The legitimacy of the assertion that the actual purchase of this disposition by a processing transaction was made

Unless there are extenuating circumstances that the Plaintiff was unaware of the name of the tax invoice of this case and was negligent in not knowing the fact that the Plaintiff was unaware of the name of the tax invoice of this case, the input tax amount of the tax invoice of this case cannot be deducted.

Article 20 of the Value-Added Tax Act [Presentation of Tax Invoice]

1. The appeal is dismissed.

2. The costs of appeal are assessed against the Plaintiff.

The appeal shall be dismissed in accordance with Article 8(2) of the Administrative Litigation Act, Article 429 of the Civil Procedure Act, and Article 5 of the Act on Special Cases Concerning the Procedure for Appeal, since the petition of appeal filed by appellant does not contain any statement in the grounds of appeal, and it is so decided as per Disposition by the assent of all participating Justices

[Seoul High Court Decision 2007Nu8371, Nov. 01, 2007]

1. The plaintiff's appeal is dismissed.

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

The judgment of the first instance shall be revoked. The defendant's imposition of value-added tax of KRW 30,591,120 on February 6, 2006 against the plaintiff on February 6, 2006 shall be revoked.

The court's explanation on the instant case is identical to the reasoning of the first instance court's judgment, and thus, citing it as it is in accordance with Article 8 (2) of the Administrative Litigation Act and Article 420 of the Civil

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

[Seoul Administrative Court 2006Guhap15271 (2007.06)]

1. The plaintiff's claim is dismissed.

2. The costs of litigation shall be borne by the plaintiff.

The Defendant’s disposition of imposition of KRW 30,591,120 on February 6, 2006, which was imposed by the Plaintiff on the Plaintiff on February 6, 2006, was revoked (the Plaintiff stated in the purport of the claim that the imposition of KRW 18,645,740 on September 2, 2004 and the imposition of KRW 11,945,380 on February 6, 2006 were divided; however, the Defendant’s disposition of imposition of KRW 9,945,380 on February 6, 2006 was consolidated, on the ground that the disposition of imposition of KRW 30,591,120 on February 6, 2006 was combined).

1. Circumstances and basic facts of taxation;

A. On November 15, 2001, the Plaintiff was engaged in the wholesale and retail business of leather products.

B. In filing a return of value-added tax on February 2, 2003, the Plaintiff’s total value in ○○ leather

The tax invoice of KRW 76,429,135 is issued to ○○, Inc., and two copies of the tax invoice of KRW 29,979,120, the sum of the supply values of KRW 29,979,120 was included in the value-added tax base; the corporate tax return was included in the gross income; the aggregate of the supply values issued by ○○ Textiles (hereinafter referred to as “○○ Textiles”) as listed below was received; and the tax invoice of KRW 211,748,025 (hereinafter referred to as “instant tax invoice”) was deducted as the value-added tax related input tax amount at the time of the corporate tax return;

Issuance Date

Value of supply (cost)

1

October 31, 2003

73,363,155

2

November 19, 2003

61,580,415

3

November 2003, 30.

3,138,050

4

December 19, 2003

39,756,485

5

December 23, 2003

3,909,920

Total

211,748,025

(C) On September 2, 2004, the Defendant: (a) deemed that the above purchase amount and sales amount are all false; (b) deducted KRW 10,640,825 from the output tax amount; and (c) calculated by subtracting KRW 21,174,802 from the input tax amount deducted from the input tax amount; (c) 10,53,977, an additional tax amount of KRW 8,111,765 (additional tax 6,363,126, and additional tax 1,798,098, such as failure to submit a list of the total tax invoices; and (d) imposed KRW 18,645,740, which is value-added tax (hereinafter referred to as the “first disposition”); and (d) filed a request for a national tax adjudication; and (e) filed a request for a national tax adjudication by correcting the pertinent purchase amount and sales amount to 21,254,090,090 for a business year 203.

"The defendant, on February 6, 2006, 2, and 6, deemed that there was a transaction between 106,408,255 won and 10,640,825 won of the above 106,640,825 won of the output tax, added 1,304,564 won of the value-added tax to increase the value-added tax of 11,945,380 won (hereinafter referred to as "the second disposition"), and issued a disposition imposing the amount of KRW 30,591,120 of the above 203 business year in relation to the corporate tax (hereinafter referred to as "the second disposition"), and revoked the disposition imposing the amount of KRW 30,591,120 of the above 203 business year in relation to the corporate tax." [the grounds for recognition], Gap evidence 1, 2-1, 2-2, Gap evidence 1, 2-1, 3-4, 1-3 evidence No.

