U.S. P. P. P. P.S.

Part VI

sales agreement

OOOOOO(OO)

aa representative director aa

Law Firm LLC et al., Counsel for defendant-appellant

Attorney OOO

The Head of the Defendant Trisung Tax Office

OO,OO of the litigation performer

2. The plaintiff's remaining claims are dismissed.

3. Of the costs of lawsuit, 4/5 shall be borne by the Plaintiff, and the remainder by the Defendant, respectively.

Cheong-gu Office

On May 2, 2014, the Defendant’s additional tax for value added tax for the Plaintiff on May 2, 2014

A disposition of imposition of each of the two installments for the second term in 2009 is revoked. < Amended by Presidential Decree No. 20099, Dec. 21, 2010; Presidential Decree No. 22093, Dec. 21, 2010; Presidential Decree No. 2020, Feb. 21, 201; Presidential Decree No. 20688, Feb. 21, 201; Presidential Decree No. 20687, Feb. 22, 2011; Presidential Decree No. 20687, Feb. 2, 2012; Presidential Decree No. 2358, Jan. 2, 2013; Presidential Decree No. 23520, Feb. 2, 2013>

A. The Plaintiff is a corporation established on November 27, 1986 for the purpose of developing, manufacturing, and selling financial automation equipment and its related software.

B. The Plaintiff concluded a contract to use automated device services with approximately 37 financial institutions, including banks, credit card companies, securities companies, etc., and provided the Plaintiff’s cash automatic withdrawal machine (hereinafter “cash withdrawal machine”) at public places, such as convenience stores, electric railroad stations, etc., and provided the said financial institutions with the services so that customers of each of the said financial institutions can obtain financial services, such as cash withdrawal, account transfer, balance inquiry, etc. (hereinafter “instant service”). In return for the provision of such services, the Plaintiff was paid the remainder (hereinafter “instant service fee”), excluding the Plaintiff’s fee for the Plaintiff’s financial institution’s fee collected from the customers’ account, out of the service fee collected from the customers’ account.

C. On November 17, 2001, the Plaintiff entered into a contract for the use of automated machine services with the BBBB (including BBBBB BB BB B B B B B B B B B B B B prior to the split-off on March 201, 2001, DDDD Co., Ltd. (hereinafter referred to as “DDDDDD”) on November 30, 2001 (hereinafter referred to as “CC”) and on March 28, 2002, respectively.

D. The Plaintiff issued a tax invoice with respect to the instant fee, which is the price for the instant service, to financial institutions other than BB, DDD, andCC (hereinafter collectively referred to as “CC”), but with respect to BB, the Plaintiff reported and paid the value-added tax by other sales without issuing a tax invoice for the instant fee after February 2003.

E. On May 2, 2014, the Defendant issued a revised and notified the Plaintiff on May 2, 201, that the Plaintiff did not issue a tax invoice for the instant fee during the value-added tax period from January 2009 to February 2, 2013, including the total value-added tax (including the additional tax), which was levied on the Plaintiff on the grounds that the Plaintiff used a non-business small-sized vehicle during the value-added tax period from January 2, 2009 to February 2, 201, for the following reasons: (a) the additional tax was imposed on the Plaintiff, including the total value-added tax levied on the non-business-type vehicle during the value-added tax period from January 2, 200 to February 2, 201 (hereinafter “the instant disposition imposing additional tax”).

(unit: Won)

Time of Taxation

Additional Tax to Issue Tax Invoice

(1)

No input tax amount shall be deducted;

(2)

Total

1, 2009

OO

OO

OO

Second Period, 2009

OO

OO

OO

1, 2010

OO

OO

OO

2010 Second Period

OO

OO

OO

1, 2011

OO

OO

OO

2011 Second Period

OO

OO

OO

1, 2012

OO

OO

2012 Second Period

OO

OO

1, 2013

OO

OO

Second Period, 2013

OO

OO

guidance.

