Daejeon District Court 2013Guhap385 (Law No. 29, 2013)

Since the disposition of income related to the unreported corporate tax is unclear, it should be made to the plaintiff who is the representative director in the corporate register of the corporation.

Even when it is assumed that the father of the plaintiff actually controlled the management of the corporation concerned, there is no evidence to acknowledge that the father of the plaintiff was registered as a representative or an officer on the corporate register or that he owns not less than 30/100 of the total shares. Thus, it cannot be a representative who is the other party to the disposition of income of the corporation concerned as provided in the proviso of Article 106(1

2013Nu1025 global income and revocation of disposition

United StatesA

The Director of the National Tax Service

Daejeon District Court Decision 2013Guhap385 Decided May 29, 2013

October 25, 2013

November 7, 2013

1. The plaintiff's appeal is dismissed.

2. The costs of appeal shall be borne by the Plaintiff.

The judgment of the first instance shall be revoked. Each disposition taken by the Defendant against the Plaintiff on July 10, 2012 on global income tax for the year 2008 and global income tax for the year 2009 shall be revoked.

1. Details of the disposition;

A. BB Co., Ltd. (hereinafter “BB”) is a company that runs a business, such as an owner of the right to operate theCC restaurant at the construction site, and its business registration was cancelled on August 12, 2003 due to the ex officio closure of business by the tax authority on May 16, 2009.

B. Meanwhile, on the corporate register of BB, the registration of appointment was completed on the same day as the Plaintiff assumed office as the representative director on January 27, 2005, but the registration was completed on September 1, 2009, after the registration was revoked due to the ex officio closure of business by the tax authority. On January 28, 2008, the Plaintiff retired from the office of the representative director on January 28, 2008, and the representative director was registered after his resignation was re-signed as the representative director on August 18, 2009.

C. As BB did not report corporate tax for the business year 2009, the head of the Song District Tax Office having jurisdiction over the head office of BB conducted a tax investigation with respect to BB on January 201, 2012, calculated the amount of income by estimation method after conducting a tax investigation with respect to BB, and notified the Plaintiff registered as the representative director and then notified the Defendant having jurisdiction over the domicile of the Plaintiff

D. On July 10, 2012, the Defendant issued a correction and notification of the global income tax OOO or OOOO or 2009 global income tax 2009 to the Plaintiff on July 10, 2012 (hereinafter “instant disposition”).

E. On July 31, 2012, the Plaintiff appealed to the Tax Tribunal, but was dismissed on October 23, 2012.

[Ground of recognition] Facts without dispute, Gap evidence 1, 2, Eul evidence 1 and 2 (including branch numbers; hereinafter the same shall apply), the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. Summary of the plaintiff's principal

Although the plaintiff was registered as the representative director in the corporate register of BB, the actual manager of BB is a D, so the disposition of income related to the unreported corporate tax of BB should be conducted with respect to the soD, which actually controls BB, while the disposition of income related to the unreported corporate tax of BB should be conducted with respect to the Plaintiff, which is only the representative in the corporate register name and form, and the disposition of this case should

B. Relevant statutes

It is as shown in the attached Form.

C. Judgment on the Plaintiff’s assertion

(1) Relevant legal principles

Article 106 (1) 1 (proviso) of the Enforcement Decree of the Corporate Tax Act provides that a system which recognizes a representative of a corporation as a result of disposal of income does not provide that representative based on the fact that such income has accrued, but provides that a certain fact which can be recognized as such act in order to prevent an unfair act under tax laws by a corporation shall be deemed as a bonus to a de facto representative regardless of its substance. In such a case, the representative of a corporation subject to bonus disposal shall be in accordance with the language and text of the above Article 106 (1) 1 (see Supreme Court Decision 92Nu3120, Jul. 14, 1992). The proviso to Article 106 (1) 1 of the Enforcement Decree of the Corporate Tax Act provides that where the ownership of stocks owned by an officer, such as a shareholder, who is not a minority shareholder, and persons with a special relationship, shall be deemed as a representative of the corporation, and thus, if the executive actually controls the operation of the corporation, he/she shall not be deemed as a representative within the above provision provision.

On the other hand, since a person who is registered as a representative director on the corporate register can be presumed to have actually been operating the company, the representative director on the corporate register must prove the fact that he/she actually failed to operate the company (see Supreme Court Decision 2006Du187, Apr. 24, 2008).

(2) Facts of recognition

(A) On the corporate register of BB, the Plaintiff retired from office on January 27, 2005, retroactively from office as the representative director on September 1, 2009, and thereafter was re-registered as the representative director on August 18, 2009.

(B) The Plaintiff, who is a representative director of BB, provided the construction company with the name of the CC restaurant operating authority and explained the cafeteria’s operating authority, and requested the construction company’s cafeteria managing officer to assist the cafeteria in operating the cafeteria at the site.

(C) The Plaintiff, as the representative director of BB from January 1, 2007 to December 31, 2009, filed a report with the tax authority to receive the benefits of KRW BB from 2007 to 00, 008, 008, and 009.

(D) On May 31, 2009, the Plaintiff submitted to the Defendant a final return on the tax base of global income tax, etc. for the year 2008, and submitted a final return on the tax base for global income tax, etc., and voluntarily returned and paid the integrated income tax to the Defendant.

(E) During the period from January 28, 2008 to August 18, 2009, the Plaintiff was registered as the representative director on the corporate register of BB for the period from January 28, 2008, which was registered as being reappointed after retirement from the representative director of BB, and the registration of the Plaintiff’s retirement was completed retroactively on September 1, 2009, the same date as the registration of the re-employment.

[Ground of recognition] Evidence No. 3, Evidence Nos. 2 through 4, and the purport of the whole pleadings.

(3) Determination

According to the above facts, even if the registration of the representative director was completed on Jan. 27, 2005 on Jan. 27, 2005 on the corporate register of BB and the registration of the retirement of the representative director was completed on Jan. 28, 2008, the plaintiff did not have the registration of the re-registration of the re-registration of the representative director until Aug. 18, 2009. Thus, from Jan. 27, 2005 to Jan. 27, 2008; and from Sep. 18, 2009, from Jan. 28, 2008 to Aug. 18, 2009, the registration of the retirement of the representative director shall be deemed legitimate representative director BB, and from Jan. 28, 2008 to Aug. 18, 2009, the income disposition of BB's non-registration of the corporate tax shall be made with respect to B's corporate register.

Meanwhile, even if it is assumed that the Plaintiff’s father, as alleged by the Plaintiff, had de facto control over BB’s management, there is no evidence to acknowledge that DoD was registered as a representative or an officer on the corporate register of BB, or that BB owns not less than 30/100 of the shares of BB, and thus, it cannot be the representative of BB’s income disposition counterpart under the proviso of Article 106(1)1 of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 21972, Dec. 31, 2009).

Therefore, the disposition of income to the plaintiff, who is the representative of BB, is legitimate, and the plaintiff's assertion is not reasonable.

3. Conclusion

Therefore, the plaintiff's claim of this case shall be dismissed in its entirety as it is without merit, and the judgment of the court of first instance shall be just and the plaintiff's appeal is dismissed as it is without merit. It is so decided as per Disposition.