Cho-2014-Divisions-3013 (2015.08)

There are special circumstances, such as failure to know that the name is the data borrowed only, without negligence.

It is difficult to view that there are sufficient circumstances to suspect the fact of borrowing the name only from the name, and it is difficult to view that there is no negligence in the absence of such knowledge, and further, it is excessive to require that there was no active investigation into the name of a person, such as having a direct representative or visiting a place of business.

The tax base under Article 2, the calculation of tax amount under Article 37, and the input tax amount under Article 38 of the Value-Added Tax Act.

2015Guhap6440 Revocation of revocation of tax withholding

AAAA Corporation

000 director of the tax office

April 13, 2017

September 7, 2017

1. The Defendant’s imposition of value-added tax of KRW 10,856,198, value-added tax of KRW 124,69,69,970 on October 1, 2013 against the Plaintiff for the second year of 2010, and the imposition of value-added tax of KRW 390,621,670 on the first year of 2012, and the imposition of value-added tax of KRW 163,89,970 on the second year of 2012, and the imposition of value-added tax of KRW 144,20,151 on the second year of 201, respectively, shall be revoked.

2. The plaintiff's remaining claims are dismissed.

3. One-fifth of the costs of lawsuit shall be borne by the Plaintiff, and the remainder by the Defendant, respectively.

Cheong-gu Office

The Defendant’s imposition of value-added tax of KRW 10,856,198 for the second period of 2010 for the Plaintiff on October 1, 2013, value-added tax of KRW 144,200,151 for the second period of 2011, value-added tax of KRW 390,621,670 for the first period of 2012, value-added tax of KRW 163,89,970 for the second period of 2012 is revoked.

1. Details of the disposition;

A. The Plaintiff, established on December 22, 200, and operated the business of manufacturing ○○○○○○○-dong 000-0 to operate the business of manufacturing primary heat machinery parts, and when the order from the business partner enters the place of pre-sale on metal products, the Plaintiff purchased and directly processed raw materials or requested the business operator to process the processed products to the business operator, and then supplied the processed products to the business operator.

B. From May 16, 2013 to August 7, 2013, 2013, the Director of the Regional Tax Office conducted an integrated investigation with the Plaintiff for the business year 2010 to 2012. ① The Plaintiff requested the processing of raw materials from an external company, and notified the Defendant of the sales of the instant scrap (the value equivalent to the instant scrap: 2: 67,724,300, KRW 2: 131, 392, KRW 27, 2012, KRW 27,253,70, and KRW 200, KRW 2012, KRW 200, KRW 2012, and KRW 27,253,70, and KRW 200, KRW 250, the Plaintiff notified the Defendant of the purchase tax invoice for the said raw materials from the external company, and the Plaintiff was issued with the output tax invoice for 250 to KRW 294,250,294.

C. The Defendant: (a) reflected the output amount of the instant scrap scrap part omitted by the Plaintiff in accordance with the foregoing taxation data; (b) decided to deduct the input tax amount for the BB industry; and (c) subsequently imposed the Plaintiff the value-added tax of KRW 16,962,860 for the second period of 2010; (b) value-added tax of KRW 156,203,380 for the second period of 201; and (c) value-added tax of KRW 390,621,670 for the first period of 2012; and (d) value-added tax of KRW 163,89,970 for the second period of 2012.

D. The Plaintiff filed an objection against the above corrective disposition on January 9, 2014, and the said corrective disposition was reduced by the imposition of value-added tax of 10,856,198 won for the second period of 2010, value-added tax of 2010, value-added tax of 144,200,151 won for the second period of 201, value-added tax of 390,621,670 won for the first period of 2012, value-added tax of 163,89,970 for the second period of 2012 (hereinafter referred to as “instant disposition”).

E. The Plaintiff dissatisfied with the instant disposition and filed an appeal with the Tax Tribunal on May 28, 2014, but was dismissed on July 8, 2015.

[Ground of recognition] Facts without dispute, Gap evidence 1, 2, 5, Eul evidence 2, 5, Eul evidence 2, 5, 17 (including paper numbers; hereinafter the same shall apply) and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

1) As to the omission of sales of the instant scrap

① The instant scrap does not constitute goods, such as by-products, because the economic value of the scrap does not exist, and the Plaintiff merely did not recover the instant scrap again and did not offset the cost for outsourcing processing by the value of the instant scrap. Therefore, the Plaintiff cannot be said to have supplied the instant scrap to the outsourcing company and sold it.

