The meaning of oligopolistic stockholders liable for secondary tax liability

In order to have a shareholder of a corporation bear the secondary tax liability under subparagraph 2 of Article 39 of the Framework Act on National Taxes, it is required that the oligopolistic shareholder be in a position to substantially control the operation of the corporation, and only the reasons registered in the register of shareholders of the corporation in the form of a corporate registry cannot be said to be an oligopolistic shareholder.

Article 39 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

The director of Busan District Office

Daegu High Court Decision 84Gu195 delivered on November 9, 1984

The appeal is dismissed.

The costs of appeal are assessed against the defendant.

We examine the grounds of appeal.

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 the oligopolistic shareholders be in a position to substantially control the operation of the corporation, and on the sole basis of the fact that the register of shareholders of the corporation is recorded as shareholders in the register of shareholders of the corporation, it is not possible to impose tax liability on the oligopolistic shareholders (see Supreme Court Decision 83Nu607, Jan. 24, 1984).

According to the reasoning of the judgment below, the court below found, based on the evidence adopted by the court below, that the non-party 1 was a company of the above non-party 1's sole payment of the total amount of the stock price at the time of incorporation or the capital increase in its decision, but the non-party 2, non-party 3, non-party 4, non-party 5, and non-party 3's wife of the above non-party 6 as a shareholder in order to meet the requirements for establishment under the Commercial Act at the time of incorporation, and the above company was registered in the shareholders' list as of the above company's employees at the time of completion of the registration of the foreign-capital invested company as of the above company's capital increase and the plaintiff who was the same as the above non-party 2's partner at the time of the above company's capital increase and did not actually participate in the management such as the plaintiff's payment of the stock price or attendance at the shareholders' general meeting. Thus, the plaintiff cannot be viewed as a shareholder of the above company, and there is no error in the judgment below's misapprehension of law.

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 O Sung-sung(Presiding Justice)