Plaintiff (Bae, Kim & Lee LLC, Attorneys Kang Yong-ok et al., Counsel for the plaintiff-appellant)

The Director of the Pacific District Office

Head of Cheongju Tax Office

The supplementary intervenor (Law Firm Han, Attorneys Kim Jung-il, Counsel for the supplementary intervenor)

April 16, 2008

Seoul Administrative Court Decision 2005Guhap20795 decided Oct. 10, 2006

1. All appeals filed by the Plaintiff and the Defendant, the director of the Songpa District Tax Office, are dismissed.

2. Of the costs of appeal by the Plaintiff, the costs of appeal by the Plaintiff and the costs of appeal by the director of the tax office relating to the Defendant is borne by the said Defendant, and the costs of appeal by the said Defendant’s supplementary intervenor, respectively.

1. Purport of claim

The disposition of imposition of KRW 61,428,100 on March 3, 200 for the first time value-added tax for the year 1996 against the Plaintiff, KRW 180,825,100 on the second time value-added tax for the year 1996, KRW 126,902,420 on the first time value-added tax for the year 1997 against the Plaintiff, KRW 843,534,950 on July 4, 2003, and KRW 387,292,480 on the corporate tax for the year 1997, KRW 969, value-added tax for the year 196, KRW 270 on the earned income for the year 198, KRW 369,590 on the earned income for the year 196, KRW 1630 on the earned income for the year 196, KRW 1936, KRW 1940 on the year 19.

2. Purport of appeal

Of the judgment of the court of first instance, the part against the plaintiff shall be revoked. The disposition of imposition of 61,428,100 won of the value-added tax of 1996 against the plaintiff on March 3, 2003, 1996, 180,825,100 won of the value-added tax of 296, 126,902,420 won of the value-added tax of 1997 against the plaintiff on July 4, 2003, 843,534,950 won of the corporate tax of 1996, 387, 292,480 won of the corporate tax of 197, and the disposition of imposition of 18,008,00 won of the value-added tax of 196 against the plaintiff on March 10, 203 shall be revoked.

The director of the Songpa District Tax Office: the decision of the court of the first instance against the defendant is revoked, and the plaintiff's claim corresponding to the revoked part is dismissed.

1. Details of the disposition;

The following facts are not disputed between the parties, or can be acknowledged in full view of the purport of the whole pleadings as follows: Gap evidence Nos. 1, 2, 52, 53, Gap evidence No. 55-1, 2, Eul evidence No. 1, 2, Eul evidence Nos. 1 and 2, Eul evidence No. 3 through 7, Eul evidence No. 8-1, 2, 3, 9, Eul evidence No. 75, and Eul evidence No. 75:

A. On October 23, 1995, the Plaintiff Company was incorporated for the purpose of manufacturing semiconductor parts under the trade name, “Non-Party 4 Stock Company,” and the details of the change of trade name, location of principal office, and representative director after its incorporation are as follows.

(Trade)

본문내 포함된 표 순번 상호 변경일자 1 소외 4 주식회사 ？ 2 소외 5 주식회사 1998. 3. 4. 3 소외 6 주식회사 1998. 9. 29. 4 원고 주식회사 2006. 8. 31.

(Location of Head Office)

본문내 포함된 표 순번 본점 소재지 변경일자 1 서울 강남구 역삼동 (이하 지번 1 생략) ？ 2 서울 강남구 역삼동 (이하 지번 2 생략) 1996. 12. 19. 3 서울 송파구 문정동 (이하 지번 3 생략) 1997. 12. 14. 4 충북 진천군 이월면 동성리 (이하 지번 4 생략) 2004. 12. 31. 5 파주시 문산읍 선유리 문산첨단산업단지 (이하 지번 5 생략) 2006. 9. 5.

(Representative Director)

The name and term of office of Nonparty 1 in the table included in the main sentence shall be from October 23, 1995 to January 3, 1997 to January 3, 2005 to March 6, 2006 to January 3, 2005 to February 3, 2006 to February 3, 2008, respectively.

B. From March 16, 200 to May 29 of the same year, the director of the Seoul Regional Tax Office conducted a tax investigation on the Plaintiff Company’s 1996 to 1999 (hereinafter “the first tax investigation of this case”). After that, he received a tax evasion report from Nonparty 2, the former representative director of the Plaintiff Company, who was subject to the pertinent data from Nonparty 2, and conducted a special tax investigation on the Plaintiff Company (hereinafter “the second tax investigation of this case”) from June 20 to September 30 of the same year.

