Seoul Administrative Court 2012Guhap34709 ( October 16, 2013)

A bona fide transaction party who was unaware of the fact that the instant transaction was processed.

Where a person liable for duty payment is not unreasonable to believe that he/she did not know his/her duty, and there are justifiable grounds for not misunderstanding his/her duty, such as when there are circumstances that make it reasonable to present him/her, or when it is unreasonable to expect the party to perform his/her duty, etc., and where there is a good faith transaction party

Article 22 of the Value-Added Tax Act, Article 48 of the Framework Act on National Taxes

2013Nu26042 Revocation of Disposition of Imposition of Value-Added Tax

- Appellants

AAAys Co., Ltd.

Samsung Head of Samsung Tax Office

Seoul Administrative Court Decision 2012Guhap34709 decided August 16, 2013

June 11, 2014

July 23, 2014

1. All appeals filed by the Defendant are dismissed.

2. The costs of appeal shall be borne by each party.

1. Purport of claim

The Defendant’s imposition of value-added tax on September 1, 201 on the first term portion of 2008, the first term portion of 2010, the first term portion of OOO, and the second term portion of OOO in 2010 shall be revoked.

2. Purport of appeal

A. The plaintiff

The part against the plaintiff in the judgment of the first instance shall be revoked. The part against the plaintiff in the disposition of value-added tax imposed by the defendant on September 1, 201 on the plaintiff on September 1, 201 shall be revoked.

B. Defendant

The part against the defendant in the judgment of the court of first instance shall be revoked, and the plaintiff's claim corresponding to the revocation shall be dismissed.

1. Quotation of judgment of the first instance;

The reasoning of this court's ruling is as follows, except for the cases where the defendant added the judgment on the argument that added the grounds for the preliminary disposition to this court, and thus, the reasoning of this court's ruling shall be cited in accordance with Article 8 (2) of the Administrative Litigation Act and Article 420 of the Civil Procedure Act.

2. Additional determination

A. The defendant's assertion

Although the substance of the instant transaction constitutes the supply of goods on consignment or on behalf of the Plaintiff, the Plaintiff issued a tax invoice only on the part of the brokerage commission acquired, it received each purchase and sales tax invoice on the basis of the total transaction amount differently from the substance of the transaction. This constitutes a case where tax invoice different from the fact is received, and thus, the instant disposition imposing additional tax is lawful.

B. Determination

Since the subject matter of a taxation disposition lawsuit is objective existence of legitimate tax amount, the tax authority may submit new data, which can support the legitimacy of the tax base and tax amount recognized in the relevant disposition, or exchange and change the reasons within the scope that maintains the identity of the disposition, even though during the lawsuit, until the closing of argument in the fact-finding court. It does not necessarily mean that only the data at the time of the disposition should be determined whether the disposition is legitimate or that only the initial reasons for the disposition can be asserted (see, e.g., Supreme Court Decisions 97Nu2429, Oct. 24, 1997; 200Du4873, Aug. 24, 2001). Such addition cannot be deemed unlawful.

Meanwhile, the main sentence of Article 6(5) of the former Value-Added Tax Act (wholly amended by Act No. 11873, Jun. 7, 2013) provides that when trading is conducted on consignment or by an agent, the truster or the principal shall be deemed to have supplied or received goods directly. Here, " commissioned consignment" refers to the purchase or sale of goods under his/her own name, and "sale by an agent" refers to the payment of remuneration to a person who is not an employee on a regular basis by acting as an agent or a broker for a trade belonging to the business category for a certain merchant, and both are not the supply of goods, but the truster or the principal shall be deemed to have supplied or received goods directly (see Supreme Court Decision 97Nu20359, Apr. 27, 199).

However, the circumstances stated in the judgment of the court of first instance are as follows: (a) the Plaintiff prepared a supply contract and a supply contract as a contracting party between the purchaser and the seller; (b) the payment of the goods was not immediately settled at the seller; (c) the first BB test date was the proposal for the instant transaction to the Plaintiff according to the necessity of diversification of the seller, stability of transaction, etc.; and (d) the Plaintiff was aware of only the commission portion as a sales revenue; (c) however, the settlement of accounts may be conducted differently from the substance of the legal transaction depending on the nature of the transaction; and (d) the Plaintiff also applied such accounting transaction to a B2 transaction similar to the instant transaction. It is difficult to deem that the instant transaction was not conducted under the Plaintiff’s responsibility and calculation; and there is no evidence to acknowledge otherwise.”

The judgment of the first instance is justifiable. All appeals filed by the plaintiff and the defendant are dismissed.