Cho-2016-China-3204 ( October 18, 2016)

In the event that the management of the company is substantially controlled, even if the company is not an officer registered or shares are owned under another person's name, it shall be the representative subject to recognition

Any person who actually controls the management of the company by holding not less than 30/100 of the shares in the name of another person, not the executives of the corporation, etc., or through the ownership of not less than 30/10 of the shares shall fall under the category of officers, such as shareholders, etc.

2016Guhap2435 Global income and revocation of disposition

○ ○

○ Head of tax office

May 23, 2017

July 18, 2017

1. The Defendant’s imposition of global income tax of KRW 788,262,840 (including additional taxes) and global income tax of KRW 181,430 (including additional taxes) for the year 2007, which reverts to the Plaintiff on May 3, 2016, shall be revoked.

2. The costs of the lawsuit are assessed against the defendant.

Cheong-gu Office

The same shall apply to the order.

1. Details of the disposition;

A. On November 9, 2004, ○○ Construction Co., Ltd. (hereinafter referred to as “○○ Construction”) was closed ex officio on December 31, 2006 when ○○○○○○○○ Dong, 85-3, a construction work business, an engineering work business, etc., the representative director was established by having the representative director as 00, and the business was closed ex officio on December 31, 2006.

B. On March 31, 2007, the ○ case reported corporate tax (tax base: 107,071,210, and calculated tax amount: 11,956,811) to the Defendant for the business year 2006.

C. In relation to the general audit and inspection items of ○○ Regional Tax Office, the Defendant included the short-term loans and the recognition interest thereon for shareholders, executives, etc. who failed to recover until the closure of business year 2006, the total amount of deposit, KRW 1,413,44,397, and ② the estimated income amount of KRW 14,080,000 based on the non-declaration of corporate tax on the amount of income for business year 2007 (1.6 million) as income (hereinafter referred to as “index amount”), and then notified the amount of corporate tax 37,310,901 on February 5, 2010.

D. On March 8, 2010, the Defendant notified the change in the amount of income in KRW 1,413,44,398, and the amount recognized as belonging to the year 2007 to ○○○ in 2006.

E. On April 29, 2010, 2010, 000: (a) the person who actually controls ○○ building was the Plaintiff and himself was not an actual business operator; and (b) on June 16, 2010, the Defendant requested a pre-assessment review against the Defendant.

F. On March 2, 2011, the Defendant: (a) deemed the actual representative of ○○ Jae-in as the amount of outflow from the company by deeming the issue amount as the amount of outflow from the company as the amount of outflow from the company; (b) notified the Plaintiff of the change in the amount of income; and (c) notified the head of Seodaemun-gu Tax Office having jurisdiction over the Plaintiff’s domicile on April 18, 201

G. On May 15, 2012, the head of the ○○○ Tax Office sent a tax notice of KRW 589,829,110 of the global income tax for the year 2006 to the Plaintiff by mail and returned it, and then sent it to the Plaintiff on the spot on May 30, 2012, and then sent it by public notice on May 30, 2012. The Plaintiff filed an appeal with the Tax Tribunal on November 5, 2012 on the ground of the illegality of service by public notice. The Tax Tribunal rendered a decision of revocation on December 31, 2012.

H. The head of ○○○ Tax Office notified the Defendant of the data upon the Plaintiff’s transfer to the jurisdiction of the Defendant. Since then, on February 5, 2016, the Plaintiff received a prior notice of taxation from the Defendant, and requested the Defendant to pre-assessment review on March 3, 2016, but the Defendant decided not to adopt the tax.

(i) On May 3, 2016, the Defendant issued a correction and notification (including additional tax) of global income tax of KRW 788,262,840 (including additional tax) and global income tax of KRW 181,430 (including additional tax) for the year 2007 on each of the instant dispositions (hereinafter referred to as “each of the instant dispositions”). As the Plaintiff’s notice of tax payment was sent by mail to the Plaintiff’s domicile and returned, the Defendant served the notice of tax payment by means of service on June 10, 2016 after serving the notice of tax payment on several occasions.

(j) On August 16, 2016, the Plaintiff filed an appeal with the Tax Tribunal on August 16, 2016, but the Tax Tribunal dismissed the claim on October 18, 2016.

