 won for the business year of 203, for 107,823,00 won for the business year of 204.

1. Details of the imposition;

A. ○○○○○○ Co., Ltd. (hereinafter “non-party company”) is a corporation that runs gold bullion wholesale business in 000 ○○○○-dong 00-0 ○○○ building, and received a refund of value-added tax of KRW 2,272,604,130 in total from the second half to the first half of 2005, subject to zero tax rate under the Value-Added Tax Act, from 203 to 2005.

B. When the non-party company reported value-added tax on the first half of 2003 from the second half of 2003 to October 25, 2004, the trade name was changed from December 29, 2003 to ○○○○ World Co., Ltd. (hereinafter referred to as “○○○○ World”) from February 12, 2004. Prior to the trade name change, the non-party company received purchase tax invoices from ○○○ World Co., Ltd. (hereinafter referred to as “○○ World”) from 2,225,305,15 won was deducted from the output tax amount. From November 25, 2004 to April 25, 2005, the Plaintiff purchased the input tax invoice from ○○○ World Co., Ltd. (hereinafter referred to as “○○”) and the Plaintiff purchased the input tax invoice from 205 to 235,235,205.

C. From November 8, 2004 to July 19, 2005, the head of ○○○ and the president of ○○○○○○○○ and the president of ○○○○○○○○, who received purchase tax invoices, conducted an investigation as to whether the unfair refund of value-added tax and the unfair deduction of the input tax amount with respect to the non-party company. During that process, ○○ and the president of ○○○○○ and the president of ○○○○○, who is the representative director of the non-party company, actually purchased from the non-party company, in order to issue the purchase tax invoice as a disguised business operator for the issuance of the purchase tax invoice necessary for the unfair refund of value-added tax by pretending the non-data purchased from the non-party company’s sales business operator of gold bullion to normal gold bullion, and then notified the Defendant of such data on September 2

D. On October 15, 2005, the Defendant: (a) deemed that the instant purchase tax invoice was issued without a real transaction; (b) did not deduct KRW 2,225,305,155, and KRW 2,258,253,30, which was deducted by the non-party company; (c) added an additional tax to the non-party company for the second period of value-added tax, KRW 549,30,630, which was 203 + KRW 369,879,90; (d) additional tax for the first period of 2004 + KRW 179,428,739; (c) value-added tax for 1,292,829,710 (the amount deducted from the input tax + KRW 1,722,852,975 + KRW 569,7369,7366); (d) additional tax for the second period of 2004.

E. However, as the non-party company closed its business on September 30, 2005 and cannot cover each of the above taxes and disposition fee for arrears, the defendant, on January 5, 2006, was registered as holding 15% of the equity shares of the non-party company due to the statement of changes in stocks, etc. as of the date of establishment of each tax liability, designated the plaintiff as the second taxpayer of the non-party company and notified the non-party company to pay the following value-added tax and corporate tax corresponding to the plaintiff's equity shares (hereinafter "disposition of this case"):

(1) Reversion

(2) The items of tax;

(3) Date the tax liability is created.

(4) Foreign companies.

Amount in arrears ( won)

(5) Amount of the instant case (No. X15%)

2 2003

Value-added Tax

December 31, 2003

549,308,630

82,396,290

1, 2004

“The”;

June 30, 2004

2,292,829,710

343,924,450

2, 2004

“The”;

December 31, 2004

2,386,867,500

358,030,120

1, 2005

“The”;

June 30, 2005

634,441,910

95,166,280

Total

5,863,447,750

879,517,140

2003

Business year

Corporate Tax

December 31, 2003

69,849,190

10,477,370

204

Business year

“The”;

December 31, 2004

718,820,00

107,823,00

Total

788,669,190

18,300,370

F. On August 14, 2006, the Plaintiff dissatisfied with the disposition of this case and filed an objection on March 29, 2006 with the National Tax Tribunal for a national tax trial on August 14, 2006, but the National Tax Tribunal dismissed it on December 13, 2006.

[Ground of recognition] Facts without dispute, Gap 1 through 3 evidence, Eul 5-1 to 6, Eul 1 to 8 evidence, Eul 10 to 16 evidence, Eul 23 evidence, and the purport of the whole pleadings

2. Whether the disposition of imposition is lawful.

A. The plaintiff's assertion

(1) The purchase tax invoice of this case is not a false tax invoice.

