Seoul Administrative Court-2016-Gu Partnership-79953 ( December 08, 2017)

If the company's short-term loans are not recovered and the company closes its business ex officio, the disposition of income made to the representative director at the time of the above ex officio closure is legitimate.

Since short-term loans that have been made at the time of the closure of official business are placed in a state where the possibility of realizing rights is not recognized beyond the scope of the right to control and manage the company of this case, the disposition of income to the plaintiff as the representative at the time of the closure of official

Article 67 of the Corporate Tax Act

2018Nu30930 global income and confirmation of invalidity of disposition

AA

BB Director of the Tax Office

May 1, 2018

May 29, 2018

1. Revocation of a judgment of the first instance;

2. The plaintiff's claim is dismissed.

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

1. Purport of claim

On March 19, 2013, the Defendant confirmed that the imposition of global income tax of KRW 237,546,436 (including additional tax) imposed on the Plaintiff in the year 2007 is null and void.

2. Purport of appeal

The same shall apply to the order.

1. Circumstances of the disposition, the plaintiff's assertion, relevant statutes, and facts of recognition;

The reasoning for this part of the judgment by the court is the same as that of the corresponding part of the judgment of the court of first instance, and thus, this is cited in accordance with Article 8(2) of the Administrative Litigation Act and Article 420 of the Civil Procedure

2. Determination

A. According to Article 67 of the former Corporate Tax Act and Article 106 (1) of the Enforcement Decree of the former Corporate Tax Act, where it is clear that the amount included in the calculation of corporate tax has leaked out of the company, it shall be treated as dividends, bonuses from profit disposal, other income, and other outflow from the company according to the person to whom it reverts, and where it is unclear that it reverts, where an officer who is not a minority shareholder under Article 87 (2) and persons with a special relationship under paragraph (4) of the same Article holds not less than 30/100 of the total number of stocks issued or total investment amount of the relevant corporation and actually controls the operation of the corporation, he shall be deemed the representative, and where a corporation has reported that there is another person representing the relevant corporation among the officers who are stockholders, etc., the reported person shall be the representative, and where there is more than two representatives, the de facto representative shall be deemed as bonuses from the former Enforcement Decree of the Corporate Tax Act and shall be deemed as losses from the representative until the date when the special relationship is extinguished in accordance with paragraph (16).

B. The Supreme Court en banc Decision 2006Da49789 Decided September 18, 2008) purporting to consider certain facts that can be recognized as such act in order to prevent such an act under tax law as bonus to a de facto representative, regardless of their substance (see Supreme Court en banc Decision 2006Da49789 Decided September 18, 2008). It is reasonable to consider that deeming that an unidentified person has been attributed to a representative of the corporation in light of the empirical rule that it is highly probable that it would have been attributed to the representative of the corporation, and that externally represents the company and externally is in a position to prove who is more easily attributed to the representative than other members of the corporation or the tax authorities (see Constitutional Court Order 2005Hun-Ba107 Decided March 26, 2009). In principle, it is reasonable to consider that a person who actually controls the outflow person as a representative when it was included in the calculation of earnings in the calculation of earnings (see Supreme Court Order 2005Hun-Ba106 Decided26, etc.).

C. The outflow from the company under Article 67 of the former Corporate Tax Act and Article 106 (1) 1 of the Enforcement Decree of the same Act means that the income or assets of a corporation are included in the scope of the right to control and manage a third party beyond the scope of the right to control and manage the corporation, and it can be deemed that the right has been leaked outside of the company unless it remains in such a state as can be objectively recognized

D. In light of the contents and purport of the relevant laws and regulations as seen earlier, and in light of the legal principles as seen earlier, KRW 569,500,000 of the short-term loans of the instant company was leaked out of the company on December 31, 2007, which was the date of ex officio closure of business, based on the following circumstances revealed by the facts acknowledged as above, and the purport of the entire pleadings, the instant disposition taken on the premise thereof is lawful.

1) On the balance sheet of the 2005 business year of the instant company, KRW 569,00,000 for short-term loans to shareholders, executive officers, and related companies are included, and on the balance sheet of the 2006 business year, KRW 569,50,000 for short-term loans to shareholders, executive officers, and related companies have been continuously appropriated, the instant company cannot be deemed to have waived its claim for short-term loans during the period when the representative director is changed from the network EE to the FF and the Plaintiff in turn.

2) On December 31, 2007, the instant company discontinued its business ex officio and became practically impossible to recover the above short-term loans, and the said short-term loans were placed in a situation where the possibility of realizing rights is not recognized beyond the scope of the instant company’s control and management right.

E. Generally, a taxation disposition imposed on a person who does not have the factual relations such as legal relations or income or act which are subject to taxation is significant and apparent. In determining whether the defect is significant and obvious, it is necessary to consider the purpose, meaning, and function of the laws and regulations which serve as the basis for the taxation disposition in question as a teleological objective and, at the same time, reasonable consideration on the specificity of the specific case itself (see, e.g., Supreme Court Decision 96Nu12634, Jun. 26, 1998). In order to determine the defect of administrative disposition as clear, it should be said that the materials based on the factual relations lack external form, or it is apparent that the authenticity of establishment or content cannot be recognized objectively. If it is apparent only when the materials of factual relations are examined accurately, such defect can not be seen as clear from the point of view that the above provision becomes invalid, and thus, it cannot be seen that there is no objective possibility for the court to interpret the basic rules and regulations as to the taxation disposition in question other than the date when it becomes invalid.

3. Conclusion

Therefore, the plaintiff's claim shall be dismissed as it is without merit. Since the judgment of the court of first instance is unfair with different conclusions, the defendant's appeal shall be accepted and the judgment of the court of first instance shall be revoked and the plaintiff's claim shall be dismissed as per Disposition.