District Court-2016-Gu Partnership-211 ( October 14, 2017)

Value-added tax and corporate tax taxation imposed on the Plaintiff by deeming that the Plaintiff received processed tax invoices is legitimate.

(1) It is reasonable to view that each of the tax invoices of this case constitutes a false tax invoice except the purchase tax invoice received by some of the transaction parties.

Article 32 of the Value-Added Tax Act

2017Nu40695, revocation of the imposition of value-added tax and corporate tax

AAAA

BB Director of the Tax Office

Suwon District Court Decision 2016Guhap211 Decided February 14, 2017

November 14, 2017

December 12, 2017

1.The judgment of the first instance shall be modified as follows:

A. The Defendant filed against the Plaintiff on December 1, 2014

1) The portion exceeding KRW 00,000,000 among the disposition of imposition of the principal tax of value-added tax for one year 2012 and the disposition of imposition of the additional tax of KRW 00,000,000,000

2) The portion exceeding KRW 00,000,000 among the disposition of imposition of the value-added tax of KRW 000,000,000 for the second year of 2012

3) The portion exceeding 00,000,000 won out of the imposition of the principal tax of value-added tax for one year 2013 and the imposition of penalty tax of KRW 000,000,000.

4) The portion exceeding KRW 00,000,000 among the disposition of imposition of the value-added tax of KRW 000,000,000 for the second year of 2013

5) Disposition imposing corporate tax of KRW 0,000,000 for the year 2012

each subparagraph shall be revoked.

B. The plaintiff's remaining claims are dismissed.

2. Of the total litigation costs, 70% is borne by the Plaintiff, and the remainder is borne by the Defendant, respectively.

1. Purport of claim

The Defendant’s imposition of value-added tax of KRW 341,368,410 (including additional tax) for the Plaintiff on December 1, 2014, KRW 525,022,260, KRW 444,400,320 (including additional tax) for the value-added tax of KRW 1,2012 for the Plaintiff on December 1, 2012, and KRW 429,576,370 for the value-added tax of KRW 429,57,370 for the first time, and KRW 3,273,970 for the corporate tax of KRW 2012 for the year 2013 is revoked.

2. Purport of appeal

A. Plaintiff: The part of the judgment of the first instance court against Plaintiff is revoked. The Defendant’s imposition of KRW 444,400,320 (including additional taxes) of value-added tax on December 1, 2013 against Plaintiff on December 1, 2014, and KRW 429,576,370 of value-added tax on February 2013 shall be revoked.

B. Defendant: The part against the Defendant in the judgment of the first instance is revoked, and all of the Plaintiff’s claims corresponding to the revocation are dismissed.

1. Details of the disposition;

A. From March 13, 2012 to July 2, 2014, the Plaintiff reported and paid the value-added tax and corporate tax on the basis of each purchase tax invoice (hereinafter referred to as the “tax invoice of this case, including each of the above sales and purchase tax invoices”) in the aggregate of the supply values issued during the same period from January 2012 to February 2013, 2013, which is approximately KRW 00 billion,00,000,000 won, from the aggregate of the supply values received during the same period as each of the sales and purchase tax invoices (hereinafter referred to as “the tax invoice of this case”).

B. On December 1, 2014, on the ground that all of the instant tax invoices were issued without real transaction, the Defendant issued the instant disposition against the Plaintiff on December 1, 2012, 34,41,368,410 won of value-added tax (including additional tax), 525,02,260 won of value-added tax for 2 years 2012, 44,400,320 won of value-added tax for 1 year 2013, and 429,576,370 won of value-added tax for 2 years 2013, and 3,273,970 won of corporate tax for 2012 as follows.

1. Principal tax and additional tax for one year 2012: 341,368,410 won;

(1) Principal tax of value-added tax: 00,000,000 won (tax amount refunded exceeding the output tax amount);

(2) Additional tax on issuance of false tax invoices: 000,000 won.

00,000,000,000 won (the processed sale of 0,000,000,000 + the processed purchase of 0,000,000,000 won) ¡¿ 2%

(3) Additional tax on an excessive refund return: 0,000,000 won

00,000,000 won x 40%

(4) Additional taxes for insincere refund: 0,000,000 won;

00,000,000 won ¡¿ 3/10,000 ¡¿ 859 days (number of days elapsed)

2. Additional tax of value-added tax for the second year 2012: 525,022,260 won;

(1) Additional tax on issuance of false tax invoices: 000,000 won;

00,000,000,000 won (processed sale of 00,000,000,000 + processing purchase of 00,000,000,000 won) ¡¿ 2%

(2) Tax credit of 00,000,000 won already paid.

