early 2012 Heavy1461 (Law No. 112.31. 201)

The plaintiffs are entitled to exercise shareholders' rights to the shares held by the date on which the tax liability becomes effective and are designated as the secondary taxpayer.

It is reasonable to view that the Plaintiff and the Plaintiff’s wife maintained the status to exercise shareholders’ rights to the shares held by the date when the liability for value-added tax was established, and it is insufficient to view that the transfer of shares was completed prior to the date when the liability for value-added tax was established or the Plaintiff’s wife’s wrongful use of the shareholder’s name, as alleged in the Plaintiff’s assertion

Article 39 of the Framework Act on National Taxes

2012Guhap3021 Revocation of Disposition of Imposition of Value-Added Tax

ThisAAA

Head of the Office of Government

April 16, 2013

May 14, 2013

1. Of the instant lawsuit, the part regarding the claim for imposition of additional 000 won as of November 7, 201 against the Appointeds YangCC is dismissed.

2. The plaintiff (Appointed)'s remaining claims are dismissed.

3. The costs of lawsuit shall be borne by the plaintiff (appointed party).

The Defendant’s imposition of value-added tax of KRW 000 on October 14, 201 against the Plaintiff (Appointed Party) and the imposition of value-added tax of KRW 000 on the same day on both the designated parties (including additional dues) and the imposition of value-added tax of KRW 000 on the designated parties on November 7, 201 and the imposition of additional tax of KRW 000 on each of the designated parties on November 7, 201 (in the case of the Director, each of the above dispositions are written on October 21, 201, which seems to be written in writing).

1. Details of the disposition;

A. On January 13, 201, Nonparty BB Development Co., Ltd. (hereinafter “Nonindicted Company”) filed a revised return with the first value-added tax amount of KRW 000 in 2008, which shall be additionally paid, but did not pay it. On August 1, 2011, the Defendant notified Nonparty Company of the correction of the value-added tax plus the additional tax (hereinafter “value-added tax”).

B. After that, the Defendant determined that the non-party company could not pay the value-added tax of this case in its own ability, and notified each of the designated parties of the payment of 000 won [the amount equivalent to 40% of the shares ratio of the Plaintiff (Appointed Party) out of the total sum of the value-added tax of this case and the additional charges for the value-added tax amounting to 000 won (the amount equivalent to 25% of the shares ratio of the designated parties among the total sum of the value-added tax of this case and the additional charges for the value-added tax of this case) by deeming the non-party company to be an oligopolistic shareholder of the Plaintiff (Appointed Party) and the second taxpayer holding 25% of the shares of the non-party company as of October 14, 201 as the oligopolistic shareholder of the above company.]

C. On November 7, 2011, the Defendant urged the Selection Committee to pay KRW 0000,000,000, plus the amount already determined, to be paid by March 31, 201, and notified that if the Defendant did not pay the amount by March 31, 2012, additional dues should be additionally collected by not later than one month after the payment period (hereinafter referred to as “the estimated amount of the instant additional dues”) (in this case, the total amount shall be KRW 000,000, written in the complaint).

D. Accordingly, the Plaintiff (Appointeds) and the Selecteds filed a request for a trial with the Tax Tribunal on March 12, 2012 following the filing of an objection on November 24, 2011, but was dismissed on May 31, 2012.

2. We examine the legality of this part of the lawsuit in this case, ex officio as to the part seeking the revocation of the disposition imposing the additional dues of this case. The additional dues of Article 21 of the National Tax Collection Act are the kind of incidental dues imposed in the meaning of interest for arrears if national taxes are not paid by the due date, and if national taxes are not paid by the due date without the due date for payment by the due date without the due date by the due date by the due date by Article 21 of the same Act, it is naturally established under the provisions of Article 21 of the same Act, and it is possible to initiate the procedure for collecting the additional dues by urging the payment by the due date. If the payment demand is unfair or procedural defects, it is possible to object to the revocation disposition by the due date by the tax authority, but it is not possible to do any act to determine the additional dues of 00 won or more, and if the tax authority fails to pay by the due date by 100 months after the due date, it is not possible to impose the additional dues of 100 won or more (see Supreme Court Decision 2010Du13131, 20.13131, respectively.

