[1] In order to constitute an oligopolistic shareholder who has secondary tax liability under Article 39(1)2(c) of the Framework Act on National Taxes, whether he/she shall directly control or exercise the rights to the shares of the pertinent corporation by participating in the management of the corporation (negative)

[2] The criteria for determining whether an oligopolistic shareholder is an oligopolistic shareholder under Article 39(1)2 of the Framework Act on National Taxes, and the burden of proving the ownership of stocks

[1] An oligopolistic stockholder who has secondary tax liability pursuant to Article 39(1)2(c) of the Framework Act on National Taxes shall be sufficient if he/she is a spouse of the person falling under subparagraphs (a) and (b) of the same Article or an oligopolistic stockholder who is a lineal ascendant or descendant living with him/her, and it does not need to be a person who has de facto control by taking part in the management of the corporation and actually exercises the rights to 51/100 or more of the total number of outstanding stocks of the corporation concerned

[2] Whether it constitutes an oligopolistic shareholder under Article 39(1)2 of the Framework Act on National Taxes shall be determined by whether it is a member of a group owned by a majority of stocks. Specifically, even if there is no fact involved in the management of the company, it cannot be determined that it is not an oligopolistic shareholder. The fact of ownership of stocks is proven by the tax authority through the data such as the register of shareholders, the statement of stock transfer status, 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 where the name of the shareholder was stolen or registered in a name other than the name of the actual owner, it cannot be deemed as a shareholder only by the name of the shareholder,

[1] Article 39 (1) 2 (c) and (2) of the Framework Act on National Taxes / [2] Article 39 (1) 2 and (2) of the Framework Act on National Taxes, Article 26 of the Administrative Litigation Act / [Burden of proof]

[1] [2] Supreme Court Decision 94Nu13077 delivered on March 24, 1995 (Gong1995Sang, 1768), Supreme Court Decision 95Nu13203 delivered on December 22, 1995 (Gong1996Sang, 605), Supreme Court Decision 95Nu1470 delivered on December 6, 1996 (Gong197Sang, 242) / [2] Supreme Court Decision 91Nu1721 delivered on July 23, 1991 (Gong191, 2264), Supreme Court Decision 92Nu10906 delivered on December 11, 1992 (Gong193, 486), Supreme Court Decision 95Nu14099 delivered on August 24, 1994 (Gong1994, No. 129459, Aug. 24, 1994)

Plaintiff

Head of the District Tax Office

Gwangju High Court Decision 2002Nu1594 delivered on January 16, 2003

The appeal is dismissed. The costs of appeal are assessed against the plaintiff.

Article 39 (1) 2 of the Framework Act on National Taxes provides that, where the property of an unlisted corporation is insufficient to cover the national taxes, additional dues, and disposition fee for arrears that the corporation imposed or pays, with the property of the unlisted corporation, the second liability to pay such shortage shall be the person who actually exercises the rights to 51/100 or more of the total number of issued and outstanding stocks of the relevant corporation (excluding nonvoting stocks) as of the date on which the liability to pay national taxes is established, the term “person who actually controls the operation of the relevant corporation (b)”, and the term “spouses and lineal ascendants and descendants who actually share their livelihood with such corporation (including those in a de facto marital relationship) and (b)” provided for in subparagraph 1 (a) and (b) of Article 39 of the same Act, the term “persons who actually exercise the rights of oligopolistic shareholders or those who share 5/100 or more of the total number of issued and outstanding stocks of the relevant corporation by dividing such shortage by the total number of issued and outstanding stocks of the relevant corporation (excluding nonvoting stocks)”in the proviso to paragraph (1) 2) of the same Article 5 (1).

On the other hand, the issue of whether a shareholder is an oligopolistic shareholder under the above provision shall be determined by whether the shareholder is a member of the majority share ownership group, and even if there is no fact involved in the management of the company, it cannot be determined that the ownership of the shares is not an oligopolistic shareholder. It shall be proved by the tax authority through the data such as the list of shareholders, specifications of stock movement, or the register of corporate register, etc. However, even if a shareholder appears to be a single shareholder in light of the above data, if there are circumstances such as where the name of the shareholder was stolen or the registration was made in a name other than the real share ownership, the actual shareholder shall not be deemed to be a shareholder, but it shall be proved by the nominal owner who asserts that he is not a shareholder (see Supreme Court Decisions 91Nu1721, Jul. 23, 1991; 94Nu6222, Aug. 12, 199; 95Nu1470, Dec. 6, 1996).

According to the reasoning of the judgment below, the court below acknowledged facts as follows. The non-party 1, the husband of the plaintiff, is a person who actually exercises the right to 32,000 shares out of 50,000 shares issued by the non-party company. The plaintiff is an oligopolistic shareholder who is the spouse of the non-party 1 and owns the non-party company's 6,00 shares (12%) on the register of shareholders, and the plaintiff is a member of the oligopolistic shareholder group who can actually exercise the right to exercise the above shares, and only delegated the right to exercise the above shares to the non-party 1 pursuant to the above legal provisions, and thus, the non-party 1, the husband of the non-party 1

In light of the above legal principles and records, the above fact-finding and judgment of the court below are just, and there is no error in the misapprehension of legal principles as to oligopolistic shareholders liable for secondary tax liability or in violation of the rules of evidence.

Therefore, the appeal is dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Lee Han-gu (Presiding Justice)