3. Principal tax and additional tax for the first period of 2013: 00,000,000 won;

(1) Principal tax: 0,000,000 won.

(2) Additional tax on issuance of false tax invoices: 000,000 won.

00,000,000,000 won (processed sale of 00,000,000,000 + processing purchase of 00,000,000,000 won) ¡¿ 2%

(3) Additional tax on an excessive return: 0,000,000 won

(4) Additional taxes for insincere refund: 000,000 won;

4. Additional tax of value-added tax for the second year of 2013: 00,000,000 won;

(1) Additional tax on issuance of false tax invoices: 000,000 won.

00,000,000,000 won (processed sale of 00,000,000,000 + processing purchase of 00,000,000,000 won) ¡¿ 2%

(2) Tax credit of 00,000,000 won already paid.

5) Corporate tax for the year 2012: 0,000,000

C. On July 7, 2015, the Plaintiff filed an objection against the instant disposition with the competent Tax Tribunal.

In March 4, 2016, the appeal was dismissed.

[Ground of recognition] Facts without dispute, Gap 1 evidence, Eul 2, Eul 9, 11 evidence, the purport of the whole pleadings

2. Whether the disposition is lawful;

A. The plaintiff's assertion

Inasmuch as the instant tax invoice was actually traded as indicated in each of the instant tax invoices, it is not a false tax invoice. Even if there was a case different from the actual transaction, the Plaintiff is a party involved in good faith and negligence that could not recognize the falsity of the purchase tax invoice, as it was traded in a normal manner with the trust and good faith of the other party to the transaction. Therefore, the instant disposition taken on a different premise is unlawful against the principle of no taxation

(b) Related statutes;

Attached Form 1 shall be as listed in attached Table 1.

C. Determination

1) Relevant legal principles, etc.

Article 22(3) of the former Value-Added Tax Act provides that the issuance of a false tax invoice shall be imposed in cases where a tax invoice is received without supplying or being supplied with goods or services, or where a tax invoice is received in the name of a person who actually supplies or is not supplied with goods or services.

In addition, Article 17(2)2 of the former Value-Added Tax Act provides that input tax shall not be deducted from the output tax amount. In this case, the meaning that it is different from the fact is that the ownership of income, profit, calculation, act or transaction, which is the object of taxation, is nominal, and if there is another person to whom it actually belongs, the person to whom it belongs shall be liable for tax payment. In light of the purport of Article 14(1) of the Framework Act on National Taxes, which provides that the requisite entry of a tax invoice does not coincide with the person to whom the goods or service is actually supplied or the person to whom the goods or service is supplied, value and time of the transaction, regardless of the formal entry of the transaction contract, etc. made between the parties to the goods or service (see, e.g., Supreme Court Decision 96Nu617, Dec. 10, 196). In addition, even if a transaction of supplying goods, etc. actually exists, it constitutes a tax invoice that is different from the fact that the supplier was issued as a different person to whom it is delivered.

However, even if an entrepreneur was issued such a tax invoice, in extenuating circumstances, such as where he/she was unaware of the nominal omission and was not negligent in not knowing the nominal omission, the input tax amount may be deducted or refundable from the output tax amount. The fact that there was no negligence in not knowing the nominal omission, ought to be attested by the claimant for the input tax deduction or refund (see, e.g., Supreme Court Decision 2013Du6527, Jul. 25, 2013).

2) The sales tax invoice portion

Of the instant tax invoices, the company that issued each of the sales tax invoices by the Plaintiff is four companies, including CCC (hereinafter “CCC”), DD, EE, FF, etc.

In full view of the purport of the entire arguments in evidence Nos. 3, 5 and 6, in the case of CCC, which is the Plaintiff’s main sales place, the Plaintiff issued the second sales place in the manner that the Plaintiff entered “CCC” in the sales place column and added the name of the company that actually supplied the future closure, etc. to the second sales place. CCC appears to have performed the role of the so-called “CCC” in issuing the sales tax invoice as it is (i.e., it appears that it did not have performed the role of the so-called “CCC” as it did. In fact, CCC did not have any essential facilities such as the open storage place, etc.) The remaining three sales places were also issued with the actual sales place on the basis of the good order determined by the enterpriser following the examination of the closure, etc., and the Plaintiff issued the sales tax invoice to the relevant sales place at least less than the unit price, and thus, it cannot be acknowledged that CCC was issued with the fact that each of the above tax invoice was issued under the Plaintiff’s name (i.e., etc., the evidence of each of the instant tax invoice.).

