Cho High-2016-Seoul-1695 ( December 21, 2016)

Designation of secondary tax liability for oligopolistic stockholders as of the date when the principal tax liability is established is legitimate.

In light of the fact that the statement of change in stocks, etc. submitted at the time of filing a corporate tax return is erroneous and wrong, it is legitimate to designate the secondary tax liability for AA with respect to AA, which owns 61% shares of the company of this case, as it is difficult to trust the claim of AA, when considering that the shareholder was appointed as the representative director after the date of filing a corporate tax return.

Disposition revocation of revocation of imposition of value-added tax by the Seoul Administrative Court-2017-Gu 1520

AA

aa

2018.030

2018.05.11

1. AA’s claims are dismissed.

2. Litigation Costs shall be borne by AA.

Cheong-gu Office

Aaa on March 11, 2016, AA on March 11, 2016, is subject to secondary tax liability for value-added tax in arrears by BBB.

The imposition of the value-added taxx,x,x, andxxx members for the second period of 201, designated as one person, shall be revoked.

1. Details of the disposition;

A. BB (hereinafter “non-party company”) filed a preliminary return of value-added tax for the second period of value-added tax on October 25, 201 to aa on October 201, 201, and received full refund from △△△△△△△△△△△△△△, and △△△△△△△△△, upon filing a preliminary return of value-added tax for the second period of the value-added tax

B. After that, the non-party company filed a final return of value-added tax on January 11, 2012 with a Aa on the second half of 2011, and received the refund of the said KRW ○○,○○, and○○○○○○○○ from which the said KRW △△△△, △△△△△△△, which was already refunded in the column

C. A through a regular audit in 2015, confirmed that the value-added tax △△△, △△△△, and △△△△△△△ was refunded in duplicate to the non-party company. On January 6, 2016, the non-party company determined the payment deadline on January 31, 2016 and notified the non-party company of the decision on the value-added tax ○○, ○○, and ○○○○○ (including additional tax for unfaithful payment) for the second period of value-added tax for 2011.

D. From March 2, 2011, the non-party company was running a food miscellaneous distribution business, and was retroactively closed on December 31, 2011 on the ground that the first year value-added tax was not reported and the place of business was transferred without permission in 2012. The non-party company did not pay the value-added tax ○○○○, ○○, ○○○○○○ (payment deadline January 31, 2016) for the second year of 2011 and the wage and salary income tax △△△△△△△△△△ (payment deadline, May 3, 2012) accrued on November 201.

E. A on December 31, 201, the end of the taxable period of AA as of December 31, 201, the shareholder who owns 122,00 shares (61%) out of the total outstanding shares of the non-party company as of December 31, 201, deemed to be the secondary taxpayer under Article 39(1)2 of the former Framework Act on National Taxes (amended by Act No. 11124, Dec. 31, 201; hereinafter the same shall apply) and notified AAA to pay the tax amount in arrears (including additional charges) equivalent to the shares shares ratio (61%) of AA out of the non-party company’s share ratio (including 61%) up to March 11, 201 (hereinafter referred to as “person liable to pay the tax in this case at issue”).

(f) AA is dissatisfied with the instant disposition and filed an objection on April 25, 2016 with the Tax Tribunal.

On December 21, 2016, the Tax Tribunal decided to dismiss the appeal.

Facts without dispute over the basis of recognition, Gap evidence 1, Eul evidence 1-5, 8, 9 (including each number), and the purport of the whole pleadings

2. Whether the instant disposition is lawful

(a) AA’s assertion

1) Nonparty Company offered additional investments to AA at the time of capital increase with capital increase issued on June 201, and offered to Nonparty Company

AA collected shares in the name of intent and arranged shares in the name of the company, and completed a report of change by preparing a new register of shareholders while giving up new shares and participating in the new shareholders interested in the 61% shares of the company. However, rhyth of this, the register of shareholders created by AA was sent to Aa by the employees of the company to the relevant certified tax accountant office in order to send the register of shareholders, which was substantially created under the circumstances where the business of the non-party company was difficult due to the difficulties at the time of settlement of accounts. Ultimately, the statement of changes in shares in the year 2011 of the non-party company, which was based on the instant disposition, is different from the strud list of shareholders, and the AA does not actually have an oligopolistic shareholder. Therefore, the instant disposition

2) Aaa’s double refund of value-added tax to a non-party company is due to a tax official’s error, which is not to recover the value-added tax from taxes, but to return unjust enrichment. In addition, AA’s tax in arrears before it takes office as the representative director of the non-party company on April 2013.