Facts that there is no dispute over recognition, Gap evidence 1, 4, Eul evidence 1, 2, 3, and 6 (including virtual numbers), the purport of the whole pleadings.

2. Whether each of the dispositions of this case is legitimate

A. The plaintiff's assertion

1) In light of the fact that the Plaintiff is not a shareholder or an executive but not a shareholder or an executive, and that there was no status as such, the Plaintiff, an executive or employee, 00, 000, 000, 000, 0000, and 300,000,000,000,0000,000,000,000,0000,000,000,0000,000,000,0000,000,0000,0000,000,0000,0000,000,0000,000,000,0000,000,000,000,000,000,000,000,000,000,00,000,00,00

2) In light of the following: (a) it is difficult for the Plaintiff to understand whether the income earned from the disposal of income is attributed, the person to whom the income belongs, and the type of income before the tax authority imposes a tax disposition; (b) it is difficult for the Plaintiff to understand the subject of the disposal in recognition due to the uncertainty of the person to whom the income accrued; (c) even if the Plaintiff intended to evade the representative’s liability at the time of the establishment of the ○○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○, there was no specific intent to evade the income tax to be attributed to the disposal in the future; (d) even if the Plaintiff operated the place of business under another person’s name, the Plaintiff constitutes fraud or other unlawful act only when the purpose of the disposal is to divide the sales and obtain a low effective tax rate; and (e) there was no proof that the Plaintiff’s reason for operating the ○ ○ ○ ○ ○ ○ ○ ○

B. Relevant statutes

The entries in the attached Table-related statutes are as follows.

(c) Fact of recognition;

1) The actual manager of ○○○○○ Marina (hereinafter referred to as “○○○○○○ Marina”) was the Plaintiff, and operated ○○○○○○ Marina and the executives and shareholders of ○○○○○○○ Marina, such as registering the Plaintiff’s wife Kim○ as the representative director of ○○○○○○○○ Marina, the wife, Kim○, as its director, on the basis of his wife’s personal relationship.

2) On September 4, 2003, the Plaintiff: (a) set up ○○○○○○ ○○○○○○○○ ○○○○○○ ○○○○○ ○○○○○ ○○○ ○○ ○, 431, and 2 parcels of land and buildings (hereinafter “instant land and buildings”); and (b) set up ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○○ ○ ○ ○ ○ ○ ○ ○

3) 그런데 ○○재건의 대표이사로 등재된 백○○는 원고에 의하여 고용된 사람으로서 ○○재건의 경영에는 실제로 관여하지 못하였고, 원고는 백○○ 외 ○○재건의 임원 및 주주로 자신의 처남댁인 박○○과 처인 김○○, 건축사 이○○를 내세워 ○○재건을 설립한 후 ○○재건을 실질적으로 경영하였다.

4) On March 5, 2008, ○○○ and ○○○○○ had been sentenced to a final judgment against ○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○, which had been awarded a full decision on July 23, 2008, by filing an appeal (Seoul High Court 2008Na000) on August 21, 2008 and filing a final judgment against ○○○○○○○○○○○○○○○○○ on behalf of ○○○○○○○○○○○○○○○○○○○○○, and the substantial party of the instant construction contract was sentenced to a full winning judgment on the ground that the actual party was ○○○○○○○○○○○○○○○○○○, but was dismissed on December 19, 201 (Supreme Court Decision 201Da40105).

5) Meanwhile, according to the detailed statement on the situation of the fluctuation of stocks, etc. in the 2006 business year, among the total number of 50,000 shares issued by ○○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ 5,000 shares (10%) 15,00 shares (30%) ○ ○ ○ ○ ○ ○ ○ ○ ○ 22,50 shares (45%) 22,50 shares (45%) and ○ ○ 7,50 shares (15%) respectively.

Facts that there is no dispute for recognition, Gap's 3, 4, 5, Eul's 4 and 5 (including virtual numbers), and the purport of the whole pleadings.

