Cho High-2018-west-309 ( October 12, 2018)

The substance of the instant business place’s transaction, etc. cannot be seen to have been attributed to the Plaintiff, the nominal owner. As such, the instant disposition on the premise is legitimate.

In light of the fact that the Plaintiff made business registration and report of business closure at the instant place of business, the content of the business agreement prepared between the Plaintiff and Kim 00, and the financial transactions on the instant place of business with its own account, it is reasonable to deem that the substance of the instant place of business, etc.

Article 14 of the Framework Act on National Taxes and Additional Tax Article 81 of the Income Tax Act

Global Income Detailed and Revocation of Disposition

New 00

00. Head of tax office

on October 22, 2019

on October 19, 2019

1. The plaintiff's claim is dismissed.

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

On May 4, 2017, the disposition of imposition of the global income tax on the Plaintiff is revoked.

A. On August 20, 2015, the Plaintiff filed a return on global income tax on global income for the year 2014, with the amount of incomex,xx,xx,xx, incomex,x,xx,xx,xx, tax amount to be paidx,xx,x, andxx.

B. From September 26, 2016 to February 28, 2017, the head of a tax office: (a) conducted an integrated investigation into the Plaintiff (the period subject to investigation: the period from January 1, 2014 to December 31, 2014) with respect to the Plaintiff; and (b) notified the Defendant of the taxation data that the Plaintiff, while engaging in the wholesale business of fishery products with the trade name (hereinafter referred to as “instant business place”) from April 30 to February 28, 2015, he/she purchased Baxxx,xx,x,xx,xx, and issued the false account statement to the Defendant by processing x, x, x, x, xx, xx, bB, etc. in the BB trade, etc.

C. Accordingly, on May 12, 2017, the Defendant issued a correction and notification of the Plaintiff on May 12, 2017, on the basis of Article 81 of the Income Tax Act (hereinafter “instant disposition”).

[Ground of recognition] Facts without dispute, Gap 1, 2, 4 through 6, Eul 1 to 3, the purport of the whole pleadings

2. The plaintiff's assertion

Of the instant taxable period, the Plaintiff, not the Plaintiff, is Kim 00, engaging in the second half-year 2014-year 00-year 201. Therefore, based on the principle of substantial taxation, global income tax from the second half-year 2014-year 00-year 201-year 200 should be imposed on Kim 00.

3. Relevant statutes;

It is as shown in the attached Form.

4. Determination

A. Relevant legal principles

1) Article 14(1) of the Framework Act on National Taxes declares the principle of substantial taxation on the ground that “if the ownership of income, profit, property, act or transaction subject to taxation is nominal and there is a separate person to whom it actually belongs, the person to whom it actually belongs shall be liable to pay taxes, and the tax law shall apply.”

Therefore, in cases where there is a person who actually controls and manages a taxable subject to income, profit, property, act, transaction, etc. different from the nominal owner, the nominal owner should not be the person who actually controls and manages the taxable subject to taxation according to the substance over form and appearance, but the person who actually controls and manages the taxable subject to taxation shall be the person liable for tax payment according to the principle of substantial taxation. Determination as to such a case should be made by comprehensively taking into account various circumstances such as the details of the use of the name, the degree and scope of the nominal owner’s involvement, the relationship

2) Meanwhile, in principle, the tax authority should bear the burden of proving the existence of the tax requirement and the tax base. However, as long as the tax authority imposed tax on the nominal business operator by deeming him/her as the actual business operator, it is necessary to assert and prove that the nominal business operator subject to the tax disposition differs from the nominal business operator’s ownership. In such a case, the need for proof is sufficient to the extent that the judge would have a reasonable doubt as to whether the tax requirement was satisfied. As a result, it is unclear whether the substance of the transaction, etc. belongs to the nominal business operator, and if the judge becomes unable to have conviction, then the disadvantage therefrom remains back to the tax authority that bears the ultimate burden of proof (see Supreme Court Decisions 2011Du9935, May 16, 2014; 2018Du35025, Jun. 28, 2018).

see, e.g., Supreme Court Decision

B. In light of the following circumstances acknowledged by comprehensively taking account of the entries in the evidence Nos. 4 through 6, 8, 9, and 13 and the purport of the entire pleadings, the instant disposition is lawful, and the Plaintiff’s assertion is without merit.

① On April 30, 2013, the Plaintiff: (a) filed an application for registration of an individual entrepreneur with respect to the instant place of business as his/her representative; and (b) was registered as a business entity until the said place of business was closed on February 27, 2015; (c) the Plaintiff himself/herself was the Plaintiff.

② At the time of the instant tax investigation, the Plaintiff stated that he/she was the actual representative of the instant workplace during the instant taxable period, and that he/she was in general in charge of all business and accounting affairs. In particular, the Plaintiff stated that the Plaintiff was involved in the process of purchase and sale of the instant workplace during the second period of 2014 at the time of the instant tax investigation, and subsequently stated in detail all the process of purchase, sale, and distribution of the instant workplace during the said period.

③ On June 10, 2014, in the business agreement entered into between the Plaintiff and Kim 00 on June 10, 2014, “the Plaintiff represents 00 water delivery and takes charge of external affairs, and Kim 00, in the distribution of fishery products, such as booms, produced from 00 military units, in the local area of 00 military units, purchase fishery products, such as brins, and exercise overall control over distribution in the Seoul, Incheon, and Gyeonggi-do, and if necessary, the Plaintiff and Kim 00 enter into bilateral agreements.” The method of division of business affairs and distribution of profits in the instant workplace is specified.

④ From November 3, 2014 to July 24, 2016, the Plaintiff was paid KRW x,xx, andxx in the name of the Plaintiff from Kim 00 and Kim Kim Kim 00 to the account in the name of the Plaintiff, on 12 occasions, the Plaintiff received KRW x,xx, andxx in the instant workplace from July 1, 2014 to December 31, 2014. However, even if the instant workplace was closed on February 28, 2015, the Plaintiff received money from Kim 00 to July 24, 2016, it is difficult to view that the Plaintiff transferred money from Kim 00 to the Plaintiff for the loan of the business owner to the Plaintiff. Rather, the Plaintiff received KRW x0 from Kim 24, October 24, 2014 to December 26, 2015.

⑤ At the time of filing the global income tax attributed to the Plaintiff in 2014, the Plaintiff returned the instant place of business, including the amount of income from the distribution of booms in the instant place of business, and was conducting financial transactions on the boom distribution business through its financial account

5. Conclusion

The claim of this case is dismissed as it is without merit, and it is so decided as per Disposition.