[부가가치세등부과처분취소][공2016하,1711]
[1] The case holding that in a case where Gap corporation et al., issued a tax invoice in the form of "trade name" of the tax invoice in which Eul corporation et al., entered the trade name of the interior firm and the name "name" of the interior firm Eul instead of the actual operation of the interior firm Eul, but Gap corporation et al., declared and paid value-added tax by deducting the relevant input tax amount from the output tax amount, and when Gap corporation et al. declared and paid the relevant input tax amount, the tax authority imposed value-added tax, etc. on Gap et al, on the grounds that the supplier's entry constitutes a different tax invoice and imposed value-added tax on Gap et al., since the above tax invoice constitutes a
[2] Requirements for establishing non-taxable practices under Article 18(3) of the Framework Act on National Taxes
[1] The case affirming the judgment below holding that in case where Gap corporation et al., issued a tax invoice in the form of "trade name" of the tax invoice that Eul corporation et al. received from Eul corporation, etc., stated the trade name of Eul corporation, and the name of Eul, "name", and "name", but Gap corporation et al., lent the name of Eul to Eul instead of operating Eul, etc., but Gap corporation et al., declared and paid value-added tax by deducting the relevant input tax amount from the output tax amount, and the tax authority deemed that the supplier's entry constitutes a tax invoice different from the fact and imposed value-added tax on Gap et al., on the premise that the above tax invoice constitutes a tax invoice stating different from the fact, and further, the tax invoice cannot be deducted from the output tax amount under the premise that it cannot be viewed as a case stipulated in Article 60 (2) 2 of the former Enforcement Decree of the Value-Added Tax Act (wholly amended by Presidential Decree No. 24638, Jun.
[2] In order to establish a non-taxable practice under Article 18(3) of the Framework Act on National Taxes, there must be an intention not to impose taxes on a person who has not imposed taxes for a considerable period of time, as well as on a person who has knowledge that the tax authority may impose taxes on the matter. Such public view or intent must be explicitly or implicitly expressed, and in order to indicate impliedness, there must be circumstances where the tax authority expressed its intent not to impose taxes on the state of non-taxation for a considerable period of time, unlike mere omission of taxation.
[1] Articles 16(1) and 17(2)2 (see current Article 39(1)2) of the former Value-Added Tax Act (wholly amended by Act No. 11873, Jun. 7, 2013); Article 60(2)2 (see current Article 75 subparag. 2) of the former Enforcement Decree of the Value-Added Tax Act (wholly amended by Presidential Decree No. 24638, Jun. 28, 2013) / [2] Article 18(3) of the Framework Act on National Taxes
[2] Supreme Court Decision 2011Du3913 Decided December 13, 2012 (Gong2013Sang, 187)
Seoul High Court Decision 200Na14488 decided May 1, 2001
Head of the Geumcheon Tax Office and two others
Seoul High Court Decision 2015Nu53888 decided May 12, 2016
All appeals are dismissed. The costs of appeal are assessed against the plaintiffs.
The grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed).
1. As to the grounds of appeal Nos. 1 and 2
Article 16(1)1 of the former Value-Added Tax Act (wholly amended by Act No. 11873, Jun. 7, 2013; hereinafter “the Act”) provides for “the business operator’s registration number and name or title to be supplied” as one of the necessary entry items in a tax invoice. Article 17(2)2 provides that the input tax amount may not be deducted from the output tax amount in cases where all or part of the necessary entry items in a tax invoice issued are differently entered from the fact, and Article 60(2)2 of the former Enforcement Decree of the Value-Added Tax Act (wholly amended by Presidential Decree No. 24638, Jun. 28, 2013; hereinafter “Enforcement Decree”) provides that the input tax amount may be deducted from the output tax amount in cases prescribed by Presidential Decree, and Article 60(2)2 of the former Enforcement Decree of the Value-Added Tax Act provides that “Where part of the requisite entry items in a tax invoice is erroneously recorded, but it is permitted by considering the relevant tax invoice or other necessary entry items in a tax invoice.”
Based on its adopted evidence, the lower court determined that the input tax amount of the instant tax invoice cannot be deducted from the output tax amount on the premise that: (a) Plaintiff 1, the representative director of the Plaintiffs, borrowed the names of the Plaintiff 2 and completed business registration; and (b) the Plaintiffs received the instant tax invoice from the instant royalties company during the period from February 2, 2008 to February 2, 2012; and (c) the “trade name” column of the said tax invoice acknowledged the following facts: (a) the instant tax invoice constitutes a tax invoice stating the name of the nominal lender instead of the Plaintiff 1, and the “name” column constitutes a tax invoice stating the name of the nominal lender; and (b) the instant tax invoice constitutes a tax invoice stating the “the name of the supplying business operator”, which is a requisite entry item, and (c) the instant tax invoice cannot be deemed as a case stipulated in Article 60(2)2 of the Enforcement Decree.
In light of the above provisions and relevant legal principles, the above determination by the court below is just, and contrary to the allegations in the grounds of appeal, there were no errors in the misapprehension of legal principles as to the interpretation and application of Articles 16(1) and 17(2) of the Act and Article 60(2)2 of the Enforcement Decree of the Act.
2. Regarding ground of appeal No. 3
In order to establish a non-taxable practice prescribed in Article 18(3) of the Framework Act on National Taxes, there must be an intent to not only establish objective facts that have not been taxed over a considerable period of time, but also to impose tax on the tax authority due to any special circumstance despite the tax authority being aware that it is able to impose tax on the said matter. Such public view or intent must be expressed explicitly or implicitly, and there must be circumstances to deem that the tax authority expressed its intent not to impose tax on the state of non-taxation for a considerable period of time, unlike mere omission of taxation (see, e.g., Supreme Court Decision 2011Du3913, Dec. 13, 2012).
The lower court rejected the Plaintiffs’ appeal asserting that the instant disposition was unlawful in violation of the non-taxable practice without explicitly determining the Plaintiffs’ assertion.
However, examining the grounds for the above assertion by the plaintiffs in light of the legal principles as seen earlier, it cannot be deemed that the tax authority explicitly or implicitly expressed its intention not to impose the value-added tax on the other party solely on the grounds that there was little case where the tax authority imposed the value-added tax on the other party by deeming the tax invoice issued by the person who registered the business under the name of the other party as a false tax invoice. Thus
Therefore, the above argument by the plaintiffs cannot be accepted, and there is no error in the misapprehension of legal principles as to the omission of judgment or the establishment of non-taxable practice, contrary to what is alleged in the grounds of appeal.
3. Conclusion
Therefore, all appeals are 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 on the bench.
Justices Jo Hee-de (Presiding Justice)