- •Tax · Customs > Tax Litigation
Represented the Client in Tax Litigation on Secondary Tax Liability of Controlling Stockholder2019-05-16
In this case, Lee & Ko Tax Practice Group representing Korean Veterans Association (“KVA”) received a favourable ruling from the Supreme Court to cancel the tax assessment of corporate income tax in the amount of USD 8.4 million.
The basis of the tax assessment imposed by the Korean tax authority was that KVA is secondarily liable for tax payments originally payable by a delinquent company of which KVA was the controlling stockholder of the immediate parent. Lee & Ko refuted with such position taken by the Korean tax authority in an effective and thorough manner, which put the brakes on the Korean tax authority’s unreasonably aggressive attempt to tax.
The outcome of this case sets the precedent as to what extent the “secondary tax liability” can occur and how a “controlling stockholder” should be interpreted in the context of secondary tax liability as provided under the Basic Law on National Taxes. Furthermore, through the ruling of this case, Lee & Ko also brought significant value in terms of enhancement of taxpayer’s rights. It is expected that Lee & Ko will have more opportunities to represent and advise taxpayers, especially Korean conglomerated which are in circular cross-holding ownership structure, on similar issues in the future