Seoul High Court-2015-Nu-4365 (Law No. 15, 2016)

It is reasonable to view that the status as an oligopolistic stockholder may be succeeded to the newly incorporated company in accordance with the provisions of the rehabilitation plan.

In cases where a rehabilitation company falls under an oligopolistic stockholder of the relevant corporation as of the date on which the secondary tax liability is established, it is reasonable to view that the status of oligopolistic stockholder can be succeeded to the newly incorporated company as prescribed by the rehabilitation plan at the time when the secondary tax liability is established.

Article 39 of the Framework Act on National Taxes

2016Du43459 Revocation of Disposition of Imposition of Comprehensive Real Estate Tax, etc.

AAA Development Corporation

BB Director of the Tax Office

2015Nu44365 (No. 15, 2016)

July 18, 2017

The appeal is dismissed.

The costs of appeal are assessed against the Plaintiff.

The grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed).

1. Article 39(1)2(a) of the former Framework Act on National Taxes (amended by Act No. 11124, Dec. 31, 201) provides that an oligopolistic shareholder who substantially exercises his/her right to the total amount of stocks owned exceeds 50/100 of the total number of outstanding stocks of the relevant corporation shall have secondary tax liability. Here, whether the oligopolistic shareholder of the relevant corporation is a requirement for establishing secondary tax liability is determined as of the date on which the relevant corporation’s tax liability is established (see Supreme Court Decision 85Nu405, Dec. 10, 1985).

Article 530-10 of the former Commercial Act (amended by Act No. 13523, Dec. 1, 2015) provides that "a company established by division or merger after division or a surviving company shall succeed to the rights and obligations of the divided company in accordance with the written agreement of division or merger after division," and Article 272-1 of the Debtor Rehabilitation and Bankruptcy Act (hereinafter " Debtor Rehabilitation Act") provides that when a debtor who is a stock company under a rehabilitation plan is divided or a debtor who is a stock company or part of another company is to be divided and merged with another company or part of another company, such division or merger after division may be allowed under the rehabilitation plan, and Article 530-10 of the former Commercial Act does not exclude the application of Article 530-10 of the same Act in such cases. Therefore, a newly incorporated company established by division of a rehabilitation company shall succeed to the rights and obligations of the

As can be seen, the rights and obligations of the rehabilitation company newly established according to the rehabilitation plan shall be deemed to include all those arising out of the public law relations, except that the transfer is not permitted in its nature. Moreover, Article 280 of the Debtor Rehabilitation Act provides that when a newly established company has determined in the rehabilitation plan to succeed to the tax obligations of the rehabilitation company, the newly established company shall be liable to pay such taxes, and the tax obligations of the rehabilitation company shall be extinguished.” Unlike the corporate division under the Commercial Act, the rehabilitation plan may determine whether to succeed to the tax obligations of the rehabilitation company, unlike the corporate division under the Commercial Act. The issue is whether the tax obligations that may arise in the future, without limiting to the tax obligations that have already occurred in

In addition to the case where a corporate rehabilitation company's tax liability is established, and even if the corporate rehabilitation company's tax liability is not yet established, if there is a possibility that its future tax liability can be established due to some of the tax requirements, etc., it shall be interpreted that the rehabilitation plan can determine whether to succeed to such status or legal effect. This interpretation is not contrary to the legal text, but also accords with the purpose of the provisions on the division of the corporate

Therefore, in cases where a rehabilitation company falls under an oligopolistic stockholder of the pertinent corporation as of the date of establishing the secondary tax liability, it is reasonable to view that the status as an oligopolistic stockholder can be succeeded to the newly incorporated company as prescribed by the rehabilitation plan at the time of the establishment of the secondary tax liability.

Whether the rights and obligations are succeeded to a newly established company according to the rehabilitation plan is a matter of determination according to the contents of the rehabilitation plan. However, if the contents of the rehabilitation plan are clear, it shall be reasonably interpreted in accordance with logical and empirical rules and the common sense of society and the common sense of transaction, in consideration of the following factors: (a) the principle of division and the contents of rights and obligations to be succeeded, (b) the existence of the rehabilitation company, (c) the management manager who prepared the rehabilitation plan and interested parties, including rehabilitation creditors who resolved the plan, and (d) the reasonable intent of division; (b) the purpose to achieve through the division; and

2. Review of the reasoning of the lower judgment and the evidence duly admitted by the lower court reveals the following facts.

A. On November 16, 2011, the Defendant: (a) deemed thatCCFV Co., Ltd. (hereinafter “CCFV”) owned a total of 28 parcels of land in each of the instant land on June 1, 2011, the global real estate holding tax base date for the year 2011; (b) designated CCPFV as December 15, 201 and imposed comprehensive real estate holding tax and special rural development tax for the year 201 (hereinafter “principal tax liability”); (c) on June 1, 2011, the Defendant owned DD DD sales Co., Ltd. (hereinafter “DD sales before the division”) by 80.46% of the issued stocks of CCPV as of June 1, 2011, which is the date on which CCPFV’s major tax liability is established.

