The meaning of oligopolistic stockholders liable for secondary tax liability

In order to have a shareholder of a corporation bear the secondary tax liability pursuant to subparagraph 2 of Article 39 of the Framework Act on National Taxes, it is essential that the oligopolistic shareholder is in a position to substantially control the operation of the corporation, and it is not possible to impose the secondary tax liability on the sole ground that the shareholder list of the corporation is registered as a shareholder.

Article 39 subparagraph 2 of the Framework Act on National Taxes

Supreme Court Decision 80Nu403 Decided January 13, 1981, 80Nu403 Decided September 28, 1982, Supreme Court Decision 82Nu8 Decided January 24, 1984

Plaintiff

Head of Dongmasan Tax Office

Daegu High Court Decision 84Gu33 delivered on December 28, 1984

The appeal is dismissed.

The costs of appeal shall be borne by the defendant.

The grounds of appeal by the defendant litigant are examined.

In order to impose secondary tax liability on the shareholders of a corporation pursuant to Article 39 subparagraph 2 of the Framework Act on National Taxes, it requires that they are oligopolistic shareholders and are in a position to substantially control the operation of the corporation, and only the reasons registered as shareholders in the register of shareholders of the corporation in the form of a company cannot be said to be an oligopolistic shareholder (see, e.g., Supreme Court Decisions 80Nu403, Jan. 13, 1981; 82Nu8 and 83Nu607, Jan. 24, 1984).

According to the court below's decision, the court below recognized that the plaintiff was registered as a shareholder in the register of shareholders of the company but the fact was not a shareholder of the company, at the time when the national tax liability imposed on the non-party non-party non-party non-party non-party non-party non-party non-party non-party non-party non-party non-party non-party non-party non-party non-party non-party company was illegal. In light of the records, the court below's above fact-finding and decision are just and it

Therefore, the appeal is dismissed, and the costs of the appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices.

Justices Shin Jong-sung (Presiding Justice)