Cho High Court Decision 2005No444 ( November 16, 2006)

Even if the purpose of title trust of shares is to avoid the secondary tax liability, it cannot be deemed a fraud or other unlawful act with the act of title trust.

Even if the purpose of title trust of the Plaintiff’s shares is to avoid the secondary tax liability, it cannot be deemed that the Plaintiff evaded taxes by fraudulent or other unlawful acts with the act of title trust, and there is no evidence to acknowledge that the Plaintiff was holding the title trust of the shares of the non-party company for the purpose of evading the secondary tax liability, the exclusion period for imposition of ten years cannot be applied

Article 26-2 of the National Tax Basic Act

2011Revocation of revocation of imposition of value-added tax, etc.

New AAAA

Head of the tax office;

May 23, 2013

June 27, 2013

1. We affirm that each disposition imposed by the Defendant against the Plaintiff on August 30, 2010 on KRW 000 of corporate tax for the business year 2002, KRW 000 of value-added tax for the first period of 2003, KRW 000 of value-added tax for the second period of 2003, KRW 000 of value-added tax for the second period of 2004, and KRW 000 of corporate tax for the business year of 2004 is invalid.

2. The Defendant’s disposition of imposition of KRW 000 of the corporate tax for the business year 2002 against the Plaintiff on August 30, 2010 is revoked.

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

In the first place, on August 30, 2010, the defendant confirmed that the imposition of the corporate tax of 2000 won for the business year of 2002, the corporate tax of 2002, the tax of 000 won for the business year of 2003, the value-added tax of 000 won for the first term of 2003, the value-added tax of 000 for the second term of 2003, the value-added tax of 000 for the first term of 2004, and the corporate tax of 000 for the business year of 2004 is null and void.

1. Details of the disposition;

A. Since January 22, 2002, DDR Co., Ltd. (hereinafter referred to as "non-party company") operated export and import business and wholesale and retail business such as gold bullion in Jongno-gu Seoul,000.

B. During the period from 2002 to 2004, the non-party company received a tax invoice (hereinafter referred to as the "tax invoice of this case") equivalent to 000 won in the purchase of gold bullion from 62 companies, such as OOE, etc. (hereinafter referred to as the "the purchaser of this case"), and filed a value-added tax return as stated below, after deducting the input tax amount from the output tax amount for each corresponding taxable year as the input tax amount, from the output tax amount for each taxable year.

On April 1, 2005, the tax invoice of this case, which was received in the course of transaction as one of the transactional processes for disguised transactions of excessive coal trade, was deemed to be a different tax invoice, and the input tax deduction was denied, and on April 1, 2005, the tax invoice of this case was corrected for each taxable year as indicated below (including additional tax) and the corporate tax for 202 business year (hereinafter referred to as the "tax imposition disposition of the corporation of this case") was corrected on the grounds that the tax invoice of this case was corrected on April 30, 2005, and the tax invoice was not received (hereinafter referred to as the "tax imposition disposition of the corporation of this case").

D. Meanwhile, on July 31, 2005, the defendant imposed corporate tax (additional tax) for the business year 2004 on the non-party company on July 31, 2005 and imposed corporate tax of KRW 000 on December 1, 2005 on the non-party company (hereinafter "the second imposition disposition on the non-party corporation") (hereinafter "the third imposition disposition on the non-party corporation") and the payment period on December 1, 2005 as the payment period on December 31, 2005, and imposed corporate tax of KRW 000 for the business year 2002 ("the third imposition disposition on the non-party corporation").

E. On August 30, 2010, the non-party company did not pay the value-added tax and corporate tax pursuant to the disposition of imposition of the first, second, and third, the non-party company, and the defendant considered the plaintiff as the oligopolistic shareholder of the non-party company as the second taxpayer, and notified the plaintiff of the tax amount in arrears (principal tax and additional dues) corresponding to the shares as

F. Meanwhile, on April 21, 2010, the non-party company filed a lawsuit seeking revocation of the first imposition disposition of this case with the Seoul Administrative Court, and the Seoul Administrative Court revoked all the first imposition disposition of this case, which is the non-party company's claim (Seoul Administrative Court Decision 2007Guhap6717), and the Seoul High Court dismissed the defendant's appeal on August 26, 2010 (Seoul High Court Decision 2010Nu13410). On February 24, 2011, the Supreme Court reversed the part concerning the imposition disposition of value-added tax other than the additional tax, such as non-submission, and remanded it to the Seoul High Court, and rejected the second appeal (Supreme Court Decision 200Du20430). The Seoul High Court accepted part of the defendant's appeal on May 9, 2012, and excluded the part concerning the first imposition disposition of value-added tax for 000% of the amount of value-added tax exceeding 200% of the tax (excluding the second imposition of value-added tax).

