Persons subject to bonus disposal for outstanding loans at the time of the closure of a corporation

1. If a corporation discontinues its business, any outstanding credit shall be disposed of to the representative at the time of the occurrence of the credit, not to the representative at the time of the closure;

2. If the representative at the time of closure of business is merely a nominal representative and there is a different real representative, it is reasonable to dispose of the bonus to the de facto representative, regardless of the name thereof;

2013Guhap20685 Global Income and Revocation of Disposition

KimA

Head of Seogsan Tax Office

November 29, 2013

December 20, 2013

1. On January 2, 2012, the Defendant revoked the disposition of imposition of the OOO of the global income tax for the Plaintiff in the year 2008.

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

Cheong-gu Office

The same as the order (OOO officers in the amount of disposition written in the purport of the claim seem to be written in writing).

1. Details of the disposition;

A. The director of the Jeju Tax Office did not collect the short-term loans by August 31, 2008, which was the cessation date of the BB industry (hereinafter “the loans in this case”) the BB industry corporation (the former trade name is theCC industry corporation, the hereinafter “CC industry corporation, and the BB industry corporation”) and then disposed of the instant loans from February 24, 2001 to August 29 to the Plaintiff on September 1, 2009 under Article 67 of the Corporate Tax Act and Article 106(1)1 of the Enforcement Decree of the same Act on the ground that the ownership is unclear.

B. On November 3, 20109, the Plaintiff was the representative director of theCC industry to the head of the Jeju Tax Office, and the actual operator of theCC industry is TRQs, so the head of the Jeju Tax Office submitted a vindication to the effect that the bonus disposition that the Plaintiff made to the Plaintiff was unjustifiable. On February 11, 2010, the head of the Jeju Tax Office recognized Doddddd as the actual representative director of theCC industry, recognized the Plaintiff as the Plaintiff’s bonus disposition that made the instant loan to be deemed as Dodddddddddddddddd, disposed of the instant loan, and notified the change in income amount. On May 3, 2010, the head of the Jeju Tax Office determined and notified the OO

C. Around February 10, 201, a Chairman of the Board of Audit and Inspection of Korea decided to revoke the comprehensive income tax imposed on Do Governors, on the grounds that Do Governors do not fall under the representatives prescribed in the proviso of Article 106(1) of the Enforcement Decree of the Corporate Tax Act, on February 10, 2011.

D. Accordingly, the head of Jeju Tax Office (hereinafter “the instant disposition”) again issued the Plaintiff the disposition of income, i.e., taking the instant loan into account the Plaintiff’s recognition, and notified the change of the amount of income on July 6, 201, and on January 2, 2012, the Defendant decided and notified the Plaintiff on January 2, 201, OOO of the global income tax for which 208 reverts (hereinafter “the instant disposition”).

E. The Plaintiff appealed and filed an appeal with the Tax Tribunal on March 27, 2012, but was dismissed on March 15, 2013.

[Reasons for Recognition] Facts without dispute, Gap evidence 1, 2, 3, 5, 10

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

1) The Plaintiff merely takes office as a representative director in the form of theCC industry upon the request of dulyD, and a person who actually operates theCC industry is dulyD. Thus, the instant disposition was unlawful on the premise that the Plaintiff is the actual representative.

2) The Defendant issued the instant disposition on the ground that the instant loan was reverted to the representative of the BB industry in 2008 taxable year. Therefore, the instant loan should be deemed to belong to the Gangwon E (Seoul) having served as the representative director of the BB industry in August 31, 2008, when the BB industry was closed. Thus, the instant disposition based on the premise that the instant loan was reverted to the Plaintiff who retired from the office of representative director on August 29, 2006 is unlawful.

3) Although the Defendant determined that the instant loan was leaked out of the company, but its attribution is unclear, it is clear that the instant loan was reverted to static, and thus, the instant disposition that made the bonus disposal against the Plaintiff on the premise that the reversion is unclear is unlawful.

4) In addition, the head of Jeju Tax Office already expressed that the Plaintiff is not a substantial representative of theCC industry. Thus, the instant disposition that reverses such a statement of opinion is unlawful against the good faith principle.

B. Relevant statutes

director Corporate Tax Act (Amended by Act No. 10337, May 31, 2010)

Article 67 (Disposal of Income)

When filing a report on the corporate tax base on the income for each business year pursuant to Article 60 or determining or revising the corporate tax base pursuant to Article 66 or 69, the amount included in the calculation of earnings shall be disposed of to the person to whom it belongs, as prescribed by Presidential Decree, such as bonus, dividends, other external outflow and internal reservation.

(1) Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 22035, Feb. 18, 2010)

§ 106. Disposal of income

(1) The amount included in the calculation of earnings under Article 67 of the Act shall be disposed of in accordance with the provisions of the following subparagraphs. The same shall also apply to non-profit domestic corporations

1. Where the amount included in the calculation of earnings has clearly leaked out of the company, the dividends, bonuses from the disposition of profits, other income, and other outflow from the company under each of the following items according to the person to whom they accrue: Provided, That where the accrual is unclear, it shall be deemed to have been reverted to the representative (where an executive who is not a minority shareholder, etc. and persons with a special relationship under Article 43 (8) holds not less than 30/100 of the total number of stocks issued or total amount of investment in the relevant corporation and actually controls the operation of the corporation, he/she shall be deemed the representative, and where there are not less than two representatives, de facto

(a) Where the person to whom benefits accrue is a stockholder, etc. (excluding a stockholder, etc. who is an executive officer or employee), the dividends to such person;

(b) If the person to whom it belongs is an officer or employee, the bonus to the person to whom it reverts;

(c) Other outflow from the company, if the person to whom it belongs is a corporation or an individual operating the business: Provided, That it shall be limited to cases where the dividend profit constitutes the income of a domestic corporation or a domestic business place of a foreign corporation for each business year, or the business income of a resident or a non-resident

(d) Other income of the person to whom it reverts, in case where the person to whom it reverts is the person.

