Article 16 (Tax Invoice)

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

The following facts may be acknowledged by taking into account the respective descriptions of Gap evidence 1, 2, Eul evidence 3-1, 2, Eul evidence 1, Eul evidence 2-1 through 4, 6, Eul evidence 3-2, and the whole purport of pleadings:

A. On December 14, 2002, the Plaintiff, a corporation established on January 9, 1991 and engaged in export business, etc., received one tax invoice on the purchase price of 2,432,100,000 won for ICCHIP (hereinafter “instant tax invoice”) from ○○ Co., Ltd. (hereinafter “○○○”). The Defendant received one tax invoice on the purchase of ICCHIP from ○○○, and issued 2,432,10,000 (hereinafter “instant tax invoice”). The entire amount of ICCHIP purchased from ○○, 50,000 (hereinafter “ICCHIP”) was 2,442,180,000 won for LAE, a foreign corporation located in the United States of America, and received a revised tax invoice of 243,51,90,000 won for the instant goods and received a refund from 200,000,0000 won for the instant tax invoice of 20,50,01.

C. On September 5, 2006, the Plaintiff filed a petition for a trial with the National Tax Tribunal on September 5, 2006, but was dismissed on April 23, 2007.

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

As indicated in the tax invoice of this case, the Plaintiff: (a) was actually supplied with ICT CHIP on December 14, 2002, and was actually loaded and exported to LACE on December 15, 2002; and (b) was not engaged in the present business; (c) thus, it is difficult for the Plaintiff to submit evidentiary data on purchase from ○○; (d) however, the Plaintiff was unable to submit evidentiary data on the purchase from ○○; and (e) was equipped with all materials to recognize that the Plaintiff actually exported the instant ICT CHIP to LAE; and (e) the materials that the Plaintiff paid to ○○○○ upon remitting’s remittance of the money for the goods, the Defendant did not deduct the input tax amount from the input tax amount; and (e) was unlawful to impose the instant disposition.

(b) Related statutes;

[Valued Tax]

Article 11 (Application of Zero Tax Rate)

(1) zero tax rates shall apply to the supply of goods or services falling under any of the following subparagraphs:

1. Exported goods;

Article 16 (Tax Invoice)

(1) Where an entrepreneur registered as a taxpayer supplies goods or services, he/she shall deliver an invoice stating the following matters (hereinafter referred to as "tax invoice") to the person who receives the supply, as prescribed by Presidential Decree, at the time provided for in Article 9 (where Presidential Decree prescribes otherwise, the time otherwise, such time as prescribed by Presidential Decree). In such cases, a tax invoice may be modified, as prescribed by Presidential Decree, if any ground prescribed by Presidential Decree, such as error or correction, arises

1. Registration number, name or denomination of the businessman who provides;

2. Registration number of the person who receives;

3. Supply value and value-added tax;

4. Date of preparation.

5. Matters prescribed by Presidential Decree, other than those under subparagraphs 1 through 4.

Article 17 (Payable Tax Amount)

(1) The amount of value-added taxes payable by an entrepreneur (hereinafter referred to as the “paid tax amount”) shall be the amount computed by deducting the tax amount under the following subparagraphs (hereinafter referred to as the “purchase tax amount”) from the tax amount on the goods and services supplied by him (hereinafter referred to as the “sales tax amount”): Provided, That where an input tax amount exceeds the output tax amount, it shall be a refundable tax amount (hereinafter

1. The tax amount for the supply of goods or services used or to be used for his own business;

2. The tax amount for the import of goods used or to be used for his own business; and

(2) The following input taxes shall not be deducted from the output tax amount:

1-2. An input tax amount, in case where the tax invoice as provided in Article 16 (1) and (3) is not delivered, or the whole or part of the matters to be entered under Article 16 (1) 1 through 4 is not entered or entered differently from the fact on the delivered tax invoice: Provided, That the input tax amount in such case as prescribed by the Presidential Decree shall be excluded;

(c) Fact of recognition;

The following facts may be acknowledged in light of the evidence as stated above: Gap evidence 8 (the same as Eul evidence 2-5), Gap evidence 17, Eul evidence 11 (the same as Eul evidence 3-5), Eul evidence 17, Eul evidence 12 through 16, Eul evidence 3-1, 2, 4, Eul evidence 4-1 through 4, Eul evidence 5-1, 2- Eul evidence 5-2, Eul evidence 6, 7-1 through 7, Eul evidence 8-1 through 4, Eul evidence 9-1 through 6, Eul evidence 9-1 through 6, and partial testimony of ○○ witness.

