Cho High Court Decision 2005No444 ( November 16, 2006)

Whether it is excessive to a nominal transaction which is not a actual transaction related to gold bullion;

It is difficult to conclude that the purchase of gold bullion is a series of nominal transactions for the purpose of tax evasion without actual delivery or transfer of goods.

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

1. The Defendant’s imposition of value-added tax for the first term of 2002 against the Plaintiff on April 1, 2005, of KRW 96,94,240 for the second term of 202, value-added tax for the second term of 2002, KRW 33,598, KRW 360 for the second term of 203, value-added tax for the first term of 2003, KRW 32,581,092,230 for the second term of 203, value-added tax for the second term of 203, KRW 40,512,224,940 for the first term of 204, value-added tax for the second term of 204, KRW 4,031,121,730 for the second term of 204, and corporate tax14,790,560 for the business year of 202 shall be revoked.

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

The same shall apply to the order.

1. Correction of the disposition;

A. The Plaintiff is a company that runs the export and import business of gold bullion (in the form of raw materials, such as gold bullion, gold bullion, etc. with at least 9.5% of the net metal, and gold bullion in the form of raw materials) and its incidental business.

B. The Plaintiff received tax invoices (hereinafter “tax invoices of this case”) equivalent to the total value of KRW 568,407,66,486 (hereinafter “the purchase price of this case”) from 70 or more companies, including the place of the residence and the place of the residence and the place of the residence and the place of the residence and the place of the residence and the place of the residence and the place of the residence and the place of the residence and the place of the residence and the place of the residence and the place of the residence and the place of the residence and the place of the residence and the place of the residence and the place of

C. Meanwhile, based on the result of the tax investigation against the plaintiff by the director of ○○○ Regional Tax Office, the purchase of this case is one of a series of DD transactions for the purpose of evading taxes without actual delivery or transfer of goods, and the tax invoice of this case received in the course of the transaction constitutes a false tax invoice different from the facts provided for in Article 17 (2) 1-2 of the Value-Added Tax Act. On April 1, 2005, the defendant issued a disposition to impose value-added tax (hereinafter referred to as the "disposition to impose value-added tax of this case" of this case by deducting the purchase price of this case from the purchase price of this case against the plaintiff, and imposed corporate tax as listed below (hereinafter referred to as the "disposition to impose corporate tax of this case").

[Recognition] The fact that there is no dispute u 300 Dan300, the entry of Gap evidence 2-1 through 7, Eul evidence 1-6, and Eul evidence 1-2, and the purport of the whole pleadings

2. Whether each of the dispositions by the vice-party in this case is legitimate

A. Summary of the plaintiff's cause of claim

Even if the so-called so-called "tax invoice" was involved in the transaction of gold bullion, as long as the plaintiff actually purchased and sold gold bullion from the purchaser of this case, the tax invoice of this case cannot be deemed to be "tax invoice different from the fact".

(b) Fact of recognition;

(i) an irregular form of transaction for the purpose of tax evasion in the transaction of gold bullion;

(a) Distribution channels of gold bullion in appearance;

B) the settlement channel of the transaction price;

The transaction price is paid in sequence from the exporter to the importer, but in the case of the colon, only the tax invoice is issued according to the direction of a specific person or a specific company, but there are many cases where the gold bullion is not actually traded or transported.

C) the role of an bomb coal company;

The unit price of gold bullion is reduced by purchasing gold bullion distributed at the transfer stage and selling it at a price lower than the purchase price, and the role of converting the gold bullion to the tax-free amount is to play a role of converting the tax-free amount. The profit shall be withdrawn in cash within the short period and the amount equivalent to the value-added tax paid by the cushion company shall be closed

(d)the profit of tax evasion transactions and their distribution;

(1) The amount equivalent to the value-added tax that is paid by the gas supplier from the gas supplier shall be successively transferred by each company at the immediately preceding stage through the tax invoice received from the immediately preceding stage company, and ultimately, the exporter exports gold bullion and then refund it from the State according to the application of zero-rate tax rate.