OO

OO

OO

F. The Plaintiff filed an appeal with the Tax Tribunal on July 10, 2014, but was dismissed on December 4, 2014.

[Reasons for Recognition] Unsatisfy, Gap evidence 1 to 4, Eul evidence 1 (including each number), the purport of the whole pleadings

2. Whether the imposition of additional tax in this case is legitimate

A. The plaintiff's assertion

As delineated below, the Plaintiff’s disposition imposing the instant penalty tax on the Plaintiff due to the failure to issue the tax invoice shall be revoked in an unlawful manner, even if there is any justifiable reason not attributable to the Plaintiff’s failure to issue the tax invoice.

1) The Plaintiff did not have a duty to issue tax invoices if the instant service is an incidental transaction of financial and insurance services subject to tax exemption under the Value-Added Tax Act. If the other party to the instant service is not a financial institution but a cash automatic withdrawal user, the Plaintiff is exempted from the duty to issue tax invoices as “the supplier of goods or services by using a non-person vending machine.” However, there are many authoritative interpretations of the relevant agencies, such as tax exemption transaction, and even if the instant service is a taxable transaction, there was sufficient room to view that the other party is a cash automatic withdrawal user. As such, there was a conflict of opinion on the interpretation of the tax law as to whether the Plaintiff is obligated to issue the tax invoices for the instant service fee.

2) In the field of finance than the Plaintiff, the instant bank, which was specialized in the field of finance, rejected the receipt of the tax invoice issued by the Plaintiff by deeming the Plaintiff as the user of the instant service, and there was no different way to enforce the receipt.

3) In light of the fact that there was no sanctions against the instant banks that refused to receive the Plaintiff’s tax invoice, and that the penalty tax imposed after 2009 on the Korea Electronic Finance Corporation (hereinafter “Korea Electronic Finance”) which is the same kind of company as the Plaintiff was completely revoked, the imposition of the instant penalty tax against the Plaintiff is contrary to equity.

(b) Related statutes;

It is as shown in the attached Form.

(c) Fact of recognition;

1) Business affairs related to the instant services of the instant banks

On March 9, 2014, the director of the Seoul Regional Tax Office requested the Bank of this case to verify the facts of transactions, etc. with the Plaintiff during the course of tax investigation with the Plaintiff as follows.

Plaintiff on the grounds of internal audit, etc.

his refusal to receive the tax invoice

Whether a tax invoice issued by a like company is received

Period of receipt of tax invoices by company

When tax invoices are not received, the reasons therefor

BB

relevant matters that do not exist

relevant matters that do not exist

Receipt of tax invoices from the time of the contract with the plaintiff, because they were withdrawn from the customer passbook and settled the price, they shall be viewed as transactions with the customer.

CC

relevant matters that do not exist

(Electronic Tax Invoice System:

(B) Transfer of administration)

Non-verification Cost

The instant fee is attributed to the enterprise, not to the profits of the bank, and it is not subject to taxation because the bank simply delivers the fee to be temporarily stored.

D

relevant matters that do not exist

[Plaintiff]

From June 2002 to June 2005 ? Receipt

From July 2005 to January 2014, 198 ? Unclaimed

B. from February 2, 2014 to ? Receipt

[ZZZ]

From April 2002 to April 1, 200 ? Unclaimed

[Law-Making]

From December 2, 2001 to June 11, 200

[Y]

From July 200 to June 200 ? Receipt

[W]

From December 2, 2002 to December 2004 ? Receiving

From January 2005 to January 2004 ? Unclaimed

B. from February 2, 2014 to ? Receipt

part of the company is not entitled to receive the tax invoice without issuing it.

2) A tax authority’s interpretation related to the instant service

A) On August 14, 1993, the Commissioner of the National Tax Service sent a reply that the value-added tax is exempted because the instant service belongs to the scope of the banking business.

The Ministry of Land, Infrastructure and Transport sent a reply to the same effect on January 3, 2002 to dddi (Ch. 46015-1922) (C. 3, 2002).

