Cho Jae-2016-China-2821 ( December 29, 2016)

If only a second tax liability is a stockholder, the second tax liability may not be imposed.

A person who has no ability to acquire shares at the time of the acquisition of the name of shares, but actually paid the shares, such as the occupation, age, academic background, etc., is another person, and it seems that he does not participate in the actual management of the company at the time of the acquisition of the name of shares

Article 39 (Secondary Liability to Pay Taxes by Investor)

2017Guhap50322 Revocation of revocation of designation as a person liable for secondary tax payment.

AA, BB

CC director of the tax office

October 27, 2017

December 22, 2017

1. On May 4, 2016, each of the dispositions imposed by the Defendant against the Plaintiffs as indicated in the separate sheet shall be revoked.

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;

(a) AD farming association corporation (hereinafter referred to as a "corporation in arrears") shall be a corporation established on August 25, 2008 and engaged in cultivating, producing, processing, or selling agricultural products, and the details of investments by a delinquent corporation shall be as follows:

B. On May 4, 2016, the Defendant, on the ground that the Plaintiffs are oligopolistic shareholders, designated the Plaintiffs as the secondary taxpayer by the delinquent corporation, and imposed each disposition as shown in attached Table 1 against the Plaintiffs by dividing the amount of corporate tax, value-added tax, and business income tax in arrears from 2010 to 2014 according to the Plaintiffs’ shareholding ratio (hereinafter “each disposition of this case”).

C. The Plaintiffs filed an appeal with the Tax Tribunal on July 12, 2016, but received a decision of dismissal on December 29, 2016.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1, 2, 4, 8, Eul evidence Nos. 1 and 2, the purport of the whole pleadings

2. Whether each of the dispositions of this case is legitimate

A. The plaintiffs' assertion

The plaintiffs lent the name, not the actual shareholders of the delinquent corporation, and since they are not farmers, they do not have voting rights as associate members of the delinquent corporation. Therefore, each of the dispositions of this case based on the premise that the plaintiffs are the secondary taxpayers is unlawful.

B. Relevant statutes

Attached Form 2 shall be as shown in attached Table 2.

C. Determination

Article 39 (2) of the Framework Act on National Taxes, Article 20 (2) and Article 18-2 of the Enforcement Decree of the Framework Act on National Taxes impose secondary tax liability on shareholders or their specially related persons (relatives, economic relations, and business governance relations), who hold more than 50/100 of the total number of outstanding stocks of the relevant corporation and exercise substantial rights thereto (hereinafter referred to as "major shareholders").

The issue of whether a person is an oligopolistic shareholder is a member of a group of stocks owned in excess of 50/100 in a special relationship. The fact of ownership of stocks is sufficient to prove it by the tax authority through the data such as the list of stockholders, the statement of stock transfer or the register of corporate register, etc. However, even if it appears to be a single shareholder in light of the above data, if there are circumstances, such as the illegal use of a shareholder’s name or registration in a name other than the name of the real owner, the actual shareholder cannot be deemed to be a shareholder only under such name (see Supreme Court Decision 2008Du983, Sept. 11, 2008)

In light of the following circumstances recognized by the testimony of witness EE, Gap evidence Nos. 4, 5, 6, 7 12, 13, 16, Eul evidence Nos. 3 and 4, and the purport of the whole pleadings, the plaintiffs are deemed to be merely the next shareholder of the delinquent corporation. Thus, the plaintiffs are not deemed to be an oligopolistic shareholder who bears the second liability to pay taxes against the delinquent corporation. Therefore, each of the dispositions of this case on the different premise is unlawful without any need to further examine the remaining arguments of the plaintiffs.

① According to the minutes of the inaugural general meeting (Evidence 12) of the defaulted corporation, Plaintiff CCC invested 500 shares, 5,000,000 shares at the time of establishment of the defaulted corporation, and Plaintiff CB acquired 500 shares, which were owned by Plaintiff CB on September 201, 201, as 50 shares, 3,500 shares, and 35,000,000 shares, which were owned by Plaintiff CB, were owned by 20,000 shares, and 20,000 shares, were owned by Plaintiff CB at the time of 20,000 shares, and 20,000 shares were owned by Plaintiff CB. 5,00 shares, 3,50,000 shares, which were owned by Plaintiff CB, and 25,000 shares were owned by Plaintiff CB, 50,000 shares, and 20,000 shares were owned by the Plaintiff under the former Framework Act on Agriculture and Fisheries.

② The Company in arrears received product sales revenue from the EE’s account (CF 00000), and deposited KRW 2,632,820,000 among them to the account in the name of Plaintiff BB (CF 11111). In other words, the Company deposited KRW 1,535,240,000 among them to the account in the name of Plaintiff CCC (CF 22222). However, EE stated in this Act that FF used a passbook in the name of the Plaintiffs, a family member while operating the Company in arrears with bad credit standing, and the Defendant also accused the FF as a violation of the Punishment of Tax Evaders Act on the ground that the account in the name of the said Plaintiffs was the borrowed account of FF. Therefore, it is difficult for the Plaintiffs to deem that the Plaintiffs received dividends, etc. from the Company in arrears.

③ According to the receipt for tax withholding for wage and salary income (Evidence No. 4), Plaintiff CCC stated that the delinquent company received wage and salary income from 2012 to 2014. However, in this court, EE stated that the Plaintiffs did not have any business related to the delinquent corporation, and according to the account transaction details (Evidence No. 16) of Plaintiff CCC, when monthly wage is deposited from the delinquent corporation to the account in the name of Plaintiff CCC (Agricultural 2222222), the full amount was immediately transferred to another passbook in the name of EE and CCC. Therefore, it is difficult to view that Plaintiff CCC was an employee of the delinquent corporation.

3. Conclusion

If so, all of the plaintiffs' claims are reasonable, it is decided as per Disposition by admitting all of them.