Early High Court Decision 2013J0625 (Law No. 146.30)

If the requirements for value-added tax are not satisfied, the taxation disposition is illegal.

The burden of proof of the existence of the taxation requirement in the administrative litigation seeking the revocation on the ground of the illegality of taxation is against the taxation authority.

Article 2 of the Value-Added Tax Act (Definitions)

Article 3 of the Value-Added Tax Act

2014Guhap8631, revocation of disposition imposing value-added tax, etc.

MaO, MaO

O Head of tax office

November 24, 2015

2016.012

1. On October 22, 2012, the Defendant’s imposition of value-added tax for the second term portion of 2006 against the Plaintiffs, the first term value-added tax for the first term of 2007, the second term of 2007, the value-added tax OO for the second term of 2007, the first term value-added tax OO for the first term of 2008, and the second term value-added tax OO for the second term of 2008 shall be revoked.

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

Cheong-gu Office

The same shall apply to the order.

1. Details of the disposition;

A. From January 1, 2006 to December 31, 2008, the director of the regional tax office confirmed that the sum of approximately KRW OO and approximately KRW OOB deposited in the Plaintiff AA's account in the name of the Plaintiff (hereinafter referred to as "the instant money") over OO twice, and notified the Defendant thereof.

B. On October 22, 2012, the Defendant deemed that the instant money was obtained by the Plaintiffs from the sale of oil that was stolen by the OO units (hereinafter “OO units”). On October 22, 2012, the Defendant imposed on the Plaintiffs the value-added tax for the second term portion of value-added tax for the second term in 2006, the OO of value-added tax for the second term in 2007, the OO of value-added tax for the second term in 2007, the OO of value-added tax for the first term in 208, the OO of value-added tax for the first term in 208, and the OO of value-added tax for the second term in 208 (hereinafter “each of the instant dispositions”).

C. On January 10, 2013, the Plaintiffs filed a tax appeal with the Tax Tribunal on each of the instant dispositions, but the Tax Tribunal dismissed the Plaintiffs’ tax appeal on June 30, 2014.

[Grounds for recognition] Each entry of Gap evidence 1 and 2 (including branch numbers), and the purport of the whole pleadings

2. The parties' assertion

A. The defendant's assertion

In light of the statements made by CCC, DD, EE, and OO unit investigators and the plaintiffs' attitude that did not vindicate the source of the instant money, the instant money should be deemed to have been proven that it was income accrued from the sale of oil stolen from the OO unit by the plaintiffs. Even if the instant money is not the sales proceeds of oil, the instant money appears to be the money that the plaintiffs received consulting services. The same applies to the provision of consulting services, which is subject to value-added tax, so the instant disposition is lawful.

B. The plaintiffs' assertion

Article 2 (1) of the Value-Added Tax Act provides that "an entrepreneur who is obligated to pay value-added tax refers to a person who supplies goods or services independently for business regardless of whether the business purpose is profit-making or non-profit," and the tax authority bears the burden of proving the facts of taxation requirements. Thus, the defendant must prove that the plaintiffs constitute the above business entity in order to take each disposition of this case, and that the plaintiffs supplied goods or services equivalent to the money of this case to a third party, but the defendant did not prove each disposition of this case. Accordingly, the disposition of this case is unlawful.

3. Related statutes;

Attachment 'Related Acts and subordinate statutes' shall be as shown.

4. Determination

(a) Facts of recognition;

1) The plaintiffs' workplace

The Plaintiffs, as married couple, were in charge of oil distribution from around 1997 to February 2009, and Plaintiff AA was in charge of oil distribution in the above OO unit from around 1988 to around 2005, and Plaintiff AA was in charge of oil distribution from around October 2006 to around March 201, and was working as the OOO chief of the corporation, a company supplying oil to the above OO unit, from around October 2006 to around March 201. From around April 2007, Plaintiff BB was in charge of oil distribution as the representative director of the OO, a real estate rental and real estate development company.