(2) Of the refund amount of value-added tax, the portion corresponding to the value-added tax that is not paid by the breadth business is the ultimate source of profit from the breadth business. The profit is distributed in the form of marin at each transaction stage to the Korean domestic company involved in the breadth business, or the profit (the remainder after deducting the purchase price from the sales price) of the breadth business is distributed in the form of margin, which is separately paid to the participating company, and is also distributed to the foreign company involved in the breadth business in the form of margin, which is the difference between the export price and the import price (the export price is lower than the import price if based on the domestic company).

E) Joint tax evasion

In order to maximize its profit, a wide-scale coal business shall distribute a large amount of gold to the greatest extent in a short term, and shall have the following specific characteristics for the purpose of preventing disputes between involved enterprises or accidents, such as loss of proceeds:

2) Form of purchase transaction of the instant case

(a)A summary;

(1) 수입거래 : ○○ 소재 ☐☐☐☐COMPANY(이하, '☐☐☐M', '☐☐☐H'라고 한다) → ○○ 소재 ◇◇◇ ASIA LTD → 수입업체(원고)

(2) Doz 300 Plaintiff 1 and one intermediate or several intermediate tax-free business (△△△△△, etc.) / breadthed coal business

{◁◁무역, ▽▽▽에스(대표 남BB) 등}

(3) 과세거래 폭탄업체 → 과세중간상(쿠션업체]) 1개 또는 수개{◇◇◇벌, ☐☐금속, ▲▲이, ★★금은(대표 홍DD) 등} → 대형도매업체(원고 등) → 수출업체 {☆☆브릿지, ●●브릿지(대표 박CC), ◆◆브릿지(김EE) 등}

(4) 수출거래 수출업자 → ☐☐☐M, ☐☐☐H

B) Abnormal trading forms

(1) The intermediate taxation and the large wholesalers, including the Plaintiff, were distributed at a price lower than the domestic and international market prices at all times by attaching a little margin to the purchase price, irrespective of gold.

(2) In the instant purchase transaction, the export price was first made and the subsequent export price was transferred to the exporting company, and subsequent payment was made in the way of remitting money to the exporting company, including the Plaintiff, etc.

3) A criminal case against New A, the former representative director of the Plaintiff,

NewAA, the former representative director of the Plaintiff, is a criminal fact of evading KRW 23,32,796,898 in aggregate of value-added tax from the first to the second period in 2003 to the second period in 2004, which was sentenced to imprisonment on February 4, 2009, a fine of KRW 15,000,000,000, and a sentence of five-year suspension of execution (○ High Court 2008No15872).

【Ground for Recognition: fact that there is no dispute over u300, Eul evidence Nos. 3, 4-1, 2, 10-1 through 5, 19-1 through 3, 22, and 42-1, each statement of evidence Nos. 42, and the purport of the whole pleadings】

C. Judgment on the Plaintiff’s ground of claim

1) As to the imposition of value-added tax of this case

A) On the other hand, Article 1(1)1 of the Value-Added Tax Act provides that "the supply of goods as taxable object of value-added tax" and Article 6(1) provides that "the delivery or transfer 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 multi-stage transaction tax, delivery or transfer of goods includes all underlying acts of transferring the right to use and consume goods, regardless of the actual profit gained, and in this case, whether a specific transaction constitutes the supply of goods under the Value-Added Tax Act should be determined individually and specifically by taking into account all the circumstances such as the purpose and circumstance of the transaction, the form and mode of the transaction, the subject to whom profits accrue, and the payment relation of the consideration, etc., of the transaction, and the specific transaction constitutes a transaction under the pretext of no actual delivery or transfer of goods, and Article 17(2)1 of the Value-Added Tax Act provides that the input tax invoice received in the process of the transaction constitutes a transaction under the pretext of no actual delivery or transfer of goods (see, etc.).

