Whether an investor falls under the secondary liability for tax payment

The plaintiff is not an oligopolistic shareholder as of the date the tax liability comes into existence, and it is merely a nominal holding of stocks as a collateral for a loan, and thus has not actually exercised the rights to stocks.

Article 38 (Secondary Liability to Pay Taxes by Investor)

1. The defendant's appeal is dismissed.

2. The costs of appeal shall be borne by the Defendant.

1. Purport of claim

The Defendant’s imposition of KRW 13,99,760 on May 13, 2005 for the first term portion of value-added tax for the first term of 2004 against the Plaintiff, KRW 12,320,060 on the second term portion of value-added tax for the second term of 204, KRW 12,83,760 on the second term portion of value-added tax for the second term of 2004, KRW 2,187,860 on the business income tax for the second term of 204, and KRW 2,187,860 on the first term portion of value-added tax for the first term of 204 against the Plaintiff on July 29, 2005, and all imposition of KRW 42,020 on the first term portion of value-added tax for the second term of 204 on the second term portion of value-added tax for the second term of 204 are revoked.

2. Purport of appeal

The judgment of the first instance is revoked. All of the plaintiff's claims are dismissed.

The reasoning of this court's explanation concerning this case is as follows: (a) the last part of the judgment of the court of first instance (No. 6, No. 13 of the judgment of the court of first instance) added the following additional descriptions to the general title among the statements in the reasoning of the judgment of the court of first instance (No. 8 (2) of the Administrative Litigation Act and Article 420 of the Civil Procedure Act shall be cited as it is in accordance with the reasoning of the judgment of the court of first instance.

"The defendant (the plaintiff did not transfer 2,500 shares on May 7, 2004, and the remaining 4,000 shares were not transferred to ○○○○, etc. on October 1, 2004, the second taxpayer was reported to pay securities transaction tax after 11 months or 6 months from the date of the above transfer in order to evade the designation and payment notice of the second taxpayer. Even if each of the above shares was transferred, in light of the relation between the parties to the above transfer, it is not a declarational meaning, in light of the relation between the parties to the above transfer, and there is no legal effect as it did not notify the tax authorities of the change. However, as seen above, the plaintiff, Gangnam○, etc. did not acquire shares as a collateral, but did not exercise their rights to the above shares, and it cannot be seen that the plaintiff's assertion that the above shares were transferred to the nonparty company's representative director, etc. by taking over the above shares as collateral."

Therefore, the judgment of the first instance court is legitimate, and the defendant's appeal is dismissed as it is without merit. It is so decided as per Disposition.

* Supreme Court Decision 2007Du15902 ( October 12, 2007)

The appeal is dismissed.

Costs of lawsuit shall be borne by the defendant.

Although all of the records of this case and the judgment of the court below and the grounds of appeal were examined, the grounds of appeal are without merit, and it is so decided as per Disposition under Articles 4 and 5 of the Act on Special Cases Concerning the

*: Seoul Administrative Court 2006Guhap4288 ( November 28, 2006)

1. The Defendant’s imposition of 12,320,060 won for the first quarter of 2004 against the Plaintiff on May 13, 2005, of 13,99,760 won for the second quarter of 2004, of 12,320,060 won for the second quarter of 204, of 12,83,760 won for the second quarter of 2004, and of 2,187,860 won for the business income tax for the second quarter of 204, and of 2,187,860 won for the first quarter of 204 against the Plaintiff on July 29, 2005, and all imposition of 42,020 won for the first quarter of 204, of 59,297,910 won for the second quarter of 204.

2. The costs of the lawsuit are assessed against the defendant.

Cheong-gu Office

The same shall apply to the order.

1. Details of the disposition;

The following facts are not disputed between the parties, or can be acknowledged in full view of the whole purport of arguments in Gap evidence 1, Gap evidence 15, 16-1, 2, Gap evidence 27-1 through 6 (the part of Eul evidence 1-1, the same shall apply to the part of Eul evidence 1-1), Gap evidence 28-1 through 4 (the part of Eul evidence 1-3, the same shall apply to the part of Eul evidence 1-1), Gap evidence 29-1, 2, and Eul evidence 1-2.

