early 2014 Heavy1426 ( December 18, 2014)

Fictitious dividend resulting from stock retirement shall be the date on which the stock is determined in the total amount of stocks to retire;

The time when deemed income from deemed dividend through stock retirement is stipulated in the date of determination on the retirement of stocks, and the date of determination on the retirement of stocks is in accordance with the resolution by the board of directors instead of the board of directors resolution

2015Guhap60748 global income and revocation of disposition

Park ○ and one other

○ Head of Tax Office and one other

9.23 2015

December 9, 2015

1. All of the plaintiffs' claims are dismissed.

2. The costs of lawsuit are assessed against the plaintiffs.

Cheong-gu Office

○○ Head of the tax office’s global income tax on December 4, 2013 on December 4, 2013, on the global income tax for the year 2009.

The imposition of KRW 981,982,210 and the imposition of KRW 544,420,960 on December 4, 2013 by Defendant ○○○○○○○○○○○○○○ on Plaintiff 2009 shall be revoked, respectively.

1. Details of the disposition;

A. On May 25, 2006, ○○ L&C Co., Ltd. (hereinafter referred to as “○○○ L&C”) owned KRW 460,000 (Capital 2,300,000,000) with a face value of KRW 5,000 (Capital 2,300,000,000). Of them, Plaintiff Kim○ held KRW 128,000 with a share ratio of KRW 27.83% and KRW 102,00 with a share ratio of KRW 22.17%.

B. On May 25, 2006, the Plaintiffs transferred a total of 230,000 shares (hereinafter “instant shares”) to △△&C. On May 30, 2006, ○○ L&C opened a board of directors on May 30, 2006 to make a resolution to purchase KRW 230,00 shares from △△C for the purpose of the retirement of shares at KRW 27,886, totaling KRW 6,413,780,00 shares, and purchased the instant shares from △△&C on the same day.

C. ○○ L&C had a decrease of KRW 1,150,000 in capital (=230,000 x face value of KRW 5,000) by holding a temporary general meeting of shareholders on March 2, 2009 and implementing a resolution to retire the shares of this case.

D. On December 4, 2013, the Defendants determined that deemed that deemed dividend income had occurred to the Plaintiffs on March 2, 2009 due to stock retirement, and on December 4, 2013, Defendant ○○○ Head of the tax office imposed global income tax of KRW 981,982,210 for the year 2009, and Defendant ○○ Head of the tax office imposed global income tax of KRW 544,420,960 for the year 2009 on Plaintiff ○○○○ (hereinafter “instant disposition”).

Grounds for Recognition

Facts without dispute, Gap evidence Nos. 1 through 4, Eul evidence Nos. 1, 2, 5, and 6 (including each number; hereinafter the same shall apply), the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

○○ L&C determined the retirement of shares through the resolution of the board of directors on May 30, 2006, and acquired the instant shares on the same day. As such, the time when deemed dividend income accrue was 2006, which was the year belonging to May 30, 2006, and the Defendants deemed the time when deemed income accrued as 2009, and thus, was unlawful.

(b) Related statutes;

Attached Form is as shown in the attached Form.

C. Determination

1) Article 46 Subparag. 4 of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 21934, Dec. 31, 2009) provides that the date of determining the retirement of stocks with respect to the receipt of constructive dividend income from stock retirement shall be the date of determining the retirement of stocks. Therefore, in this case, whether ○○○ C&C determines the retirement of stocks at any time

2) The former Commercial Act (amended by Act No. 10281, May 14, 2010; hereinafter the same) shares.

It is largely divided into cases where a company retires its own stocks through its profits that can be distributed, and regulations are different (see Article 343 of the former Commercial Act). In this case, the board of directors of ○○ C&C adopted a resolution on May 30, 2006 to retire its stocks by opening a board of directors on the holding of the board of directors on the stock of this case held by △△ C&C, and acquiring the stocks of this case on the holding of △△ C&C, and taking into account all the evidence and arguments mentioned above, it is reasonable to view that the minutes of the board of directors’ resolution as mentioned above were subject to deliberation on whether ○○ C&C’s profits exist at the time of the board of directors’ resolution, and that ○○ C&C purchased the stocks of this case from △△ C&C after the resolution of the board of directors, and then passed a resolution on the reduction of capital amount corresponding to the retirement of the stocks at the temporary general meeting of shareholders on March 2, 2009.

3) According to Article 343 of the former Commercial Act, in the case of stock retirement that brings about the reduction of capital, the reduction of capital.

In addition, the provisions of Articles 440 and 441 of the same Act shall apply mutatis mutandis, and in order to retire shares following the reduction of capital, it shall undergo procedures such as a special resolution of the general meeting of shareholders (see Articles 438(1) and 434 of the former Commercial Act). However, in this case, 00 ○○ C&C only passed a resolution of the board of directors on May 30, 2006, and did not pass a special resolution of the general meeting of shareholders to decide the retirement of shares. Thus, it cannot be deemed that ○○ C&C only passed the resolution of the board of directors, but decided the retirement of shares on May 30, 206, and as seen earlier, it shall be deemed that there was a decision to retire shares at the time of a resolution to retire shares through a temporary general meeting of shareholders on March 2, 2009, which stipulates the date on which the fictitious dividend income was determined, as income accrued under Article 46(4) of the former Enforcement Decree of the Income Tax Act.

4) As to this, the Plaintiffs are subject to a resolution of the board of directors on voluntary retirement of the instant shares.

In addition, ○○○ L&C acquired the instant shares on May 30, 2006, which are the shares of this case, brought about a substantial decrease in capital, and stated them in the financial statements in 2006, 2007, and 2008, as well as in the financial statements in 2008, since ○○ L&C acquired the instant shares in accordance with a resolution of the board of directors, it should be deemed to have received the constructive dividend income on May 30, 2006.

In the instant case where, as seen earlier, stock retirement due to the reduction of capital has been effected:

In light of the overall purport of the statements and arguments stated in the evidence Nos. 8 and 9, the retirement of shares must be conducted without regard to whether it is a voluntary retirement or compulsory retirement, and the purport of each of the statements and arguments stated in the financial statements No. 8 and 9, as alleged by the Plaintiffs, that ○○ L&C acquired and held the shares of this case, which are its own shares through the resolution of the board of directors on May 30, 2006, and each of the financial statements No. 2008, as alleged by the Plaintiffs, and each of the above facts can be acknowledged as having obtained approval of the general meeting of shareholders. However, even according to the above financial statements, ○○ L&C held the shares of this case without undergoing the procedures necessary for the retirement procedure or the reduction of capital for the shares of this case. Thus, even if such financial statements were approved by the general meeting of shareholders, such resolution alone cannot be deemed to have been a special resolution on the retirement of shares.

5) Therefore, on March 2, 2009, the Defendants premised on the fact that deemed dividend income was generated to the Plaintiffs.

The disposition of this case is legitimate, and the plaintiffs' assertion is without merit.

3. Conclusion

Thus, each claim of the plaintiffs in this case is dismissed as it is without merit, and all of them are dismissed.

It is so decided as per Disposition.