B) Comprehensively taking account of the following circumstances revealed in light of the foregoing facts as to the instant case’s health stand-off, and the facts acknowledged as above, Gap’s evidence Nos. 8-1 through 314, and Eul’s evidence Nos. 24-1 through 3, and the overall purport of the arguments as seen earlier, it is difficult to conclude that the instant tax invoice falls under a different tax invoice from one fact, inasmuch as it is difficult to conclude that the instant purchase transaction was merely a nominal transaction that received only a tax invoice, or that gold bullion was delivered and paid for the purpose of disguised the actual transaction of a bombombing business.

(1) The Plaintiff et al. distributed gold bullion in real form from the class company to the export company by paying transportation charges to the transport company and receiving transportation invoices, etc.

(2) The Plaintiff purchased gold bullion from the purchaser of this case, received it on the day of delivery, and received the tax invoice of this case after paying the price.

(3) Around that time, the Plaintiff sold gold bullion purchased as above to the exporter, delivered it on the day, and issued a sales tax invoice with the payment. At that time, the Plaintiff’s export of the gold bullion was conducted on the spot.

(4) The Plaintiff purchased gold bullion in Korea, and processed and exported it, and started gold bullion pressure trading only at around September 2003. Since the ratio of gold bullion itself to the trade details from 2003 to 2004 accounts for the export of gold bullion itself is 3% of the total amount, it is difficult to view that the entire tax invoice of this case was used as a fraudulent electric transaction, as alleged by the Defendant.

(5) If the Defendant alleged otherwise, it is difficult to maintain the disposition imposing the value-added tax in this case on the following grounds: (a) trade under the nominal transaction not only between the Plaintiff and the exporter, but also between the Plaintiff and the exporter, and the sales tax invoice issued in the process may be deducted from the original output

2) As to the disposition of imposition of the corporate tax of this case

Article 76 (5) and Article 116 (2) 2 of the former Corporate Tax Act (amended by Act No. 8141 of Dec. 30, 2006) provide that "in case where a corporation is supplied goods by an entrepreneur in connection with its business and fails to receive a tax invoice under Article 16 of the Value-Added Tax Act, the chief of the district tax office having jurisdiction over the place of tax payment shall collect an amount calculated by adding an amount equivalent to 2/100 of the unpaid amount to the corporate tax," and Article 16 of the former Value-Added Tax Act (amended by Act No. 8142 of Dec. 30, 2006; hereinafter the same) provides that "in case where an entrepreneur registered as a taxpayer supplies goods, he shall issue a tax invoice stating the registration number, name or name, the person who receives the goods, the registration number, the value of supply and value-added tax, etc. of the supplier

However, as seen earlier, insofar as it cannot be concluded that the instant purchase transaction is not a supply of goods subject to value-added tax, it is difficult to conclude that the instant tax invoice received therefrom is not a legitimate tax invoice under the Value-Added Tax Act, and therefore, the instant corporate tax disposition cannot be maintained as it is.

(d) Judgment on the Defendant’s assertion;

The Defendant asserts that the purchase transaction of this case violates the principle of good faith required for taxpayers since the Plaintiff’s purchase transaction violated the principle of input tax deduction required by the Plaintiff, by wholly abusing the input tax deduction system and the zero tax rate system at all stages of the value-added tax system.

However, inasmuch as the Plaintiff transferred the authority to consume goods by purchasing gold bullion from the instant purchasing entity and selling it to the selling entity, it cannot be deemed that there is any defect in the instant tax invoice. Moreover, in light of the intent of the tax invoice system, it cannot be determined whether to deduct the input tax according to the motive or purpose of the transaction. This does not change even if the Plaintiff’s former representative director was convicted in a criminal case against the crime of tax evasion.

Therefore, there is no reason for the chief executive officer of the defendant.

3. Conclusion

Therefore, since each disposition of this case is unlawful, the plaintiff's claim seeking its revocation is justified and it is decided as per Disposition by the assent of all.