The judgment below

Among them, the part against the plaintiff on the imposition of global income tax for 2001 to 2004 and the part on the imposition of global income tax for 2005 to 2008 are reverted.

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

1. Judgment on the Plaintiff’s grounds of appeal

A. In the case of using a base company, whether the principle of substantial taxation is applied (ground of appeal No. 1) (1). Article 14(1) of the Framework Act on National Taxes provides for the principle of substantial taxation. In a case where there is a separate person to whom the title of taxation, such as income, profit, property, and transaction, belongs, the person to whom the title of taxation belongs is not the person to whom the title of taxation belongs but the actual owner

Therefore, in a case where the nominal owner of the property is not capable of controlling and managing it, and there is a separate person who substantially controls and manages it through control, etc. over the nominal owner, and the disparity between the name and the substance arises from the purpose of tax evasion, the income on the property shall be deemed to have accrued to the person who actually controls

(See Supreme Court en banc Decision 2008Du8499 Decided January 19, 2012 (see, e.g., Supreme Court en banc Decision 2008Du8499, Jan. 19, 2012). The substance over form principle applies to international trades in which a nonresident or a foreign corporation establishes a nominal company in a country benefiting from a tax treaty to use only the corporate form in order to avoid Korean tax, which is the source country, as well as international trades in which a resident or a domestic corporation is not capable of performing business activities in a tax haven place taxable or lower tax rate to avoid Korean tax, which is the resident country, and only a tax haven place where the resident or a domestic corporation establishes a so-called “base company” and uses only the corporate form, thereby unfairly reserving the income to be attributed to the actual controlling manager (see, e.g., Supreme Court Decision 2014Du3355