② If the Plaintiff, as alleged by the Defendant, received a purchase tax invoice regarding the cost of the instant scrap and the cost for the outer scrap processing so reduced, even if the sales of the instant scrap was made, the sales of the instant scrap was reduced, and thus, the cost for the external processing corresponding to the Plaintiff’s input tax amount is limited to the cost for the outer scrap processing, which is substantially equivalent to the sales of the instant scrap, causing the same outcome as the sales of the instant scrap, since the input tax amount that the Plaintiff is entitled to be deducted is limited to the reduced cost for the outer scrap processing, and thus, the instant disposition is limited to this and the value-added tax is imposed again on the sales of the instant scrap, and constitutes an illegal double

③ Even if the Plaintiff omitted the sales report of the scrap of this case, the Defendant committed an error in calculating the supply price of the scrap of this case, which serves as the tax base for the disposition of this case, by which the Defendant has presumed the quantity of the scrap of this case and the unit price therefor in a timely manner without accurate basis

2) As to the transaction with BB industry

① Since thisCC, which traded with the Plaintiff and raw materials, was a de facto partner of the BB industry, not only the name of BB industry but also the name of BB industry, the purchase tax invoice issued by the Plaintiff under the name of BB industry does not constitute a case different from the fact of the supplier.

(2) Even if this data was insufficient, it is unreasonable to deduct the input tax amount on the purchase tax invoice, since the Plaintiff was unaware of such fact, and there was no negligence in not knowing such fact.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

1) As to the omission of sales of the instant scrap

A) Scrap scrap has a minimum commercial value due to its characteristics that should be collected by more than a certain quantity of goods, and the amount of raw materials would increase a single use value. In full view of the purport of Gap evidence Nos. 10, Eul evidence Nos. 8 and 9, and the whole entries and arguments as to the whole, the scrap scrap of this case does not generate a large amount of more than one time work since it is nothing more than a metal scrap generated in the process of manufacturing the goods for the plaintiff by the outsourcing company for the plaintiff. Thus, it is possible to collect and sell the scrap generated each time of metal processing and then recycle for a considerable period of time, and if there are many metals mixed, it is not easy to classify them. Accordingly, if the plaintiff intends to collect and sell the scrap of this case to realize the economic value of the scrap of this case, the transportation cost or storage cost would rather change the value of the scrap of this case. Accordingly, from the plaintiff's standpoint, the scrap of this case is nothing more than a kind of waste generated in the process of requesting the processing company for metal services.

B) However, from the standpoint of metal processing companies, it is possible for the clients to gather and economically utilize scrap generated while the work is accumulated, and thus, it appears that a transaction for the reduction of the cost of metal would take place on the condition that the clients did not recover scrap. This is nothing more than the adjustment of the contract amount in favor of the clients by reflecting the economic benefits arising from an unexpected event that was not intended in the process of concluding and implementing the metal processing contract. In the case of the Plaintiff, it is nothing more than a favorable use in the contract for the Plaintiff’s perception that the instant scrap was produced as a secondary product, or there was no intention to sell it in the market, or there was no intention to sell it in the market, and it is nothing more than a favorable use in the contract that the external supplier would have any means to recycle it. However, it is too difficult for the Plaintiff to deem that the Plaintiff sold the instant scrap to the external company.

C) The Plaintiff’s vice president, the vice president of the instant scrap, appears to have submitted a confirmation document (Evidence B No. 8 and 9) along with the statement to the effect that he/she would have set off the cost for the external processing of the instant scrap. However, if such statement and confirmation document are more specifically examined, whether “it was not known as sale of the instant scrap,” or “it was not known that there was no contract for the disposal of the instant scrap,” or “it was paid implicitly below the external unit price on the condition of recovery,” and if such contents were collected, it can be understood to the extent that he/she used the instant scrap as a favorable condition in the process of the contract with the external company. It is sufficient to view that the instant scrap was also appeared as a set-off without sufficiently understanding the contents of the investigator’s questioning. However, there was no agreement or agreement on the disposal of the instant scrap as stated by the Kim Do’s statement, or there was no objective statement on the amount or unit price of the instant scrap, other than the aforementioned evidence.