C. The director of the Seoul Regional Tax Office, following the second tax investigation in 196 through 197, deducted the sum of supply values in the names of six companies including the non-party 10 corporation during the first tax period of 1996 from 196 to 197, 2,839,658,750 won (referring to the time when the location of the office of the plaintiff company was the location of its head office in Gangnam-gu, Seoul (hereinafter referred to as the "number 1 omitted) and the Seoul Songpa-dong (hereinafter referred to as the "number 3 omitted) from 2,839,658,750 won (the first half, 472,523,900 won, 1962, 350 won, 197, 1976, 172, 500 won, and 199, and notified the Defendants of the purchase price of each factory tax invoice and the supply price of each taxable year after deducting it from its deductible expenses.

D. Accordingly, the Defendants denied the input tax deduction of the above processed tax invoice, and excluded the value of supply from the deductible expenses, and the head of Songpa District Tax Office imposed the Plaintiff Company the amount of KRW 61,428,100 for the first taxable year of 1996, the amount of the value-added tax of KRW 180,825,100 for the second taxable year of 1996, the amount of the value-added tax of KRW 126,902,420 for the first taxable year of 1997, the amount of KRW 369,15,620 for the first taxable year of 197, and the amount of KRW 843,534,950 for the business year of 196, the amount of corporate tax of KRW 387,292,480 for the corporate tax of KRW 1,230,427,430 for the second taxable year of 198.

E. The head of Song-gu Tax Office considers the difference in the income amount of the Plaintiff Company generated under the above tax adjustment as belonging to the non-party 3 and the non-party 2, who held office as the representative director of the Plaintiff Company at the time, to be divided into their respective tenure of office. On July 3, 2003, the head of Song-gu Tax Office notified the Plaintiff Company of changes in the income amount in relation to the non-party 2's income amount in 1997, 82, 87, 717, 197, 984, 307, 271, 197, 1997, 89, 482, 479, 197, 197, 1997, 39, 482, 479, 200, 196, 196, 197, 40, 197, 196, 194, 197.

F. The details and results of the request for a trial filed by the Plaintiff Company against each disposition of imposition and collection of this case to the National Tax Tribunal are as follows.

As a result of the judgment on the date of the petition for the trial on the imposition and collection disposition of the attached disposition disposition in the main text, the rejection of the petition filed on September 6, 2005 of the value-added tax on March 3, 2003 (the filing of the objection) on September 26, 2003, which was September 4, 2003, which was September 10, 2003, and included in the previous petition for trial on November 28, 2003, which was added to the purport of the previous petition for trial on November 28, 2003, which was the value-added tax on September 10, 2003, which was September 23, 2003.

2. Whether the instant disposition of imposition and collection is legitimate

A. The plaintiff company's assertion

(1) The director of the Seoul Regional Tax Office has already discovered the receipt of processed tax invoices at the time of the first tax investigation on the taxable year, items, and objects of taxation identical to the disposition of this case, but did not impose a taxation thereon. However, he again conducted the second tax investigation of this case even though there was no special change in circumstances after two years have passed. This is unlawful in violation of Article 81-3 of the former Framework Act on National Taxes (amended by Act No. 6782 of Dec. 18, 2002; hereinafter “former Framework Act on National Taxes”) and Article 63-2 of the former Enforcement Decree of the Framework Act on National Taxes (amended by Presidential Decree No. 17830 of Dec. 30, 202; hereinafter “former Enforcement Decree of the Framework Act on National Taxes”). Thus, the second tax investigation of this case is unlawful.

(2) The chief of the tax office: (a) deemed the income difference between the first period of December 1996 through 197, which occurred as a result of the above tax adjustment as income belonging to the Plaintiff Company’s representative director, and disposed of it for recognition and award to Nonparty 3 and Nonparty 2; and (b) pursuant to Article 26-2(1)3 of the Framework Act on National Taxes, the period for exclusion from imposition of withholding income tax is five years from the date on which national taxes can be imposed; and (c) the final deadline for filing a tax return on earned income from Nonparty 3 and Nonparty 2’s bonus on June 1, 1997 and June 1, 1998. However, Article 9-2 subparag. 2 of the Punishment of Tax Evaders Act provides that when a corporation files a report on the corporate tax base, or the Government determines or revises, it shall not be deemed that the amount disposed of as income from fraud or other unlawful act; and (d) the period for exclusion from imposition of withholding income for 10 years after the expiration of the period for exclusion period of imposition.