2) Contents of the statement of the persons concerned

GG and HH made each investigation and business trip confirmation report (Evidence No. 11) prepared on September 18, 2012 and on the 21st of the same month, the Plaintiff stated that the CCC and DD, working in the U.S. military unit, together with the Plaintiff, are aware that they conspired with the Plaintiff that they have accumulated a huge amount of oil from the OO unit, and that they had conspired with the Plaintiff that they had accumulated a enormous amount of oil from the OO unit. After the Plaintiff AA, EE had conspired with the Plaintiff that they stolen oil and supplied it to the nearby urban gas station, and that there was a possibility that it could be deducted from the fact that the Plaintiffs conspired in relation to the oil theft case. However, if the oil manager and the oil supplier in the military unit conspired to do so, the CCC and DD stated that the oil would have been supplied with a document that could be stolen, and that there was sufficient probability that the oil would have been supplied with the document that could be fabricated.

3) Details of internal investigation against the plaintiffs

In the report of the completion of the investigation into the source of funds of the regional tax office (Evidence B No. 15), the intelligence report of the National Police Agency stated that the plaintiffs were in charge of supplying oil and stolen acts by using the method of giving O liters to the oil tank. However, the records of the oil theft case in the O National Police Agency, the OO police station, and the OOO prosecutor's office stated that the defendant was investigated due to the fact of the theft of oil, such as III, and there is no investigation records against the plaintiffs.

4) The plaintiffs' explanation about the source of the instant money

On October 20, 2010, when the director of the regional tax office requested the plaintiffs to vindicate the source of the instant monetary amount, the plaintiff AA provided consulting services on the conclusion, etc. of contracts with OO by using professional knowledge accumulated while working at OO units without a separate office or employee. The amount of revenue from such consulting services was "OO won in 2006, OO won in 2007, and OOO won in 2008" (Evidence B No. 14). The defendant provided the plaintiff AA with consulting services on global income tax from 2006 to 2008, and the plaintiff BB provided consulting services on global income tax from 208 to 2008, but the defendant provided the plaintiff AA with consulting services on global income tax amounting to 200,000 won in total, not the amount of OO's notice of correction.

[Reasons for Recognition] Each entry of evidence Nos. 3, 9, 11, 14, 16, and the purport of the whole pleadings

B. Determination

1) Article 4 subparag. 1 of the Value-Added Tax Act provides that "the supply of goods or services by an entrepreneur" means a transaction subject to value-added tax, and Article 2 subparag. 3 of the same Act provides that "the entrepreneur means a person who supplies goods or services independently for business regardless of whether the entrepreneur's business purpose is profit-making or non-profit," and "the supplier of goods or services independently for business" refers to a person who provides goods or services in the form of a business to the extent that it can be paid by creating a value-added and who continuously and repeatedly wishes (see Supreme Court Decision 98Du16705, Sept. 17, 199).

2) Meanwhile, in the administrative litigation seeking the revocation of tax disposition on the grounds of illegality, the tax authority bears the burden of proving the existence of the taxation requirements. In order for the Defendant to impose value-added tax on the instant money, the fact that (1) the Defendant is a person who supplies goods or services in the form of business to the extent that the Plaintiffs may create added value and continuously and repeatedly, and (2) the fact that the Plaintiffs supplied goods or services equivalent to the instant money should be proved.

3) In light of the above facts and the fact that the plaintiffs had almost been abroad upon the commencement of the OOM thief incident, it is insufficient to conceal the fact that the plaintiffs had been provided goods (oil) or services ( consulting services) with continuous and repeated intent with the business form to create added value, and there is no other evidence to prove otherwise.

In addition, the amount of this case is limited to CCC, DD, EE's statements, and the report on the completion of the investigation into the source of funds of the OE office, which contain each of the statements of CCC, DD, EE and the counter-report of the National Police Agency (Evidence No. 15). It is difficult to believe that each of the statements of CCC, DDD, EE did not directly witness the plaintiffs' oil theft act, but it was merely a reply. In light of the fact that the counter-report of the National Police Agency did not directly investigate the plaintiffs after the counter-report of the National Police Agency, it is insufficient to recognize the fact that the plaintiffs sold oil from the OO unit only by the counter-report of the above National Police Agency, and there is no other evidence to acknowledge it.

4) Therefore, it is deemed that the taxation requirement of value-added tax against the plaintiffs was not satisfied.

Therefore, each of the dispositions of this case made on different premise is unlawful.

5. Conclusion

Thus, the plaintiffs' respective claims of this case are justified, and all of them are accepted:

It is so decided as per Disposition.