[2] Whether the zero tax rate is applied to special circumstances that undermine the order of collection of value-added tax (negative), and the method of proving such special circumstances

According to Article 11(1)1 of the Value-Added Tax Act and Article 24(2) of the former Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 16661 of Dec. 31, 199), the supply of exported goods shall be subject to the zero-rate tax rate, and even where an entrepreneur supplies goods through a local letter of credit or a purchase approval under the Foreign Trade Act, the zero-rate tax rate shall apply to such exported goods.

Meanwhile, in principle, the application of zero-rate tax under the VAT system is recognized only for exports to prevent double taxation, and it is recognized as exceptional and limited only for domestic consumption in compliance with the national policy purpose of foreign exchange management and the promotion of foreign exchange earnings within the scope of not impairing the order of collection of value-added tax (see Supreme Court Decision 83Nu409 delivered on December 27, 1983).

In light of the purport of applying the zero-rate tax rate and the relevant laws and regulations, where a supplier of goods sells goods by applying the zero-rate tax rate with the knowledge of the defect in obtaining a false purchase approval or in obtaining a false purchase approval with the knowledge of the defect in issuing a purchase approval, the purchaser shall not be subject to zero-rate tax if there are special circumstances that impair the order of collection of value-added tax, such as where he knows that he/she knowingly uses a defective purchase approval with the intent to evade taxes by selling them not for the purpose of export and not for the purpose of export, and where he/she does so (see Supreme Court Decision 2003Du3642, Jun. 11, 2004). Such special circumstances must be proved individually in the relevant case.

According to the reasoning of the judgment below, the court below acknowledged the facts of the judgment based on the employment evidence, and found that the plaintiff's present issue of this case supplied to Epid Co., Ltd. and New Epid for the first quarter of the value-added tax period of 1999 was actually exported or not affected the plaintiff's application of zero-rate tax rate, and it cannot be deemed that the purchase approval issued by the head of a foreign exchange bank cannot be automatically null and void, unless there are special circumstances such as the defect in the process of issuing the purchase approval, and that the supplier of the goods knew of the defect in the process of issuing the purchase approval, the supply of goods by the purchase approval can not be immediately excluded from zero-rate tax rate under the Value-Added Tax Act. Thus, the court below's determination that the plaintiff conspired with the purchaser during the taxable period of the value-added tax for the first quarter of 199 for the first quarter of the Value-Added Tax Act, or there were any defects in the process of issuing the purchase approval of this case, and it cannot be accepted in light of the facts alleged in the grounds for appeal.

Therefore, the appeal is dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices.

Justices Jeon Soo-ahn (Presiding Justice)