3. Whether the instant disposition is lawful

A. The plaintiff (appointed)'s assertion

On December 17, 2003, the plaintiff (Appointed) was assigned to the representative director of the non-party company, and the SelectionsCC did not resign from the office of auditor of the non-party company on February 18, 2004, and did not participate in all the management of the above company, and all shares were transferred to E, the representative director of the above company, and in return, they were transferred to the apartment located in the non-party government city. Accordingly, the plaintiff (Appointed) and the SelectionsCC did not fall under the de facto control over the management of the non-party company, and in particular, it was merely the stolen use of the shareholder's name in the case of the SelectionsCC, and thus, the second tax liability is not imposed.

B. Relevant statutes

The entries in the attached Table-related statutes shall be as follows.

C. Determination

1) Article 39(1)2 (a) of the former Framework Act on National Taxes (amended by Act No. 9263, Dec. 26, 2008; hereinafter the same) provides that "any person who actually exercises the rights to stocks in excess of 50/100 of the total number of issued stocks of the relevant corporation" among oligopolistic shareholders shall be subject to secondary tax liability. The exercise of rights to stocks in excess of 50/100 referred to in the above item (a) does not necessarily require that the person must exercise his/her rights in reality, and it is sufficient that the person has a status to exercise his/her rights to the stocks in excess of 50/10 as of the date on which the tax liability is established (see, e.g., Supreme Court Decisions 2006Du19105, Jan. 10, 200; 2001Du5354, Jul. 8, 2003). 207; and if so, it does not affect the above list of oligopolistic shareholders.

2) In light of the above legal principles, the entire purport of the pleading is taken into account in each description of the instant case, Gap evidence Nos. 1 through 3, and evidence Nos. 14 through 16 (including household numbers), and the following circumstances are recognized.

① The Plaintiff (Appointed) and the Selected both parties are married with each other, and Lee E-E, the representative director of the Plaintiff (Appointed Party) and the non-party company, are siblings. The Plaintiff (Appointed Party) was in office as a director of the above company since the incorporation of the non-party company, and then became the representative director of the above company around May 30, 1998, and the Appointed was appointed as the auditor of the above company at that time. Thereafter, on December 17, 2003, the Plaintiff (Appointed Party) transferred the representative director of the non-party company to the same E-E, and the Appointed retired from the office of auditor of the above company on February 18, 2004. In light of the relationship between the Plaintiff (Appointed Party) and the non-party, both parties (Appointed Parties) and the Selected Parties will continue to exercise their influence over the non-party company even after the said company was dismissed from the office of officer of the non-party company.

② On January 7, 2005, the Plaintiff (Appointed Party) alleged that he/she transferred the shares owned to EE and received 'O 0000000' from the Government of the Republic of Korea on January 7, 2005, but the date of sale and purchase under the above apartment sales contract and the price therefor are not in accord with the transfer contract of shares issued by the Plaintiff (Appointed Party) on June 30, 2006. Furthermore, the above apartment was the property of the non-party company, not the private property of EE.

③ It is difficult to understand that, even though various procedures asserted by the Plaintiff (Appointed) including the resolution of the board of directors regarding the transfer of stocks held by the Plaintiff (Appointed Party) and the Appointeds and the preparation of a stock transfer agreement, the report on the change of stocks was omitted by June 2009.

④ The mere fact that the Plaintiff (Appointed) had been engaged in other business from December 6, 2005, or the details on which benefits were paid to the SelectionsCC is not discovered, and that the Plaintiff (Appointeds) and the SelectionsCC already resigned from office as executive officers of the non-party company before the establishment date of the instant value-added tax liability, it cannot be readily concluded that the Plaintiff (Appointeds) and the Selections Co., Ltd had no possibility of exercising the right of shareholders of the non-party company.

In full view of this, it is reasonable to view that the Plaintiff (Appointed) and the Appointed maintained the status to exercise shareholder rights regarding the shares held by the date on which the VAT liability is established, and considering all the evidence submitted by the Plaintiff (Appointed Party) as a whole, it is insufficient to view that the transfer of shares has already been completed prior to the date on which the VAT liability is established, or that the SelectionCC has taken advantage of the shareholder’s name, and there is no other evidence to acknowledge it. Accordingly, the Plaintiff (Appointed Party)’s assertion is without merit.

4. Conclusion

Therefore, among the lawsuit of this case by the plaintiff (appointed party), the part on the plaintiff's claim for revocation of disposition with 000 won as to the amount of additional dues of this case is unlawful, and the remaining claim by the plaintiff (Appointed party) is dismissed as it is without merit. It is so decided as per Disposition.