It is improper to allow AA, which is only a simple shareholder who participated in the management of the non-party company at the time of 2011 or who did not receive any benefit from the non-party company, to pay the tax in arrears.

B. Relevant statutes

It is as shown in the attached Form.

C. Facts of recognition

1) On December 22, 2010, the non-party company was established with capital of one million won (one million won per share, ten thousand won per share, and 10,000 shares) and completed the same day on March 15, 201 after increasing its capital of KRW 100 million (10,000 shares in total). On June 22, 2011, the non-party company newly increased its capital of KRW 200,000 (20,000 shares in total) and completed its registration of change on June 23, 2011 (hereinafter referred to as the “instant capital increase”).

2) On March 7, 2011, the non-party company registered its business on March 2, 201 as of March 2, 201. Around March 30, 2012, upon filing a settlement of accounts, the non-party company electronically reported the stock fluctuation status in the business year 201 (from March 2, 2011 to December 31, 201) pursuant to Article 119 of the Corporate Tax Act (this is a statement of stock fluctuation issued by Aa) (this is a statement of stock fluctuation) and its details are as follows (2,000 shares, which are owned at the end of the end of the period are transferred from BB; hereinafter the non-party company prepared and reported by the non-party company, hereinafter referred to as the "detailed statement of this case").

3) Meanwhile, as of December 16, 2010, the register of shareholders submitted by the non-party company upon its business registration was held 7,000 shares issued by the non-party company and 1,50 shares each among the 10,000 shares issued by the non-party company and 1,500 shares AA and BB.

4) On March 15, 201, 201, 201, 201, and 31 December 31, 2011, which was submitted by AA to this Court, the ownership status of the non-party company as of the shareholder registry as of December 31, 201, is as listed below. Meanwhile, prior to the issuance of new shares by the non-party company, the ownership status of the non-party company as of March 15, 201, 200 shares was as follows: AAA 20,000 shares among the non-party company’s total issued shares; DD 30,00 shares; CCC 20,000 shares; BB; 18,000 shares; FE 10,000 shares; and EE 2,00 shares shares issued by the non-party company’s account as of June 21, 2011 following the resolution of the board of directors.

5) From the time of incorporation of the non-party company, YF, and GG have resigned on June 21, 201. On the same day, EE, FF, and DG held office as an inside director and a representative director concurrently, and DD had office as an inside director and a representative director. On February 29, 2012, EE, FF retired from office as an inside director and the office of inside director and the representative director, and on the same day, CCC again assumed office as the representative director. AA had been an inside director since its incorporation, and was appointed to the representative director after 29 April 2013.

Facts that there is no dispute over the basis of recognition, Gap evidence Nos. 4-6, Eul evidence Nos. 3, 6, 7, and 9, and the purport of the whole testimony and arguments of the CCC.

D. Determination

1) Whether AA constitutes an oligopolistic shareholder of a non-party company at the time of December 31, 2011

Article 39 (1) 2 (a) of the Framework Act on National Taxes provides that "where the property of an unlisted corporation is insufficient to cover national taxes, additional dues, and disposition fees for arrears imposed on or to be paid by the corporation, the person who actually exercises the rights to the stocks in excess of 50/100 of the total number of issued stocks of the corporation as of the date on which the liability to pay national taxes is established shall be liable to pay taxes for the shortage within the limit of the amount calculated by multiplying the amount calculated by dividing the shortage by the total number of issued stocks (excluding non-voting stocks) of the corporation by the

The issue of whether a person is an oligopolistic shareholder under Article 39(1)2 of the Framework Act on National Taxes shall be determined by whether the person is a member of a group of stocks owned by the majority. Specifically, even if there is no fact involved in the management of the company, it cannot be determined that the person is not an oligopolistic shareholder. The principal fact of ownership is proved by the data such as the register of shareholders, the statement of stock transfer status, the register of corporate register, etc. However, even in cases where a person appears to be a single shareholder in light of the above data, if the person actually uses the name of the shareholder or is listed in the name other than the de facto ownership, it cannot be deemed as a shareholder only in such name. However, the nominal shareholder who asserts that he is not a shareholder should prove that he/she is not a shareholder (see, e.g., Supreme Court Decisions 91Nu1721, Jul. 23, 1991; 2003Du1615, Jul. 9, 2004; 2008Du14080.

