[1] The time when the secondary tax liability of oligopolistic shareholders is established

[2] The case holding that where exempted acquisition tax, etc. is collected later, whether it is an oligopolistic shareholder who is the second person liable for tax payment should be determined at the time when the grounds for additional collection of acquisition tax

[1] According to Article 22 of the Local Tax Act, "......... is liable for secondary tax liability for such shortage..........." Thus, since it is unclear at the time when the main tax liability becomes effective whether the shortage in collection occurs, it shall not be deemed the time when the secondary tax liability becomes effective, and only when the main tax liability is established, and the amount of the secondary tax liability is not paid by the time after the lapse of the tax liability.

[2] The case holding that where acquisition tax, etc. exempted pursuant to Article 276 (4) of the former Local Tax Act (amended by Act No. 6312 of Dec. 29, 2000) is collected later, whether it is an oligopolistic shareholder who is the secondary taxpayer should be determined at the time when a ground for collection of acquisition tax, etc. exempted arises, not at the time when the initial tax liability, such as acquisition tax, etc., was established

[1] Articles 22, 29(1), and 29(2)4 of the Local Tax Act / [2] Articles 22, 29(1), (2)4, 30-4(1), 120, and 150-2 of the Local Tax Act, Article 276(4) of the former Local Tax Act (amended by Act No. 6312 of Dec. 29, 200), Article 14-2(2)3 of the Enforcement Decree of the Local Tax Act, Articles 2(4), and 18 of the former Act on Special Measures for the Promotion of Residents (amended by Act No. 6723 of Aug. 26, 2002)

[2] Supreme Court Decision 91Nu8487 delivered on April 28, 1992 (Gong1992Sang, 1754) Supreme Court Decision 91Nu10725 delivered on June 9, 1992 (Gong192Ha, 2164)

[Judgment of the court below] The Head of Si/Gun/Gu (Attorney Yang Chang-soo, Counsel for plaintiff-appellant)

Seoul Special Metropolitan City Mayor

June 11, 2003

1. The part of the plaintiffs' lawsuit of this case seeking revocation of the second taxpayer designation disposition is dismissed.

2. On June 20, 2002, the Defendant, on June 20, 2002, had the Plaintiffs as secondary liability for tax payment by Youngdong Venture Operator Co., Ltd.:

(a) Acquisition tax of KRW 7,730,880 and its additional dues of KRW 850,370 and special rural development tax of KRW 773,090 and its additional dues of KRW 85,040, registration tax of KRW 211,361,361,050 and its additional dues of KRW 23,249,680, education tax of KRW 38,679,080 and its additional dues of KRW 4,254,70;

B. Acquisition tax of 5,875,460 won and its additional dues of 646,280 won and special rural development tax of 587,550 won and its additional dues of 64,630 won, registration tax of 160,634,640 won and its additional dues of 17,69,750 won, education tax of 29,396,100 won and its additional dues of 3,23,570 won;

C. The disposition of imposition of acquisition tax of KRW 1,546,170 and its additional dues of KRW 170,070 and KRW 154,620 for special rural development tax and its additional dues of KRW 17,010, registration tax of KRW 42,272,200 and its additional dues of KRW 4,649,930, education tax of KRW 7,735,820 and its additional dues of KRW 850,940 shall be revoked.

3. The costs of lawsuit shall be borne by the defendant.

The defendant's decision that on June 20, 2002, the disposition that the plaintiffs designated as the secondary taxpayer by the Youngdong Venture Franman Co., Ltd. as the secondary taxpayer shall be revoked and the decision in Paragraph 2 of this Article is

1. Basic facts

A. The plaintiff Lee Dong-dong and Lee Young-dong are married couple, and the plaintiff Lee Young-dong are their relatives.

