[1] The case holding that Byung is a party to a bareboat, and Eul is a substantial party to a contract in case where Eul is a party to a bareboat charter, in case where Eul established a bareboat charter with Eul, a domestic corporation which owns ships as its main business, entered into a bareboat charter with Byung's foreign corporation, and Eul used the above ships for shipping business after concluding a time charter with Byung's foreign corporation

[2] The case holding that it cannot be confirmed that the bareboat charter for the above ships was cancelled or that the above ships were returned to Gap corporation, in case where Gap corporation, which owns the ships, entered into a bareboat charter with a nominal company established overseas by Eul corporation Eul, which is operated as the main business of marine transportation, etc., and Eul corporation entered into a time charter for hire with Byung corporation, and used it for shipping business after concluding a time charter for hire with Byung corporation, and returned to Byung corporation before the last installment payment date of the above bareboat charter

[1] The case holding that Byung is a party to the bareboat, and Eul is a substantive party to the above contract in case where Eul established a time charter with Byung's foreign corporation established in a foreign country, such as Pakistan, and Eul established in a foreign country with Eul's main business to purchase ships with the money borrowed by Eul's foreign corporation and Korean financial institutions, and Eul formed a time charter with Byung's foreign corporation, and used the above ships for its own shipping business, in case where Byung used the above ships for its own shipping business after it entered into a time charter with Byung's own shipping business, the case held that Byung is a nominal company with the capital of USD 1 and without any human organization and material facilities, and that Byung takes charge of all the business of paying charterage to Gap through Byung's foreign corporation, and Eul is merely a party to the bareboat charter.

[2] In a case where Gap, a foreign corporation established in a foreign country, such as Pakistan, purchased vessels with money borrowed from the above financial institutions, and entered into a bareboat charter with a nominal company established by Eul, a foreign corporation established in a foreign country, and entered into a bareboat charter with Eul, which provides that if the agreed charterage is fully paid, Eul shall acquire ownership; and Eul, after entering into a time charter with Byung, used the above vessels for shipping business; and returned the said vessels to Byung before the last installment payment date of the above bareboat charter, the case holding that the actual party of the above bareboat charter is Eul, and it cannot be seen that Eul returned the vessels to Byung, a nominal company established by Eul, even if Eul returned the vessels to Byung, it cannot be seen that the above vessels were returned to Eul beyond the control scope of the corporation, and that the above vessels were not returned to Eul, or that the above vessels were not ratified.

[1] Article 14(1) of the former Framework Act on National Taxes (Amended by Act No. 911, Jan. 1, 2010); Article 82 (see current Article 147 of the Framework Act on Local Taxes) and Article 105(1) (see current Article 7(1)) of the former Local Tax Act (Amended by Act No. 7843, Dec. 31, 2005); Article 111(1) and (7) of the former Local Tax Act (Amended by Act No. 7843, Dec. 31, 2005; see current Article 10(7)); Article 73(5) (see current Article 20(5)) of the former Enforcement Decree of the Local Tax Act (Amended by Presidential Decree No. 21215, Dec. 31, 2008);

The Nonparty, et al. (Attorneys Son Ji-yol et al., Counsel for the defendant-appellant)

The head of Jung-gu Incheon Metropolitan City

Seoul High Court Decision 2007Nu33384 decided May 29, 2008

The judgment below is reversed and the case is remanded to Seoul High Court.

The grounds of appeal are examined.

1. Regarding ground of appeal No. 1

A. Article 105(1) of the former Local Tax Act (amended by Act No. 7843, Dec. 31, 2005; hereinafter “former Local Tax Act”) provides that “acquisition tax shall be imposed on a person who acquires real estate, vehicle, machinery, equipment, standing trees, aircraft, ships, mining rights, fishing rights, golf membership rights, condominium membership rights, or sports complex membership rights.”

Meanwhile, Article 14(1) of the former Framework Act on National Taxes (amended by Act No. 9911, Jan. 1, 2010) provides that “if the ownership of income, profit, property, act, or transaction subject to taxation is nominal and there is a person to whom such income, profit, or transaction belongs, and there is another person to whom such income, profit, property, act, or transaction, belongs, the person to whom such income, profit, or transaction belongs shall be liable to pay taxes.” Article 82 of the former Local Tax Act provides that “Except as otherwise provided for in this Act and other Acts and subordinate statutes, the Framework Act on National Taxes and the National Tax Collection Act shall apply mutatis mutandis to the imposition and collection of local taxes.” Thus, in cases where there is

B. According to the reasoning of the lower judgment and the evidence duly admitted by the lower court, 9 foreign corporations (hereinafter “Virginia, etc.”) including Korea’s banks and Kiung Bank, etc., have purchased 12 vessels, including Oralina, etc. (hereinafter “each of the instant vessels”) from the above financial institutions during the period from 1994 to 199. The Korea Shipping Co., Ltd. (the Plaintiff, as the first instance court, took over the lawsuit of this case, each of the instant vessel’s ownership of the instant vessel, which was newly established by the administrator of the Korea Shipping Co., Ltd. with the Korea Shipping Co., Ltd. (hereinafter “Korea Shipping Co., Ltd.”) for the period from 191 to 199, with the Korea Shipping Co., Ltd., Ltd., which was established by the Korea Shipping Co., Ltd. (hereinafter “Korea Shipping Co., Ltd.”), and each of the instant vessel was newly established with the Korea Shipping Co., Ltd. (hereinafter “Korea New Charter Co., Ltd.”).

