Early High Court Decision 201J 1001 (Law No. 106,08)

This disposition is legitimate as a processing tax invoice received without real transaction of each of the tax invoices of this case.

As a result of the tax investigation with respect to the customer, DDR was confirmed to be 100% processed sales.CC resources were 100% of sales, 99% of sales revenue was stated as a processing tax invoice, there was no employee working in the office, and two business partners were denied the input tax deduction with the processing tax invoice received without real transactions as so-called so-called "data," and the defendant's disposition of this case was legitimate as bonus to the representative of the plaintiff.

2011Gu Joint 10639 Value-Added Tax, etc.

AAA Industry Corporation

Head of Suwon Tax Office

February 1, 2013

February 15, 2013

1. The plaintiff's claim is dismissed.

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

On September 1, 2010, the Defendant revoked each disposition imposing the Plaintiff value-added tax of KRW 000 for the first period of 2007, value-added tax of KRW 000 for the first period of 2008, value-added tax of KRW 000 for the second period of 2008, KRW 00 for the second year of 2007, and KRW 000 for the second year of 2008 (each disposition of income change of KRW 00 for the second year of 2007).

1. Details of the disposition;

A. The Plaintiff is a corporation that runs wholesale and retail business, such as non-ferrous and scrap iron, which is a waste resource. The Plaintiff received 000 won purchase tax invoices from Non-Party 1B, the representative of the 'DDuriching' in the first taxable period of the value-added tax in 2007, including purchase tax invoices of KRW 000,000, total value of supply in the first taxable period of the value-added tax in 2008, and issued 00,000 won purchase tax invoices from Non-Party E, the representative of the 'CC resource' in the second taxable period of the value-added tax in 2008 (hereinafter referred to as the "each of the above purchase tax invoices").

(Omission of Tax Invoice)

B. The Plaintiff reported to the Defendant for the first period portion in 2007, each value-added tax for the second period portion in 2008, and 2007, and each corporate tax for 2008, and each of the above tax invoices was deducted from the output tax amount for value-added tax, and the above tax invoices were added to the income amount for the pertinent business year.

C. However, the defendant denied the deduction of the input tax amount on the ground that each of the tax invoices received by the plaintiff was the processing tax invoice without real transactions, disposed of the price for each of the above tax invoices as recognized reward for the representative director ○○○○, and notified the plaintiff on September 1, 2010, the plaintiff at KRW 00 of the value-added tax for the first period of 2007, KRW 000 of the value-added tax for the first period of 2008, and KRW 000 of the value-added tax for the second period of 2008 (hereinafter "the tax disposition in this case") as bonus for the representative, and notified the change in the income amount for the second year of 2007, and the income amount for the year 2008 changed to KRW 000,000 (hereinafter "the notice of change in the income amount in this case", and hereinafter collectively referred to as "each disposition in this case").

D. The Plaintiff was dissatisfied with the instant disposition and filed an appeal with the Tax Tribunal on June 8, 201.

The above claim was dismissed.

[Grounds for Recognition] The entry into the non-speed facts, Gap 1, 3, 17, 26, and 31, and Eul 1 and 3, and the purport of the whole pleadings

2. Whether each of the dispositions of this case is legitimate

A. The plaintiff's assertion

The Plaintiff was supplied with each of the instant tax invoices, which was actually supplied by JungB and KimE, and accordingly received each of the instant tax invoices. Therefore, each of the instant tax invoices does not constitute a processing tax invoice received without a real transaction, and on a different premise, the Defendant’s each of the instant dispositions was unlawful.

(b) Related statutes;

It is as shown in the attached Form.

C. Determination

(1) Article 17(2)1-2 of the former Value-Added Tax Act (amended by Act No. 9268 of Dec. 26, 2008) provides that input tax shall not be deducted from output tax in cases where the entries of a tax invoice are different from the facts. Here, it means that the entries of a tax invoice are different from the facts, and where there is a person to whom the tax invoice belongs, and where there is another person to whom the tax invoice belongs, the person to whom the tax invoice belongs shall be liable to pay taxes, and where the necessary entries of a tax invoice are inconsistent with the purpose of Article 14(1) of the Framework Act on National Taxes that provides that the person to whom the tax invoice belongs shall be liable to pay taxes and the person to whom the tax invoice is actually supplied or supplied with the goods or service, regardless of the formal descriptions of the transaction contract, etc. made between the parties to the goods or service (see, e.g., Supreme Court Decision 96Nu617, Dec. 10, 1996).

