Suwon District Court 2008Guhap540 (No. 27, 2008)

National High Court Decision 2007J3148 ( October 12, 2007)

Appropriateness of the disposition of non-deduction of the waste resources purchase tax amount on the fact that the registered business operator acquired waste resources

The special exception to deduction may not be applied to the price for acquisition of waste resources solely on the ground that the supplier is a non-registered business operator who is unable to issue a tax invoice, after purchasing waste resources from an unregistered business operator falling under the general taxable scale and deducting the waste resources purchase tax amount.

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

Article 108 of the Restriction of Special Taxation Act Article 5 of the Value-Added Tax Act

1. The plaintiff's appeal is dismissed.

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

The decision of the court of first instance is revoked. The defendant's disposition of imposition of value-added tax against the plaintiff on April 2, 2007 (the "the plaintiff's claim of April 10, 2007" seems to be written in writing) of the first half of 2005, the first half of 2005, the second half of 2005, the second half of 56,750,141, and the first half of 28,339,981 shall be revoked.

1. A part citing a judgment of the first instance;

The reasoning for the court's explanation concerning this case is as stated in the reasoning of the first instance court's judgment, except for the correction to the second instance court's "No. 12, 207," as stated in Paragraph 2, and as such, it can be cited as it is in accordance with Article 8 (2) of the Administrative Litigation Act and Article 420 of the Civil Procedure Act.

2. Additional determination

A. The plaintiff's assertion

The Defendant’s imposition of value-added tax calculated after non-deduction of input tax on the Plaintiff solely on the ground that the Plaintiff acquired recycled waste resources to the above high-rise, etc. operating a value-added tax taxable business without confirming whether the Plaintiff was registered as a business operator in trading with high-rise, etc., and without obtaining a tax invoice. It is unreasonable as it goes against the legislative intent of the Restriction of Special Taxation Act to impose value-added tax on the Plaintiff after deducting the input tax amount.

B. Determination

It is difficult to view that the Defendant is obligated to take the guidance to cause the receipt of a tax invoice after confirming whether the Plaintiff’s high ○○, etc. constitutes a person who operates a taxable business of value-added tax and trades with high ○, etc. with the Plaintiff. It is difficult to view that imposing the value-added tax calculated after deducting the input tax related to the above high ○, etc. is contrary to the legislative intent of the Restriction of Special Taxation Act.

3. Conclusion

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.

[Uwon District Court 2008Guhap540 [27 August 2008]

1. The plaintiff's claim is dismissed.

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

The Defendant’s imposition of value-added tax against the Plaintiff on April 10, 2007 of KRW 40,189,737 for the first term of January 2005, KRW 56,750, KRW 141 for the second term of February 2005, KRW 28,339,981 for the first term of January 2006 shall be revoked.

1. Circumstances of dispositions;

A. The Plaintiff, a person whose main business is to collect and sell recycled waste resources, purchased scrap metal, etc. from 19 unregistered business operators, and subsequently filed a value-added tax return on the purchase price after deducting the input tax amount of KRW 36,235,87, and KRW 51,920,360 during the second half of 205, and KRW 30,455,218 during the first half of 206.

B. The defendant decided that 15 days of business operators listed in the separate sheet among the above unregistered business operators (hereinafter referred to as "unregistered business operators in this case") belong to general business operators who are not simplified taxable business operators under the Value-Added Tax Act in light of the transaction frequency, price for supply, etc., and issued the disposition of this case where the defendant deducteds the input tax amount for the second half of 2005, 2005, 46, 157, 235 won for the second half of 2005, and 24,125,293 won for the first half of 206, and imposed each value-added tax stated in the plaintiff's claim on April 5, 2007.