3) Purchase tax invoice portion

A) Of the instant tax invoice, the company for which the Plaintiff was issued the purchase tax invoice is 28 companies, including GGG. Among them, the transaction with 21 companies, including HHH, is acknowledged as having added the entire purport of the pleadings to the statement Nos. 1, 3, and 12 (including the serial number). According to the following facts, the pertinent purchase tax invoice constitutes a false tax invoice issued in the name of a person, other than the actual supplier.

(1) HH

He stated that the workplace of HH did not have a good-time position, and that the owner of the high-water commercial chain I and the JJ at the same location did not see the non-ferrous metal handled by HH.

(2) KKN

KRK opened on May 12, 201, and closed ex officio on October 31, 2012 after its opening on May 12, 2011. When the sales proceeds are deposited from the seller without equity capital, it immediately remitted them to the purchaser, and the purchaser did not have any substance as an independent trading party, such as deposit in cash, immediately after its receipt of the payment.

(3) OOO

OO sent an electronic map sent by the seller by facsimile, and then calculated the purchase volume by calculating it as a calendar, and prepared photographs, etc., and prepared evidentiary documents. In the course of tax offense investigation, the OOO stated, "IO was not able to engage in the non-ferrous-related industry, and substantial management was all performed by OO, but the problem was found about the actual quantity flow and the difference between the receipt and issuance of tax invoices, and whether the purchase and sale transaction was actual transaction, but it was not corrected by OO."

(4) LLmers

The Lmera stated that the place of business of the Lmera stated that there is no trace of the operation of the business in the state of closure, and that there is no actual transportation vehicle or the string vehicle or the string vehicle in the place of the business in the vicinity.

(5) MM

MM was started on January 9, 2013 and closed on April 30, 2014. The workplace of MM was conducted by MM in the absence of closure at the time of checking the site of MM tax affairs around March 2013 and around May 2013. The representative director of MM was investigated by MM in the absence of closure at the time of investigating the MM tax affairs.

6. NN trade

NN trade was established on April 2, 2012, and was closed ex officio on June 30, 2013. NN trade transferred the amount to a purchaser immediately after receiving the payment from a seller during the period of the value-added tax, and the purchaser who received the payment was deposited in cash within 5-10 minutes from that purchaser. NN trade was registered as a place of business on April 2, 2012 on a lease of N00-00 points, but the said place of business did not have any facilities that can be seen as a place of business, such as an office, a fraternity, and a warehouse.

(7) PPmers

PPmers started on January 30, 2012 and closed on April 14, 2014. PPmers issued a measurement certificate using the measurement program with the Kas Korea. PPmers issued the measurement certificate at will, without any actual succession, the weight, date, time of the issuance of the measurement certificate, and the time of the issuance of the PP certificate at will was possible from April 17, 2013. The result of the investigation of the value-added tax (information suspected) conducted by the Jungbu regional tax office in February 2013 by the Jungbu regional tax office was found to have not been engaged in the non-ferrous-related industry, and it was confirmed that the PP was not capable of engaging in the closed-dong wholesale business, and it was found that the PP was failed to present the data that can prove the actual purchase of the closed-dong wholesale business, or failed to disclose the actual purchase price.

⑧ QQ메탈

QQ메탈의 사업장인 QQ시 QQ구 QQ동 000 에는 소량의 고철이 적재되어 있을 뿐 화물차량 등의 출입 등 실제로 폐동 등을 거래한 흔적이 확인되지 않았다. QQ메탈은 매출처로부터 대금을 지급받는 즉시 이를 매입처로 송금하였고, 대금을 송금받은 매입처도 곧바로 이를 모두 현금으로 출금하였으며, QQ메탈에 매출세금계산서 등을 발급한 거래업체 등의 조사에서 실물 거래가 이루어지지 않았음이 확인되었다.

(9) RRR resources

RR resources have not been equipped with the substance of an independent trading party as an independent trading party, such as: (a) the Plaintiff received the payment from the Plaintiff; (b) the Plaintiff transferred the payment from the Plaintiff to the OOO; (c) the OOOO; and (d) the purchaser was investigated to have withdrawn the payment in full on the day or the following day; and (c) the Plaintiff was investigated to have withdrawn the payment in cash.

