Daejeon District Court Decision 2013Guhap2732 Decided July 17, 2014

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

A. The Plaintiff: (a) purchased tax invoices of KRW 1,135,58,440 (36,942,60,600 on September 30, 201; (b) 191,597,200 on October 17, 201; (c) 358,047,620 on October 31, 201; (d) 181,80,806,500 on November 15, 201; and (e) 53,660,60,000 on November 30, 201; and (e) 30,31,305,000 on the purchase tax invoices of KRW 36,942,60 on September 30, 201; and (e) 30,31,305,31,305, and 431,011.

B. As a result of the investigation conducted by the head of the Busan Regional Tax Office with respect to the above CCC companies, CCC companies determined that the instant tax invoice constitutes a false tax invoice issued without real transaction, and notified the Defendant of such fact. On September 1, 2012, the Defendant denied the exemption of input tax pursuant to the instant tax invoice, and notified the Plaintiff of the correction and notification of the amount of value-added tax of KRW 188,549,510 (including additional tax) and corporate tax of KRW 22,711,740 (including additional tax) attributed to the business year 2011 (hereinafter “instant disposition”).

C. The Plaintiff appealed and filed a tax appeal on December 10, 2012, but the Tax Tribunal dismissed the Plaintiff’s request on June 24, 2013.

[Ground of recognition] Facts without dispute, Gap evidence 1-1, 2, Gap evidence 2, 3, 8, Eul evidence 1-1, 2, Eul evidence 2-2, and Eul evidence 2 and 5, the purport of the whole pleadings

2. Determination

A. The plaintiff's assertion

1) The assertion that the tax invoice is not false

The Plaintiff, as indicated in the instant tax invoice, was supplied with scrap metal by CCC companies operated by AA and received the tax invoice accordingly. Therefore, the instant tax invoice does not constitute a false tax invoice.

2) The assertion that the trader is a trader of good faith and negligence

Even if the company that supplied the Plaintiff with scrap metal is not a CCC company listed as a supplier under the instant tax invoice, the Plaintiff was unaware of the fact that the scrap metal was supplied from other companies than CCC companies. In light of the fact that the Plaintiff fulfilled its duty of care, such as obtaining a business registration certificate, etc. before commencing the transaction with CCC companies and receiving the scrap metal through the prescribed examination procedure, etc., the Plaintiff is a trader with good faith and without fault, and the Plaintiff was not negligent in not knowing the fact.

3) Therefore, the instant disposition should be revoked in an unlawful manner.

(b) Related statutes;

It is as shown in the attached Table related statutes.

C. Determination

1) Whether the instant tax invoice constitutes a false tax invoice

A) Article 17(2)2 of the former Value-Added Tax Act (amended by Act No. 11873, Jun. 7, 2013) that denies the deduction of an input tax amount on a tax invoice received in the course of transaction refers to a case where the requisite entries of a tax invoice do not coincide with those of the actual supplier, the price, and the timing of the supplier, regardless of the formal descriptions of the transaction contract, etc. prepared between the parties to the transaction concerning the goods or services (see, e.g., Supreme Court Decision 96Nu617, Dec. 10, 196). Thus, even if the transaction of supplying the goods, etc. actually exists, the supplier constitutes a different tax invoice from the issuer.

In addition, the fact that a tax invoice submitted by a taxpayer for value-added tax as a basis for input tax deduction was prepared in a false way without a real transaction, or that the entries in a tax invoice are different from the fact, is proved to a considerable extent by a taxation office, and the authenticity of whether it is an actual purchase or the contents entered in a tax invoice is disputed. In a case where a transaction with a supplier stated in a tax invoice claimed by a taxpayer is proved to a considerable extent that it is false, it is necessary for a taxpayer to prove that it is easy for a taxpayer to present data, such as books and evidence, regarding the fact that the transaction with the supplier entered in the tax invoice was actually conducted with the supplier (see, e.g

On the other hand, the facts acknowledged in the final judgment of the public and criminal cases related thereto, unless there are any special circumstances, can be rejected in the case where it is deemed difficult to adopt a factual judgment in the final judgment of the relevant public and criminal cases in light of various evidence submitted in the relevant tax trial (see, e.g., Supreme Court Decision 95Nu3398, Oct. 13, 195).