(2) Based on the above legal principles, the following circumstances are comprehensively taken into account: (a) health units in this case; (b) Party A’s evidence Nos. 1, 1, 2, and 4, and 5 evidence Nos. 51 through 53 (including household numbers); and (c) Party A’s witness Kim E’s testimony as a whole; and (d) each of the tax invoices in this case shall be deemed to be tax invoices of the processed without real transactions; and (e) Party A’s tax invoices shall be deemed to be tax invoices of the actual transactions; and (c) Party A’s tax invoices of the evidence Nos. 2, 4 through 16, 27 through 30, and 32 through 50 (including any natural disaster) and some of Party A’s evidence Nos. 51 through 53 (including any natural disaster) and the testimony of Kim E’s testimony are insufficient to reverse the recognition.

① In the name of “DD Rateing”, JungB issued and issued sales tax invoices of KRW 127,00,000, and KRW 1200,000 in the first taxable period of the value-added tax in 208, and as a result of the tax investigation conducted by the tax authorities, the entire sales tax invoices were issued and received without real transactions. And as for the tax invoice for the first taxable period of the value-added tax in 2007, which was prepared and submitted by JungB on April 25, 2007 and July 25, 2007, the details of sales on the Plaintiff are not stated.

② At the time of the tax investigation by the tax authorities on the first and second taxable periods of the value added tax in 2007 and 2008 (=the first and second taxable periods of 2007 + KRW 0000 + the second and second taxable periods of 2007 + KRW 000 in 2008 + the first taxable period of 2008). However, in order to deduct the input tax amount of the value-added tax, the tax authorities voluntarily stated that the transaction was made and made a false report without any real transaction. Although there were some of the actual transactions on the sales, the grounds for the actual transaction cannot be presented, and the actual purchase price and payment relationship cannot be confirmed at all. In addition, in light of the motive and circumstances of the above statement, and the situation before and after the statement, there were no objective evidence supporting the fact that the Plaintiff failed to submit the actual transaction of DDris and the real transactions, and even if the aforementioned statement was partially reversed by the prosecution after YB, it is difficult to reject the credibility of the above statement solely because it was reversed.

③ The KimE issued and issued sales tax invoices of 00 won in total among the taxable periods of value added tax from 1st to 2nd, 2008, and received sales tax invoices of 000 won in total, and as a result of the tax investigation conducted by the tax authorities, at least 100% of the above sales tax invoices and at least 99% of the sales tax invoices issued and received without real transactions. In addition, on April 2009, the tax authorities conducted the on-site investigation of theCC resource, and at the same time, the offices of theCC resource did not have any substance as places of business, such as where there were no employees working at the offices.

④ At the time of the tax investigation by the tax authorities, KimE reported to the effect that it purchased recyclable resources equivalent to the total value of KRW 000 during the 2007 and the 1st value added tax period in 2008 (i.e., the 2nd period portion in 2007 + the 1st period in 2008 + the 000 won) from an individual, but this reported to the effect that it arbitrarily recorded his relative and relative resident registration numbers without real transactions and made a false declaration. Moreover, the purchase tax invoice equivalent to KRW 00 (the 12nd taxable period in 208 and the 12nd taxable periods in 2008) was received only from the non-party, the actual business owner, without real transactions, in light of the motive and circumstances of the above statement, and the circumstances before and after the prosecutorials’s statement and circumstances, it is difficult for the Plaintiff to properly submit evidence that the above evidence was insufficient to support the aforementioned transactions.

5. The term “data”, which issues a false tax invoice without real transactions, is so-called “data”, and there is little fact that the Plaintiff actually purchased the waste resources from another transaction party during the pertinent taxable period. Therefore, it cannot be deemed that the fixedB and the KimE actually supplied a large volume of waste resources, such as the entries in each tax invoice in this case, to the Plaintiff.

(3) Therefore, each of the instant dispositions by the Defendant, which denied the deduction of the pertinent input tax amount by deeming each of the instant tax invoices as tax invoices that were received without actual transactions, and that was disposed of as bonus to the Plaintiff’s representative, is lawful.

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and it is so decided as per Disposition.