Plaintiff (Law Firm Chungcheong, Attorneys Choi Dong-dong et al., Counsel for the plaintiff-appellant)

port of destination

August 14, 2014

1. The plaintiff's claim is dismissed.

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

The Defendant’s disposition of imposition of KRW 532,98,140 against the Plaintiff on September 14, 2012 is revoked.

1. Details of the disposition;

A. The Co., Ltd. (hereinafter “STX construction”) is a company that was seeking to carry out an apartment building construction project (hereinafter “instant project”) built on the land of 27 parcels outside the Heung-gu ( Address omitted) and Gosi-si (hereinafter “STX construction”) and the ETX construction company (hereinafter “STX construction”) is a company that was seeking to carry out the said project.

B. Around January 1, 2009, Nonparty Company issued 30,000 common shares, and the status of shares held was 15,000 shares (50%), Nonparty 1’s 9,00 shares (30%), and Nonparty 2’s 6,00 shares (20%).

C. On December 18, 2009, the Plaintiff entered into a contract to acquire 9,000 shares of the non-party company from the non-party 1 as KRW 9,000, and 6,000 shares of the non-party company from the non-party 2 as KRW 6,000 (Evidence 4-1, 2, 5-1, 5-2, hereinafter “instant stock acquisition contract”). The Plaintiff entered the number of shares of the Plaintiff in the list of shareholders and the statement of changes in shares of the non-party company of this case as KRW 30,00 (100%).

D. On September 14, 2012, the Defendant imposed KRW 484,534,690,690, totaling KRW 532,988,140, and KRW 532,98,140, on the ground that the Plaintiff became an oligopolistic shareholder by acquiring the shares of the non-party company from the non-party 1 and the non-party 2 (wholly amended by Act No. 1021, Mar. 31, 2010; hereinafter the “former Local Tax Act”), based on Article 105(6) of the former Local Tax Act (wholly amended by Act No. 1021, Mar. 31, 2010; hereinafter the “instant disposition”).

[Reasons for Recognition] Facts without dispute, Gap evidence 4-1, 2, Gap evidence 5-1, 2, Gap evidence 9, Eul evidence 3, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

1) When the approval of the instant project was delayed and the non-party company transferred the instant project implementation right to STX Construction to STX Construction, the Plaintiff acquired shares owned by the non-party 1 and the non-party 2 formally in the course of business convenience upon the request of the STX Construction. In fact, it is unlawful for the Plaintiff to take the instant disposition on the premise that the Plaintiff was an oligopolistic shareholder, even though

2) Even if the Plaintiff acquired the shares owned by Nonparty 1 and Nonparty 2, in order to become an oligopolistic shareholder under Article 22 subparag. 2 of the former Local Tax Act, the oligopolistic shareholder must be in a position to substantially control the operation of the corporation. However, on March 30, 2010, when four months have passed since the date when the Plaintiff entered into a share sale contract with Nonparty 1 and Nonparty 2 (the date when December 18, 2009), the Plaintiff reported the acquisition to the head of the regional tax office, and the Plaintiff did not have all participated in the appointment of the representative director, etc. of the non-party company and the board of directors, etc. after transferring the shares of the non-party company to the STX Construction, the Plaintiff cannot be deemed to have been in a position to substantially control the operation of the non-party company. Therefore, it cannot be deemed to have become an oligopolistic shareholder.

B. Relevant statutes

Attached Form "Related Acts and subordinate statutes" shall be as stated.

C. Determination on the first argument

1) The acquisition of a corporation’s stocks referred to in Article 105(6) of the Local Tax Act, which provides for the liability to pay acquisition tax upon becoming an oligopolistic stockholder, includes all cases of acquisition of stocks by the form of transfer of ownership, regardless of whether a person who acquires stocks acquires ownership in substance, and in this case, acquisition tax imposed on an oligopolistic stockholder is naturally arising from the existence of taxation requirements that became an oligopolistic stockholder by acquiring stocks (see, e.g., Supreme Court Decision 2003Du9008, Oct. 15, 2004). The fact of ownership of stocks is proved by data such as a list of stockholders, a list of stockholders, a statement of stock transfer, a list of corporate register, etc. by the tax authority. However, even if a single stockholder appears to be a single stockholder in light of this data, if there are circumstances such that the actual stockholder was stolen from the name of the stockholder, or registered in a name other than the name of the real owner, but the title holder who asserts that he is not a stockholder should prove (see Supreme Court Decision 94Nu622222, 12, 199, 1994.

2) On December 18, 2009, the Plaintiff entered into a contract with Nonparty 1 to acquire 9,000 shares of the company from Nonparty 2, and 6,000 shares of the company from Nonparty 2; according to the specification of changes in the shares and the statement of transfer of shares and equity shares (No. 3) and the register of shareholders as of December 31, 2009, the Plaintiff entered the fact that the Plaintiff acquired the shares of the company from Nonparty 1 and Nonparty 2 on December 18, 2009 and acquired the entire shares of the company from Nonparty 1 and Nonparty 2 in its name for business convenience; however, according to the witness’s testimony on the fact that the Plaintiff acquired shares of Nonparty 1 and Nonparty 2 and did not actually acquire them, it is insufficient to acknowledge that the Plaintiff did not receive all shares from Nonparty 2 under the name of Nonparty 1 and Nonparty 2, and there is no other evidence to recognize that the Plaintiff received shares from Nonparty 2 as the entire name of the Plaintiff and Nonparty 2.

D. Judgment on the second argument

1) In order to impose acquisition tax liability on a person who has become an oligopolistic stockholder by deeming that he/she has acquired goods subject to taxation of acquisition tax, it is required that he/she not only meets the formal requirements under Article 22 subparagraph 2 of the same Act, but also that the relevant oligopolistic stockholder is in a position to substantially control the operation of the corporation (see Supreme Court Decisions 78Nu33, Dec. 26, 1979; 92Nu1138, May 24, 1994, etc.).

2) In full view of the following circumstances, it is reasonable to deem that the Plaintiff was in a position to substantially control the operation of the non-party company, and the Plaintiff’s assertion as to this part of the evidence and evidence Nos. 3-1, 2, and 7-1 through 3, comprehensively considering the purport of the entire pleadings.

A) Since the Plaintiff stated that the changes in the stocks, etc. of Nonparty Company, details of the transfer of stocks and investment shares, and the list of shareholders, the Plaintiff acquired the entire stocks of Nonparty Company, the Plaintiff may be deemed to have been in a position of de facto controlling the operation as a single shareholder of Nonparty Company, even though it was very short after December 18, 209.

B) The fact that the non-party company reported the acquisition of the Plaintiff’s stocks to the director of the regional tax office on March 30, 2010 is merely a report within three months from the end of the month to which the end of the business year belongs pursuant to Article 60(1) of the Corporate Tax Act, and it is difficult to view that the Plaintiff is in a position to substantially control the non-party company only after the report was filed.

C) Article 105(6) of the Local Tax Act merely requires “overpoint shareholder” as a taxpayer for acquisition tax, and does not require “a person operating a corporation substantially among the overpoint shareholder,” which is the secondary taxpayer under Article 22 subparag. 2 of the Local Tax Act, and thus, the oligopolistic shareholder liable for acquisition tax is deemed to have satisfied the status that substantially controls the operation of the company, i.e., the status that is a shareholder holding more than a certain percentage of shares. Furthermore, the “whether a company is operating a company as an actual manager” should be deemed to have no impact on the status.

3. Conclusion

Therefore, the plaintiff's claim is dismissed as it is without merit. It is so decided as per Disposition.

[Attachment]

Judges Lee Heung-nam (Presiding Judge)