C. Meanwhile, on August 10, 201, prior to the division, the Defendant received a decision on commencing the rehabilitation procedure under the Debtor Rehabilitation Act from the Seoul Central District Court 201 Gohap000 on August 10, 201, prior to the imposition of the above disposition against CCPFV, and the rehabilitation plan submitted by the administrator of DD sales prior to the division was approved on December 9, 201 (hereinafter “instant rehabilitation plan”).

D. According to the instant rehabilitation plan, prior to the division, DD sales were to be divided into continuing, newly established, and human division. The purpose and main contents are as follows.

(1) The purpose of the corporate division is to divide the automobile sales sector and the construction sector in order to promote the rehabilitation of DD sales prior to the division through the concentration of business capacity and the improvement of the financial structure through investment attraction, and the surviving company after the division is to achieve business normalization based on the improved financial structure by concentrating in the FF development business sector.

(2) Under the instant rehabilitation plan, the bus sales division and the construction division were separated from the bus sales division and the Plaintiff, a bus sales company, was newly established, respectively. DDD sales company and the Plaintiff, a new company, were transferred the assets and liabilities of DD sales prior to the division related to the pertinent business. In other words, ① DDD sales company transferred the assets and liabilities related to the existing DDD sales company prior to the division, and ② the Plaintiff was transferred the assets and liabilities related to the bus sales, i.e., the assets and liabilities related to the former DD sales company prior to the division, and (ii) the Plaintiff was transferred the assets and liabilities related to the construction business except the FD sales. Meanwhile, the Plaintiff was transferred the stocks of this case, which were owned by DDD sales company prior to the division, to the 'GF development company'. Meanwhile, the surviving company was changed into the 'GF development company' and continued the FD sales business.

According to the company division, the rehabilitation plan of this case has a principle on the division that transfers assets and liabilities related to each business to the new company along with the business.

(3) Under the instant rehabilitation plan, the Plaintiff was transferred a total of 48 construction businesses and defect repair business establishments, current account assets, inventory assets, current assets, and investment assets related to the business of the said construction business establishment.

The "HFV", one of the construction businesses transferred by the Plaintiff, was the land owned by the CCPFV, and the shares of this case were transferred as the investment assets for the Plaintiff to run the "HHPF business".

(4) With respect to the division of liabilities, the instant rehabilitation plan provides that, if a security right is established on an asset subject to transfer of a newly incorporated company, the amount recognized as a rehabilitation security right on the collateral is transferred to the company to which the relevant asset is transferred, and that tax liabilities and public-interest claims are transferred in full to the newly incorporated company and its surviving company, depending on the terms and conditions of the investment contract of the newly incorporated company and the nature of business-related claims. In other words, in principle, the existing liabilities of DD sales prior to the division are comprehensively transferred to the newly incorporated company and related assets.

In addition, the rehabilitation plan of this case did not limit the obligation to be transferred from DD sales to rehabilitation claims or public interest claims, or did not limit the obligation already established at the time of the division of the company of this case.

E. CCPFV failed to fulfill its duty to pay taxes until December 15, 201, which is the due date for the main tax liability. Accordingly, the Defendant issued the instant disposition to impose the comprehensive real estate tax and special rural development tax for the year 201, along with the notice of designation of the secondary taxpayer as the oligopolistic shareholder of CCPFV, on December 18, 2013 by the court’s decision that the surviving company cannot be deemed the secondary taxpayer following the division.

3. According to these factual relations, it is reasonable to view that the status as oligopolistic shareholders of the CPFV prior to the division, which forms the basis for establishing the secondary tax liability of the instant rehabilitation plan, was succeeded to the Plaintiff, a newly incorporated company, along with the instant shares. The grounds for such determination are as follows: ① The purpose of the instant corporate division is to divide the automobile sales sector and the construction sector for the rehabilitation of the CPD sales before the division, and the surviving company after the division is to transfer the assets and liabilities related to each business to the FF sector in accordance with the instant rehabilitation plan; ② The instant corporate division is based on the principle of division that transfers the assets and liabilities related to each business to the newly incorporated company along with the instant rehabilitation plan, and comprehensively transfer the existing liabilities related to the CPFV to the newly incorporated company to the newly incorporated company. ③ The Plaintiff is also determined according to the instant rehabilitation plan, which is the entire rehabilitation plan, to comprehensively transfer the assets and liabilities related to the instant business to the newly incorporated company.

In the same purport, the lower court is justifiable to have determined that the instant disposition by the Defendant was lawful. In so determining, the lower court did not err by misapprehending the legal doctrine on the scope of succession to rights and obligations, the effect of authorization for rehabilitation plan, and the joint and several tax liability in the company division

4. The Plaintiff’s appeal is dismissed as it is without merit, 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.