D) The instant scrap constitutes goods capable of recognizing the economic value, and even if the Plaintiff supplied the instant scrap to an outsourcing company, the Plaintiff received monetary compensation equivalent to the same amount by receiving a partial reduction of metal processing costs from the outsourcing company. Accordingly, pursuant to Article 29(3)1 of the Value-Added Tax Act, the supply price of the instant scrap would be the amount of metal processing costs reduced between the Plaintiff and the outsourcing company. According to each description stated in the evidence Nos. 8 and 9, the Defendant presumed the supply price based on the general market price of the instant scrap, not on the amount of metal processing costs reduced as above, but on the basis of the market price of the instant scrap.

E) Therefore, the instant disposition did not meet the taxation requirements or is erroneous in calculating the amount of tax. In the case of KRW 144,200,151 for the Plaintiff, the value-added tax of KRW 2,200,151 for the second year of 201, 124,694,610 for the Plaintiff is irrelevant to the sales of scrap of this case. Therefore, only the remainder except the above part shall be revoked. The Plaintiff’s allegation in this part is with merit within

2) As to the transaction with BB industry

가) 을 제12호증의 기재에 의하면, BB산업의 실대표자 이EE은 ◉◉세무서의 조사과정에서, "이CC으로부터 500만 원을 빌리면서, 그 대가로 BB산업의 사업자등록증을 빌려주었다. 그 후 이CC이 BB산업의 명의로 발급한 세금계산서의 액수가 너무 많아지자, 이CC에게 차라리 BB산업을 인수하여 가라고 권유하였고, 더 이상 BB산업 명의로 세금계산서를 발급하지 말아달라고 부탁하기도 하였다. 원고와 이CC 사이의 거래 사실에 대하여는 알지 못한다"는 취지로 진술하였는바, 위 진술내용에 따르면 이CC이 BB산업의 명의만을 빌려 원고와 거래하였고, 그 과정에서 원고에게 자신이 차용한 BB산업의 명의로 매입세금계산서를 발급하여 준 것으로 보이기는 한다.

B) However, even if the Plaintiff received a false purchase tax invoice from thisCC, if it proves special circumstances, such as the Plaintiff’s failure to know the false name of thisCC, and the Plaintiff’s failure to know it, the input tax amount may be deducted or refundable from the output tax amount (see, e.g., Supreme Court Decision 94Nu13206, Mar. 10, 195). As such, whether such special circumstances exist in the Plaintiff should be separately examined. The legal principles on this issue are as follows.

Inasmuch as a person who is supplied with goods or services is not obligated to actively investigate whether the other party is a disguised business operator, there is sufficient reason to suspect that the other party is a disguised business operator when determining based on the facts revealed in the process of collecting data to determine whether the other party is a qualified business operator. However, the other party’s failure to know that the other party is a disguised business operator should be deemed as negligence (see, e.g., Supreme Court Decision 97Nu7660, Sept. 30, 1997).

In a case where a bona fide trading party, who was unaware of the fact that the other party was a disguised business operator and did not know of such fact, made a scheduled and final return of value-added tax pursuant to the relevant tax invoice, even if the person who was not the actual business operator became a supplier, the relevant input tax amount should be deducted within the prescribed period, and no additional payment for the return is imposed (see, e.g., Supreme Court Decision 89Nu2134, Oct. 24, 1989)

In light of the above legal principles, the Plaintiff: (a) obtained a business registration certificate from thisCC before commencing the transaction and confirmed the name of the business operator; (b) the Plaintiff purchased raw materials from thisCC and remitted the proceeds therefrom to the account in the name of BB industry; (c) there are no circumstances to deem that the Plaintiff purchased raw materials from thisCC to purchase raw materials from thisCC and then sell them again to other companies; and (d) the Plaintiff distributed and disposed of normally traded goods such as processing raw materials purchased from thisCC and re-sale them to other companies; and (b) there is no sufficient reason to suspect that thisCC was in material transfer from the name of BB industry; and (c) there is no negligence on the part of the Plaintiff; and (d) there is no reason to believe that the Plaintiff did not know the above fact. Furthermore, the Plaintiff did not directly visit the actual representative of the B industry or actively request the Plaintiff’s investigation into the B industry, including the Plaintiff’s name.

Therefore, the plaintiff's assertion on this part is justified.

3. Conclusion

Thus, the plaintiff's claim of this case is justified within the scope of the above recognition.

We dismiss the remainder of the claim as it is without merit. It is so decided as per Disposition.