Cho High Court Decision 2007J3045 (Ob. 22, 2008)

Whether an input tax amount can be deducted by deeming it as a tax invoice different from the fact related to gold bullion transactions.

It is difficult to view the instant transaction, one of the whole transactions related to gold bullion, as the nominal transaction, not the supply of goods subject to value-added tax, solely on the basis of the fact that there is a so-called wide coal business entity that prepares and issues a tax invoice and does not pay the amount equivalent to the value-added tax, etc.

The contents of the decision shall be the same as attached.

1. The Defendant’s imposition of value-added tax of KRW 857,323,250 on December 1, 2006 against the Plaintiff on December 1, 2006 shall be revoked.

2. The costs of the lawsuit are assessed against the defendant.

The same shall apply to the order.

1. Circumstances of the disposition;

A. The purpose of the Plaintiff is to sell steel products as a company established on May 10, 1982.

B. The Plaintiff reported the input tax amount on six copies of the purchase tax invoice on gold bullion 8,080,430,000 won (hereinafter “the tax invoice of this case”) in the output tax amount after deducting the input tax amount from the total tax amount of 8,080,430,000 won, which was received from the Seoul Special Metropolitan City, Do, Seoul Special Metropolitan City (hereinafter “Seoul Special Metropolitan City Special Metropolitan City Special Metropolitan City Special Metropolitan City Special Metropolitan City Special Metropolitan City”).

C. However, on December 1, 2006, the Defendant: (a) viewed the tax invoice of KRW 5,879,130,000 as a false tax invoice; and (b) instead deducted the input tax amount (the details that the Defendant did not deduct are as stated in the column of “the details of the tax invoice of this case”; and (c) notified the Plaintiff of KRW 171,857,323,250 for value-added tax of KRW 171,3250 for the Plaintiff on December 1, 2006 (hereinafter “instant disposition”).

D. On August 1, 2007, the Plaintiff dissatisfied with the instant disposition and filed a request for a trial with the National Tax Tribunal on August 1, 2007, but the National Tax Tribunal dismissed the said request on February 22, 2008.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1 through 3 and 7, the purport of the whole pleadings

2. Whether the instant disposition is lawful

(a) Recommendation of the Parties;

(1) The plaintiff's assertion

The Plaintiff purchased the gold bullion in this case from the Hong Kong and paid the price, and then made a normal transaction, such as exporting the gold bullion in this case to the company located in Hong Kong after receiving the tax invoice in this case, and there was no fact that the Plaintiff made an irregular transaction, such as public offering with the so-called "large Carbon Enterprise" in order to unlawfully receive value-added tax. Thus, the disposition of this case on the premise that the tax invoice in this case is different from the facts or is false, is unlawful.

(2) Defendant’s principal

The Plaintiff’s series of acts, such as purchase and export of the gold bullion of this case, and the preparation and issuance of tax invoices therefor, do not constitute an act of supplying goods to create added value, such as general commercial transactions, but constitutes a formal act made to evade value-added in collusion with so-called wide coal companies, etc., and the instant tax invoice is merely a false tax invoice different from the facts

(b) Related statutes;

It is as shown in the attached Table related statutes.

(c) Fact of recognition;

(1) From March 11, 2004 to September 17, 2004, the Plaintiff purchased gold bullion amounting to KRW 14,779,080,000, including the instant gold bullion, from each of the supply values of the gold bullion, and received gold bullion purchased in full. Of them, the price for the instant gold bullion was paid in full on the purchase date specified in the instant tax invoice (hereinafter “the instant transaction”).

(2) The Plaintiff exported the entire gold bullion to the importing party located in Hong Kong immediately after the purchase thereof.

(3) 이 사건 금지금 거래와 관련하여, 주식회사 ★★종합무역, 주식회사 ○○○○ 등 이 금지금을 수입하여 주식회사 재승상사 등 여러 중간 도매상을 거쳐 원고에 의하여 수출되기까지 일련의 전체거래(이하 '이 사건 전체거래'라고 한다)의 중간 단계에서 부가가치세가 면제되는 금지금을 매입한 다음 면세추천 받지 아니한 자에게 부가가치세 과세대상이 되는 금지금으로 공급하면서 세금계산서를 작성ㆍ교부하고 그 부가가치세 상당액을 납부하지 않는 이른바 폭탄업체가 존재하고 있었다.

(4) Meanwhile, the entire transaction of this case was conducted within a very short period of time after the import of gold bullion to be exported to a company located in Hong Kong through the 4-7-stage transaction process, and repeated at 2-10-day intervals. The transaction of this case was also conducted from the purchase of gold bullion to the payment of the price and the export of the gold bullion to only 1-2 days, and the Plaintiff paid the price before the gold bullion was cleared.

[Ground of recognition] Facts without dispute, Gap evidence 2, 3, 6 through 19, Eul evidence 2 to 6 (including each number), the purport of the whole pleadings

D. Determination

Article 1(1)1 of the Value-Added Tax Act provides that "the supply of goods as a taxable object of value-added tax" and Article 6(1) provides that "the supply of goods shall be a delivery or transfer of goods on all contractual or legal grounds." In light of the characteristics of value-added tax as a multi-stage transaction tax, "Do or transfer, which is stipulated in Article 6(1) of the Value-Added Tax Act, includes all acts of causing the transfer of authority to use and consume goods regardless of the actual profits gained (see, e.g., Supreme Court Decision 9Du9247, Mar. 13, 2001). In such a case, the issue of whether a specific transaction constitutes the supply of goods as stipulated in the Value-Added Tax Act shall be determined by comprehensively taking into account the purpose and circumstance of each transaction, the parties to the transaction, the subject of whom profits from the transaction, and the payment relationship of prices, etc., and the tax invoice provided for in Article 28(1)20-17 of the Value-Added Tax Act provides that the input tax amount shall be borne by the tax authority.

In light of the aforementioned circumstances and legal principles, the Plaintiff: (a) paid the price of the instant gold bullion from the △△△ to June 30, 2004 and received it from the Plaintiff during the period from March 11, 2004 to June 30, 2004; and (b) each tax invoice for the instant gold bullion transaction was issued; and (c) the Plaintiff exported all the gold bullion received from the △△△△ to the Hong Kong company located in Hong Kong; (d) a series of total transactions until the instant gold bullion was imported and exported; and (e) a tax invoice is prepared and issued while supplying the gold bullion subject to value-added tax to the purchaser of the gold bullion exempted from value-added tax at the intermediate stage; and (e) there is a so-called wide-called carbon company that did not pay the amount equivalent to value-added tax, which is one of the entire transaction related to the instant gold bullion, and thus, it is difficult to deem the instant transaction subject to value-added tax as a nominal transaction.

Therefore, since the instant transaction is a nominal transaction without any supply of goods, the instant tax invoice is deemed to be a different tax invoice from the fact, and the Defendant’s disposition of imposition of the instant tax without deducting the input tax amount is unlawful.

3. Conclusion

Therefore, the plaintiff's claim is reasonable, and it is so decided as per Disposition with the assent of all participating Justices.