(3) The chief of the Song-gu Tax Office deemed the representative between the first period and the first period in 1996 to 197 of the Plaintiff Company as Nonparty 3 and Nonparty 2. However, Nonparty 3 and 2 are merely a nominal representative director, and the person who actually runs the Plaintiff Company during the above period is either the sales type of Nonparty 3 and the supplementary intervenor of the head of Song-gu Tax Office, the pro-friendly relationship between Nonparty 2 (hereinafter referred to as the “participating”). Therefore, the difference in the amount of income calculated by the park based on the receipt of the above processing tax invoice is deemed to have been attributed to the intervenor who is the actual representative of the Plaintiff Company. Thus, the instant collection disposition based on the premise that Nonparty 3 and Nonparty 2 is the representative of the Plaintiff Company is unlawful.

(b) Related statutes;

It is as shown in the attached Table related statutes.

(c) Fact of recognition;

The evidence of the above-mentioned 1, 2, 4-1, 5-1, 5-1, 3-1, 5-2, 5-1, 5-2, 5-1, 5-1, 5-2, 5-1, 3-1, 5-2, 5-1, 5-1, 5-2, 5-1, 3-1, 5-2, 5-1, 6-1, 5-2, 3-1, 4-1, 5-1, 5-2, 5-1, 6-1, 3-1, 5-2, 5-1, 5-2, 5-1, 5-1, 5-2, 3-1, 5-1, 5-2, 5-1, 3-1, 5-1, 5-2, and 4-1, 3-1, 5-2, 27, 3-1, 3-1

(1) Operation of Non-Party 1 Company and tax evasion

(A) The non-party 1 corporation (hereinafter referred to as "non-party 1 corporation") was established on June 23, 1987 by the intervenor and the non-party 3, his wife, etc., engaged in the manufacturing of the special floor space of semiconductors. The non-party 3 was registered as the representative director from June 23, 1987 to December 31, 1996 on the corporate register by the non-party 3 and from January 1, 1997 to September 1, 2005 by the non-party 2, the intervenor's birth, as the representative director.

(B) However, the intervenor approved the internal documents of the non-party company, such as the substitution table, disbursement resolution, purchase tax invoice, sales tax invoice, and draft sheet, as "president", and the non-party 3 and the non-party 2 had the final right to vote on the execution of the affairs of the non-party company by supporting the intervenor, and signed each of the above documents. The non-party 3 led the intervenor to manage the funds of the non-party company. Meanwhile, the non-party 3 was in charge of the external business in the position of the director in the non-party company, and the employees of the above company, such as the non-party 12, 13, 14, 9, and 15, are not only aware that the intervenor actually operated the above company,

(C) During the business year from 1995 to 2001, Nonparty Company received processed tax invoices of KRW 10,331,942,292 and KRW 37,382,00 from Nonparty 10 and 26 companies, and deducted the input tax amount in filing a return of value-added tax for the pertinent taxable period, and included the value of supply in deductible expenses at the time of filing a corporate tax for each business year. Nonparty 16, the Intervenor’s children paid the total of KRW 105,870,200 in deductible expenses during the business year from 1996 to 2001, and included it in deductible expenses at the time of filing a corporate tax for the pertinent business year.

(D) On August 5, 2003, the director of the tax office of Cheongju imposed KRW 691,721,950 in total corporate tax for the business year from 1998 to 2000 by non-Inclusion of the above processing tax invoice and processing benefit in deductible expenses. The above processing tax invoice and processing benefit were disposed of to the intervenors, who are the actual representative of the non-party company, and notified the changes in the amount of income to the non-party company.

(E) Around August 2005, the non-party company filed a lawsuit against the director of the tax office of Cheongju, stating that “the non-party 3 and the non-party 2 actually managed the non-party company, which is deemed to have been attributed to the intervenor,” and that it was unlawful to impose corporate tax on the non-party. However, on July 13, 2006, the Cheongju District Court dismissed the non-party company’s claim on the ground that “the substantial representative of the non-party company is the intervenor, and it is legitimate for the director of the tax office of Cheongju to recognize and dispose of the non-party income to the intervenor.” The non-party company appealed against this and filed an appeal with the Daejeon High Court No. 2006Nu1874, May 16, 2007.”