D. Determination

1) Determination on the first argument

A) Article 67 of the former Corporate Tax Act (amended by Act No. 8831 of Dec. 31, 2007; hereinafter the same) provides that in filing a report, determination, or correction of the corporate tax base, the amount included in the calculation of earnings shall be disposed of as bonus, dividends, other outflow from the company, internal reservation, etc. according to the person to whom they accrue, and Article 106 (1) 1 of the former Enforcement Decree of the Corporate Tax Act provides that where it is unclear to whom the amount of outflow from the company belongs, the amount shall be deemed to have been reverted to the representative. Article 106 (1) 1 of the former Enforcement Decree of the Corporate Tax Act provides that where an officer who is not a minority shareholder and a person with a special relationship hold not less than 30/100 of the total number of stocks issued or total amount invested in the corporation

However, in general, a person who is registered as a shareholder in the register of shareholders is presumed to be a shareholder of the company, but if the person who denies his/her shareholder's rights proves it, the presumption is reversed (see, e.g., Supreme Court Decision 2007Da51505, Mar. 11, 2010). Thus, in order to recognize a certain person as a shareholder, the person does not necessarily have to be registered in the register of shareholders. In light of such legal principles, it is difficult to view that there are special reasons that are not applicable to the disposal system of income under Article 106 (1) 1 of the former Enforcement Decree of the Corporate Tax Act, in order to constitute a "shareholders" under the above provision, it should not be interpreted that the person who actually holds shares in the name of another person should be registered as a shareholder in the register

Meanwhile, Article 43 (6) of the former Corporate Tax Act provides that all members of the board of directors such as chairperson, president, vice president, chief director, representative director, managing director, executive director, etc. of a corporation, liquidator (title 1), managing member of an unlimited partnership company, limited partnership company and limited liability company or director (title 2), and auditor (title 3) and other persons engaged in duties corresponding to subparagraphs 1 through 3 (title 4). Thus, there is no reason to regard "executive" as different from those under the proviso of Article 106 (1) 1 of the former Enforcement Decree of Corporate Tax Act, and "other persons engaged in duties corresponding to subparagraphs 1 through 3" under the above provision of definition as to officers also include "other persons who actually control the management of a corporation" under the proviso of Article 106 (1) 1 of the former Enforcement Decree of Corporate Tax Act. In light of the above provisions, it is reasonable to see that a person who actually participated in the registration of a corporation or management and actively exercises the right of decision-making and execution of a management team.

나) 살피건대, 원고는 2003. 9. 4. ○○재건을 설립하는 과정에서 자본금 5억 원을 사채업자로부터 차용하여 납입하였다가 다시 인출하는 방법으로 주금을 가장납입한 사실, 그런데 ○○재건의 대표이사로 등재된 백○○는 원고에 의하여 고용된 사람으로서 ○○재건의 경영에는 실제로 관여하지 못하였고, 원고는 백○○ 외 ○○재건의 임원 및 주주로 자신의 처남댁인 박○○과 처인 김○○, 건축사 이○○를 내세워 ○○재건을 설립한 후 ○○재건을 실질적으로 경영한 사실, ○○재건의 2006 사업연도의 주식등변동상황명세서에 의하더라도 ○○재건의 발행주식 총수를 김○○, 박○○, 백○○, 이○○가 그대로 각각 보유하고 있는 사실은 앞서 본 바와 같다.

In light of the above facts in light of the legal principles as seen earlier, since the plaintiff is a de facto shareholder who owns not less than 30/10 of the total number of shares issued and outstanding ○○ re-issuance and has de facto controlled the management of ○○ re-issuance, it is reasonable to view that the plaintiff constitutes "executive who is a shareholder, etc." as a representative under the proviso of Article 106(1)1 of the former Enforcement Decree of the Corporate

2) Judgment on the second argument

A) Article 26-2(1)1 of the former Framework Act on National Taxes (amended by Act No. 8830, Dec. 31, 2007; hereinafter the same) can be interpreted as "Fraud and other unlawful acts" under Article 9 of the Punishment of Tax Evaders Act. "Fraud and other unlawful acts" under Article 9 of the Punishment of Tax Evaders Act refer to fraudulent and other active acts that make it impossible or considerably difficult to impose and collect taxes impossible. In the context of crime of evading taxes, "the crime of evading taxes" refers to fraudulent and other unlawful acts that are committed by the person liable to pay taxes, while recognizing the fact that his act constitutes fraud and other unlawful acts, the person commits or attempts to commit unlawful acts while recognizing the fact that the act constitutes fraud and other unlawful acts, (see, e.g., Supreme Court Decision 2004Do817, Jun. 29, 2006). In this context, whether active concealment can be seen as being objectively revealed or not, should be determined differently from the method and method of filing a false tax return and the relevant tax base report.