Examining these facts in light of the aforementioned provisions and legal principles, Levi New Daily, etc. is merely the nominal party to the bareboat charter of each of the instant contracts with acquisition of nationality. However, the actual party to the said contract is not Korea Shipping, but the actual party to the said contract. However, the lower court determined that the instant disposition, which imposed acquisition tax and special tax for rural development, on the Defendant’s vessel, based on charterage paid by Korea Shipping to each of the instant vessels as the actual party to the said contract, was unlawful. In so doing, the lower court erred by misapprehending the legal doctrine on the principle of substantial taxation, etc., thereby adversely affecting the conclusion of the judgment. The Defendant’s ground of appeal pointing this out is with merit.

2. Regarding ground of appeal No. 2

A. Article 111(1) and (7) of the former Local Tax Act provides that “The tax base of acquisition tax shall be the value at the time of acquisition, but in cases of acquisition in annual installments, it shall be the amount of annual installments, and the scope of annual installments, the application of annual installments, and the time of acquisition shall be prescribed by Presidential Decree.” Article 73(5) of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 21215, Dec. 31, 2008) provides that “The acquisition in annual installments shall be deemed the date of annual installments, and the actual payment shall be deemed the date of annual installments payment, and such annual installments (referring to the amount actually paid, and including the contract bond included in the acquisition amount) shall

B. According to the reasoning of the judgment below, the court below held that the disposition of this case was unlawful on the ground that, in the case of the bareboat charter on the condition of acquisition of nationality constitutes the acquisition of a ship by annual installments, and that, in the case of the acquisition by annual installments, the obligation to pay acquisition tax is established on the date of payment of annual installments. However, in the case of the termination of the contract prior to the payment of the last annual installments, the obligation to pay acquisition tax is extinguished on the premise that the object of taxation was not acquired from the beginning, and as long as the bareboat charter on the condition of acquisition of nationality of this case was cancelled prior to the date of payment of each of the last annual installments, and the Korea Shipping returned each of the ships of this case to the bareboat charter on the condition that the Korea Shipping did not acquire each of the

C. However, we cannot agree with the judgment of the court below for the following reasons.

(1) The court below acknowledged the following facts: Gap evidence Nos. 9-1, 2, and 11-1, Gap evidence No. 12-1, 2-2, Gap evidence No. 14-1, 14-2, Gap evidence No. 15-1, 2, and Eul evidence No. 16, which were removed before the last installment payment date of each of the instant vessels, and Eul's shipping returned the instant vessel to her port, etc. (hereinafter "the instant rescission and reflect-ship") based on Gap evidence No. 9-1, 2, and Eul evidence No. 16-2; Eul's 6-2, which were prepared to list No. 44 of the instant vessel's vessel's operation and sale contract (hereinafter "the instant vessel's sale and purchase contract"), and Eul's 6-2, which were notified of the above vessel's sale and sale contract to the Korea Shipping Corporation No. 1, and Eul's 4,000's operation and sale of the instant vessel.

However, it is difficult to propose that Korea Shipping should return three vessels, such as Dr. Dr. Dr. Dr. Dr. Dr. Dr. Dr. Dr. Dr. Dr. Dr. Dr. Dr. Dr. Dr. Dr. Dr. Dr. Dr. Dr. Dr. Dr. Dr. Dr. Dr. Dr. Dr. Dr. Dr. Dr. Dr. Dr. Dr. Br. D. D. Br. D., Dr. Dr. P. D. P. D. P. D. D. P. P. D. P. D. P. D. P. D. P. P. L. L. L. L. L. vessel’s purchase and sale of each vessel under Dr. D. D. B. D. D. P. D. P. D. P. P. L. L. L.D.’s purchase and sale of each vessel and sale of each vessel under D. D. D. B. B. D. P. D. D. P. D. D. D.D.D.D.D.D.

(2) In addition, even though each of the above evidence contains only three items, such as Oral Ba, and four items, such as Blue Blue Blue, the lower court acknowledged the remainder of five ships, excluding this, among each of the instant vessels, as to global Drara, global Plue, global Plue, fashion, and global SlueD venture businesses, without a clear basis.

D. If so, the court below erred in the misapprehension of the bounds of the principle of free evaluation of evidence by ratification against logical and empirical rules or by finding facts without evidence that found the cancellation of this case and the anti-party facts. The defendant's ground of appeal pointing this out is with merit.

3. Conclusion

Therefore, the lower judgment is reversed, and the case is remanded to the lower court for further proceedings consistent with this Opinion. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Min Il-young (Presiding Justice)