(F) On October 14, 2003, the Seoul District Court rendered a judgment of conviction against the Intervenor on the charge that “The Intervenor, while actually operating the non-party company, received false tax invoices from the non-party company 10, the principal industry, etc., and appropriated excessive expenses, and then, at the competent tax office, evaded corporate tax for the business year 1995 and the business year 1997 by filing a report on corporate tax base with the competent tax office” (Seoul District Court Decision 2003Da751). The Intervenor appealed against this and filed an appeal and appeal, but the judgment of conviction became final and conclusive (Seoul High Court Decision 2003No292, Supreme Court Decision 2004Do1557).

(2) The details of the establishment and operation of the Plaintiff Company

(A) On October 23, 1995, the intervenor, who is the actual representative of the non-party company, has decided to separate the company as the size of assets of the non-party company increases, and established the company by investing KRW 200,000 of the capital with the funds of the non-party company (in the amount of KRW 40,000,000, the par value is 5,000), but the issued shares were distributed in the name of the non-party 3 and the non-party 3, who is an officer or employee of the non-party company. The details of changes in the ownership of shares of the plaintiff

Non-party 312,00 (30%) on December 31, 1995, as of December 31, 1995, non-party 20, non-party 40, 000 (20%) 12,000 (30%) 42,000 (30%) on December 31, 1997, non-party 10,000 (20%) 28,000 (20%) 20%) 10,000 (20%) 20%) 10,000 (20%) 128,000 shares (20%) 6,000 shares (20%), non-party 13,000 shares (20%) 6,000 shares (14%) 6,000 shares (14%) 60%)

(B) However, in fact, the Plaintiff Company did not have an independent organization or office, and executives and employees of the Nonparty Company were entitled to do so under the name of the Plaintiff Company. The Intervenor exercised the final right to vote with respect to the performance of duties and the payment of funds of the Plaintiff Company. Nonparty 3 was in charge of external business in the same position as that of the Nonparty Company.

(C) On October 23, 1995, March 26, 1996, and January 3, 1997, the minutes of the board of directors held by the Plaintiff Company were signed and sealed by Nonparty 3 as the chairperson of the board of directors (the minutes as above are all Nonparty 15, 12, and 13 signed and sealed as the director of the Plaintiff Company). On January 6, 1997, the execution contract entered into between Nonparty 10 Co., Ltd. and the Plaintiff Company in relation to “the seal construction among the newly constructed ○○ factory” was written as the representative director of the Plaintiff Company, and Nonparty 3 signed and sealed the minutes of the ordinary meeting of the Plaintiff Company held on March 31, 1997 as the chairperson of the general meeting.

(D) However, around December 196, Nonparty 3 filed a complaint that the intervenor did not give treatment corresponding to his business performance, and submitted a letter of resignation of the representative director of each of the above companies. On December 31, 1996, the intervenor registered Nonparty 2, one of his birth, as the representative director in the corporate register of the plaintiff company and the non-party company, as the representative director in the corporate register of the non-party company. Around January 1997, the intervenor proposed that the non-party 3 will take over the management right of the plaintiff company.

(E) Accordingly, on February 4, 1997, Nonparty 3 was appointed as the representative director of the Plaintiff Company ( Nonparty 2 resigned from the representative director of the Plaintiff Company on the same day). Around April 1997, Nonparty 3 opened the Plaintiff Company’s corporate director’s corporate director and the corporate account deposited with KRW 500 million in operating funds from the Intervenor, and prepared a statement of actual expenses settlement between the Nonparty Company and the Nonparty Company on July 5, 1997, and received transfer of management rights from the Intervenor.

(F) Around July 1999, the Plaintiff Company filed a lawsuit claiming delivery of securities against the non-party company, including local development bonds, national housing bonds, urban railroad bonds, and public bonds, against the non-party company. The non-party company filed a preparatory document (Evidence A No. 54-2, 3) with the above court that "the non-party company is only a company established by the non-party company for the purpose of receiving the services for semiconductor dried Studs Construction." On June 30, 2000, the Seoul District Court: "The non-party company was a separate corporation in the form of form, but at the time the non-party company established the Plaintiff company without having an employee separate from the office, the officers and employees of the non-party company performed the Plaintiff company's business in the name of the non-party company. The Plaintiff company started to operate the non-party company as a corporation with physical and human facilities separated from the non-party company only on April 1, 199, which became final and conclusive on the ground that the above claims were acquired at its expense."