A. ○○○○○○○○○○○ (hereinafter “○○○○”) was a corporation that runs a wholesale business, retail business, etc. of household goods, and was liable to pay a total of KRW 160,639,490 (66,608,520 + KRW 94,030 + KRW 94,970) as stated in the attached Table of Tax in the attached Table of Tax in arrears. (hereinafter “instant tax in arrears”).

B. On June 30, 2004 and December 31, 2005, the date when the Plaintiff’s liability to pay the delinquent national tax of this case was established, the Defendant deemed the oligopolistic shareholder holding 6,500 shares (65%, hereinafter “the shares of this case”) out of the total issued shares of Nonparty Company 10,000, and designated the Plaintiff as the secondary taxpayer of the delinquent national tax of this case, and imposed 41,341,440 won (excluding additional taxes; hereinafter the same shall apply) in the attached tax table on May 13, 2005, totaling KRW 59,39,930 on July 29, 2005 (hereinafter “instant disposition”).

C. On July 28, 2005, the Plaintiff appealed against the instant disposition and filed an appeal with the National Tax Tribunal on September 8, 2005, and the National Tax Tribunal dismissed the Plaintiff’s appeal on November 8, 2005.

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

On November 2003, the Plaintiff leased gold 60 million won to ○○○○○○○○, a representative director of ○○○○○○, etc., and thereafter, acquired the instant shares under the title of the Nonparty Company established by Kang○, etc. as a collateral therefor, and did not participate in the management of the Nonparty Company or actually exercise the right to the instant shares after acquiring the instant shares. In addition, on May 7, 2004, the Plaintiff transferred 2,500 shares out of the instant shares to bothO, and thereafter transferred 2,00 shares to ○○ and Kang○○, respectively, on October 1 of the same year, and thereafter, transferred 4,00 shares remaining 2,00 shares to ○○ and Kang○○. Accordingly, the Plaintiff did not have the status of an oligopolistic shareholder of the Nonparty Company at the time of the non-party Company’s failure to pay the

Therefore, the disposition of this case that the Plaintiff, as an oligopolistic shareholder of the non-party company at the time when the liability to pay the delinquent national tax of this case was established, was unlawful.

(b) Related statutes;

Article 21 of the Framework Act on National Taxes: Time when tax liability becomes effective

Notwithstanding the provisions of paragraph (1), the obligation to pay the following national taxes shall accrue at the following time:

3. For the income tax, corporate tax, or value-added tax on the scheduled return period for interim prepayment, when the interim prepayment period or the scheduled return period is terminated;

4. For a national tax collected by occasional assessment, when the cause of such occasional assessment occurs; and

○ Secondary tax liability of the investor under Article 39 of the Framework Act on National Taxes

(1) Where the property of a corporation (excluding a corporation whose stocks are listed on the Korea Stock Exchange) is insufficient to cover the national tax, additional dues, and disposition fee for arrears imposed on or to be paid by the corporation, 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 liable to pay the second tax for such shortage: Provided, That in the case of an oligopolistic stockholder under subparagraph 2, the limit shall be the amount calculated by multiplying the amount calculated 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 investment amount of the corporation, by the number of stocks owned (excluding non-voting stocks) or investment amount (in the case of an oligopolistic stockholder under subparagraph 2 (a) and (b), the number of stocks or investment amount actually exercised by the oligopolistic stockholder concerned) by the oligopolistic stockholder:

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

(a) A person who exercises a substantial right over the stocks or investment shares in excess of 51/100 of the total issued stocks or total investments of the relevant corporation;

(b) An honorary president, president, president, vice president, senior managing director, managing director, director, or a person who actually controls the management of a corporation, notwithstanding the name thereof;

(2) For the purpose of paragraph (1) 2, the term “excess stockholder” means a person who is a relative or has other special relations with a stockholder or partner with limited liability as prescribed by the Presidential Decree, and the total sum of his stocks or investment is 51/100 or more of the total number of stocks issued or total amount of investment made by the juristic person concerned (hereinafter referred to as “excess stockholder

(c) Fact of recognition;

Each evidence mentioned above, Gap evidence 2, Gap evidence 3-1, 2, 4-7, Gap evidence 8-1, 2, 9, 10, Gap evidence 11-1, 2, 3, Gap evidence 12-1, 2, Gap evidence 13, 14, Gap evidence 17-1, 2, Gap evidence 24-1, 24-2, Gap evidence 25, Eul evidence 26-1, 2, 30-1, 2, and 8-1, 2, and 8-1, 2, and 11-2, 3, and 11-3, Gap evidence 12-1, 13, 14, 17-1, 17-2, and 23, Gap evidence 26-1, 2, and 30-1, 30-2, and new witness ○, and the whole purport of the pleadings in ○○ testimony can be acknowledged as follows.

