Seoul Administrative Court 2010Guhap4995 (Law No. 19, 2010)

The Board of Audit and Inspection ( December 17, 2009) 209-0249

The propriety of the imposition of additional tax if no document attached to zero tax is submitted

Under Article 105 of the Restriction of Special Taxation Act, if the documents attached to the zero-rate tax rate are not submitted for the transaction before February 22, 2008 under the zero-rate tax rate, there is no basis for imposing the penalty tax, so the imposition of penalty tax for failure to report the zero-rate

2010Nu31958 Revocation of Disposition of Refusal to Request Reduction or Correction

- Appellants

○ Stock Company

○ Head of tax office

Seoul Administrative Court Decision 2010Guhap4995 decided August 19, 2010

April 19, 2011

June 7, 2011

1. All appeals filed by the plaintiff and the defendant are dismissed.

2. The costs of appeal shall be borne by each party.

1. The plaintiff's purport and purport of appeal

A. Purport of claim

(1) Selectively, the Defendant’s disposition of suspending the Defendant’s second-term portion in 2004 against the Plaintiff on May 12, 2009, first-term portion in 2005, first-term portion in 2008, first-term portion in 2008, and second-term value added tax in 2009, or (2) the Defendant’s disposition of imposing value added tax on the Plaintiff on April 1, 2009, second-term portion in 20,793,300, first-term portion in 2004, first-term portion in 2005, first-term portion in 207,747,740 won in 205, first-term portion in 150,413,630 won in 208, second-term portion in 2008, and second-term portion in 7,03,630 won in 208.

B. Purport of appeal

The part against the plaintiff in the judgment of the court of first instance is revoked. (1) The defendant's refusal of a request for reduction or correction of the value-added tax for the first and second years of 2008 against the plaintiff on May 12, 2009 is revoked. (2) The defendant's disposition of imposition of value-added tax for the second period of 2008 against the plaintiff on April 1, 2009 is revoked.

2. The defendant's purport of appeal

The part against the defendant in the judgment of the court of first instance shall be revoked, and the plaintiff's claim corresponding to the revocation shall be dismissed.

1. Quotation of judgment of the first instance;

A. The reasons for the statement concerning this case are as stated in the judgment of the court of the first instance except for the parts which are dismissed or added in the following sub-paragraph (b). Thus, they are cited in accordance with Article 8(2) of the Administrative Litigation Act and Article 420 of the Civil Procedure Act.

B. Parts to be removed or added

(1) At the third bottom of the first instance judgment, 'Article 22 (6)' was added to 'Article 22 (7) of the first instance judgment (after that amendment, it was changed to 'Article 22 (7) of the same Act as of December 30, 2006, and the same content was maintained until before amendment by Act No. 9915, Jan. 1, 2010).

(2) Article 105(5) of the former Restriction of Special Taxation Act (amended by Act No. 105(1)3 of the former Restriction of Special Taxation Act), which reads "Article 105(1)5 of the former Restriction of Special Taxation Act" as "Article 105(1)3 of the former Restriction of Special Taxation Act, shall add the following:

Since Article 22(6) of the former Value-Added Tax Act only provides that "the subject of the imposition of penalty tax for failure to report the zero-rate tax base shall be the tax base to which the zero-rate tax base shall apply" and does not limit it to "the tax base to which the zero-rate tax rate shall apply" under the Value-Added Tax Act and its Enforcement Decree, among the construction services in this case, the two-year period portion in 2004 and the first and second-year portion in 2005 shall also be subject to the imposition of penalty tax under the above provision.

Under the principle of no taxation without law, the interpretation of tax laws and regulations shall be interpreted in accordance with the text of the law, barring any special circumstance, and shall not be extensively interpreted or analogically interpreted without any reasonable reason (see, e.g., Supreme Court Decisions 2001Du731, Apr. 12, 2002; 2008Du11372, Aug. 20, 2009). In light of the content and purport of the relevant provisions in light of such legal principles, the transactions that are deemed not to have been reported as zero-rate tax base when failing to submit attached materials related to zero-rate tax pursuant to Articles 64(9) and 65(4) of the former Enforcement Decree of the Value-Added Tax Act are deemed to have been limited to the tax base to which zero-rate tax is applied pursuant to Article 11(1) of the Value-Added Tax Act and Article 26 of the former Enforcement Decree of the Value-Added Tax Act before being amended by February 22, 2008).

(3) The following are the ten-one to five-five parts of the first instance judgment.

In light of these legal principles, after June 22, 2004, the construction service of this case was already subject to zero tax rate because it constitutes urban railroad construction service under Article 105 (1) (3) of the former Restriction of Special Taxation Act. Construction service at issue is supplied after a considerable period of time has elapsed since 2008. The Plaintiff’s internal factors of the Plaintiff or the contracting party of the Korea Rail Network Authority as the Plaintiff or the contracting party, and it is difficult to deem that the Plaintiff had caused unfair involvement or erroneous explanation, etc. of the tax authority. In full view of various circumstances such as the fact that the Plaintiff had been engaged in the business related to value-added tax for a long time as a specialized construction business entity established around 1952, the Plaintiff did not submit any documents related to zero tax rate even though it was not aware that the construction service of this case falls under zero tax rate due to mere site or error under the tax laws and regulations. Thus, the Plaintiff cannot be deemed to have legitimate grounds for exemption from additional tax.

2. Conclusion

Therefore, the judgment of the first instance is just and there is no ground for appeal by the plaintiff and the defendant, and all appeals by the plaintiff and the defendant are dismissed. It is so decided as per Disposition.