(G) On the other hand, on March 16, 200, the director of the Seoul Regional Tax Office conducted a tax investigation on the value-added tax and corporate tax over 1996 to 1999 on the basis of the accounting books, etc. of the Plaintiff Company. As a result, the Plaintiff Company discovered the omission of value-added tax and corporate tax by appropriating the processed material costs and labor costs as listed below in the above business year, and imposed and notified the Plaintiff Company.

Processed labor costs of KRW 274,36,00 in 1998, processed labor costs of KRW 74,366,00 in 71,383,00 in 1999, and KRW 71,475,00 in 72,425,428,000 in 72,428,000 in 16,340,000 in 80,540,000 in 89,474,000 in corporate tax of KRW 64,852,00 in 1,36,000 in 5,235,235,00 in 1,40 in 197,00 in 16,340 in 1,474,149,483,000 in 196,00 in corporate tax of KRW 1,36,00 in 5,00 in 208.

(3) Complaints, etc. filed against Nonparty 3 by Nonparty Company

(A) On February 2002, Nonparty 2, the representative director of Nonparty 2 filed a complaint with Nonparty 3 at the Dong District Prosecutors’ Office in Seoul Special Metropolitan City, stating that “The Nonparty 3 held title trust with Nonparty 3 on five parcels, other than 2,141m2 and 42,00m2 of the Plaintiff Company’s shares, but Nonparty 3 rejected the return and embezzled it without good cause.”

(B) On March 21, 2002, the intervenor submitted to the above prosecutor's office under investigation of the above case on March 21, 2002, a written statement that "the non-party company established the plaintiff company with the funds of the non-party company, and the shares issued by the plaintiff company was trusted in title to the non-party 3, and the actual manager of the plaintiff company is the intervenor. Although the intervenor was found to be operating the plaintiff company under certain conditions to the non-party 3, the intervenor is delegated only to the operation of the plaintiff company (Evidence No. 46-2)."

(C) On June 25, 2002, the prosecutor of the Seoul District Prosecutors' Office, who investigated the above accusation case, prosecuted Nonparty 3 on the charge that "the non-party 3 refused to return the land in custody under title trust from the non-party company and embezzled." The non-party 2, the representative director of the non-party company, was present as a witness of the above embezzlement case on February 26, 2003, and testified to the effect that " until the non-party company and the plaintiff company finished settlement as of July 5, 1997, as the president of the plaintiff company, approved all of the business execution of the plaintiff company, and affixed the seal of approval directly to the president of the document approved by the plaintiff company on June 11, 2003 (Evidence evidence 47-1 of the evidence No. 47). The Dong District Court sentenced the non-party 3 on June 11, 2003 to the judgment of conviction against the non-party 2, 2003, and 3639.

D. Determination

(1) Whether the principle prohibiting double investigation is violated

On the other hand, Article 81-3 of the former Framework Act on National Taxes provides that a re-investigation of the same item and the same taxable period may not be conducted except in the case where there is clear evidence to prove a suspicion of tax evasion. However, unlike the first tax investigation of this case, the second tax investigation of this case was conducted according to the active report on tax evasion attached by Nonparty 2, who served as the representative director of the non-party company and the plaintiff company, and as a result of the tax investigation of this case, the plaintiff company's omission of value-added tax and corporate tax in a considerable amount of money is discovered. In full view of the circumstances where there was a discovery of the fact that the plaintiff company was actually involved in the omission of value-added tax and corporate tax,

The plaintiff company asserted that the director of Seoul Regional Tax Office reserved the disposition of value-added tax and corporate tax according to the confirmation of the existence of the processing tax invoice discovered at the time of the second tax investigation of this case. However, there is no evidence to acknowledge it.

Therefore, this part of the Plaintiff Company’s assertion is without merit.