G. Accordingly, on April 18, 2013, the Defendant revoked the payment notice to the Plaintiff as set forth in the following table (the amount including additional dues; hereinafter the same shall apply) (the notice of payment dated August 30, 2010, “the instant disposition”).

[Based on recognition] Items A through 5, 7, and 1, and 2, and 3, respectively, and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

1) The primary claim(s)

The defendant made the disposition of this case five years after the date on which the principal liability for tax payment expired. The disposition of this case is null and void since all of the exclusion period for taxation of this case was imposed.

2) Claim as to the preliminary claim

When the taxation imposed on the principal taxpayer is unlawful, the secondary tax liability cannot be recognized, and the judgment that the taxation imposed on the principal taxpayer was unlawful has become final and conclusive in the lawsuit disputing the main tax liability, so the instant disposition also is unlawful.

B. Relevant statutes

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

C. Determination

1) Judgment as to the main claim

A) Relevant legal principles

According to Article 26-2(1) of the former Framework Act on National Taxes (amended by Act No. 8860, Feb. 29, 2008; hereinafter the same), the exclusion period for national taxes, excluding inheritance and gift taxes, is five years from the date on which national taxes can be imposed. Generally, the date on which national taxes may be imposed, in principle, excludes cases where the time limit for filing the tax base and amount of national taxes of the relevant national tax is prescribed, and, in principle, the time when the tax liability is established (see Supreme Court Decision 98Du11250, Apr. 9, 199); and so long as the notice of tax payment against the secondary taxpayer has a characteristic as an independent disposition for imposing taxes on the principal taxpayer (see Supreme Court Decisions 98Du4535, Oct. 27, 1998; 87Nu375, Jun. 14, 198; 2000Du15865, May 26, 1988).

"However, in order to establish the secondary tax liability, the occurrence of the fact that falls under the requirements such as the failure of the principal taxpayer. Therefore, the time of establishment is at least after the expiration of the time limit for payment of the principal tax liability (see Supreme Court Decision 2003Du13083, Apr. 15, 2005), and the tax authority has no legal impediment in imposing the secondary tax liability from the day following the expiration of the time limit for payment of the principal tax liability, and it is reasonable to view that the secondary tax liability applies the limitation period for five years from the date following the expiration of the time limit for payment of the principal tax liability to the date following the expiration of the time limit for payment of the

With respect to this case, each disposition of tax of 00 won for the business year 2002, 000 won for the first term of value-added tax of 2003, 000 won for the second term of value-added tax of 2003, 000 won for the first term of 2004, and 0000 won for the first term of 2004 (the due date for the first tax payment of 2005, April 30, 2005) and corporate tax of 0000 for the business year 2004 (the due date for the first tax payment of 2005, July 31, 2005), which was made only on August 30, 200 after five years from the date following the due date for the principal tax payment of 204, shall be null and void, unless there are special circumstances.

In this regard, the defendant, and ① the case where the name transfer is confirmed only by judgment, as in this case, Article 26-2(3) of the former Framework Act on National Taxes, and ② the starting date for the second tax liability of this case is August 24, 2010, when the plaintiff came to know that the second tax liability of this case was the person liable for tax payment, the exclusion period has not been set, or ③ the plaintiff argued that the second tax liability of this case should be applied for a long-term exclusion period of ten years, or since the second tax liability of this case was 10 years or 7 years or 10 years since the second tax liability of this case was 10 years or 7 years since the fraudulent or other unlawful act to conceal the fact that the plaintiff was the person liable for tax payment.

Article 26-2 (3) of the former Framework Act on National Taxes provides that in a judgment in a lawsuit under the Administrative Litigation Act, where it is confirmed that the name lending has been made, notwithstanding paragraph (1), a correction decision may be made or other necessary measures may be taken against a person who actually runs a business after cancelling the disposition of imposition of the name lending person within one year from the date on which the judgment becomes final and conclusive, and since the fact of the name lending by the plaintiff cannot be confirmed in the judgment in the related lawsuit of this case (in addition, according to each of the evidence Nos. 2 and 7, and No. 1, the defendant's investigation into the second taxpayer of this case, while the related lawsuit of this case is pending on August 24, 2010, it is recognized that the fact of the disposition of this case was made on August 30, 2010 by deeming the plaintiff as the actual shareholder of the non-party company, and it cannot be confirmed that the plaintiff listed his employee, etc. in the judgment in this case related to this case as a false shareholder disease)