On December 31, 201, the facts stated in the instant report filed by the non-party company A with AA as of December 31, 201, that the shares were 61% of the total shares issued by the non-party company were owned by the non-party company as of December 31, 201 as seen earlier. Although the instant report contains no changes in the capital stock of the non-party company and the shares of the non-party company at the end of 2011 business year and at the end of the end of the period, the basic share ownership status appears to indicate the distribution of shares at the time when all shares were transferred to AA due to any circumstance of 102,00 shares held in the name of DD, EE, FF, or GG after the instant capital increase. However, it is difficult to conclude that the instant report was made in a situation where 2,00 shares were transferred to Ga at the end of the period due to the transfer of 2,00 shares held in the name of BB.

Meanwhile, it is difficult to believe that part of the statement of the witness CCC, which seems consistent with the argument of the AA that the instant statement was reported as an employee’s failure, was not immediately corrected by the non-party company, or that the said witness also prepared the instant statement. On December 31, 2011, the reference shareholder registry submitted by the AA was not submitted any evidence that it is true, and it is not consistent with the argument of the AA that other shareholders did not acquire the shares of the non-party company after issuing new shares, and that the AA assumed office as the representative director of the non-party company around April 2013. In addition, the circumstance alleged by the AA or the evidence submitted by the AA alone, unlike the content of the instant statement, cannot be said to have been proven that the non-party company did not hold 61% of the total issued shares of the non-party company as of December 31, 201.

Therefore, IA's assertion on this part is not accepted.

2) Whether the instant disposition against A is legitimate

Article 49(2)1 of the former Value-Added Tax Act (amended by Act No. 13805, Jan. 19, 2016; hereinafter the same) provides that when an entrepreneur files a final return of value-added tax, he/she shall file a return for value-added tax, subtracting the amount of unpaid tax from the amount of payable tax at the time of filing the final return pursuant to Article 59(2). Article 57(1)2 of the same Act provides that where an entrepreneur makes an error or omission in the details of preliminary return or final return, the head of a tax office having jurisdiction over the place of tax payment shall investigate the tax base and amount of payable tax or the amount of refundable tax for the relevant preliminary return period and taxable period, and Article 57(3) of the same Act provides that where an error or omission is found in the tax base and amount of payable tax or the amount of refundable tax for the relevant tax amount determined or corrected pursuant to paragraphs (1) and (2) of the same Article, the head of a tax office having jurisdiction over the place of tax payment shall collect such amount in accordance with the National Tax Collection Act.

As seen earlier, the non-party company’s final return of value-added tax on January 11, 2012 was filed with Aa on the second half-year value-added tax in 201 and did not receive a refund of KRW 14,469,785, which was already paid for the second half-year value-added tax in 2011, and thus received double refund equivalent to the above amount. Such refund constitutes a case where there is an error or omission in the details declared in the final return under Article 57(1)2 of the Value-Added Tax Act, and aa can be collected pursuant to the National Tax Collection Act after correcting the legitimate tax amount of value-added tax for the second half-year portion in 2011.

Meanwhile, as of December 31, 201, the date on which the liability for tax payment of value-added tax was established for the second period portion of the company in arrears of AA as of December 31, 201, the oligopolistic shareholder of the non-party company under Article 39(1)2 (a) of the Framework Act on National Taxes is recognized, and the assets of the non-party company are insufficient to meet the above national taxes imposed on the non-party company as of December 31, 201. Therefore, it is legitimate that AA designated the non-party company as the secondary taxpayer pursuant to Article 39(1) of the Framework Act on National Taxes and notified the non-party company of the amount equivalent to the shares of AA in arrears of the non-party company as of December 31, 201 (AA is improper to impose secondary liability for tax payment on the non-party company on the grounds that the non-party company was not delinquent on the part of the non-party company after taking over the non-party company, but it cannot be accepted since the non-party company was designated as the taxpayer. 2131.

3. Conclusion

Therefore, the claim of AA is dismissed as it is without merit, and it is so decided as per Disposition.