1) On December 4, 2002, the Plaintiff, as a general sales agent of △△△△ Co., Ltd. (hereinafter “△△△”), drafted a contract for the supply of goods between ○○ and a company that purchases and sells financial devices, etc. from △△△, and the following contents are as follows.

Article 2 (Terms of Contracts)

1. Contract price: USD 42.20;

2. Contract amount: USD 2,010,000;

3. Contract goods: ICCHIPS39.

4. Contract quantity: 50,000 PCS.

5. Deadline of delivery: December 14, 2002.

6. Places of supply: Places designated by the plaintiff.

Article 5 (Payment and Method of Price Payment)

1. The first payment: 6% of the down payment and 30 days after the delivery;

2. Secondary payment: 40% of the down payment and 60 days after delivery.

3. The Plaintiff may select and pay the payment in Korean won and USD, taking into account the fluctuation in the exchange rate, and in no case the Plaintiff does not incur exchange loss.

4. The Plaintiff and ○○ shall be the base exchange rate at the time of the supply of goods.

2) According to relevant data, such as account books, purchase and sales tax invoices of ○○○ and △△△△, ○○ purchased financial devices, etc. from △△△△ around 2002 and did not purchase the ICCHIP used as its part, and merely appears to have been used as part in MY-PAY39, which appears to have been purchased on March 30, 2002 in MY-PAY (U). Meanwhile, on December 14, 2002, the ○○○ book stated that the Plaintiff sold the ICCHIP in the amount of KRW 2,432,100,000 to the Plaintiff.

3) At the time, ○○○○○○○○○○, on January 10, 2006, prepared a confirmation document stating that “○○○, in the course of the Defendant’s tax investigation with respect to the Plaintiff, separated the device purchased on March 30, 2002 from parts and supplied it to the Plaintiff, and submitted it to the Defendant.”

4) LACE deposited USD 1,206,00.00 on the same day, and USD 1,2006,000, and USD 804,00.00 on the same day into the Plaintiff’s account. The Plaintiff deposited USD 28,211,383.38, and USD 807.38 on the same day.

5) On February 12, 2003, the Plaintiff received a refund of value-added tax on the instant CHIP input tax amount from the Defendant and received 233,210,000 won from the refund to the Defendant’s bank account without passbook. ○○ filed a full return and payment of value-added tax on the sales of CHIP on the instant tax invoice as the value-added tax for the second quarter of 2002.

6) Meanwhile, since the establishment in 191, the Plaintiff continues its business until now. From 1996 to 2005, the sales amount was as follows. The Plaintiff reported that CHIP was exported to KRW 2,442,180,000, the sales amount of KRW 1,616,000,000 total sales amount for the remaining nine business years, excluding 2002.

Business year

196

1997

1998

199

200

201

202

2003

204

205

Sales

523

56

0

0

124

118

2,481

220

204

371

D. Determination

1) The burden of proving that the tax invoice is false, in principle, to the defendant who is the tax authority, and the defendant must prove that the tax invoice is not accompanied by real transactions on the basis of direct evidence or all the circumstances. If the defendant proves that the tax invoice is not false and that it is not accompanied by real transactions, it is necessary to prove that it is consistent with his/her own assertion in view of the position in which it is easy for the plaintiff who is the taxpayer to present evidence and materials related to the illegality of the defendant's disposition, by asserting that the tax invoice is not false (see, e.g., Supreme Court Decision 96Nu8192, Sept. 26, 1997).

2) As to the instant case, the following circumstances, which can be inferred based on these facts, ① purchased only financial devices from △△△△, which do not produce ICTCHIP, and ② ○○○○ representative director purchased from △△△△ on March 30, 202, separately sold FY-PA (UP) 9,500 parts, which were purchased from ○○○○○○○○○○○○○○○○○○○○○○○○○ 2, which did not have any capacity to separate CHIP from 50,000 parts, and there is no material to view that ○○○○○○○○○○○ 2,00 parts were less than 0,000 parts of the instant case’s sales contract, and there is no material to view that ○○○○ 2,000 parts of the instant case’s sales contract were less than 0,000 parts of the instant case’s sales contract.

Therefore, since the tax invoice of this case is prepared without any actual transaction or prepared differently from the actual transaction by at least the supplier, it constitutes "tax invoice different from the actual transaction", the disposition of this case on the premise that it is legitimate and there is no error of law as alleged by the plaintiff.

3. Conclusion

Therefore, the plaintiff's claim is dismissed as it is without merit. It is so decided as per Disposition.