Early High Court Decision 201Du1068 (2012.05.08)

The fact that the representative director's account is deposited can not be seen as omitting sales.

It is sufficient to view that the amount deposited from the joint entity to the account of representative director, etc. of the relevant corporation is settled among the joint entities, and it is insufficient to prove that the amount deposited falls under the omission of sales by the tax authorities, so it is unreasonable to dispose of the initial corporate tax

2012 disposition of revocation of imposition of value-added tax, etc.

AAA Construction, Inc.

The director of the North Incheon National Tax Office

March 28, 2013

April 18, 2013

1. On January 3, 2011, the Defendant’s imposition disposition of value-added tax of KRW 000 in excess of KRW 000 in the imposition disposition of KRW 1, 2009 against the Plaintiff on January 3, 200 and the imposition disposition of KRW 000 in the business year of 2009, respectively, shall be revoked.

2. The defendant shall bear the costs of the lawsuit.

The same shall apply to the order.

1. Details of the disposition;

A. On June 13, 2007, the Plaintiff formed a joint contractor with BB Construction Co., Ltd. (hereinafter referred to as “B Construction”) and completed the Incheon City City Library Construction Corporation (hereinafter referred to as “the instant construction”) by being awarded a contract with theCC Information Center Co., Ltd. (hereinafter referred to as “CC Information Center”).

B. On October 27, 2010, the Incheon District Prosecutors’ Office notified the Plaintiff’s representative director, the Plaintiff’s stateAA, and the Defendant of the results of the investigation on the suspicion of tax evasion, and requested the Defendant to file a criminal charge. During the investigation process, BB Construction’s vice president, “The Plaintiff issued a tax invoice equivalent to 93% of the cost of the instant construction at the time of settling the cost, etc. of the instant construction, but only issued tax invoices equivalent to 90% of the cost of the instant construction, and transferred KRW 000 equivalent to 3% of the remainder to the Plaintiff’s representative director’s account and the KOO account, etc.”

C. On January 3, 2011, the defendant notified of the investigation results, deemed the above amount of KRW 000,000 among the above amount of KRW 000 (hereinafter referred to as "the amount of this case") as the omission of sale, and imposed the plaintiff the value-added tax of KRW 000 (the value-added tax of this case is KRW 000) for the first term of January 3, 2009 and the corporate tax of KRW 000 for the business year of 2009 (the corporate tax of this case is KRW 000 for the corporate tax of this case) for each disposition (hereinafter referred to as "each disposition of this case").

[Based on Recognition] The entry of Gap 2, Eul 5, and Eul 1 through 5 (including household numbers), and the purport of the whole argument

2. Whether each of the dispositions of this case is legitimate

A. The plaintiff's assertion

The Plaintiff and BB Construction included the construction cost received from theCC Information Center in sales with respect to each of the instant construction works. However, the Plaintiff merely received an ex post facto settlement of the instant amount corresponding to the portion of BB Construction from BB Construction with respect to the site expenses spent by the Plaintiff, such as trees, crops, and livestock compensation for the smooth progress of the instant construction works, and it is unlawful for the Defendant to consider the instant amount as an omission of sales, thereby making each of the instant dispositions against the Plaintiff.

B. Determination

In principle, the burden of proof of sales revenue, which serves as the basis for calculating the tax base of value-added tax, is imposed on the tax authorities (see, e.g., Supreme Court Decision 91Nu7415, Jan. 17, 192), and the evidence No. 5-1 and No. 4-2, and the testimony of YO, together with the overall purport of the pleadings, the Plaintiff and B-Construction decided to settle the amount of the instant construction as shares as to the costs of the instant construction as joint beneficiaries, and (2) the Plaintiff’s settlement of the cost of the instant construction and the instant construction, on February 2, 2009, using the cost of the instant construction as site expenses, on the ground that it is difficult to conclude that the Plaintiff’s representative director at the time, ABO, and B-Construction were deposited into the accounts of the 3rd Construction Contract, and that the amount of the instant construction was not reported and paid to the Plaintiff, and that it is difficult to see that the Plaintiff’s payment of the price was made to the No.3 Construction Contract.

3. Conclusion

Then, the plaintiff's claim is reasonable, and it is so decided as per Disposition.