Although the non-party company actually purchased gold bullion from ○○○○ and ○○○○ World and received the instant purchase tax invoice, the non-party company deemed the purchase tax invoice of this case as a false tax invoice issued by the Defendant without real transaction, and thus, the disposition of imposition of each value-added tax and corporate tax against the non-party company is unlawful. Accordingly, the disposition of this case on the premise

(2) The Plaintiff is a second-class shareholder of the non-party company.

The Plaintiff is merely registered as a shareholder of the non-party company by issuing a certificate of personal seal impression and a certificate of seal impression upon request of the ○○○○○○, and the instant disposition imposing the Plaintiff on the sole ground of the statement on the situation of changes in stocks, etc., without considering such substance, is unlawful as it goes against the principle of substantial taxation.

(b) Related statutes;

Article 14 of the Framework Act on National Taxes

(1) If the ownership of income, profit, property, act or transaction subject to taxation is merely nominal and a person to whom such ownership belongs exists, the tax-related Acts shall apply to such person to whom such person actually belongs as a taxpayer.

○ The second tax liability of the investor under Article 39 of the Framework Act on National Taxes (amended by Act No. 8139 of Dec. 30, 2006)

(1) Where the property of a corporation (excluding a corporation which has listed stocks on the Korea Stock Exchange) is insufficient to cover the national taxes and additional dues imposed on or to be paid by such corporation, and the expenses for disposition on default, any person who falls under any of the following subparagraphs as of the date on which the liability to pay national taxes is established shall be subject to secondary tax liability for such shortage: Provided, That in the case of oligopolistic stockholders under subparagraph 2, it shall be limited to the amount calculated by multiplying the amount obtained by dividing the shortage by the total number of stocks issued (excluding non-voting stocks; hereafter the same shall apply in this Article) or total amount of investment of such corporation by the number of stocks issued by such oligopolistic stockholders (excluding non-voting stocks) or amount of investment by such oligopolistic stockholders (in

2. An oligopolistic stockholder who falls under any of the following items:

(a) A person who actually exercises the rights to 51/100 or more stocks or shares out of the total number of issued stocks or investments of the juristic person concerned;

(b) An honorary chairperson, chairperson, president, vice president, senior managing director, managing director, director, or any other person who actually controls the management of the corporation, notwithstanding the title thereof;

(c) The spouse (including the person in de facto marital relations) of the persons under items (a) and (b) and the lineal ascendants and descendants sharing their living

(2) For the purpose of paragraph (1) 2, the term “major stockholder” means a stockholder or one partner with limited liability and his relatives or other persons in special relationship with him as prescribed by the Presidential Decree, whose total amount of stocks held or investments is not less than 51/100 of the total number of stocks issued or investments made by the juristic person concerned (hereinafter referred to as “major stockholder”).

(c) Fact of recognition;

(1) The process of issuing the purchase tax invoice of the instant case

(A) On November 20, 2003, the non-party company was established for the purpose of Do and retail business of precious metal, now, Do and Do.

(B) From November 28, 2003 to December 30, 2003, the non-party company prepared a transactional director that purchased gold bullion amounting to KRW 3,698,79,350 in total from ○○○○○○○○○ (hereinafter referred to as “○○○○○○”) eight times, and transferred money equivalent to the purchase price to the account of ○○○○○○○○○○ by means of deposit without passbook, etc.

From January 5, 2004 to February 16, 2004, the non-party company purchased gold bullion amounting to KRW 8,000,798,300 in total from 00 ○○○○○○○○○ from 15 times. From February 23, 2004 to June 29, 2004, the non-party company prepared the head of each transaction partner who purchased gold bullion amounting to KRW 9,229,454,30 in total from 00 on 21 occasions. The amount equivalent to the purchase price was remitted to the account of 00 ○○○○○ and ○○○○○○○○○○.

(C) On July 8, 2004, the non-party company prepared a trading partner's ledger that it purchased gold bullion amounting to KRW 439,20,00,000, KRW 442,39,800 on September 15, 2004, and KRW 442,39,800 on September 20, 2004, and KRW 442,39,800 on December 1, 2004. From October 1, 2004 to December 31, 2004, the non-party company prepared a trading partner's ledger that purchased gold bullion amounting to KRW 17,387,725,00,00 from the ○○○○○○○○○○○, which was the total amount of KRW 17,387,725,00,00 from the ○○○○’s trading partner's purchase date.

