Article 7 of the Enforcement Decree of the Value-Added Tax Act; Article 45-3

2. All of the plaintiffs' primary claims are dismissed.

3. The costs of lawsuit are assessed against the plaintiffs.

The following facts shall not be disputed between the parties, or may be recognized by comprehensively taking into account the respective descriptions of Gap's 1 through 300, Gap's 304-1 through 26, and the whole purport of pleadings:

A. Door-to-door Co., Ltd. (hereinafter referred to as "non-door Co., Ltd.") is a company established on October 30, 2003 in order to run a business related to the O-Type marketing Co., Ltd. (hereinafter referred to as "O-type marketing company").

B.O established six branches, including Gangnam-gu, Busan, Gwangju, Incheon, Daejeon, Daegu, and Daegu, and operated 62 centers across the country. The non-party company operated its business through the OO branch and the center, and did not have a separate branch and the center. The above two companies maintained and managed the sales organization together through the organization of the sales organization through the organization of the place of business (Center), the manager of the place of business (the representative of the center), the superior sales unit and the assistant sales unit, etc., with the compensation system for the payment of phased allowances according to the performance of the purchase of the goods.

C. On the basis of a prospectus or a basic lecture distributed at the headquarters by each center, the non-party company recruited new sales clerks by holding a business explanation meeting to invite their salespersons to join, and the Plaintiffs were employed as the sales clerks of the non-party company.

D.O sold health food, etc. mainly because the sales amount is limited to not more than 000 won according to the laws and regulations related to multi-level marketing business. The non-party company, which had no such restriction, sold the non-party company's products, relatively high-priced silver, dubs, multi-units, etc. The sales price of the products sold by the non-party company was 1.16% of the sales price. The sales price of the non-party company only purchased the products to increase the performance, there was no other interest in the performance, quality, or price of the products. Generally, most of the sales prices of the products do not individually select the goods in ordering the order, but they did not mean the amount that they can invest to the head of the center, etc., by taking into account the investment amount. Meanwhile, the non-party company did not have any particular import personnel other than this sales.

E. Since then, when the non-party company discontinued the payment of the remuneration to the salespersons, some salespersons of the non-party company filed a complaint against the non-party company's fraud, and around June 2007, the headA and the branchB, a general manager of the non-party company, were detained on the charge of violating the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Fraud) and the Door-to-Door Sales Act. On October 30, 2007, the Seoul Central District Court sentenced the non-party company to nine years of imprisonment and five years of imprisonment, respectively. The above judgment was finalized on June 12, 2008 as both the headA and the branchB's appeal (Seoul High Court Decision 2007No2567) and the appeal (Supreme Court Decision 2008Do2236) were dismissed.

F. Meanwhile, between April 2006 and April 2007, the non-party company reported and paid each value-added tax to the tax authorities from January 1, 2006 to January 2007. On March 16, 2009, the non-party company filed a claim for correction against the tax authorities for the total amount of KRW 000 of the value-added tax from January 2006 to January 2007, by asserting that the non-party company’s business was merely taking the form of selling and selling goods to attract investment funds without actual trading of the goods, and thus does not constitute supply of goods under the Value-Added Tax Act.

G. Accordingly, the pertinent tax authorities rendered a disposition rejecting a claim for correction of the non-party company to the effect that the non-party company supplied the goods purchased by the non-party company to the salesperson upon receiving the price constitutes subject to taxation pursuant to Articles 6 and 1 of the Value-Added Tax Act (hereinafter “instant refusal disposition”).

H. On August 7, 2009, the non-party company filed a tax appeal against each of the instant refusal dispositions. However, on March 9, 2010, the Tax Tribunal dismissed all the non-party company's appeal on the ground that the non-party company's act of selling the goods to the multi-level marketing salesperson constitutes a transaction subject to value-added tax because the transaction type between the non-party company and the sales salesperson is somewhat different from the ordinary commercial transactions. The above decision reached the non-party company on March 11, 2010.

