No disposition shall be taken for the recognition of the representative in the name registered in the corporate register.

The representative shall be a representative who actually runs the company, and even if the representative is registered on the corporate register as the representative director of the company, if the company does not actually operate the company, such recognized income shall not be subject to comprehensive income tax because it reverts to the name of the representative director.

Article 14 of the Framework Act on National Taxes

Article 67 of the Framework Act on National Taxes

1. The Defendant’s disposition of imposition of KRW 4,110,920 against the Plaintiff on August 1, 2007 shall be revoked.

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

The decision is as follows (the disposition date stated by the plaintiff in the purport of the claim is August 7, 2007 and the amount of 4,283,570 won are stated by mistake).

1. Details of the disposition;

A. On July 8, 1987, the company was established for the purpose of trade business, etc. on July 8, 1987, and closed on February 28, 2006. The plaintiff was registered as the representative director in the corporate register of the company from October 10, 2000 to May 22, 2002 and from October 13, 2003 to the date of business closure.

B. As the instant company did not report corporate tax in 2004, the director of the Ansan Tax Office estimated corporate tax on the income amount in 2004 under the simple expense rate, and notified the Defendant, who is the chief director of the Plaintiff’s tax office, who is the representative director of the corporate registration injury, of the said taxation data.

C. On August 1, 2007, the Defendant issued the instant disposition that determined and notified the Plaintiff of the global income tax of KRW 4,110,920 for the year 204 based on the foregoing taxation data.

D. The Plaintiff, who was dissatisfied with the instant disposition, filed an appeal on December 18, 2007 with the Defendant, but the Tax Tribunal dismissed the Plaintiff’s appeal on May 1, 2008.

[Grounds for Recognition: Evidence A 1, 5, and 6]

2. Whether the disposition is lawful;

A. The plaintiff's assertion

The actual manager of the company of this case is Kim ○, China's nationality, and the plaintiff is only the representative director in the name registered in the corporate register of the company of this case in order to resolve inconvenience caused to Kim ○, which is a foreigner, and there was no participation in the management of the company of this case. Thus, the disposition of this case against the plaintiff is

(b) Related statutes;

Article 14 of the Framework Act on National Taxes

Article 67 of the Framework Act on National Taxes

Article 106 of the Enforcement Decree of Corporate Tax Act

C. Determination

Under Article 106 (1) of the Enforcement Decree of the Corporate Tax Act, the system does not provide that the representative shall be based on the facts that such income has accrued, but it aims to consider certain facts that can be recognized as such in order to prevent an unfair act under tax law by a corporation as a bonus to a unconditional representative regardless of their substance. In such a case, the representative who is subject to the bonus disposition shall be limited to a strict interpretation, and the representative shall be the representative who actually manages the company, and even if the representative is registered on the corporate register of the company, the representative shall not be subject to the comprehensive income tax by reverting such income to the representative director, unless he actually operates the company.

According to the statements in Gap evidence Nos. 2 through 6, Gap evidence No. 7-1, 2, and Gap evidence No. 8, a Chinese national Kim ○ shall acquire the shares of the company of this case around October 2000 and operate the company of this case as the representative of this case for the year 2006 after registering a foreign investment company as provided by Article 21 (1) of the Foreign Investment Promotion Act on December 7, 2000. The plaintiff allowed Kim ○ to register himself as the representative director of the company of this case for the purpose of resolving inconvenience caused to financial transaction relations with foreigners. However, the plaintiff did not participate in the management of the company of this case for the period when he was registered as the representative director, and it is recognized that he did not receive any remuneration from the company of this case (the above points can be presumed to have been difficult for the plaintiff to have engaged in the business of the company of this case for the aged 70 years old at the time).

According to the above facts, the plaintiff is merely a representative director who permitted the use of his name without involvement in the management of the company of this case, and is not a representative director who actually operated the company of this case. Thus, the defendant's disposition of this case against which the general income tax was imposed on the plaintiff, who is the representative director in the name of this case, is unlawful.

3. Conclusion

Therefore, the plaintiff's claim is reasonable, and it is decided as per Disposition by admitting it.