(2) As to whether the exclusion period for imposition of income tax from the disposal of the income tax on the ground of the recognition

(A) The starting date of the establishment and exclusion period of the income tax liability

In cases where the tax authority deemed that the additional amount of gross income that was released from the company was reverted to the representative and disposed of as a bonus, unlike the fact that the withholding agent is liable on the date when the notice of change in the amount of income was served on the corporation as the payer of the relevant amount of income, for the corporation that is the withholding agent, regardless of whether or not the notice of change in the amount of income was served on the corporation, if the disposition of income is made with respect to the person to whom the income accrued, it constitutes the "amount disposed of as bonus by the corporate tax" under Article 20 (1) 1 (c) of the Income Tax Act and is subject to taxation of the amount of earned income tax. Pursuant to Article 39 (1) of the Income Tax Act and Article 49 (1) 3 of the Enforcement Decree of the Income Tax Act, the relevant amount of income is the date when the person to whom the income accrued accrues provides labor during the relevant business year in which the tax was imposed. Thus, the global income tax liability of the person to which the income accrued is established when the taxable period expires (see Supreme Court Decision 2004Du4604

Therefore, the liability to pay global income tax on the Plaintiff’s representative’s 196 year to which the 1996 year belongs and the 1997 year to which the 197 year belongs, is established when each taxable period expires, and the starting date of the exclusion period of imposition shall be the date following the filing deadline of global income tax pursuant to Article 70(1) of the Income Tax Act.

(B) The exclusion period for imposing income tax on the representative of the Plaintiff Company following the recognition of the disposition

Article 26-2(1)1 of the Framework Act on National Taxes provides that if a taxpayer evades a national tax, or obtains a refund or deduction by fraudulent or other unlawful means, a national tax may be imposed for ten years from the date on which the relevant national tax may be imposed. Here, “Fraud or other unlawful means” refers to a deceptive scheme which makes it impossible or significantly difficult to impose and collect taxes, or other affirmative acts, and it does not constitute a mere failure to file a report under the tax law or making a false report without accompanying any other acts (see Supreme Court Decision 2001Do3797, Feb. 14, 2003).

However, the Plaintiff Company evaded corporate tax by receiving processing tax invoices from the customer without real transactions and including the purchase amount in deductible expenses at the time of the return of corporate tax. This is an affirmative act that makes it impossible or considerably difficult for the tax authority to impose and collect taxes, and constitutes fraud or other unlawful act under Article 26-2 (1) 1 of the Framework Act on National Taxes. Therefore, the exclusion period for the corporate tax evasion portion of the Plaintiff Company shall be 10 years pursuant to Article 26-2 (1) 1 of the Framework Act on National Taxes. Since it is impossible or considerably difficult for the Plaintiff Company to impose and collect tax on earned income corresponding to the difference as it included a temporary park in deductible expenses due to such fraud or other unlawful act, it shall be deemed 10 years pursuant to Article 26-2 (1) 1 of the Framework Act on National Taxes, and the exclusion period for the income tax belonging to the year 196 and the income tax belonging to the year 197 shall not be deemed to go against the purpose of the recognition system and the principle of no taxation without law.

Meanwhile, Article 9-2 Subparag. 2 of the Punishment of Tax Evaders Act provides that when a corporation files a report on the tax base of corporate tax or the Government makes a determination or correction, the amount disposed of as income of shareholders, employees, or other specially related persons of the corporation shall not be deemed income amount generated by fraud or other unlawful act. The purport of the above provision is that where the amount included in gross income pursuant to corporate tax law is excluded from cases of disposal of income (in cases of difference between corporate accounting and tax accounting) under Article 9-2 Subparag. 1 of the same Act, the amount of the disposed income shall not be deemed as the amount of illegal income of the corporation. Thus, it cannot be deemed that the provision directly applies to determining the exclusion period for imposition of income

Therefore, the collection disposition of this case, which was made before the expiration of 10 years of the exclusion period of imposition of the income tax for 1996 and the pro rata income tax for 197 by the representative of the plaintiff company, is lawful. Therefore, this part of the plaintiff company's assertion is without merit.

(C) Extinctive prescription of the right to collect the instant collection disposition

Articles 127 and 128 of the former Income Tax Act (amended by Act No. 5580 of Dec. 28, 1998) provide that a withholding agent shall pay withheld income tax by the 10th day of the month following the month in which the date of collection falls, and Article 192 (1) and (2) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 18705 of Feb. 19, 2005) provides that the income disposed of as bonus in determining or correcting corporate income shall be notified by the notice of change within 15 days from the date of determination or correction, and in such case, the bonus shall be deemed to have been paid on the date of receipt of the notice of change, and as seen earlier, the defendant Song-gu Tax Office disposes of the difference in income of the plaintiff company as the recognition of non-party 3 and non-party 2 on July 3, 2003 and the period of extinctive prescription of the plaintiff 10 on July 18, 2008.