B) Even if the Plaintiff was actually supplied with scrap metal as indicated in the instant tax invoice, if the customer who supplied scrap metal to the Plaintiff is not a CCC company that is not a supplier under the tax invoice, the instant tax invoice becomes a different tax invoice from the fact. Therefore, we examine whether the customer who supplied scrap metal to the Plaintiff corresponds to the supplier under the tax invoice.

The following circumstances revealed by adding up the whole purport of the pleadings to each entry in Gap's 2 and 3, Gap's 19-1, 2, Gap's 20-4, Eul's 2 through 4, and Eul's 13-2;

① On June 20, 201, AA was registered under the trade name of CCC company, but it was merely a person who had no property at the time and was engaged in self-denunciation manufacturing business from May 1, 2002 to December 31, 2002, and was not engaged in other self-employed business as well as the type of business related to high iron and steel wholesale and retail business, and it seems that CCC company was registered under its own name upon request of DDR, which was actually operated by CCC company, to lend its name.

② CCC issued sales tax invoices of approximately KRW 6.29 billion during the second taxable period in 2011, but only issued sales tax invoices of KRW 79 billion. However, in light of the fact that CCC did not pay any value-added tax on KRW 6.2 billion issued during the second taxable period in 201 and closed on April 17, 201, it appears that it issued and received false tax invoices without real transactions;

③ AA made a withdrawal in cash immediately after the date of the payment of the scrap metal, and it seems to support the circumstances that the actual supplier exists separately because it is difficult for an enterprise operating the business to make a full withdrawal in cash at all times because it is difficult to easily understand that the revenue deposited in the transaction account is deposited in cash;

④ By October 25, 2011, CCC had a place of business in Ulsan-gun, Ulsan-si, Ulsan-si, and thereafter, it was registered as a business owner to move the place of business to the land B in Yangsan-si, Yangsan-si, but as a result of a tax official’s on-site investigation, the roads entering the said land into the said land cannot pass by a large-scale scrap metal transport vehicle. There was no place where scrap metal was loaded on the said land at the said place of business, nor a place where a valley was installed, and the scrap metal loaded on the said land C was low, such as a string soil, and the scrap metal loaded on the said land C was very low, and there was little discovery of the transaction subject to the instant tax invoice.

⑤ 정PPP는 세무조사가 실시되자 고철 사업과 관련한 증빙자료를 폐기하였고, 경찰에서 AA상사라는 상호로 자료상을 운영하면서 세금계산서가 필요한 무자료상에 세금계산서를 발급해주고 관련 부가가치세를 대가로 받아 AAA 70%, AAA 50%의 비율로 나누어 갖기로 했다고 진술하였고, 부산지방법원 2012고단9521 조세범처벌법위반 사건에서도 CCC상사의 사업장에는 종업원이 없었고, 고철사업을 하려면 고철을 보관하는 장소가 있어야 하는데 그러한 장소가 없었으며, 사업자등록을 하기 위해서는 계근대가 있어야 함에도 CCC상사에는 계근대가 없어 QQ스틸에 있는 계근대로 사업자등록을 하였고, CCC상사에서 실제로 고철을 납품한 사실이 없다고 진술한 점,

6. On May 7, 2013, in the case of violation of the Punishment of Tax Evaders Act (amended by Act No. 11210, Jan. 26, 2012) by issuing a false tax invoice to the Plaintiff on May 7, 2013, the charges of violation of the former Punishment of Tax Evaders Act (amended by Act No. 11210, Jan. 26, 2012) were acquitted on the grounds that there is insufficient evidence to prove that there was no real transaction, but the charges of violation of the former Punishment of Tax Evaders Act by issuing a false tax invoice to the FF were sentenced to a suspended sentence of ten months for a period of 8 months;

7) Although AA was acquitted for lack of evidence to prove that there was no actual transaction in the case of violation of the Punishment of Tax Evaders Act, considering the fact that the actual transaction of goods or services is not in accord with the actual supplier, price, and time of the goods or services, it is reasonable to view that the actual supply of scrap metal to the Plaintiff in relation to the transaction of this case constitutes a third party other than the transaction partner of this case.

