early 2011west 4913 ( December 27, 2012)

Since the Plaintiff cannot be deemed to have known that the instant transaction was conducted without any actual transaction, the imposition of penalty tax is unreasonable.

Inasmuch as the Plaintiff did not know that the instant transaction was a processing transaction, and did not appear to have any circumstance to suspect it, it is reasonable to deem that there was a justifiable reason not to charge the Plaintiff’s negligence of neglecting the Plaintiff’s duty in the return of value-added tax on the instant tax invoice.

2013Guhap9212 Revocation of Disposition of Imposition of Value-Added Tax

AAA, Inc.

Gangwon-gu Director of the District Office

September 27, 2013

November 19, 2013

1. The Defendant’s imposition of the value-added tax on September 1, 201 against the Plaintiff on September 1, 2011 is 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. The Plaintiff, a corporation that runs the wholesale and retail business, such as NAB, received four purchase tax invoices (hereinafter referred to as "purchase tax invoices of this case") from BB (hereinafter referred to as "BB") during the 2010 taxable period of the second value-added tax as listed in the table below, and issued four copies of the sales tax invoice (hereinafter referred to as "the sales tax invoice of this case") to CCC Distribution Center (hereinafter referred to as "CCC Distribution Center"), and issued four copies of the sales tax invoice of the sales tax invoice of this case. On November 30, 2010, the Plaintiff reported and paid the value added tax (hereinafter referred to as "purchase tax invoice of this case") for the remainder of the sales tax invoice except the sales tax invoice of this case as of November 30, 2010.

(unit: Won)

Details of receipt of purchase tax invoices

Details of issuance of sales tax invoices

Date of purchase

Value of Supply

Date of sale

Value of Supply

August 2, 2010

OOO

August 25, 2010

OOO

September 7, 2010

OOO

September 29, 2010

OOO

October 15, 2010

OOO

October 29, 2010

OOO

November 15, 2010

OOO

November 30, 2010

OOO

Total

OOO

Total

OOO

B. The director of the Seoul Regional Tax Office: (a) the Plaintiff and relevant enterprises from May 17, 2011 to August 24, 2011;

After conducting a value-added tax investigation on the Plaintiff, the instant tax invoice received by the Plaintiff was deemed as a processing tax invoice and notified the Defendant of the taxation data.

C. Accordingly, the Defendant: (a) reduced both the output tax amount and the input tax amount on the instant tax invoice; and (b) applied the additional tax, etc. on the receipt of the instant tax invoice to the Plaintiff on September 1, 2011; and (c) corrected and notified the KRW 2000 of the value-added tax for the second time in 2010; (b) the details of the amendment are as follows; and (c) the penalty tax is the sum of the amount calculated by adding the KRW 00, KRW 000, KRW 00, KRW 000, KRW 00

(unit: Won)

Classification

Details of correction

Reporting

Correction

Amount of increase or decrease

Tax Base

OOO

OOO

OOO

Sales amount

OOO

OOO

OOO

Purchase Tax Amount

OOO

OOO

OOO

Vehicle reduction meters

OOO

OOO

OOO

Reduction and Mutual Aid Tax Amount

OOO

OOO

Tax amount already paid

OOO

OOO

OOO

Additional Tax

OOO

OOO

Amount of tax notified after deduction

OOO

OOO

D. On October 20, 201, the Plaintiff appealed to the Tax Tribunal for a tax trial on October 20, 201. Article 47-3 of the Framework Act on National Taxes and Article 27 of the Enforcement Decree of the same Act stipulate that the Tax Tribunal shall impose penalty tax on the Plaintiff on the malicious breach of duty by active means, such as preparing and receiving false records or false evidence, such as preparation of double books, destruction of account books and records, concealment of assets, or fraud, such as income, profit-making, transaction manipulation, and other unlawful acts, unlike general penalty tax, on the grounds that the imposition of penalty tax on the Plaintiff is too harsh, and thus, it is reasonable to impose penalty tax on the general underreporting on September 16, 201 (the date of receiving additional tax on September 16, 201).