In this regard, in a case where the representative of a corporation engaged in the act of manipulating the accounting books of a corporation in the course of embezzlement of corporate funds, the Supreme Court held that such act does not constitute "a case where a taxpayer evades national taxes by fraudulent or other unlawful act" under Article 26-2 (1) 1 of the former Framework Act on National Taxes because it is difficult to see that such an act is intended to conceal the fact that the amount of embezzlement is deducted, and that the income tax on the bonus that is to be reverted to him/her is anticipated to have been disposed of in the future. (See Supreme Court Decision 2007Du20959 Decided January 28, 2010).

On the other hand, Article 26-2 (1) 1 of the former Framework Act on National Taxes provides that "if a taxpayer evades a national tax, obtains a refund or deduction by fraudulent or other unlawful means, it shall be ten years from the date on which the national tax can be imposed," which is revised by Act No. 11124 on December 31, 201, if a taxpayer evades a national tax, obtains a refund or deduction by unlawful means, it shall be ten years from the date on which the income tax or corporate tax can be imposed on the amount disposed of under Article 67 of the Corporate Tax Act in relation to the corporate tax." Article 2 of the latter part of Article 26-2 (1) 1 of the Addenda provides that "the amended provisions of Article 26-2 (1) 1 of the former Framework Act on National Taxes shall apply from the amount disposed of under Article 67 of the Corporate Tax Act for the first time after January 1, 2012."

Therefore, the principle of no appeal against law merely means that the relevant law cannot be applied to the facts completed prior to the entry into force of the law, and it does not restrict the application of the law to the facts in progress or the facts that occurred thereafter (see, e.g., Supreme Court Decision 93Nu20726, Feb. 25, 1994; Supreme Court Decision 2001Du5705, Nov. 13, 2001). Therefore, if the period of imposition of the statute of imposition has not yet lapsed as of January 1, 2012, the above provision of the amendment can be applied (see, e.g., Supreme Court Decision 2015Du45274, Oct. 15, 2015).

B) On the other hand, in the process of establishing ○○ building, the Plaintiff, as an executive officer and shareholder in the form of ○○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

However, according to the above facts and each of the above evidence, if the person to whom the income accrued from the corporation was disclosed clearly, it cannot be presumed that it actually reverts to the representative director (see, e.g., Supreme Court Decision 98Du16347, Dec. 24, 1999). There is no other evidence to prove that the amount at issue actually belonged to the plaintiff. ② Even though the plaintiff's act of forging the name of the representative and manipulating the corporation's books can be seen as a means of evading the imposition of corporate tax on the amount at issue, it is difficult to conclude that the disposition at issue constitutes a comprehensive evasion of income tax due to the disposition at the tax authority's recognition of the amount at issue, and it is reasonable to see that the defendant's act was unlawful after the lapse of the exclusion period of imposition under Article 216 of the former Framework Act on National Taxes, since the defendant's act was based on the premise that "the actual representative at issue was recognized as the amount of outflow from the corporation, and thus, it cannot be viewed as unlawful under Article 216 of the former Framework Act.

3. Conclusion

Therefore, the plaintiff's claim is justified, and it is so decided as per Disposition.

[Attachment]

Relevant statutes

(1) The former Framework Act on National Taxes (amended by Act No. 8830 of Dec. 31, 2007)

Article 26-2 (Period for Excluding Assessment of National Tax)

(1) No national tax may be levied after the period prescribed in the following subparagraphs expires: Provided, That where a mutual agreement procedure is in progress under the provisions of a treaty concluded to prevent double taxation (hereinafter referred to as "tax treaty"), Article 25 of the Adjustment of International Taxes Act shall apply:

1. Where a taxpayer evades a national tax, or receives a refund or deduction by fraudulent or other unlawful means, for ten years from the date on which the national tax is assessable;

2. If the taxpayer fails to file a written tax base return within the legal return term, for seven years from the day on which the national tax is assessable;

3. If it does not fall under subparagraphs 1 and 2 above, for five years from the day on which the national tax is assessable; and

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

Article 26-2 (Period for Excluding Assessment of National Taxes)