(i) On June 4, 2010, the non-party company filed a lawsuit to revoke the revocation of the disposition of refusal to request the correction of value-added tax by Seoul Administrative Court 2010Guhap23910. On February 23, 2012, the above court accepted the non-party company's claim on February 23, 2012, and accepted the non-party company's "the transaction between the non-party company and the salesperson was conducted in the form of sale to pretend the supply of the goods, and the substance of the transaction was merely a monetary transaction that attracting investment funds and paid investment allowances. Accordingly, it cannot be deemed that the supply of the goods subject to value-added tax was made. Thus, the non-party company calculated the tax amount by including the sales from the transaction with the salesperson at the time of filing the initial value-added tax return to the tax authority in the form of tax base. The tax authority's rejection disposition based on the premise that the initial declaration of value-added tax was legitimate is unlawful (hereinafter referred to as "related judgment"). After then, the tax authority filed a final appeal.

2. The plaintiffs' assertion

(a) The primary claim

The Plaintiffs recommended that part of the goods purchased from Nonparty Company orO be paid to its subordinate business operators and used them free of charge. This constitutes advertising and publicity expenses for business, etc., and the remainder of the goods fall under the category of sales and publicity expenses for business, etc., and collected part of the purchase price by disposing of them as salt prices to the intermediate wholesale, it is reasonable to deem that

If a multi-level marketing salesperson, such as the plaintiffs, is registered pursuant to Article 7 (6) of the former Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 19892 of Feb. 28, 2007, hereinafter referred to as the "former Enforcement Decree of the Value-Added Tax Act"), it is naturally recognized as a business operator even if the plaintiffs do not file an application for business registration. However, in this case, the plaintiffs can be a simplified taxable person whose general value-added tax is not recognized, but as long as the plaintiffs actually run a wholesale business, it should be viewed as a general taxable person subject to value-added tax in accordance with the principle of substantial taxation.

Therefore, the defendant shall refund the difference between the value-added tax (sales tax) in 2006 and the value-added tax (purchase tax) paid by the plaintiffs in advance through the non-party company orO as unjust enrichment without any legal ground. Since April 18, 2011, the plaintiffs completed the return of tax base lawfully by the National Tax Service from April 18, 201 to the present day, so the defendant is liable to pay the plaintiffs the corresponding amount as stated in the separate sheet 3 and the delay damages.

(b) Preliminary claim

Since the plaintiffs suffered enormous damages due to the acts of fraud of the non-party company, they have the right to claim damages against the non-party company due to nonperformance of obligations or illegal acts. Meanwhile, according to the relevant judgment, the non-party company holds the right to claim restitution of unjust enrichment equivalent to KRW 000 against the defendant. Thus, the plaintiffs can exercise the right to claim restitution of unjust enrichment against the defendant of the non-party company that will occur in the future as subrogation claim.

Therefore, the defendant is obligated to pay unjust enrichment that the defendant should pay to the non-party company on behalf of the non-party company.

3. Determination

A. Judgment on the main defense of the conjunctive claim

A creditor’s subrogation right may be exercised by a creditor to preserve his/her claim only in cases where the debtor does not exercise his/her right against a third party obligor (see, e.g., Supreme Court Decision 2008Da65839, Mar. 12, 2009). In addition, “the debtor does not exercise his/her right by himself/herself” means that the debtor has a right against a third party obligor and the debtor is able to exercise his/her right, but does not exercise his/her right by himself/herself. The meaning that the debtor is in a state where he/she can exercise his/her right by himself/herself is in a state where the debtor is able to exercise his/her right by himself/herself. It means that there is no legal obstacle that makes it impossible to exercise his/her right by himself/herself, and that there is no real obstacle to the debtor himself/herself, and that the debtor does not ask for reasons for not exercising his/her right (see, e.g., Supreme Court Decision 91Da9312, Feb. 25, 1992)

According to the above legal principles and facts acknowledged earlier, in order for the plaintiffs to exercise their right to claim restitution of unjust enrichment against the defendant by subrogation of the non-party company, it should be presumed that the non-party company does not exercise their right despite the fact that the non-party company could exercise its right to claim restitution of unjust enrichment against the defendant because there is no legal obstacle in exercising the right to claim restitution of unjust enrichment against the defendant. However, the non-party company is in a legal obstacle that the non-party company is unable to claim restitution of unjust enrichment against the defendant until the revocation of each refusal of the disposition of this case by the non-party company. Thus, the plaintiff's preliminary claim is unlawful because the