E. According to the decision of the Tax Tribunal, the Defendant rendered a re-determination of reduction of additional tax amount by reducing additional tax amount (hereinafter the Defendant’s second imposition of additional tax amount by the head of the office of tax Tribunal in 2010, which deducts the remainder of additional tax amount by deducting the amount of the Defendant’s re-determination from the amount of the additional tax amount by the head of the office of tax Tribunal.

[Reasons for Recognition] Unsatisfy, Gap evidence 1 to 4, Eul evidence 1 (including each number), the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

Inasmuch as the Plaintiff fulfilled his duty of care to the extent that the transaction was normally required for the transaction, and the transaction stated in the instant tax invoice was entirely different from the processing transaction, and there was no reason to suspect it, the instant disposition imposing penalty tax on the Plaintiff on a different premise is unlawful, even though it is deemed that there was a justifiable ground for not misunderstanding the Plaintiff’s duty in relation to the instant tax invoice.

B. Relevant statutes

It is as shown in the attached Form.

(c) Fact of recognition;

(1) The CCC distribution center is a public institution established by the CCC Promotion Foundation by investing 100% in order to develop markets for products manufactured by small and medium enterprises and promote their management.

(2) DoD is the actual operator of EE (EE), BB, and FF Distribution (hereinafter referred to as “FF Distribution”), a distributor, who is a eE, BB, and FF Distribution (hereinafter referred to as “EE”); on the other hand, when the above companies are individually named, EE, BB, and FF Distribution (hereinafter referred to as “E3 company”), ES3 companies have concluded an entrustment contract for the purchase and delivery of goods with the CCC Distribution Center since 2005, and have been acting as an agent.

(3) In order to raise funds for the repayment of obligations arising from the investment in the home shopping business and the occurrence of damages to the KRW OOOOO, DoD processed circular transactions between specialized distributors, such as EE3 companies and GGG the sales of goods, ? CCC distribution center ? EE3 companies without actual distribution of goods, and used the money for purchase of goods for its existing debt payment, etc., by continuously expanding the above processing transactions, eE3 companies had been entrusted with the purchase business and sales business from the CCC distribution center. In fact, DoD had attempted to pay the money already received in advance from the specialized distributors by inducing the actual specialized distributors to make the above processing transactions.

(4) On July 26, 2010, 2010 between the Plaintiff and CCC Distribution Center, HH used a position as agent for B2B teams, which is the Plaintiff’s employee II, proposed a transaction with the CCC Distribution Center. On the other hand, Korea HH was in charge of the transaction between the Plaintiff and CCC Distribution Center by November 2010 after the conclusion of the said contract.

Article 1(Purpose)The purpose of this Agreement is to determine the matters necessary for the delivery of goods by Eul (the plaintiff; hereinafter the same shall apply) to customers designated by Gap (CCC Distribution Center; hereinafter the same shall apply).

The goods and unit prices to be supplied to A under Article 2 (Items and Unit Prices for Goods to be Delivered) shall be determined by mutual consultation between A and B.

Article 3 (Delivery of Goods)

(1) B shall send goods to a customer designated by A within three business days including the date on which the test for delivery is requested by A.

(2) B When any loss (including the receipt of another person), damage, defective quality, request for return of goods, request for replacement, etc. occurs at the time of delivery, the re-delivery shall be made immediately.

(3) Where goods are not sent within three business days including the date of receipt of dispatched data, appropriate measures, such as notification of wire due to delay of delivery, shall be taken to the customer who has applied for the goods, and in such cases, B shall notify the customer of the acquisition fee of customer information (the name of the company, the provider of information, etc.) without fail

Article 5 (Payment of Price for Goods) A shall pay the price (purchase for sale), and the due date for payment shall be determined by mutual agreement between A and B, only when the goods supplied by B have been sold last to the customer.