[Ground of recognition] Facts without dispute, Gap evidence 1-2, Gap evidence 2-4 through 6, Eul evidence 1-1 through 6, Eul evidence 2-2, and the purport of the whole and part of Eul evidence 2

2. Whether the disposition is lawful;

A. The plaintiff's assertion

(1) The instant unregistered business operators constitute a person who is not engaged in the value-added tax business, and thus, in relation to the acquisition of scrap metal from them, the special case of input tax deduction of value-added tax on recycled waste resources, etc.

(2) Even if the non-registered business operator of this case is a person operating a value-added tax business, the purpose of the special taxation for input tax deduction is to encourage the collection of waste resources, so even if the non-registered business operator of this case, which cannot issue a tax invoice, acquires waste resources, such special taxation for input tax deduction as in Article 25 of the Value-Added Tax

(3) Even if the non-registered business operators of the instant case cannot be treated as a simplified taxable person and thus, cannot deduct input tax amounts for the scrap metal supplied by them, the time of non-deduction shall be the second taxable period of the year following the year in which the supply was conducted pursuant to Article 74-2(1) of the Enforcement Decree of the Value-Added Tax Act regarding the time of the application of the simplified taxation and the general taxation, and the subsequent taxable period of the next year shall not be deducted in the year in which the supply was conducted, as

(4) It is unreasonable for the Defendant to deduct the input tax amount on the ground that the Plaintiff acquired waste resources from the said U.S. business operators without fulfilling such obligations even though the instant unregistered business operators should have taken measures for business registration.

(b) Related statutes;

C. Determination

(1) According to the above evidence, the non-registered business operators of this case continuously and repeatedly collected scrap iron from January 2005 to January 1, 2006 and supplied it to the Plaintiff, and even if the value of supply was reached for only 2005 years, it can be recognized that the value of supply was increased by 50 million won. Thus, the above non-registered business operators are those who continuously and repeatedly supply goods with the business form to the extent that the value of added value can be created and who are engaged in the value-added tax assessment business. The plaintiff's assertion on this is without merit.

(2) According to the relevant provisions such as Article 108 of the Restriction of Special Taxation Act, Article 110 of the Enforcement Decree of the same Act, Articles 5 and 25 of the Value-Added Tax Act, and Article 74-2 of the Enforcement Decree of the same Act, an individual entrepreneur who collects recycled waste resources, etc. is not engaged in a business subject to value-added tax, or a simplified taxable entrepreneur [the individual entrepreneur whose total proceeds from supply of goods for the immediately preceding 100 million won falls short of 48 million won in the calendar year including the date on which the new entrepreneur starts his business (hereinafter referred to as a “general simplified taxable person”), which is anticipated to fall short of 48 million won in the total proceeds from supply of goods to the head of the competent tax office, and who has reported the simplified taxable application along with his business registration (hereinafter referred to as a “person subject to simplified taxable application”), and whose total proceeds from supply falls short of 10 million won in the first taxable period or less than 20 million won in the subsequent taxable period, shall not be considered as a simplified taxable person subject to value exemption for the previous taxable period.

(3) In addition, pursuant to Article 74-2 of the Enforcement Decree of the Value-Added Tax Act, the chief of the competent tax office shall notify the relevant entrepreneur of the fact not later than 20 days prior to the commencement of the taxable period that the provisions concerning the simplified taxable person apply or are not applied, and shall create and deliver a business registration certificate by the date prior to the commencement of the taxable period. With respect to an entrepreneur to whom the provisions concerning the simplified taxable person apply, regardless of the above notification, the provisions concerning the simplified taxable person apply in the relevant taxable period, and with respect to an entrepreneur to whom the provisions concerning the simplified taxable person are not applied, the provisions concerning the simplified taxable person apply until the taxable period whereto belongs the date of the above notification. In full view of the above contents, the above provisions concerning the period of application of the simplified taxable and general taxation apply to the entrepreneur who has completed his business registration, or who is not a simplified taxable person, and thus, it shall not be applied to the instant US

(4) In addition, it is difficult to see that the non-registered business operator of this case has the obligation to take measures for business registration, and the plaintiff's assertion on this is also without any need to examine further.

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.