(D) The representative director of the non-party company ○○ established ○○○ ○○○○ ○○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○, a multiple processing gold bullion wholesale company established a single gold bullion wholesale company in a successive order from 6 months to 1 year, without actually

(E) The ○○○○○, the representative director of the ○○○○○○○○○’s name, was lent only the name without having been invested in the capital to the ○○○○○○○○○, a deceptive act of the ○○○○○, and the ○○○○○, a shareholder of the ○○○○○○○○○○, and the lease contract for the business place of the ○○○○○○○○○○

(F) The ○○○○○○○ was not working at the place of business of the ○○○○○○○○○○○○○○○○○○○○○○○○ 00 00 ○○○○○○○○○○○○○), and the Nonparty Company’s office (formerly, ○○○○○○○○○○ 000 00 ○○ building) delivered some gold bullions to the customer under the direction of the ○○○○○○○○.

(G) The customers of the ○○○○○○○○○ (son of the Nonparty Company) ordered the Nonparty Company’s office to issue a tax invoice under the name of the Nonparty Company and the settlement of the transaction amount was made by the Nonparty Company, which is the accounting employee of the Nonparty Company. The letters recording the transaction volume or transaction amount on the evidence, Internet banking transaction statement, tax invoice, and outer sign of the deposit passbook, etc. were written by this○○○.

(h) The amount that the non-party company received and paid the purchase tax invoice from the ○○○○ Co., Ltd., the purchaser of the ○○○○○ Co., Ltd., ○○○○, ○○○○, and ○○○ Co., Ltd., and the amount that the company deposited in cash was delivered to ○○○ through Han○, etc.

(i) When it was no longer possible to issue a tax invoice under the name of ○○○○○○○’s refusal, Kim○ established on March 6, 2002, and borrowed the name of ○○○○○○○○, which was operated as a small business, and the ○○○○ entered into a lending contract with the ○○○○○○○○○ on the entry of a business establishment of ○○○○○○○○○○○. If the ○○○○ gains non-data into the Nonparty’s office, the ○○○ issued a tax invoice under the name of ○○○○○○○○○○○○○, and the transaction passbook of ○○○○○○○○

(j) The amount that the non-party company received and paid the purchase tax invoice from the ○○○○○○○○, which is the purchasing entity of the ○○○○○○○○○, was remitted to ○○○○○○ Co., Ltd., ○○○○○ Co., Ltd., and the amount that was deposited in cash by the said company or its pre-stage company was delivered to ○○○○ through Korea, etc.

(k) While exporting part of the non-data gold bullion purchased from a seller of non-data gold bullion to Asia ○○ located in Hong Kong, the non-party company treated the value of supply on the purchase tax invoice of this case as losses.

(other) On April 6, 2007, the Seoul Central District Court sentenced ○○○ to a violation of the Act on the Aggravated Punishment, etc. of Specific Crimes (tax) and a violation of the Punishment of Tax Evaders Act (tax), 6 years of imprisonment and fine 74 billion won, and sentenced 74 billion won to a suspended sentence on two years and six months of imprisonment, respectively. The criminal facts include the part that the non-party company purchased gold bullion from his name-free persons and received the purchase tax invoice of this case as if it purchased gold bullion from ○○○ and ○○○○○○○○○○ as if it actually purchased gold bullion from his name-free persons (this decision was appealed by Seoul High Court 2007No896).

(2) The plaintiff's status and role in the non-party company

(A) At the time of establishment, the Plaintiff was registered as an auditor of the non-party company on the registry, and was registered as a director on February 25, 2004.

(B) The status of Nonparty Company’s stockholding between November 20, 2003 and December 31, 2004, and personal relations between each oligopolistic shareholder, etc. are as follows.

Stockholders

Period

Number of shares (shares)

Amount (won)

Equity ratio (%)

Personal Relations

○ ○

Above 2003.11.20 up to

December 31, 2003

5,000

25,000,000

50

Representative Director;

Ma-○

3,500

17,500,000

35

-

1,500

7,500,000

15

○ ○ Bana

Total

10,000

50,000,000

100

○ ○

Above January 1, 2004

December 31, 2004

30,000

150,000,000

50

Ma-○

21,000

105,000,000

35

9,000

45,000,000

15

Total

60,000

300,000,000

100

(C) The Plaintiff received benefits equivalent to KRW 18,00,000 during the period from January 2, 2004 to May 31, 2004 from the non-party company.