(5) The transaction between the Plaintiff and the purchaser BB and the CCC distribution center was conducted in a manner that BBB takes full charge of the sales of the goods, ① if CCC distribution center orders the Plaintiff to pay the goods price calculated at a unit price set by CCC distribution center for the goods designated by CCC distribution center in the form of an order, the Plaintiff was issued a detailed statement and purchase tax invoice from the above purchaser, and the Plaintiff paid the purchase price to the above purchaser. ② The Plaintiff received 4.5% of the purchase price from CCC distribution center on the 15th day of the month following the month following the month in which the date the purchase price was paid to the above purchaser. ③ The delivery of goods to the CCC distribution center was conducted in the manner that BBB takes full charge of the sales of the goods. The goods in the transaction statement were traded as daily products, such as Arabic, odor, fluor, fluor and fluor, and the small amount of goods, and the Plaintiff did not receive the purchase price from BCC 100.

(6) On December 10, 2010, the Plaintiff rejected the Plaintiff’s receipt of a tax invoice for the supply of goods on November 30, 2010 on the grounds that goods were not actually supplied by the CCC Distribution Center, and the Seoul Regional Tax Office provided a tax evasion report relating to the processing transaction with the CCC Distribution Center.

(7) At the time of the instant transaction, the CCC Distribution Center had ES3 companies use part of its building as its office and provided office fixtures, such as telephone and facsimile, and there was no sign indicating E3 on the office or the head office building bulletin board used by E3 employees. Moreover, the CCC Distribution Center had handled as if the phone number was connected to the department to which the EE3 employees were affiliated.

(8) In order to pretend the above false circular trading as if it were a progressive trading, DaD instructed KR to work for the LLA and prepare a false cargo loading and verification certificate to this KR, and issued it to the CCC Distribution Center with a false cargo loading and verification certificate.

(9) Meanwhile, the Plaintiff was accused of violating the Punishment of Tax Evaders Act by the director of the Seoul Regional Tax Office. On December 16, 201, the Plaintiff was found to have received false tax invoices from the Seoul Southern District Public Prosecutor’s Office with knowledge of circular processing transaction, and the Plaintiff was not subject to disposition of non-prosecution on the grounds that there was no evidence

[Ground of recognition] Unsatisfy, entry of Gap evidence 5 to 25 (if there are several numbers, including a house number) and the purport of the whole pleadings

D. Determination

(1) Under the tax law, penalty taxes are administrative sanctions imposed pursuant to the tax law in order to facilitate the exercise of the right to impose taxes and the realization of a tax claim where a taxpayer violates a return and tax obligation under the tax law without justifiable grounds, and the taxpayer’s intentional and secondary negligence is not considered. However, if a taxpayer is deemed not to have been aware of his/her duty, and there is a justifiable reason to believe that it is unreasonable for the taxpayer to be unaware of his/her duty, or that it is unreasonable for him/her to expect the fulfillment of his/her duty, etc. (see, e.g., Supreme Court Decision 2004Du930, Nov. 25, 2005).

(2) In light of such legal principles, the Plaintiff’s initial transaction of the instant case, i.e., the transaction of the instant case was conducted by DaD’s fraud with a view to returning its debts. DoD also has a person in charge of processing, who is in charge of the Plaintiff’s business, made it impossible for the Plaintiff to verify the transfer of goods. ② The Plaintiff prepared a contract for the supply of goods on the 14th floor of the CCC distribution center to obtain the name of B2B team H, and then did not appear to have been confirmed by 30% of the Plaintiff’s initial transaction of the instant case. The Plaintiff’s transaction of the instant case was conducted by DaD 10, and it was difficult to conclude that the Plaintiff’s transaction was conducted as a legal entity created by 100% investment of the CCC 10% of the Plaintiff’s sales and delivery Center’s sales and receipt of goods. ③ The Plaintiff’s issuance and delivery order of the CCC 14 months of the sales and delivery Center’s sales and delivery order did not appear to have been issued by 13 months of the CCC 14 months.

(3) Therefore, the disposition of this case is unlawful, and the plaintiff's allegation pointing this out is with merit.

3. Conclusion

Therefore, the plaintiff's claim of this case is reasonable, and it is so decided as per Disposition.