B) On the other hand, on December 20, 2002 and May 13, 2003, the Commissioner of the National Tax Service authoritatively interpreted that “the instant service is subject to value-added tax” (Article 46015-12209, west 46015-10785, west 46015-10785), and on March 29, 2005, “the commission for the instant service provided under a contract with the bank must be issued with the person to whom the relevant bank was supplied” (Additional Part).

C) On June 26, 2003, the Chairman of the Board of Audit and Inspection conducted four financial institutions, including EE Bank, to request that the service of this case provided by a person without authorization under the Banking Business Act be subject to value-added tax. On August 11, 2003, the Superintendent of the Board of Audit and Inspection of the Board of Audit and Inspection of Korea issued a request for correction and notification of the value-added tax from February 2, 2001 to January 2003 with respect to fees received by ddddd on the said service. Dd on October 29, 2004, the Board of National Tax Tribunal filed a request for a judgment with the National Tax Tribunal on the grounds that "the service of this case becomes subject to value-added tax exemption under Article 33 (2) of the former Enforcement Decree of the Value-Added Tax Act." (The Court Decision 2003Do3194 delivered on October 29, 2004).

D) Accordingly, the same company including the Plaintiff filed a request for correction of value-added tax refund, and filed a request for adjudication with the National Tax Tribunal upon receiving a rejection disposition from the head of the competent tax office. On June 30, 2006, the National Tax Tribunal dismissed the Plaintiff’s instant service on the grounds that it is subject to value-added tax (the Korean Supreme Court Decision 2005No2898), and all of the claims of the other identical companies were dismissed on the same grounds (the Korean Supreme Court Decision 2006Da2943, Nov. 3, 2006; 2006Du627, Aug. 31, 2006).

E) On the other hand, on May 9, 2006, the Minister of Finance and Economy sent a reply to the effect that the business operator who is not engaged in banking business under the Banking Act was affiliated with a bank, insurance, credit card company, and provided a CD/ATM machine at a public place and received commission from its customers, who are users of the device, because the business is included in the banking business under Article 18-2 of the Enforcement Decree of the Banking Act (amended by Presidential Decree No. 22493, Nov. 15, 2010; hereinafter the same) as it is included in the banking business under Article 18-2 of the Enforcement Decree of the Banking Act (amended by Presidential Decree No. 22493, Nov. 15, 2010; hereinafter the same).

3) The court’s interpretation regarding the instant service

A) Upon the dismissal of a request for a trial in the National Tax Tribunal as above, the plaintiff filed an administrative litigation, and the first instance court (this court 2006Guhap34968) held on March 22, 2007 that "the service of this case is the service that is identical with or similar to the financial and insurance services that are incidental to the plaintiff, and thus is subject to exemption from value-added tax," but the appellate court (Seoul High Court 2007Nu9961) held on October 23, 2007 "the service of this case is the service that installs and manages the cash payment machine and provides cash withdrawal, account transfer, and balance inquiry service at the bank, and the fee for the operation of the cash payment machine is paid from the bank, and it cannot be deemed that it is identical with or similar to the value-added tax." The appellate court held that the service of this case is the same as the service that is subject to exemption from value-added tax."

B) Meanwhile, on August 2, 2011 and October 10, 2011, 2009, Mapo Tax Office, pointed out that the instant service is subject to taxation by the director of the Seoul Regional Tax Office, imposed value added tax (including additional tax) on ddd on 2, 2009 and 10 on dd d d d d d d d d d d d d d d d d 2, 2010. Upon the request for a trial by the Tax Tribunal, d d d e d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d e d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d e.