(D) According to the details of ○○○○○ Account and ○○ Account, which is the wife of ○○○○○○○ Account, deposited and withdrawn approximately KRW 27.8 billion from ○○○○ Account, but transferred approximately KRW 24.3 billion to ○○○○○ Account again. Of approximately KRW 3.5 billion, approximately KRW 38 billion, which is the difference, was transferred to ○○○ and ○○○○○○ (here after ○○○’s ○○’s ○○○) as the fixed deposit deposit, and KRW 220 million was remitted to ○○○ and ○○○○○ (here after ○○○’s ○○ ○○)’s ○○ ○○○ ○○ ○○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

(E) On the other hand, around 2001, ○○○, one of its own housing, was also a tenant of ○○○○○○○○○○, ○○○○○○○, a ○○○○○○, and the Plaintiff talked about the business of ○○○, which was engaged in the livestock industry, such as “the ○○○ is doing a gold business with money,” and the Plaintiff introduced ○○ to ○○○. The Plaintiff visited the Nonparty’s office two to three times for 14 months during which ○○ was working.

[Ground of recognition] Facts without dispute, Gap 1 to 3 evidence, Gap 6, 7 evidence, Eul 8 evidence, Eul 23 to 26 evidence, witness Kim ○'s testimony, and the purport of the whole pleadings

D. Determination

(1) Whether the instant tax invoice is a false tax invoice

(A) The burden of proving that the tax invoice is false, in principle, to the defendant who is the tax authority, and the defendant must prove that the tax invoice is not accompanied by real transactions on the basis of direct evidence or all the circumstances. If the defendant proves that the tax invoice is not false and that it is not accompanied by real transactions, it is necessary to prove that it is consistent with his/her own assertion in light of the position of easy presentation of evidence and materials related to the plaintiff, who is the taxpayer disputing the illegality of the defendant's disposition, by asserting that the tax invoice is not false (see, e.g., Supreme Court Decision 96Nu8192, Sept. 26, 1997).

(B) In the instant case, as shown in the above facts of recognition, ○○○ and ○○○○ was found to have been identified as the so-called data that issued a tax invoice without a real transaction while substantially operating ○○○○, and that ○○○ was convicted of violating the Punishment of Tax Evaders Act, etc. on the grounds that ○○ issued the purchase tax invoice without a real transaction, etc., the fact that the purchase tax invoice in the instant case was not accompanied by a real transaction is insufficient to reasonably acceptable. On the other hand, it is insufficient to recognize that the non-party company actually purchased gold bullion from ○○○○○ and ○○○○○○○○. Accordingly, each value-added tax and corporate tax imposed on the non-party company by deeming the purchase tax invoice in the instant case as a false purchase tax invoice is lawful, and the Plaintiff’s assertion in this part is without merit.

(2) Whether the Plaintiff is a borrowed-name shareholder

Whether it constitutes an oligopolistic shareholder under Article 39 (1) 2 of the Framework Act on National Taxes (amended by Act No. 8139 of Dec. 30, 2006) shall be determined by whether it is a member of a group which owns a majority of stocks. Specifically, even if there is no fact involved in the management of the company, it cannot be determined that it is not an oligopolistic shareholder. The fact of ownership of stocks is sufficient to prove by the tax authority based on the data, such as the list of stockholders, specifications of stock movement, or the register of corporate register, etc., and the fact of ownership of stocks should only be proved by the tax authority. Provided, That even if it appears to be a single shareholder in light of the above data, if there are circumstances such as the fraudulent use of the name of the shareholder or the registration in the name other than the real name of the owner, it cannot be deemed to be a shareholder only under such name, but this should be proved by the nominal shareholder who is not a shareholder (see, e

While holding the Plaintiff’s shares due to the statement on changes in stocks, etc. in this case, the following circumstances revealed in the above facts and arguments, i.e., ① the Plaintiff was registered as the auditor or director from the incorporation to the closure of business, ② the Plaintiff was paid 18 million won of the Plaintiff’s shares from the non-party company, ③ the amount deposited to the non-party company, ③ considerable part of the amount deposited to the Plaintiff’s account was deposited into the Plaintiff’s account, ④ the Plaintiff recommended the ○○○ to assist the Plaintiff in the business of the ○○○○, ④ the Plaintiff introduced the ○○○ to the ○○○○ by introducing the ○○○ to the ○○○○○○, and finally the ○○○○ was the representative in the name of the ○○○○○○○○○○, and the ○○○○ was the ○○○○○○○’s name. Accordingly, the Plaintiff’s respective statements (the ○○ and the ○○○○) are insufficient to deem that the Plaintiff was the next shareholder of the Plaintiff.

3. Conclusion

Therefore, the plaintiff's claim is without merit, and it is decided as per Disposition by the assent of all.