(1) No national tax may be levied after the period prescribed in the following subparagraphs expires: Provided, That where a mutual agreement procedure is in progress in accordance with the treaty for the prevention of double taxation (hereinafter referred to as "tax treaty"), Article 25 of the Adjustment of International Taxes Act shall apply:

1. Where a taxpayer evades a national tax, or receives a refund or deduction by fraudulent or other unlawful means prescribed by Presidential Decree (hereinafter referred to as "unlawful means"), it shall be for ten years from the date on which the national tax is assessable. In such cases, where the national tax which is evaded, refunded or deducted by unlawful means is a corporate tax, it shall be for ten years from the date on which the income tax or corporate tax on the amount disposed of under Article 67 of the Corporate Tax Act is assessable;

Sub-laws (Law No. 11124, 31, 2011)

Article 1 (Enforcement Date)

This Act shall enter into force on January 1, 2012: Provided, That the amended provisions of Article 84-2 (1) 1, Article 85-5 (1) 3, (2) and (5) shall enter into force on July 1, 2012.

Article 2. (Application Period for Excluding Assessment of National Taxes)

(1) The amended provisions of the latter part of Article 26-2 (1) 1 shall apply from the amount disposed of under Article 67 of the Corporate Tax Act for the first time after January 1, 2012.

(2) The amended provisions of Article 26-2 (2) shall apply from January 1, 2012 to the first application for correction or recommendation for adjustment.

(1) The former Corporate Tax Act (amended by Act No. 8831 of Dec. 31, 2007)

Article 67 (Disposition of Income)

In filing a report on the corporate tax base on the income for each business year under the provisions of Article 60 or in determining or revising the corporate tax base under the provisions of Article 66 or 69, the amount included in the calculation of earnings shall be disposed of as bonus, dividends, other outflow from the company and internal reserve according to the person to whom it belongs, as prescribed

(1) The former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 19891 of Feb. 28, 2007)

Article 43 (Non-Inclusion of Bonuses in Calculation of Losses)

(1) Bonuses paid by a corporation to officers or employees in the disposition of profits (excluding piece rates falling under the provisions of any subparagraph of Article 20 (1)) shall not be included in the calculation of losses. In this case, remuneration paid to members who invest through work and labor in unlimited partnerships or limited partnerships shall be deemed as bonuses from the disposition of profits.

(6) Officers under the provisions of paragraphs (1) through (5) (hereinafter referred to as officers) shall mean persons performing the duties under the provisions of each of the following subparagraphs:

1. All members of the board of directors and liquidators, such as the chairperson, president, vice president, chief director, representative director, managing director, and managing director;

2. Executive partners or directors of unlimited partnerships, limited partnerships and limited companies;

3. Auditor.

4. Other persons performing duties similar to those under subparagraphs 1 through 3.

Article 106 (Disposition of Income)

(1) The amount included in the calculation of earnings under the provisions of Article 67 of the Act shall be disposed of under the provisions of the following subparagraphs. The same shall apply to non-profit domestic corporations

1. Where the amount included in the calculation of earnings has clearly leaked out of the company, the dividends, bonuses from the disposition of profits, other income, and other outflow from the company under each of the following items according to the person to whom they accrue: Provided, That where the accrual is unclear, it shall be deemed to have been reverted to the representative (where the total number of stocks held by an officer who is not a minority shareholder under the provisions of Article 87 (2) and persons with a special relationship under the provisions of paragraph (4) of the same Article is 30% or more of the total number of stocks issued or total investment amount of the concerned corporation and the officer actually controls the operation of the corporation, he shall be deemed the representative, and where a corporation which has been exempted from withholding taxes under the provisions of Article 46 (12) of the Restriction of Special Taxation Act reports that there is a separate representative among the officers who are stockholders, the reported person shall be the representative, and where there

(a) Where the person of accrual is a stockholder (not including stockholders who are officers or employees), the dividends of the person of accrual;

(b) If the person to whom it belongs is an officer or employee, the bonus to the person to whom it reverts;

(c) Where the person to whom it belongs is a corporation or an individual operating the business, other outflow from the company: Provided, That it shall be limited to where the distributed profit constitutes the income for each business year of a domestic corporation or a domestic business place of a foreign corporation under the provisions of Article 94 of the Act or the business income of a resident or a non-resident under

(d) If the person to whom it belongs is other than those as referred to in items (a) through (c), other incomes for the person to whom it reverts