(1) Since its incorporation on January 28, 2004, the company holds the largest ○○ as the representative director, and the holding status of 10,000 shares issued by the non-party company from January 28, 2004 to December 31, 2004 is as follows (based on the detailed statement on changes in shares, etc., which reflects the Plaintiff’s transfer of shares on May 7, 2005 and October 1 of the same year as seen below).

No.

Name

January 28, 2004 (Equity Ratio)

December 31, 2004 (Equity Ratio)

1

6,500 Shares (65%)

·

2

○ ○

2,000 Shares (20%)

2,000 Shares (20%)

3

Ma-○

1,000 Shares (10%)

1,000 Shares (10%)

4

○ ○

500 note (5%)

500 note (5%)

5

Yang-○

·

2,500 Shares (25%)

6

Gangwon ○

·

2,000 Shares (20%)

7

○ ○

·

2,000 Shares (20%)

(2) From March 30, 2002 to March 30, 2002, the Plaintiff is serving as the representative director of ○○○○, a company engaged in soil construction business, etc., and was receiving monthly wage of KRW 2,500,000 from the said company from January 30 to July 2005.

(3) The Plaintiff’s lending of money and conclusion of a lease agreement

(A) On November 2003, the Plaintiff agreed to lend 60,000,000 won of the office lease deposit to ○○○○○○○○○○○○○○○○○○○○○ and its executive officers upon the request of ○○○○○○○○○○ and Yang○○○○○○○○ (hereinafter “Gang○○○, etc.”) and to secure this.

On the other hand, ○○○○○ is a company that runs the visit sales business, etc. established on March 24, 2000, and works as the representative director from March 4, 2004 on the corporate register, ○○○ is a company that is engaged in the business of visiting and selling business, etc. on the other hand, and ○○○○○ is a company that is engaged in office as the representative director, ○○○○ is a company that is employed as a director (a vice president who works as the vice president) and a senior director (a vice president

(B) In accordance with the above agreement, on November 14, 2003, the Plaintiff entered into a lease agreement with PostalO for the lease deposit amounting to KRW 60,00,000, monthly rent of KRW 30,000, monthly rent of KRW 30,000, and the lease period from November 26, 204 to November 25, 2004. The Plaintiff used the lease contract amounting to KRW 00,000 for the three-story offices (92 square meters) owned by ○○○○○-dong ○○○○○○○, ○○○-dong, ○○○○, and the Plaintiff used it as an office.

(C) However, around November 26, 2003, the Plaintiff received a request from Gangnam-gu, ○○○○○○, etc. to change the name of the lessee in the name of the company under the above lease contract in order to move the name of the lessee to the business registration domicile of ○○○○○○○○○○○○, etc., and let PostalO and ○○○○○○○○○○, Inc., the above lease agreement on November 14, 2003 and the object of lease, deposit money for lease, monthly rent, etc. The lease term is the same, but the lessee changed the name of ○○○○, Inc.

(D) On November 26, 2003, as the representative of ○○○○○○○○○○, the Plaintiff paid the lease deposit amount of KRW 60,000,000 under the above lease agreement with the Do○○○○○○○○○○ on November 26, 2003. Since the Do○○○○○○ and the Do○○○○○○○○○○ established a lease agreement in the name of the company due to the relocation of the business place of ○○○○○

(4) After that, the Plaintiff acquired the instant shares of the non-party company established and operated by GangwonO, etc. for the purpose of securing KRW 60,000,000 for the above loans to Gangwon○, etc.

(5) Details of the transfer of 2,500 shares of the instant shares

(A) Around April 2004, when the Plaintiff demanded the return of the above loan, the GangwonO et al. offered 25 million won out of the above loan to the Plaintiff on May 7, 2004 as a collateral for a promissory note that ○○○ Co., Ltd. used to transfer 25 million won out of the shares of this case to ○○○, and the remainder of 35 million won out of the loan was proposed to be repaid until May 30 of the same year.