(c)

Relevant statutes

director Framework Act on National Taxes (amended by Act No. 11124, Dec. 31, 201)

Article 39 (Secondary Liability to Pay Taxes by Investor)

(1) Where the property of a corporation (excluding a corporation which has listed stocks on the securities market pursuant to Article 9 (13) 1 of the Financial Investment Services and Capital Markets Act; hereafter the same shall apply in this Article) is insufficient to cover the national taxes, additional dues, and expenses for disposition on default that the corporation has imposed or should pay, any of the following persons as of the date on which the liability to pay national taxes is established shall assume secondary tax liability for the shortage: Provided, That in cases of oligopolistic stockholders under subparagraph 2, the limit shall be the amount calculated by multiplying the amount calculated by dividing the shortage by the total number of outstanding stocks (excluding non-voting stocks; hereafter the same shall apply in this Article) of the corporation or the total amount of investment in the corporation, the number of stocks owned (excluding non-voting stocks; hereafter the same shall apply in this Article) or investment shares of the oligopolistic stockholders (in

1. General partners;

2. An oligopolistic stockholder who falls under any of the following items:

(a) A person who actually exercises the rights to stocks or shares in excess of 50/100 of the total number of issued stocks or investments of the relevant corporation;

(2) The term " oligopolistic stockholder" in paragraph (1) 2 means a stockholder or one limited partner and his/her relatives prescribed by Presidential Decree or other persons having a special relationship with him/her, whose total amount of stocks held or investments exceeds 50/100 of the total number of outstanding stocks or investments of the relevant corporation (hereinafter referred to as " oligopolistic stockholder").

/ Value-Added Tax Act (Amended by Act No. 13805, Jan. 19, 2016)

Article 49 (Final Tax Return and Payment)

(1) A business operator shall report to the head of a tax office having jurisdiction over the place of tax payment, as prescribed by Presidential Decree, within 25 days (in cases of closure of business, the 25th day of the month following the month in which the date of closure under Article 5 (3) falls) after the tax base and amount payable or refundable amount for each taxable period expires: Provided, That no business operator who has made a preliminary return pursuant to Article 48 (1) and (4) or who has filed a return to receive early refund pursuant to Article 59 (2) shall

(2) In filing a final return under paragraph (1) (hereinafter referred to as "final return"), a business operator shall pay the following amounts to the head of each tax office having jurisdiction over each place of tax payment (referring to the head of each tax office having jurisdiction over the location of the main place of business in cases under Article 51) along with the final return of value-added tax after deducting the following amounts from the

1. The amount of tax refundable for early refund under Article 59 (2) but not yet refunded;

Article 57 (Determination and Correction)

(1) The head of a tax office, the commissioner of a regional tax office or the Commissioner of the National Tax Service having jurisdiction over the place for tax payment (hereafter referred to as "head of a tax office, etc. having jurisdiction over the place for tax payment" in this Article) shall investigate the tax base and amount

1. Where the preliminary or final return is not filed;

2. Where any error exists in the details of the preliminary or final return or omission thereof;

3. Where, in filing the final tax return, the list of the total tax invoices by customer or seller is not submitted, or all or part of the entries are not entered in the list of the total tax invoices by customer or seller submitted, or entered differently from the fact;

4. Where the value-added tax is likely to be evaded (.......) for other reasons prescribed by Presidential Decree.

(3) If any error or omission is found in the tax base and paid tax amount or refundable tax amount determined or corrected pursuant to paragraphs (1) and (2), the head of the tax office, etc. having jurisdiction over the

Article 58 (Collection)

(1) Where an entrepreneur fails to pay the declared tax amount or pays it below the payable tax amount when filing a preliminary or final return, the head of a tax office having jurisdiction over the place of tax payment shall collect the tax amount pursuant to the National Tax Collection Act, and where a decision or correction is made pursuant to Article 57, the amount to be additionally paid shall

m. Corporate Tax Act

Article 119 (Submission of Detailed Statement on State of Fluctuation of Stocks)

(1) A corporation (excluding partnership corporations prescribed by Presidential Decree) with changes in stocks, etc. during a business year shall submit a detailed statement on changes in stocks, etc. to the head of the tax office having jurisdiction over the place of tax payment by the deadline for tax return under