[Ground of recognition] Facts without dispute, Gap evidence 7, Eul evidence 3, the purport of the whole pleadings

D. Determination

1) In order to facilitate the exercise of taxation rights and the realization of tax claims, additional tax under the tax law is an administrative sanction imposed as prescribed by the individual tax law in cases where a taxpayer violates various obligations, such as a return and tax payment, without justifiable grounds, and the taxpayer’s intent or negligence is not considered. However, it is unreasonable for a taxpayer to be unaware of his/her obligations due to a conflict of opinion due to a doubt in the interpretation of the tax law beyond a simple scope of a land or a misunderstanding under the tax law, and it is unreasonable for the taxpayer to be aware of his/her obligations due to a conflict of opinion, etc.

Seoul High Court Decision 2006Du11750 Decided October 23, 2008; Supreme Court Decision 2002Du666 Decided August 23, 2002

2) In light of the above legal principles, in light of the following circumstances acknowledged by adding the entries in Eul evidence No. 4 and the purport of the entire pleadings to the above facts, it is reasonable to deem that the service of this case was established until October 15, 2009, which was sentenced by the Supreme Court Decision No. 2009, and thus, it is not unreasonable to deem that the Plaintiff did not know of its duty. However, it is difficult to deem that there was any circumstance to deem that it is unreasonable to expect the Plaintiff to perform the duty to issue a tax invoice only with the evidence submitted by the Plaintiff, including evidence No. 5, and there is no other evidence to deem that there was a justifiable reason to deem otherwise. Accordingly, the Plaintiff’s assertion is justified only within the scope of the above recognition.

A) As to whether the instant service is a tax transaction requiring the issuance of a tax invoice, the tax authorities failed to express its consistent view by 2006, and furthermore, as the conclusion was inconsistent between the first and the second trials of the Supreme Court decision in 2009, it should be deemed that there was a conflict of opinion due to the significance of tax interpretation as to the instant issue until October 15, 2009, which was sentenced by the said Supreme Court decision.

B) However, in the decision of the Supreme Court in 2009 of this case, it was clear that the instant service was a taxable transaction that requires the issuance of a tax invoice and its counterpart is a bank, by stating that “The instant service is formally assisting the original cash withdrawal, account transfer, and balance inquiry service that is provided at the bank, and the fee for the operation of an automatic cash payment machine is paid from the bank, and it cannot be deemed that it is identical with or similar to the financial and insurance services that are exempt from value-added tax, and at least from October 15, 2009, the said decision of the Supreme Court rendered.

C) Furthermore, since the Plaintiff was a direct party to the Supreme Court decision in 2009, the Plaintiff seems to have clearly known that the instant bank, after the said judgment, still has an obligation to issue a tax invoice to the said bank, regardless of whether or not it has received the tax invoice from some identical companies.

D) Since the Supreme Court’s decision in 2013 decided that the Plaintiff was a bank for the first time, the Plaintiff still asserted that there was sufficient room to regard the opposite contractual party to the instant service as the user of the instant service as the user of the cash automatic withdrawal, and that the issuance of the tax invoice for the instant fee is unnecessary. However, the Supreme Court’s decision in 2009 also clarified that the opposite contractual party to the instant service was a bank, and even if the Plaintiff issued the tax invoice to the financial institution other than the instant bank, it is difficult to accept the Plaintiff’s above assertion even if the Plaintiff was the one who issued

E) In light of the following: (a) BB andCC replyed that most of the tax invoices were received from the other identical companies except the Plaintiff, and DD was not received due to the Plaintiff’s failure to deliver the tax invoices; (b) the Plaintiff’s expression of intent not to receive the tax invoices was prior to 2005; and (c) there was no evidence to prove that the Plaintiff had led to the Plaintiff to issue the tax invoices to the instant banks after the Supreme Court’s decision in 2009. In light of the above, it is difficult to deem that the instant banks actively rejected the Plaintiff’s receipt of the tax invoices even after the Supreme Court’s decision in 2009.

