Cho Jae-2016-Mining-1254 ( May 27, 2016)

The disposition of income as bonus to the representative director on the corporate register is a political party.

A disposition to the representative director on the corporate register who has been registered as the representative director on the corporate register but is not proved by the assertion as to circumstances other than the actual representative is legitimate as a bonus.

Article 106 of the former Enforcement Decree of the Corporate Tax Act

2016Guhap12103 global income and revocation of such disposition

AA

a) the Director of the Tax Office

December 22, 2016

January 19, 2017

1. The plaintiff's claim is dismissed.

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

Cheong-gu Office

The tax disposition rendered by the Defendant against the Plaintiff on July 1, 2015 shall be revoked.

1. Details of the disposition;

A. From October 10, 2008 to October 10, 201, the Plaintiff was registered as the representative director of bbb Construction Co., Ltd. (hereinafter “instant company”).

B. As a result of the investigation into the part of the value-added tax of the instant company from November 26, 2013 to December 5, 2013, the head of a tax office confirmed that the instant company processed and purchased two copies of the tax invoice (including the supply price of KRW 00,000,000) from CC during the second period of 2010, and included the amount of KRW 00,000,000 (including value-added tax) in the gross income of the instant company, and notified the changes in the amount of income by disposing of the same amount as the bonus to the Plaintiff as a bonus to the Plaintiff.

C. Accordingly, on July 1, 2015, the Defendant determined and notified the Plaintiff’s global income tax of KRW 00,000,000,000 as global income tax for the year 2010 (hereinafter “instant disposition”).

D. The Plaintiff appealed and filed an appeal with the Tax Tribunal on February 29, 2016, but the Tax Tribunal dismissed the Plaintiff’s appeal on May 27, 2016.

[Ground of recognition] Unsatisfy, Gap evidence 1, 2, Eul evidence 1, 2 and 3, the purport of the whole pleadings

2. Whether the disposition is lawful;

A. The plaintiff's assertion

The plaintiff is merely a representative director in the name of the company of this case and actually worked as the field director at the company of this case, and as a de facto manager and taxpayer BB, the disposition of this case is unlawful.

(b) Related statutes;

It is as shown in the attached Table related statutes.

C. Determination

1) Article 106(1) of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 23589, Feb. 2, 2012; hereinafter referred to as the "former Enforcement Decree of the Corporate Tax Act") does not provide the representative with the basis of the fact that such income has accrued to the representative, but provides that certain facts that can be recognized as such act in order to prevent unfair conduct under the tax law by a corporation shall be deemed as a bonus to a de facto representative, regardless of their substance. Thus, the representative shall be a de facto representative operating the company. Thus, even if a person is registered as a representative on the corporate register of the company, if the company did not actually operate the company, the income of which the company is missing shall not be imposed (see Supreme Court Decision 87Nu1238, Apr. 12, 198).

However, a person who actually exercises the authority as a representative director and actually takes part in the management falls under the representative subject to a disposition by recognizing the representative (see Supreme Court Decision 2005Du8030, Jan. 18, 2008). The fact that the person constitutes the representative director of a corporation who is subject to disposition by recognizing the amount of income is proved by the data, such as the certified transcript of corporate register, etc. The fact that the person constitutes the representative director of a corporation who is subject to disposition by recognizing the amount of income is proved by the data, such as the certified transcript of corporate register, and, notwithstanding being registered as the representative director on the corporate register, the person who is not the actual representative must prove the

2) In light of the above legal principles, comprehensively taking account of the following circumstances acknowledged by the Health Team, the above facts and evidence as to the instant case, and the statements (including additional numbers) Nos. 4 through 7, the entire purport of the pleadings, it is insufficient to recognize that the Plaintiff was merely a representative director under the name of the instant company at the time of the business year 2010, and there is no other evidence to acknowledge that the Plaintiff did not exercise the substantial power of representation. Accordingly, the Plaintiff’s assertion is without merit.

A) From October 10, 2008 to October 10, 201, the Plaintiff was recorded as the representative director of the instant company as well as 00% (0,000 shares) of the shares issued by the said company.

B) According to the company’s wage payment record from around 2008 to 2010, the Plaintiff received the payment amount of KRW 00,000,000 (= KRW 00,000,000 ( KRW 2008) + KRW 00,000,000 ( KRW 2009) + KRW 00,000,000 ( KRW 200,000)) from the company of this case, but BB did not receive the payment amount from the company of this case for the same period.

C) Also, according to the details of passbook transactions (Account Number 000-000-00000) of the instant company and the details of passbook transactions (Account Number 000-0000-0000-00000) by inside directors BB, there exists a financial transaction with the Plaintiff between 2010 and 2011, but there is no financial transaction with BB with the Plaintiff.

D) According to the Certificate (Evidence No. 5), on September 9, 201, the Plaintiff, as the representative director of the instant company, prepared a statement of performance to DD Co., Ltd. as a joint guarantor, and at the time BB signed as Dd Co., Ltd., FF, GG, and BB. Each fact confirmation (Evidence No. 3, 4, and Evidence No. 8-1) of Dd Co., Ltd., FF, GG, and BB is insufficient to recognize B B as the actual representative of the instant company in 2010 (two-year period), which is the year to which the instant disposition belongs.

In addition, the purport that the actual operator of the instant company is BB around 2007, around 2009, or around July 2013, is merely that the instant company’s actual operator is BB, and is irrelevant to the 2010 (two-year) year to which the instant disposition belongs.

E) Meanwhile, the proviso of Article 106 (1) 1 of the former Enforcement Decree of the Corporate Tax Act is deemed to have been reverted to the representative in cases where the accrual of the amount out of the company is unclear. In light of the fact that, in cases where an officer who is not a minority shareholder and an officer who is not a shareholder and a person with a special relationship with him own 30/10 or more of the total number of issued stocks or total amount of investment in the relevant corporation and where the officer actually controls the management of the corporation, he/she shall be the representative in cases where he/she is not a representative but can actually be deemed a representative, and the foregoing provision limits the cases where a person who is not a representative but can be deemed a representative shall be deemed a representative in the corporate register or a person who actually controls the management of the corporation among the officers, such as shareholders who meet the requirements set forth in the above subparagraph, even if he/she actually controls the management of the corporation (see Supreme Court Decision 201Du18108, Oct. 18, 2010).

Therefore, even if it is assumed that BB actually controlled the management of the company of this case as alleged by the Plaintiff, there is no evidence to acknowledge that BB was registered as a representative or an officer in the corporate register of the company of this case or owned not less than 30/100 of the shares of the company of this case, it cannot be deemed that BB was the representative of the company of this case, which is the year to which the disposition of this case belongs (two-year period portion).

3. Conclusion

The plaintiff's claim of this case is dismissed as it is without merit, and it is so decided as per Disposition.