Criteria for determining whether a secondary taxpayer is a secondary taxpayer

In order to have a shareholder of a corporation bear the secondary tax liability pursuant to Article 39 subparagraph 2 of the Framework Act on National Taxes, the person who is an oligopolistic shareholder and needs to be in a position to substantially control the operation of the corporation, and on the sole basis of the fact that the shareholder list of the corporation is registered as a shareholder in the shareholder list of the corporation, the person cannot be subject to the secondary

Article 39 subparagraph 2 of the Framework Act on National Taxes

Supreme Court Decision 83Nu272 Delivered on September 27, 1983

[Judgment of the court below]

The Director of the Korean Tax Office

Seoul High Court Decision 83Gu866 delivered on July 6, 1984

The judgment below is reversed and the case is remanded to Seoul High Court.

The defendant's grounds of appeal are examined.

In order to impose secondary tax liability on the shareholders of a corporation under Article 39 subparagraph 2 of the Framework Act on National Taxes, it requires that the oligopolistic shareholders be in a position to substantially control the operation of the corporation, and only the reasons registered as shareholders in the register of shareholders in the form of corporate shareholders is the case of party members (see Supreme Court Decision 83Nu272 delivered on September 27, 1983). The court below, based on the macro-economic evidence, acknowledged that the non-party Central Fixed Industrial Company was a substantial one shareholder established with capital of 6 million won (6 million won per share issued, 600 shares, 1,000 won per share) for the purpose of its determination, and that the shares issued by the above non-party through capital increase were also combined with 2,00,000 shares issued by the above non-party, 75,000, 65, 600, and 1,000 shares of the Plaintiff’s new shares acquired from 25,000 shares or 97,00 shares of the Plaintiff’s shares.

However, according to the records of Nos. 1 (Designation of Taxpayer), 4, 5 (Register of Shareholders), 6 (Register of Shareholders), 7, and 8 (Register of Income Tax) that did not reject the lower court's rejection, the Plaintiff entered the shareholder movement statement and register of shareholders of the above company as of December 31, 1981 and paid by the time limit of dividend income in 1979 and 1980 as of December 31, 1981 while increasing the number of shareholders as of December 31, 1981. Among evidence employed by the lower court, the Plaintiff was merely a shareholder of the above company Nos. 3-2 (Written Decision) and 9 (Register of Copies), and it cannot be concluded that the Plaintiff did not have any influence on the Plaintiff's acquisition of the above shares as a shareholder of the above company No. 1 and No. 2.

Therefore, the judgment of the court below is reversed, and the case is remanded to the court below for further proceedings consistent with this Opinion. It is so decided as per Disposition by the assent of all participating judges.

Justices Jeong Jong-tae (Presiding Justice)