F) Even if the instant bank actively rejected the receipt of the tax invoice issued by the Plaintiff, it was deemed that the use of the electronic tax invoice was obligated for corporate entrepreneur from January 1, 201, when the electronic tax invoice was entered into the receipt by the recipient of the goods or services, and the recipient of the goods or services was received at the time of receipt by the recipient of the goods or services. As such, the Plaintiff, a corporate entrepreneur, could unilaterally issue the tax invoice to the instant bank even after being pointed out the non-issuance of the tax invoice, and the Plaintiff began to issue the electronic tax invoice to the instant bank immediately after being pointed out by the Defendant (amended by Presidential Decree No. 21304, Feb. 4, 2009). According to Article 53(4) of the former Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 21304, Feb. 4, 2009).

G) In light of the fact that a tax invoice plays a key role in maintaining a value-added tax system as a legal device to enhance transparency in sales content of a business entity and to promote the training of tax base of its counterpart, the issue of the principal payment of value-added tax seems not to be an element to consider in determining the justifiable grounds for neglecting the duty to issue a tax invoice. The revocation of the additional tax for February 2, 2009 and January 2010 for Korean Electronic Finance was made several replies or decisions by the tax authorities to the effect that the instant service was a tax-free transaction, unlike the Plaintiff, and the tax authorities did not explicitly changed the above opinion even after the Supreme Court ruling in 2009, and the said additional tax imposed on Korean Electronic Finance appears to be a return and an erroneous payment for negligence, the Plaintiff’s assertion that the imposition of the additional tax against the Plaintiff contravenes equity cannot be accepted.

3) Ultimately, the part of the disposition imposing additional tax of this case, which is deemed to have justifiable grounds for neglecting the Plaintiff’s duty to issue the tax invoice, should be revoked illegally, and the remaining part from January 2, 2010 to February 2013 should be lawful.

3. Conclusion

Therefore, the plaintiff's claim of this case is justified within the above scope of recognition, and the remaining claims are dismissed as it is without merit. It is so decided as per Disposition.

Related Acts and subordinate statutes

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

Article 9 (Transaction Time)

(2) The time when services are supplied shall be the time services are provided or goods, facilities or rights are used.

Article 12 (Exemptions)

(1) The supply of the following goods or services shall be exempted from value-added taxes:

11. Financing and insurance services prescribed by Presidential Decree;

Article 16 (Tax Invoice)

(1) Where an entrepreneur registered as a person liable for tax payment supplies goods or services, he/she shall issue 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 specified in Article 9 (where Presidential Decree prescribes otherwise, referring to the time specified otherwise by Presidential Decree). In such cases, a tax invoice may be revised and issued, as prescribed by Presidential Decree, if any ground prescribed by Presidential Decree, such as error

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.

(2) Notwithstanding paragraph (1), corporate entrepreneurs and individual entrepreneurs prescribed by Presidential Decree shall issue tax invoices by electronic means (hereinafter referred to as "electronic tax invoices") prescribed by Presidential Decree: Provided, That corporate entrepreneurs may also issue tax invoices other than electronic tax invoices by December 31, 201, and individual entrepreneurs by December 31, 201. < Amended by Act No. 9910, Jan. 1, 2010>

(3) Where an electronic tax invoice is issued under paragraph (2), a detailed statement of the issuance of the tax invoice prescribed by Presidential Decree shall be transmitted to the Commissioner of the National Tax Service by the deadline prescribed by Presidential Decree.

(6) Paragraphs (1) and (2) may not apply to cases prescribed by Presidential Decree, such as where the issuance of a tax invoice is impracticable or unnecessary.

(7) Matters necessary for the preparation and issuance of tax invoices, other than those provided for in paragraphs (1) through (6), shall be prescribed by Presidential Decree.