B. On April 8, 200, Nonparty Co., Ltd., Ltd. (hereinafter referred to as the “Ydong Venture Operator”), which was established by the plaintiffs, acquired a facility for the collective location of venture businesses from the head of Gangnam-gu Seoul Metropolitan Government, pursuant to the Act on Special Measures for the Promotion of Venture Businesses on April 8, 200, 5,327.05 square meters of land and buildings above 1,062.93 square meters of land and buildings above 1,062.93 square meters of land and buildings above 5,327.05 square meters of land and buildings above (hereinafter referred to as “the real estate in this case, including all the land and buildings above 3 lots of convenience) for the purpose of developing, creating, selling, or leasing the facility for collective location of venture businesses pursuant to Article 276(3) of the Local Tax Act, and was exempted from acquisition tax, special rural development tax, and registration tax from the head of education tax.

C. At the time of the acquisition of the instant real estate by the Youngdong Venture Operator, the Plaintiff’s examples were 50%, 38% in the length of the Plaintiff, and 10% in the interest of the Plaintiff, respectively. However, on June 25, 2001, the private roads sold part of the shares he/she owned to Nonparty 1 and 3, and the Plaintiff’s private roads sold to Nonparty 20% in the shares of the Youngdong Venture License Operator, 15% in the shares of the Plaintiff Lee Young-dong Venture License, and 10% in the shares of the Plaintiff Lee Young-soo.

D. However, on October 4, 2001, he/she entered into a sales contract for the real estate of this case with the Korean President Cho Sung-sung (hereinafter referred to as the "Korean Association for the Korean Residents Yang Sung-soo"), and the Korean Association for the Korean Residents Yang Sung-soo completed the registration of ownership transfer for the real estate of this case on October 7, 2001.

E. On December 11, 2001, the head of Gangnam-gu Seoul Metropolitan Government imposed and collected 572,267,040 won in total to collect acquisition tax, special agricultural and fishing villages tax, registration tax, and education tax, which were exempted from the Youngdong Venture License.

F. The defendant (the right to impose and collect the tax delegated to the head of the Gu pursuant to Article 6(3) of the Seoul Special Metropolitan City Tax Ordinance and Article 118-2(1) of the Seoul Special Metropolitan City Detailed and Collection Rule shall be reverted to the defendant as of March 1, 2002 as of June 20, 2002, the plaintiffs are oligopolistic stockholders of a corporation under Article 22 of the Local Tax Act in relation to the Youngdong Venture Business Operator, and the plaintiffs are designated as the secondary taxpayer, and the tax amount by item according to the ratio of stocks at the time when the acquisition tax, etc. of this case was exempted and notified the plaintiffs to pay the above tax amount (hereinafter referred to as "each disposition of this case").

(g) Procedures for the previous trial;

- Formal Objection on August 7, 2002, October 2, 2002 (Dismissal of Objection)

- Request for review on October 17, 2002, November 27, 2002 (Dismissal of Request for Review)

[Ground of recognition] Facts without dispute, Gap 3 evidence, Eul 10 and 11, and the purport of the whole pleadings

2. Determination as to the legitimacy of a lawsuit seeking revocation of a disposition designating a secondary taxpayer

Since the plaintiffs sought revocation of the disposition that the defendant designated as the secondary taxpayer against the plaintiffs, the second taxpayer's liability for the second taxpayer is abstractly established due to the occurrence of the fact that meets the requirements, such as the failure of the principal taxpayer, and the second taxpayer's liability for the second taxpayer is confirmed by the notice of payment. The designation of the second taxpayer does not have a specific obligation to pay taxes yet become final and conclusive, so the designation of the second taxpayer cannot be subject to appeal litigation.

Therefore, the part of the plaintiffs' claim for revocation of the second taxpayer designation disposition among the lawsuit of this case is unlawful since it seeks revocation of the disposition.

3. Whether the instant disposition is lawful

A. The parties' assertion

(1) The plaintiffs asserted that the secondary tax liability of the investors is unlawful since they were not oligopolistic shareholders at the time when the grounds for additional collection occurred, since they were sold the real estate in this case and were not at the time of the acquisition of the real estate in this case, the time when the establishment of corporate tax liability occurs when the corporate tax liability comes to impose taxes under Article 29(2)4 of the Local Tax Act in the case of additional collection of acquisition tax exempted as in this case.