(10) Smers

Smere opened on May 7, 2013 and closed on August 13, 2014. At the time of the investigation by the tax authorities, the Smere’s places of business were 1 containers, 1, storage, commutings, and PC 2, etc., but was left alone in the storage without managing small and medium amount of waste bus bars and PCs, and the exhaustr was destroyed by melting and partial damage, and the exhaustr program installed in PC was not operated.The representative Smere’s Smere, as a result of the investigation by the Central Tax Office, was confirmed that there was no sufficient means to operate the non-ferrous-related distribution business.

(11) Telecommunication industry

The TT industry was started on September 3, 2012, and closed on January 11, 2014. The representative TT industry did not grasp the location at the time of investigating the transaction order by the tax authorities at the beginning of 2014, and the TT metal listed in the tax invoice, etc. as the main purchaser of the TT industry was not confirmed as a result of the visit and investigation at the workplace.

(12) UUmers

The UUmer was started on April 30, 2013 and closed on April 28, 2014. UUmers transferred the money to a purchaser immediately after receiving the payment from a seller. The purchaser who received the money was immediately deposited in cash or remitted it to another purchaser. As a result of the investigation conducted by the tax authority, the UUmers representative confirms that the UUUU has no means to carry on the distribution business related to the non-ferrouss.

(13) Vmers de

At the time of the investigation by the tax authority, the Vmers did not load at all the business sites of Vmers, and the office installed one computer and one facsimile, but did not keep all the data related to the business, such as the guidance chart. The guidance chart submitted by Vmers was able to be prepared at will by means of a computer, not by means of a computer. However, the guidance chart submitted by Vmers was able to be prepared at will during the total hours, but multiple times were found as a result of the comparison between the time of the security boundary and cancellation of the business site of Vmers and the time of the relay of the Vmers issuance of the Vmers.

(14)W industry

WW industry was established on June 20, 2013, and closed on October 25, 2013. However, even though there was no evidence that it purchased closed operation, etc. during the said period, WW industry reported about KRW 00 billion as the sales amount and failed to pay the value-added tax of KRW 00 billion. W industry transferred money from the sales office to a third party immediately after receiving payment from the sales office.

⑮ XXXXX

중부지방국세청의 조사 결과 XXXXX는 폭탄업체로부터 폐동을 매입하여 2차 간판업체로 판매하는 도관 역할을 하였고, 원고로부터 대금을 수령한 즉시 XX자원에 이를 송금한 것으로 확인되었다.

n. Ymers

As a result of the survey by the Central Regional Tax Office, Ymers were found to have performed their role as a signboard company, such as remitting money to Y resources, etc. immediately after receiving payment from the Plaintiff.

⑰ ZZ산업

As a result of the survey by the Central Regional Tax Office, the Z industry was confirmed to have performed the role of the signboard company, such as remitting money to the Zmers, etc. immediately after receiving the payment from the plaintiff.

⑱ OOO메탈

As a result of the investigation of the Central Regional Tax Office, it was confirmed that the OOmer was performing the role of the signboard company, such as remitting money to Omers immediately after receiving payment from the plaintiff.

⑲ 신의금속

As a result of the investigation by the Central and Central Tax Office, it was confirmed that the OM had performed the role of the signboard company, such as remitting money to the purchaser, etc. on the tax invoice.

⑳ OO메탈

As a result of the investigation by the Central Tax Office, the OO industry, the main purchasing agency under the tax invoice of the Central Tax Office, and the OO resources were confirmed to be the bomb coal companies, and at the time of the investigation, the taxpayer was in arrears with the amount of tax of KRW 00 billion.

㉑ OO금속

As a result of the investigation by the Central Tax Office, the OM was immediately paid to the purchaser confirmed as a breadthed coal company, and there are many taxation data confirmed as a processing transaction, and at the time of the investigation, the taxpayer was in arrears with the tax of KRW 00 million.

B) However, according to the following facts acknowledged by adding the overall purport of the pleadings to the entries in the evidence Nos. 8, B, 1, 3, 4, and 10 among the Plaintiff’s purchasing companies under the instant tax invoice, it is difficult to view that the relevant purchase tax invoice constitutes a false tax invoice, and there is no other evidence to acknowledge it otherwise.