B. Judgment on the main claim

(1) Article 2 of the former Value-Added Tax Act (amended by Act No. 8142 of Dec. 30, 2006; hereinafter referred to as the "former Value-Added Tax Act") provides that "any person who supplies goods or services independently for business purposes regardless of the existence of profit-making profits shall pay the value-added tax pursuant to this Act." Article 5 (1) of the same Act provides that "any person who newly commences a business shall register his business with the head of the competent district tax office within 20 days from the date of commencement of the business as prescribed by the Presidential Decree." Article 17 (1) of the same Act provides that "the value-added tax amount payable by a business operator shall be the amount calculated by deducting the input tax amount from the tax amount on the goods or services supplied by him." Article 17 (1) of the former Value-Added Tax Act provides that any person who bears an obligation to pay the value-added tax pursuant to the above Act and has the right to receive the refund of the input tax amount exceeding the output tax amount shall be registered independently with the head of the head of the competent tax office.

(2) Therefore, first of all, the following circumstances are revealed by comprehensively considering whether the plaintiffs were registered (general registration) in accordance with the procedure stipulated in Article 7(6) of the former Enforcement Decree of the Value-Added Tax Act, Gap's No. 301-1-7 and Eul's 3-2, and the overall purport of each entry and pleading as follows: (i) the plaintiffs were actually general registration; or (ii) the non-party company submitted a general multi-level marketing report necessary for general registration to the tax authority; (iii) the multi-level marketing business entity submitted a report on the current status to the tax authority of multi-level marketing salespersons and received the above report by the tax authority; and (iv) the fact that the general sales business entity submitted the above report to the tax authority; and (iii) the fact that the general sales business entity submitted the above report to the non-party company under Article 7 of the former Enforcement Decree of the Value-Added Tax Act or the non-party company was merely a multi-level marketing business entity's registration under the name of the non-party company.

(3) In addition, even if the supply of goods appears to exist in appearance, if it is merely the pretending of the supply of goods or ice, and it can be deemed that there was only the receipt of investment funds without the transaction of the goods, it shall not be deemed that there was the supply of the goods subject to the imposition of value-added tax. Whether it is a reasonable price for the objective value of the goods in question and its supply price, whether the person who received the supply actually intended to use and consume the goods, and whether the parties planned to recover the investment funds (see Supreme Court Decision 2006Du13497, Dec. 24, 2008). In light of the above legal principles, it is difficult to view that the price of the goods subject to the transaction between the plaintiffs and the non-party company was unreasonable, and that the Plaintiffs, including the plaintiffs, received only the amount equivalent to 5% of the price of the goods purchased from the non-party company, and the Plaintiffs, etc., paid the goods to the non-party company’s seller in excess of the price of the goods in question.

(4) Furthermore, Article 45-3 of the former Framework Act on National Taxes (amended by Act No. 8139, Dec. 30, 2006; hereinafter “former Framework Act on National Taxes”) provides that a person who fails to file a tax base return within the statutory due date of return may file a tax base return after the due date. Unlike the previous Act, the former Act provides that only the person with a tax amount to be paid may file a tax base return after the due date (hereinafter “after the due date of return”), a person who is not only the person with a tax amount to be paid within the due date but also the person with a tax amount to be refunded. However, Article 6 of the Addenda of the same Act provides that the above revised provision shall apply from the date when the statutory due date of return arrives after January 1, 2007; the Plaintiffs filed a tax return within the due date of return for the value-added tax for the first half of the year 2006 and the statutory due date of return for value-added tax for the first half of the year 2006.

(5) Therefore, the plaintiffs' primary claims are without merit.

4. Conclusion

Therefore, the part of the plaintiffs' preliminary claims in the lawsuit of this case is dismissed in its entirety, and all of the plaintiffs' primary claims are dismissed as it is without merit. It is so decided as per Disposition.