(c) Fact of recognition;

1) TheCC industry was established on August 23, 1998 for the purpose of housing construction business and mainly engaged in a construction implementation business. AD has acquired the stocks and management rights of theCC industry around February 2001.

2) The Plaintiff was registered as the representative director of theCC industry from February 14, 2001 to August 29, 2006 under the corporate registry of theCC industry.

3) In filing the final return of value-added tax for the second period of time in 2001 on January 25, 2002 for theCC industry, theCC industry was prosecuted as follows: "The actual representative director of theCC industry was duly informed of the final return of value-added tax on January 25, 2002 by understating the OOO members on the account books, thereby evading the return and payment period of value-added tax and the aggregate amount of the value-added tax and the corporate tax as well as evading the OO members by fraudulent or other unlawful act." The summary order was issued by the Jeju District Court on May 24, 2004, and the above summary order was finalized as it is.

4) On the other hand, on February 14, 2001, immediately after static acquired theCC industry, the Plaintiff held 23,000 shares of theCC industry, and 23% of the total face value (23% of the shares). The tax authority imposed gift tax on the Plaintiff on the ground that the amount equivalent to 23,00 shares issued in the aboveCC industry, and 23,00 shares issued in the Plaintiff’s name, when conducting a corporate tax integration in 2005, the tax authority imposed gift tax on the Plaintiff on the ground that ASEAN was donated to the Plaintiff.

5) According to the balance sheet of theCC industry, since the short-term loans were newly appropriated by the OOOO in the fifth (from January 1, 2002 to December 31, 2002) of the business year, the amount of the short-term loans increased by approximately KRW OO0 in each year since the newly appropriated short-term loans were caused by the increase of approximately KRW 006 in 206.

6) On August 25, 2006, Gangnam acquired all the shares and management rights of theCC industry, and changed the trade name on August 30, 2006 to BB industry, and thereafter registered it as the representative director of the B industry until August 31, 2008.

[Evidence] Facts without dispute, Gap evidence Nos. 4, 11, 12, 13, 26, Eul evidence Nos. 3, 4, and 6 (including additional numbers), the purport of the whole pleadings

D. Determination

1) On the other hand, the recognition contribution system for the representative under Article 106 (1) of the Enforcement Decree of the Corporate Tax Act does not provide that the representative shall be based on the facts from which such income was generated, but rather on certain facts which can be recognized as such in order to prevent an unfair act under tax laws by a corporation shall be deemed as a bonus for the de facto representative of the company regardless of their substance. The representative shall be the de facto representative of the company. Thus, even if the company was registered as the representative director in the corporate register, if there is no actual operation of the company, such recognized income shall not be attributed to the representative and shall not be imposed on the representative. However, since the representative director in the corporate register can be presumed to be actually operating the company, the representative director in the corporate register must prove that he/she actually failed to operate the company (see, e.g., Supreme Court Decision 2006Du187, Apr. 24, 2008).

2) The facts that the Plaintiff was registered as the representative director of theCC industry from February 14, 2001 to August 29, 2006 on the corporate register are as seen earlier. As such, it is examined whether the Plaintiff was a nominal representative director who did not participate in the management of the BB industry, i.e., the following circumstances revealed by the facts of recognition, i.e., (i) the above summary order as the actual representative director of theCC industry. The fact finding in the criminal trial is significant evidence in administrative judgment. (ii) the fact finding in the criminal trial is proved as evidence in the administrative judgment. (iii) the JungG and HaH held 33.5% of the shares in theCC industry as of December 31, 2005, while the shares ratio in the Plaintiff’s name is not only 23%, nor does the Plaintiff appear to have a special relationship with other shareholders. (iii) In light of the above circumstances, the Plaintiff can not be viewed as the representative director of theCC industry as the actual title trust company’s shares disposal of the Do industry.

3) Meanwhile, the loan of this case was newly appropriated in the balance sheet of theCC industry in 2002 and accrued approximately KRW 00 per year from the year 2006 to the year 2006, and where the amount included in the above amount included in the gross income was leaked out of the company, but it is unclear that it would be attributed to the representative, the income disposition that reverts to the year in which the amount included in the gross income was leaked should be made to the representative at that time.

However, the defendant not only made a bonus disposition that reverts to the amount leaked until 2006 in the year 2008, but also made a bonus disposition that reverts to the representative in the year 2008, but also made a bonus disposition against the plaintiff who resigned from the representative director on August 29, 2006, the disposition of this case is unlawful in this regard.

4) Therefore, without having to examine the remaining arguments of the Plaintiff, the instant disposition is unlawful and thus ought to be revoked.

3. Conclusion

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