The legitimacy of the assertion that the disposition of bonus is merely a representative under the name of the simple title

No evidence exists that the plaintiff actually owns shares in light of the circumstances registered as representative director in the corporate register, status, name, monthly salary receipt status, health insurance and national pension payment status, etc. in the company of the plaintiff, etc.

Article 14 of the Framework Act on National Taxes

Article 16 of the Framework Act on National Taxes

1. The disposition of imposition of global income tax of KRW 49,878,870 on the Plaintiff on March 10, 2006 shall be revoked.

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

The same shall apply to the order.

1. Details of the disposition of the case

The following facts are not disputed between the parties, or acknowledged by considering the whole purport of the pleadings in each entry of Gap evidence 1-2, Gap evidence 2-3, Eul evidence 1-3, and Eul evidence 3.

A. The ○○ Comprehensive Construction Co., Ltd. (hereinafter referred to as “○○ Comprehensive Construction”) was registered as the representative director on the registry of the said corporation (from December 21, 2000 to June 7, 2001) and the representative on business registration (from April 4, 2001 to June 12, 2001).

B. Around November 2004, the director of the distribution tax office confirmed that the ○○ General Construction processed the advance payment of KRW 537,400,000 in the year 2001 as a result of the corporate tax investigation on the ○○ General Construction, and confirmed that the 537,400,000 won was included in the calculation of earnings, and then disposed of KRW 116,313,973 distributed proportionally based on the Plaintiff’s representative’s representative’s tenure of office, and notified the Plaintiff of the change in the amount of income on February 21, 2005.

C. On March 10, 2006, the Defendant notified the Plaintiff of the above data from the head of the distribution tax office, imposed a disposition imposing global income tax of KRW 49,878,870 (including additional tax) on the Plaintiff for the year 2001 (hereinafter “instant disposition”).

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The Plaintiff asserts that the instant disposition should be revoked as it is unlawful on the following grounds.

(1) On December 20, 200, the Plaintiff entered the ○○ General Construction, but allowed the registration as a representative director on the corporate register upon request of Kim○, the actual representative of ○○ General Construction, and was not the actual representative director of the said company. Thus, the instant disposition is against the principle of substantial taxation.

(2) The instant disposition, which deemed that the advance payment of KRW 537,400,00 was processed solely on the confirmation document of Kim○, a representative director of the ○○ General Construction at the time of the tax investigation by the director of the distribution office, is contrary to the underlying taxation principle.

B. Relevant statutes

Article 14 of the Framework Act on National Taxes

Article 16 of the Framework Act on National Taxes

Article 67 of the Corporate Tax Act

Article 106 of the Enforcement Decree of Corporate Tax Act

C. Determination

(1) The system, which is recognized as a representative under Article 106 (1) of the Enforcement Decree of the Corporate Tax Act, is not based on the facts that such income has accrued to the representative, but rather requires that certain facts recognized as such in order to prevent an unfair act under tax law by a corporation be considered as a bonus to a unconditional representative regardless of their substance. In such a case, the representative of the corporation subject to the bonus disposition shall be interpreted strictly (see Supreme Court Decision 93Nu176, Mar. 8, 1994). Thus, such representative shall be a representative operating the company in substance, and even if the representative or representative of the company is registered in the corporate register or business registration, if such income is not actually operated, it shall not be imposed on the representative director or representative under the name of the company.

(2) According to the facts that ○○○○○ Construction Co., Ltd. (hereinafter “○○○○○ Construction Co., Ltd.”), the Plaintiff was listed in the 20-year old 2-old 2-based ○○○○○○ Construction Co., Ltd. (hereinafter “○○○○ Construction Co., Ltd.”)’s 1-year 2-old 2-year 1-old 2-old 2-year 1-old 2-old 2-old 2-old 1-old 2-old 2-old 2-old 1-old 2-old 2-old 3-old 1-year 2-old 2-old 2-old 3-old 2-old 1-year 3-old 2-old 2-old 1-year 3-old 2001-old 2000 -

(3) Comprehensively taking account of the aforementioned legal principles and circumstances under Paragraph (1) and Paragraph (2) above, the instant disposition is imposed on the Plaintiff, who is merely a representative director (representative) and is in violation of the principle of substantial taxation, and thus, the instant disposition is unlawful and revoked without further examination.

3. Conclusion

Therefore, the plaintiff shall accept the claim of this case on the grounds of its reasoning, and it is so decided as per Disposition.