(B) On May 7, 2004, the Plaintiff drafted a “stock transfer agreement” with both ○○ and 2,500 shares out of the shares of this case to ○○○○○○, a sum of KRW 10,000 per share, KRW 25,00,000 per share, and both ○○○ on the same day made a endorsement and transfer of a promissory note with the face value of KRW 25,000,000 issued by ○○○ Company on April 30, 2004, and the due date of December 10, 204 to ○○○○○○○ on March 31, 2005, the Plaintiff reported the amount of KRW 2,50 out of the shares of this case to ○○○ on May 7, 200, KRW 1000, KRW 5000, KRW 5,005, KRW 37,2005.

(6) The developments leading up to the transfer of 4,000 shares out of the shares of this case

(A) On October 1, 2004, 2004, the Plaintiff agreed to transfer 4,000 shares out of the shares of this case to the ○○○○○, etc., a representative of the Plaintiff, as a result of partial payment in lieu of the above loan, such as where the said promissory note was not discounted. The Plaintiff agreed to transfer 4,00 shares out of the shares of this case to the ○○○ and Cho○○○.

(B) In accordance with the above agreement, on October 1, 2004, the Plaintiff drafted a "contract on the transfer of shares" with the content that 2,000 shares out of the shares of this case shall be transferred to ○○○ and ○○○○○ for each of 10,000 won per share to 10,000 won per share, respectively. On the same day, the Plaintiff transferred 4,000 shares out of the shares of this case to ○○ and ○○○○ and ○○○○ for each of the shares of this case to ○○○ and ○○○○ for the set-off of the sale price of 2,00 shares out of the shares of this case transferred to ○○ on May 7, 2004 and the set-off of the sale price of 2,00 shares out of the shares of this case to ○○ and ○○○ for each of the shares of this case.

Then, on June 14, 2005, the Plaintiff reported that on October 1, 2004, the Plaintiff transferred 2,000 shares of the instant shares to ○○○ and ○○○○○, each of the instant shares to KRW 20,000,000, respectively, and paid KRW 220,000 in total, securities transaction tax on June 15, 2005.

(7) On October 12, 2004, the non-party company transferred the ownership of the instant passenger car to ○○, Inc.

(8) The process of collecting loan claims

(A) On October 25, 2004, the Plaintiff requested a refund of KRW 60,000,000 to the original contractor, since the lease agreement concluded with the Ma○○○○○○○○○○○○ on November 14, 2003 expired on November 25, 2004.

(B) On November 3, 2004, the Plaintiff, as ○○○○○○○○○○○○○○○○○○, a district court 2004Kadan22454 on November 3, 200, provisionally seized the above claim for the return of the lease deposit against the above company’s UOO in order to preserve the claim amounting to KRW 60,000,000,000, and thereafter, received reimbursement of KRW 34,896,460 out of the lease deposit upon the provisional seizure

D. Determination

(1) According to Article 39(1)2 of the former Framework Act on National Taxes (amended by Act No. 7930 of Apr. 28, 2006), in order to impose tax liability on a secondary taxpayer for the delinquent national tax of a corporation, an oligopolistic shareholder who owns more than 51% of the total number of outstanding stocks of a corporation as of the date when the tax liability under Article 21(2) of the Framework Act on National Taxes is established and who actually exercises a right to the relevant stocks or actually controls the management

(2) Therefore, as to whether the Plaintiff is an oligopolistic shareholder holding 51% or more of the shares issued by the non-party company as of January 28, 2004, the Plaintiff held 6,500 shares out of 10,00 shares issued by the non-party company as of January 28, 2004 (65% of the shares held by the non-party company as of May 7, 2004). As of June 30, 2004, the Plaintiff transferred 2,50 shares out of 2,50 shares to both ○○○ and held only 4,00 shares issued by the non-party company as of June 30, 204 (40% of the shares issued by the non-party company as of June 30, 2004, and the Plaintiff exceeded the status of oligopolistic shareholder as of June 30, 204. Furthermore, in light of the aforementioned circumstances, the Plaintiff did not actually exercise its rights to the shares of the non-party company at the time of this case.

3. Conclusion

Therefore, the plaintiff's claim of this case is with merit, and it is decided as per Disposition by admitting it.