(2) As to this, Article 22 of the Local Tax Act provides that "where the property of a corporation (excluding corporations listed on the Korea Stock Exchange) is insufficient to cover the money collectible by a local government to be paid or paid by such corporation, a person who falls under any of the following subparagraphs as of the tax base date or the date of establishment of tax liability (the date of commencement of tax payment period in cases of items without any provision related thereto) shall be subject to secondary tax liability for such shortage," and Article 29 (1) of the same Act provides that "when acquiring an object of taxation of acquisition tax," registration tax, "when acquiring an object of taxation of acquisition tax," and "when registration tax is registered or recorded," the acquisition tax and registration tax are exempted for the purpose of acquiring real estate acquired by a business operator of Young-dong Venture F&D, by developing and building facilities for the purpose of selling or leasing them in lots, but the designation of facilities for clustering venture businesses has not been developed and developed within three years after the acquisition, or the designation of such facilities has been revoked within five years after the acquisition, even if the oligopolistic F&D acquired the real estate and completed the registration of oligopolistic shareholders at that time.

(3) Therefore, the issue of this case is whether the time when the secondary tax liability of oligopolistic stockholders of a corporation comes into existence, when the acquisition and registration taxes are exempted, when the date when the tax liability comes into existence, and when the acquisition and registration taxes are registered, or when the reasons for the additional collection occur.

B. Relevant statutes

It is as shown in the attached Form.

C. As to the time when the secondary tax liability of oligopolistic stockholders is established

According to the provisions of Article 22 of the Local Tax Act, "............ are liable for secondary tax liability for shortage......" This is because it is unclear at the time when the main tax liability becomes effective whether the shortage occurs. Thus, it cannot be deemed as the time when the secondary tax liability is established, and only when the main tax liability is not fulfilled by the due date after the establishment of the secondary tax liability, the secondary tax liability shall be established (Article 22 of the Local Tax Act provides that the oligopolistic shareholder as of the date when the primary tax liability is established is the person liable for secondary tax liability, i.e., the date when the secondary tax liability is established, which means that the oligopolistic shareholder is the person liable for secondary tax liability for the assessment of the amount collectible by the oligopolistic shareholder as of the date when the primary tax liability is established. However, this is merely because it is the purpose of pursuing the liability for secondary tax liability for the oligopolistic shareholder as of the

D. As to the establishment time of the principal tax liability

(1) Articles 120 and 150-2 of the Local Tax Act provide for the determination of liability to pay acquisition tax and registration tax as follows. According to the literal interpretation of each of the above Articles and Article 276(4) of the Local Tax Act, liability to pay acquisition tax and registration tax are established at the time of acquisition of objects of taxation or registration, but they do not meet the requirements under the main sentence of the same Article, so they are naturally exempted from taxation as a matter of course because there is no provision on application for reduction or exemption and notification thereof, and they can be collected at the time of occurrence of certain causes

[Local Tax Act]

Article 120 (Return and Payment) (1) Any person who acquires an object of taxation of the acquisition tax shall file a return on it within 30 days (Omission of Contents of the items in bulk) from the date of acquisition, and simultaneously file a return on and pay the tax amount calculated by applying the tax rate under the provisions of Article 112 to the reported tax base amount (hereinafter referred to as the

(3) Notwithstanding the provisions of paragraph (1), where any taxable object becomes subject to imposition or collection of the acquisition tax after this Act or other Acts and subordinate statutes are non-taxable, exempted or reduced, the tax amount [in cases of reduction, it refers to the tax amount obtained by deducting the already paid tax amount (excluding additional taxes)] calculated by applying the tax rate under Article 112 to the tax base amount shall be paid by self-return within 30 days from the date

(1) Any person who desires to make a registration or a record shall pay the tax amount calculated by applying the tax rate as provided in Articles 131 through 146 to the tax base amount as provided in Article 130, before he makes the registration or record as prescribed in the Presidential Decree, under the conditions as prescribed by the Presidential Decree.