In addition, the secondary tax liability borne by the plaintiff is established when the non-party company, the main taxpayer, is delinquent, regardless of whether the defendant is the secondary taxpayer, so the time when the defendant becomes aware of the secondary taxpayer cannot be considered as the initial date of the exclusion period. As alleged by the defendant, deeming the initial date of exclusion period as the time when the secondary taxpayer becomes aware of the secondary taxpayer is contrary to the essence of the exclusion period system to ensure legal stability, and the exclusion period is contrary to the legislative intent that separately prescribes the exclusion period according to the type of taxpayer's act (such as non-report, fraud, and other unlawful act) and the method of tax imposition (such as inheritance tax, gift tax, and national tax, etc. based on the imposition method).Therefore, the above argument by the defendant was

In addition, even if the purpose of title trust of the Plaintiff’s shares is to avoid the secondary tax liability, it cannot be deemed that the Plaintiff evaded taxes by fraudulent or other unlawful acts with the title trust act, even if the non-party company received illegal refund by abusing the zero tax rate system, it is not a refund of national taxes due to fraudulent or other unlawful acts, and there is no evidence to recognize that the Plaintiff held the shares of the non-party company in title trust for the purpose of evading the corporate tax and value-added tax in this case, it cannot be deemed that the Plaintiff made a significant difficult tax quota due to fraudulent or other unlawful acts. Accordingly, the Defendant’s above assertion is not reasonable.

Furthermore, since the secondary tax liability is replaced by the original tax liability, it is established on the premise of the main tax liability, and if the main tax liability is extinguished, the secondary tax liability becomes extinct (the subsidiary nature of the secondary tax liability). However, with respect to the main tax liability, the long-term exclusion period under Article 26-2 (1) 1 through 2 of the former Framework Act on National Taxes applies to the secondary tax liability, and the above long-term exclusion period under Article 26-2 (1) 1 through 2 of the former Framework Act on National Taxes does not apply to the secondary tax liability as a matter of course, and the exclusion period for the secondary tax liability runs separately from the main tax liability, and the period is five years from the date on which the secondary tax liability, which is the date on which it may be imposed under Article 26-2 (1) 3

C) Sub-determination

Therefore, each disposition of 200 won of corporate tax for the business year of 2002, 000 won of value-added tax for the first period of 2003, 000 won of value-added tax for the second period of 2003, and 000 won of value-added tax for the first period of 2004, and 0000 won of corporate tax for the business year of 2004 is null and void after the exclusion period of imposition expires. The plaintiff's primary claim is justified within the scope of the above recognition.

2) Determination on the conjunctive claim

Since the secondary tax liability is established and finalized separately from the primary tax liability, or is based on the premise of the existence of the primary tax liability, the grounds for the secondary tax liability should in principle affect the secondary tax liability. Therefore, it is reasonable to deem that the secondary tax liability can assert the defects in the disposition of imposition against the primary tax liability in a lawsuit seeking revocation of the secondary tax liability against himself/herself as to whether the secondary tax liability is unlawful (see, e.g., Supreme Court Decision 79Nu270, Nov. 13, 1979).

Article 76 (5) and Article 116 (2) 2 of the former Corporate Tax Act (amended by Act No. 8141 of Dec. 30, 2006) provide that "if a corporation provides goods to a businessman in connection with its business and fails to receive a tax invoice as provided in Article 16 of the Value-Added Tax Act, the chief of the district tax office having jurisdiction over the place of tax payment shall collect an amount calculated by adding an amount equivalent to 2/100 of the unpaid amount to the corporate tax," and Article 16 of the former Value-Added Tax Act (amended by Act No. 8142 of Dec. 30, 2006) provides that "if an entrepreneur registered as a taxpayer supplies goods, he shall deliver a tax invoice stating the registration number, name or name, and the person who receives the goods, and the registration number, and the amount, value, value, etc. of the supplied goods to the person who receives

On December 1, 2005, the defendant imposed corporate tax of 2000 won on the non-party company for the business year 2002, and in light of the contents of the related judgment of this case, so long as it cannot be concluded that the purchase transaction of the non-party company is not a supply of goods subject to value-added tax, it is difficult to conclude that the tax invoice of this case is not a legitimate tax invoice under the Value-Added Tax Act, and therefore, the disposition of imposing the non-party corporation of this case cannot be maintained as it is because it is unlawful. Thus, the disposition of imposing the non-party corporation of this case which is the main liability for tax payment is illegal, so it is also unlawful to impose the second liability for tax payment, and the defendant's disposition of imposing corporate tax of 000 won against the plaintiff of 2002 business year

3. Conclusion

The plaintiff's primary claim shall be accepted within the scope of the above recognition, and it shall be dismissed due to the lack of the reasons, and the preliminary claim shall be accepted for the reason.