Article 22 (Additional Tax)

(3) Where an entrepreneur falls under any of the following subparagraphs, the amount equivalent to 2/100 of the value of supply (in cases falling under subparagraph 2, referring to the amount entered in the relevant tax invoice, etc.) shall be added to the amount of tax payable or deducted from

1. Where a tax invoice under Article 16 is not issued by the taxable period in which the time of supply for goods or services falls (in cases prescribed by Presidential Decree, the 10th day of the month following the end of the taxable period);

▣ 구 부가가치세법 시행령(2013. 6. 28. 대통령령 제24638호로 전부개정되기 전의 것)

Article 33 (Scope of Financing and Insurance Services)

(1) Financial and insurance services referred to in Article 12 (1) 11 of the Act mean services falling under any of the following subparagraphs:

1. Banking services and incidental services under the Banking Act, as follows:

(2) The same or similar services as financing and insurance services under paragraph (1) shall be deemed included in financing and insurance services under Article 12 (1) 11 of the Act, even where a person who runs a business other than those under each subparagraph of the same paragraph provides services incidental to the main business.

Article 53-2 (Electronic Tax Invoice)

(2) The period during which an individual entrepreneur obligated to issue electronic tax invoices is required to issue the electronic tax invoices shall be the second taxable period for the year following the year in which the total amount of supply value of goods and services for each place of business is at least one billion won and the first taxable period for the following year (the first taxable period for the year 2012 in cases of an individual entrepreneur whose total amount of supply value of goods and services for each place of business in 2010 is at least one billion won): Provided, That where the total amount of supply value of goods and services for each place of business is at least one billion won due to a revised return under Article 45 of the Framework Act on National Taxes or a decision and correction under Article 21 of the Act (hereafter in this paragraph, referred to as "reported return, etc."), the

(4) "Electronic means prescribed by Presidential Decree" in the main sentence of Article 16 (2) of the Act means issuing items referred to in the subparagraphs of paragraph (1) of the same Article through an information and communications network through a certified certification system through which the identity of an originator can be verified by any of the following methods:

1. Using facilities for enterprise resource planning under subparagraph 1 of Article 5-2 of the Restriction of Special Taxation Act, which have obtained standard certification under Articles 18, 23, and 24 of the Framework Act on Electronic Documents and Transactions;

2. Using the electronic tax invoice issuance system of a business entity vicariously issuing electronic tax invoices on behalf of a business entity that has obtained standard certification under Articles 18, 23, and 24 of the Framework Act on Electronic Documents and Transactions;

3. Using an electronic tax invoice issued by the Commissioner of the National Tax Service;

4. Using the Cash Receipt Issuing Device capable of issuing electronic tax invoices, and other systems for issuing electronic tax invoices designated by the Commissioner of the National Tax Service;

(6) "Period prescribed by Presidential Decree" in Article 16 (3) of the Act means the day following the date of issuance of electronic tax invoices.

(9) Where a person who is supplied with goods or services fails to receive an electronic tax invoice or designate it, or uses a system that cannot be applied to the receipt of an electronic tax invoice, such as a system referred to in paragraph (4) 4, the system shall be deemed designated by receiving the electronic tax invoice issued under paragraph (4) 3.

(10) When an electronic tax invoice is entered in the receipt designated by a person to whom goods or services are supplied or entered in the electronic tax invoice issuance system under paragraph (4) 3, the person to whom the goods or services are supplied shall be deemed to have received such electronic

Article 57 (Exemption, etc. from Duty to Issue Tax Invoice)

(1) "Cases prescribed by Presidential Decree, such as where it is impracticable or unnecessary to issue a tax invoice under Article 16 (6) of the Act means the supply of any of the following goods or services:

1. Goods or services supplied by a taxi transport business operator, a street store or a person engaged in driving and other business operators prescribed by Ordinance of the Ministry of Strategy and Finance;

▣ 구 부가가치세법 시행규칙(2013. 6. 28. 기획재정부령 제355호로 전부개정되기 전의 것)

Article 17 (Exemption from Duty to Issue Tax Invoice)

Business operators prescribed by Ordinance of the Ministry of Strategy and Finance in Article 57 (1) 1 of the Decree means the following business operators:

1. The person who supplies goods or services using vending machines; and