2. Whether the taxation disposition is legitimate

A. The plaintiff's assertion

For the reasons indicated below, the instant taxation disposition is unlawful.

(1) Since the Plaintiff was supplied with leather from Park○, a director of ○ Textiles, the Plaintiff, the instant tax invoice cannot be said to be another tax invoice by the actual supplier.

(2) Even if the instant tax invoice is a tax invoice different from the fact, the Plaintiff traded to believe that Park○○ himself/herself was a director of ○ Textiles. As such, the Plaintiff constitutes a case where the Plaintiff was unaware of the fact that the supplier of the instant tax invoice was not aware of the fact and was not negligent as to the failure to know, and thus, the input tax amount based on the instant tax invoice should also be deducted.

(3) The Plaintiff, who is dissatisfied with the first disposition, filed a national tax trial by the National Tax Tribunal, rather than the National Tax Tribunal.

The sales should be included in the tax base, which is naturally null and void in violation of the principle of prohibition of disadvantageous alteration as stipulated in Article 79(2) of the Framework Act on National Taxes.

(b) Related statutes;

Attached Table shall be as listed in the attached Table.

(c) Fact of recognition;

(1) On September 12, 2001, 00, 000 ○○-dong ○○○○-dong ○○○○○-dong ○○○○-dong ○○○○○-dong ○○○○-dong ○○○ ○○ ○○ ○○ ○○ ○ ○○ ○ ○ ○ dong-dong dong on the lease of ○○ 1 August 1, 2003, however, there was little person visiting the said place of business, but the lease was terminated on September 203, 11, 30 due to delinquency in rent and management expenses. The ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ was also published in the tax invoice.

(2) The representative director of ○○ Textiles stated that, from September 12, 2001 to February 13, 2003, Kim○○, from February 13, 2003 to June 25, 2003, ○○○, from June 25, 2003, ○○○○, and after June 25, 2003, ○○○ had no business performance of ○○ Textiles, while ○○ was in the office of Kim○○, ○○ had no business performance of ○○, and ○○ was removed as anless academic resident, and ○○ stated that he had no business performance of ○○○ was removed from ○○ Textiles, and ○○ had acquired Korean nationality as a Chinese national, but stayed abroad for a considerable period of time during the office of representative director.

(3) The Plaintiff’s assertion that ○○○○○ was a director of ○ Textiles to supply leather at low prices, and thus, was engaged in transactions. There was no fact that ○○ was a director on the certified copy of ○ Textiles’s corporate register, and ○○ did not receive benefits from ○ Textiles.

(4) The Plaintiff did not visit the place of business of ○ Textiles at the time of transaction with ○○○○.

(5) The Plaintiff, in trading with Park○-○, delivered promissory notes as the supply price.

The bill has been in default, and after the bill has been issued, Park ○-○ notified his account number and deposited the supply price into the account of Park ○-○ after the first disposition.

(6) The Plaintiff did not have remitted the supply price to the account of ○ Textiles, and did not know about the account number of ○ Textiles. The director of the account division of the Plaintiff on January 2004 stated that the Plaintiff’s credit purchase price of ○○ Textiles was KRW 232,922,826 (total value-added tax) but the Plaintiff paid KRW 103,030,000 from January 26, 2004 to November 3, 2004 and paid KRW 129,892,826 of the balance as of the end of 204.

(Reasons for Recognition) Facts without dispute, Eul evidence 2-1 through 4, Eul evidence 3-1, 2, Eul evidence 4, Eul evidence 8, Eul evidence 9-1 through 10, Eul evidence 1-1, 2, Eul evidence 12-1 through 3, Eul evidence 13-1 through 4, evidence 13-1 through 13-4, testimony by both witnesses ○○ and the purport of the whole pleadings.