(D) Sub-committee

Therefore, the collection disposition of this case is legitimate as it is notified within the exclusion period of income tax and the statute of limitations of the right of collection against the non-party 3 and the non-party 2. Therefore, this part of the plaintiff company's assertion is without merit.

(3) As to the portion of the Plaintiff Company’s non-subdivided income

(A) First, as to whether the income difference occurred in the tax adjustment between the first period of 196 to 197 against the Plaintiff company by the head of the Songpa District Tax Office in 196 and the first period of 197 belongs to the non-party 3 or the intervenor, it is insufficient to recognize that the above income has been actually reverted to the non-party 3 or the intervenor on the basis of the written statements in the above facts of recognition, Eul evidence Nos. 18 to 23, Eul evidence Nos. 25 to 27, Eul evidence Nos. 42 to 70, and Eul evidence Nos. 42 to 70.

(B) Next, we examine who is the representative of the Plaintiff company, who will be attributed to recognized and neglected income accrued.

1) Under the corporate tax law, the purpose of the bonus system is not to establish the representative on the basis of the fact that such an income is generated, but to allow the representative to be regarded as a bonus regardless of its substance with respect to certain facts which can be recognized as such in order to prevent unfair conduct under tax laws by the corporation. In such a case, the representative of the corporation subject to bonus disposal shall be interpreted strictly (see Supreme Court Decision 93Nu1176 delivered on March 8, 1994). In light of the purport of the bonus system, the representative of the corporation subject to such recognition shall be deemed to refer to the person who actually operates the corporation regardless of the registration of the representative on the corporate register, and if the representative owns more than 30/10 of the total number of shares issued and outstanding shares of the corporation or shares owned by an officer who is not a minority shareholder, etc. and the person who has a special relationship with him, he shall be deemed to be the representative who actually controls the management of the corporation, and if the representative is more than 29/100 of the total number of shares issued and total amount invested in the corporation, he shall be deemed to be the representative.

2) In light of the above legal principles, the non-party 3 and the non-party 2 registered as the representative on the corporate register of the plaintiff company were examined as to whether the non-party 1 and the non-party 2 were the representative of the plaintiff company during the first period from 1996 to 197, and the following circumstances revealed in the above recognition. ① The non-party company was established independently in the form of semiconductor clean work according to the expansion of the asset size, or the non-party company was not equipped with independent organization or office after its establishment. The non-party company's officers and employees were merely non-party 1 and the non-party 3 did not exercise substantial management right, such as exercising the right to final approval on all the business affairs of the plaintiff company. The non-party 3 was merely a director of the plaintiff company, and the non-party 2 was registered as the representative director of the non-party 1 and the non-party 3 was actually listed on the non-party 1's corporate register for the same period of time as the plaintiff's representative director, and the non-party 1 and the non-party 3 were directly involved.

In regard to this, the intervenor is the non-party 3 who actually operated the plaintiff company, and the intervenor claims that the intervenor was in charge of only overseas business and technical parts, and thus, the intervenor's above assertion is without merit. The entries in the evidence No. 18, No. 19-1, No. 2, No. 3, and No. 19-1, No. 2, No. 20, and No. 21, and No. 20, and No. 20 and No. 21, which correspond to the intervenor's argument, and some testimonys by the witness of the court of first instance and the witness of the court of first instance are difficult to believe

(C) Therefore, from the first to the first half of 1996, the Plaintiff Company’s representative disposes of the Plaintiff Company’s income generated during the above period on the premise that it is Nonparty 3 and Nonparty 2, and the instant collection disposition that collected and notified the income tax is unlawful. Accordingly, this part of the Plaintiff Company’s assertion is with merit.

3. Conclusion

Therefore, among the plaintiff's claim in this case, the part of the plaintiff's claim against the plaintiff on November 10, 2003 seeking the cancellation of the collection disposition of 969,270,590 won earned income tax on the original source for 1996, and 465,146,130 won earned income tax on the original source for 197, which belongs to 1997, shall be accepted, and the remaining part shall be dismissed as it is without merit. The judgment of the court of first instance is just as the conclusion, and the appeal by the plaintiff and the defendant-appellant is dismissed as all of them are without merit, and it is so decided as per Disposition.

[Attachment Omission of Related Acts]

Judges Cho Byung-hee (Presiding Judge)