(3) Notwithstanding the provisions of paragraph (1), if any taxable object becomes one subject to the imposition or collection of the registration tax after the registration tax is not levied, exempted, or reduced as provided in this Act or other Acts and subordinate statutes, the tax amount calculated by applying the tax rate as provided in Articles 131 through 146 to the tax base [in case of mitigation, it refers to the tax amount obtained by deducting the already paid tax amount (excluding the additional tax)] shall be paid by self-return within

(2) According to the provisions of Article 30-4(1) of the Local Tax Act, local taxes may not be imposed if they are not imposed for five years (the date on which local taxes may be imposed is prescribed by the Presidential Decree. In this case, the day on which local taxes may be imposed shall be determined by the Presidential Decree. The following day is the day on which local taxes may be imposed notwithstanding the provisions of Article 14-2(2) of the Enforcement Decree of the Local Tax Act.

(3) According to the Supreme Court precedents, where the law on exemption from acquisition tax is amended after the acquisition of land as a factory site, the issue of whether the above land is subject to exemption from acquisition tax should be determined in accordance with the provisions of the law at the time of the acquisition. However, barring any special circumstance, whether the transfer of the above land within a certain period from the date of acquisition constitutes a ground for collection of acquisition tax shall be determined in accordance with the provisions of the law at the time of the occurrence of the above reason (see Supreme Court Decision 91Nu10725 delivered on June 9, 192). In a case where the transfer of land for the purpose of relocation of a factory is exempted from capital gains tax and local tax or non-taxation, where the new factory construction is not constructed within a certain period from the date of transfer, the exempted tax amount should be collected separately if the requirements for exemption are met, and the original disposition of imposition and taxation shall be separately different (see Supreme Court Decision 91Nu10725 delivered on April 28, 192).

(4) In full view of the above facts, it is reasonable to view that in this case, the liability to pay the acquisition tax and registration tax of the Young Venture Line operator was established on October 4, 2001, when the reason for collection occurred, that is, the Young Venture Line operator disposed of the instant real estate to another person.

In this case, the Defendant asserted that, at the time of the first acquisition of the instant real estate by the Youngdong Venture Operator, the liability for the payment of the instant acquisition tax and registration tax were established, but the Youngdong Venture Operator conditioned that the instant real estate should be used for the purpose of exemption within a certain period of time according to national policy purposes, and that, within three years after its acquisition, the Youngdong Venture Operator exempted the Defendant from the obligation to collect the said real estate as "requirements to collect the said tax if he did not develop and create the facilities for clustering venture businesses or if its designation is revoked within five years after its acquisition." However, the Defendant

The plaintiffs argued that the time when a liability for tax payment, such as acquisition tax and registration tax, occurs under the premise that the time when the liability for acquisition tax and registration tax, etc., are established, on the premise that the reason for exemption of the acquisition tax and registration tax are the local tax to be collected by occasional assessment, once the reason for additional collection arises, but in this case, it shall be deemed that the acquisition tax and registration tax, in principle, are determined by the method of tax payment and that the method of exceptional disposition is confirmed by the method of tax

E. Meanwhile, according to the facts acknowledged earlier, as of October 4, 2001, when the principal liability for the payment of this case was established, the Plaintiffs held only 45% of the shares of the Youngdong Venture Ra, and at that time, the Plaintiffs cannot be deemed to be the oligopolistic shareholder of the Youngdong Venture Ra, and therefore, the instant disposition of taxation based on the premise that the Plaintiffs are the oligopolistic shareholder of the Youngdong Venture Ra is illegal.

3. Conclusion

Therefore, the part of the plaintiffs' claim for revocation of the designation of the second taxpayer among the lawsuit of this case is unlawful and dismissed, and each of the plaintiffs' remaining claims is justified and it is so decided as per Disposition.

Judge Han-sung (Presiding Judge)