Suwon District Court-2013-Gu Partnership-13823 (2015.07.09)

It is difficult to see that there is a justifiable reason for misunderstanding that the instant service is subject to value-added tax exemption.

Inasmuch as justifiable grounds falling under the grounds for preventing the imposition of penalty tax are deemed grounds for exemption from penalty tax, barring special circumstances, taxpayers are responsible to prove that justifiable grounds exist.

Article 48 of the Framework Act on National Taxes

2015Nu52878 Revocation of Disposition of Imposition of Value-Added Tax

○○○ Construction Works

○ Head of tax office

Suwon District Court Decision 2013Guhap13823 Decided July 9, 2015

November 18, 2015

December 16, 2015

1. The plaintiff's appeal is dismissed.

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

The judgment of the first instance court shall be revoked. The defendant's imposition of additional tax on the value-added tax for the second period of 2007 against the plaintiff on January 9, 2013 shall be revoked.

1. Quotation of judgment of the first instance;

The reasoning for the court’s explanation concerning this case is as follows. Paragraph (2) below is the same as the part of the reasoning of the judgment of the court of first instance, except for the addition of the judgment as to the Plaintiff’s new argument in the trial, and thus, it is consistent with Article 8(2) of the Administrative Litigation Act and the main text of Article 420 of the Civil Procedure Act.

○○ There is no evidence of “no evidence of 7-8 conduct for the fifth 5th 7th 7th 8th ,” and the lower court’s decision that the instant service is subject to value-added tax exemption is also the Plaintiff as of April 17, 2014 and November 27, 2014 after the time when the Plaintiff reported.

2. Additional determination

A. The plaintiff's assertion

1) The National Tax Service had expressed its position to exempt the Plaintiff from the duty to issue a tax invoice regarding the instant service through the inquiry reply. Since the Defendant did not impose a tax on the Plaintiff from February 2, 2007 to January 201, the Plaintiff had no choice but to act in trust. Accordingly, the Plaintiff’s failure to issue a tax invoice without filing a value-added tax return on the instant service, in accordance with the principle of trust protection, is recognized as justifiable grounds for not issuing a tax invoice.

2) The instant service is not for a business entity, but for most of the final consumers, it is difficult to issue a tax invoice whenever it is practically traded, and the transaction partner is mainly a final consumer and there is no need for input tax or other counter-party input tax. Even if the business that supplies the instant service does not fall under the “business of supplying a residential building” under Article 25-2 subparag. 3 of the former Enforcement Rule of the Value-Added Tax Act, it constitutes at least a business that is similar to subparagraphs 10 through 9 of the same Article, and thus constitutes a business that is either impossible or considerably difficult to issue a tax invoice, and thus, a receipt may be issued in lieu of the issuance of the tax invoice for the instant service. Accordingly, the penalty tax for the reason of the failure to issue

B. Determination

1) As to the first argument

In general, in order to apply the principle of trust protection to the acts of tax authorities in tax and legal relations, the tax authorities must name the public opinion list subject to trust to taxpayers, the tax authorities’ name of opinion is justifiable, and there is no cause attributable to taxpayers to the taxpayer. The taxpayer must trust the opinion list, and what is the taxpayer’s name is, and the tax authorities should make a disposition against the above opinion list, thereby infringing the taxpayer’s interest (see, e.g., Supreme Court Decision 84Nu593, Apr. 23, 1985).

In addition, there is no evidence to acknowledge that the Plaintiff received a reply by revealing important facts and legal issues with respect to the instant service to the National Tax Service, and it cannot be deemed that the general questioning reply by the National Tax Service is the Defendant’s name of public opinion with respect to the Plaintiff. It is difficult to deem that the Plaintiff’s failure to issue a tax invoice is due to the Plaintiff’s trust in the questioning reply by the National Tax Service. Moreover, value-added tax cannot be deemed as having expressed the view that the Plaintiff would not impose value-added tax on the Plaintiff by failing to impose value-added tax on the Plaintiff without filing a tax return, which is a tax imposed by the taxpayer’s tax return method. The Plaintiff’s above assertion is without merit.

2) As to the second argument

Article 25-2 subparag. 10 of the former Enforcement Rule of the Value-Added Tax Act provides that "other businesses similar to subparagraphs 1 through 9, for which it is impossible or considerably difficult to issue a tax invoice." However, Article 53(2) of the former Enforcement Rule of the Value-Added Tax Act provides that "if a person who is supplied goods or services is not a business operator, a tax invoice may be issued by stating the address, name, and resident registration number of the person who is provided with the goods or services," and according to the evidence and the whole purport of the oral argument at the first instance trial, the Plaintiff appears to have been aware of the address, name, and resident registration number of the buyers, and it is difficult to deem that the Plaintiff did not supply the services within a short period of time. Therefore, the mere fact that the Plaintiff supplied the services to multiple buyers, the Plaintiff alone does not constitute "business that is impossible or considerably difficult to issue a tax invoice" as provided for in Article 10 of the former Enforcement Rule of the Value-Added Tax Act.

3. Conclusion

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