Therefore, this case's tax invoice under the name of CCC company that the plaintiff received constitutes a tax invoice that is written differently from the fact by the supplier. Therefore, this part of the plaintiff's assertion is without merit.

2) Whether the Plaintiff acted in good faith and without negligence

A) Unless there are special circumstances, the actual supplier and the supplier on a tax invoice may not deduct or refund the input tax amount unless there is any negligence on the part of the person who received the other tax invoice in the name of the supplier, and the person who asserts the deduction or refund of the input tax amount should prove that there is no negligence on the part of the person who received the tax invoice in the said name, unless there is any negligence on the part of the person who received the tax invoice in the said name (see, e.g., Supreme Court Decision 2009Du180

B) We examine whether the Plaintiff was negligent in not knowing the difference between the supplier and the actual supplier as indicated in the instant tax invoice and the Plaintiff’s failure to know the difference, and the evidence submitted by the Plaintiff alone is insufficient to acknowledge that the Plaintiff was not negligent due to the failure to know the same, and that there was no other evidence to acknowledge that there was no negligence due to the failure to know, and that there was no other evidence to prove otherwise. Rather, the following circumstances

① On September 201, 201, prior to the transaction with the CCC, GG, the head of the Busan Busan Business Division, met AAA with the neighboring workplace of the CCC, and thereafter visited the said workplace at least ten times to verify goods. However, on September 201, 201, the location of the workplace under the CCC’s business registration certificate of the CCC company was 366 in Ulsan-gun, Ulsan-gun, not the Yangsan-si, and thus the CCC company visited the GG. In addition, it is doubtful whether the workplace was the CCC company’s place of business. Even if AA was introduced into the workplace of the CCC company, even if it was introduced into the workplace of the CCC, the location of the workplace of the CCC company located in Yangsan-si was changed to the location of the workplace indicated in the CCC company’s business registration certificate, and there was sufficient reason to doubt whether the Plaintiff was a disguised business entity, not at least the CCC’s place of business within the short period.

② In addition, in the above-mentioned land, which was entered as the location of the workplace at the time, the Plaintiff could not engage in the scrap metal business as seen earlier, and did not have any trace of being engaged in it. Therefore, if the location of the above-registered establishment was actually verified, the Plaintiff could have easily known that AA had not actually engaged in the scrap metal business on the above-mentioned land.

③ Since the fact that the supply structure of the scrap metal industry is complicated and non-data transactions are frequent, it is necessary to pay special attention to whether an operator of the ordinary scrap metal business is a actual supplier. In particular, the Plaintiff has operated the scrap metal wholesale and retail business since 2009, and GGG, an employee of the Plaintiff, worked as an agent in WGG from May 2006 to May 201, 201. From June 201, 201, the Plaintiff was in office as the head of the Busan Business Department in the Busan Business Department, and was well aware of the actual status of the transaction in materials widely existing in the domestic scrap metal industry.

④ In full view of the fact that this GG appears to have been actually operated by the CCC company in the past WCC company, and the Plaintiff appears to have been engaged in the transaction with the CCC company, it is reasonable to deem that there was the Plaintiff’s negligence even if the Plaintiff knew or was unaware of the fact that the CCC company was not actually supplying the scrap metal at the time of the issuance of the instant tax invoice, even if he knew or was unaware of such fact. Accordingly, the Plaintiff’s assertion on this part is without merit.

3. Conclusion

Therefore, the plaintiff's claim is dismissed as it is without merit, and the judgment of the court of first instance is just as it is concluded, and the plaintiff's appeal is dismissed as it is without merit. It is so decided as per Disposition.

Relevant statutes

◈ 구 부가가치세법(2013. 6. 7. 법률 제11873호로 전부개정되기 전의 것)

Article 16 (Tax Invoice)

Article 17 (Payable Tax Amount)