D. Determination

(1) Determination on the first argument

As seen earlier, in light of the fact that ○ Textiles does not have a proper place of business and it is difficult to see that the representative director was engaged in business as well as that ○ Textiles is engaged in the sales of the tax invoice in newspapers, it is recognized that ○○ Textiles is a so-called data merchant who issues only the tax invoice without any actual transaction. Since the Plaintiff based on the instant tax invoice and the ○○ Textiles do not exist, the instant tax invoice is deemed to have been actually issued according to the actual transaction details. Therefore, the Plaintiff’s above assertion is without merit.

(2) Judgment on the second argument

Unless there is any special circumstance that the Plaintiff was unaware of the name of the tax invoice of this case and was unaware of the fact that there was no negligence, the input tax amount of the tax invoice of this case cannot be deducted, and the burden of proof on this is borne by the Plaintiff who asserts the input tax deduction (see, e.g., Supreme Court Decision 2002Du2277, Jun. 28, 2002

On the other hand, it is insufficient to recognize that the Plaintiff was not negligent due to the Plaintiff’s failure to know that the supplier of the instant tax invoice was written differently from the fact, and that there was no negligence on the part of the Plaintiff. Rather, as recognized above, the Plaintiff paid the price by means of an individual passbook in transactions with Park○○○ in transactions with Park○○, and was unable to know the identity of Park○○○, and was engaged in a large amount of credit transactions over a long period of time, and Park○ also paid the price by an exceptional method in light of the general transaction concept, such as the absence of any particular objection, etc., in light of the fact that the Plaintiff was negligent as to the mistake of ○○ Textiles as the supplier, and thus, the Plaintiff’s allegation contrary to this is without merit.

(3) Judgment on the third argument

The principle of prohibition of disadvantageous change under Article 79(2) of the Framework Act on National Taxes is only applicable to a decision on a request for a trial, and the tax authorities may correct the decision at any time, unless the exclusion period does not expire if omissions or errors are found in the tax base and tax amount, so the defendant's decision of prohibition of disadvantageous change does not go against the principle of prohibition of disadvantageous change. Thus, the plaintiff's above assertion is without merit.

3. Conclusion

Then, the plaintiff's claim is justified and it is decided not to accept it.

The decision shall be rendered as above.

Related Acts and subordinate statutes

○ Value-Added Tax Act

○ Article 17 Tax Amount payable

(1) The amount of value-added taxes payable by an entrepreneur (hereinafter referred to as the “paid tax amount”) shall be the amount computed by deducting the tax amount under the following subparagraphs (hereinafter referred to as the “purchase tax amount”) from the tax amount on the goods and services supplied by him (hereinafter referred to as the “sales tax amount”): Provided, That where an input tax amount exceeds the output tax amount, it shall be a refundable tax amount (hereinafter

1. The tax amount for the supply of goods or services used or to be used for his own business;

(2) The following input tax amounts shall not be deducted from the output tax amount:

1. An input tax amount in case where the list of the total tax invoice by customer is not submitted under Article 20 (1) and (2), or the input tax amount on the portion not entered or entered differently from the fact, in case where the whole or part of the registration numbers or supply values by transaction parties in the submitted list of the total tax invoice by customer is not entered or entered differently from the fact, except in such case as prescribed by

1-2. An input tax amount, in case where the tax invoice as provided in Article 16 (1) and (3) is not delivered, or the whole or part of the matters to be entered under Article 16 (1) 1 through 4 (hereinafter referred to as a “necessary entry item”) is not entered or entered differently from the fact on the delivered tax invoice: Provided, That the input tax amount in such case as prescribed by the Presidential Decree shall be

2. An input tax amount for expenditure not directly related to the business.

3. An input tax amount on the purchase and maintenance of small nonbusiness automobiles;

3-2. The purchase tax amount related to the disbursement of the entertainment expenses and similar expenses as prescribed by the Presidential Decree;

4. The input tax amount related to the business of supplying goods or services exempted from the value-added tax (including the input tax amount related to investments) and the land-related purchase tax amount as prescribed by

5. The input tax amount before the registration as prescribed in Article 5 (1): Provided, That those as prescribed by the Presidential Decree shall be excluded.

○ Value-Added Tax Act

○ Article 79 Prohibition of Irregularity or Giving Disadvantages

②국세심판관회의 또는 국세심판관합동회의는 제81조에서 준용하는 제65조의 규정에 의한 결정을 함에 있어서 심판청구를 한 처분보다 청구인에게 불이익이 되는 결정을 하지 못한다.끝.