(1) GGmers

In the case of violation of the Act on the Aggravated Punishment, etc. of Specific Crimes (Issuance of False Tax Invoice, etc.), the representative of GGM-P received a judgment of not guilty as to the portion of the issuance of false tax invoices on the ground that the Plaintiff was not guilty on the grounds that the Plaintiff was equipped with equipment for the actual transaction of the closed tax invoices and received the sale price, etc. for the sales tax invoices, and that the false purchase tax invoices were received for the evidence of the purchase portion (Seoul Central District Court Decision 2013Rahap00, Jan. 23, 2014; Seoul High Court Decision 2014No000, May 15, 2014; Supreme Court Decision 2014Do000, Sept. 26, 2014).

(2) Omers

OOO’s representative stated that “the Plaintiff and Dmers provided the same company with the closed Dong,” and then issued a tax invoice to the Plaintiff. However, when purchasing the closed Dong, the Plaintiff appears to have used Dmers workplace at the same time. However, it cannot be concluded that the said tax invoice is different from the facts solely on the ground that the Plaintiff supplied the closed Dong without distinguishing Dmers from the Plaintiff, and the Plaintiff issued the tax invoice without distinguishing Dmers from the Plaintiff. Moreover, there is no evidence to acknowledge that the tax invoice issued by Thaimers is false.

(3) OMM

With respect to the fact of transactions with OM, the Plaintiff submitted a measurement table stating the weight of vehicles before and after the closure of an OM shop at the OM shop, photographs containing the process of mooring and lowering the waste movement entered in the Plaintiff’s workplace, and these materials conform to the contents of the tax invoice issued by the OM to the Plaintiff.

(4) AA metal

In the case of violation of the Act on the AM Representative, etc. (Issuance of False Tax Invoice, etc.), etc. on the AAM No. 2000, Jul. 17, 2014, 2014; Seoul High Court Decision 2014No0000, Dec. 18, 2014, which was acquitted on the part of the issuance of false sales tax invoices (Seoul Central District Court Decision 2013 High Court Decision 2014No000, Jul. 17, 2014; Supreme Court Decision 2014No000, Dec. 18, 2014).

5. Dmers

Dmere was awarded a favorable judgment on the ground that the case of revocation of the imposition of value-added tax and corporate tax on the purchase tax invoice issued from January 2012 to January 2013 (U.S. District Court 2016Guhap000) to September 6, 2016, "DD Does cannot be deemed a disguised transaction entity that received false tax invoices from the purchaser," and there is no evidence to prove that there is a false tax invoice issued by R.S. to the Plaintiff at that time.

(6) O non-performance metal

As a result of the investigation of the Central Regional Tax Office, only the circumstance was confirmed to the extent that the place of business of the head of the office of the Plaintiff was about 90km away from the Plaintiff’s place of business, and no other evidence exists to prove that a tax invoice issued by the head of the office of the Central and

(7) Distribution of O non-ferrous metals

O non-stock distribution was rendered in favor of the Plaintiff on the grounds that the case of revocation of disposition of imposition of value-added tax, etc. on purchase tax invoices issued between February 2, 2009 and January 201, 2010 (Korean Government District Court Decision 2012Guhap000) through October 15, 2013, "it is difficult to view the O non-stock distribution as a disguised transaction that received false tax invoices from the purchaser," and there is no evidence to prove that the tax invoice issued by the Plaintiff is a false tax invoice.

C) Furthermore, as to whether the Plaintiff had acted in good faith and without fault on the part of the Plaintiff issued a false tax invoice, the following circumstances acknowledged by the evidence revealed earlier, i.e., the Plaintiff’s actual operator, (i) appears to have been fully aware of the supply structure, distribution channel, type of transaction and data, and the risk thereof, and (ii) if the Plaintiff’s representative visited each of the purchasing places of business, and confirmed whether the purchase tax invoice received from the said purchasing places of business, could have easily known that it was a false tax invoice, in full view of the fact that the purchase tax invoice received from the said purchasing places of business, could not be deemed to have been a bona fide and without fault.

(iv)the calculation of a legitimate tax amount;

A) Determination of the legality of a disposition in a lawsuit seeking revocation of taxation is based on whether it exceeds a legitimate tax amount. The parties concerned may submit objective tax bases and materials supporting the tax amount until the closing of arguments in the fact-finding court, and when a legitimate tax amount is calculated based on such materials, only the portion exceeding the reasonable tax amount should be revoked (see, e.g., Supreme Court Decision 9Du8930, Jun. 12, 2001).

B) The amount of the purchase tax invoice for seven enterprises, such as GGmers, which cannot be deemed as a false tax invoice, is as shown in attached Table 2, and the amount of a legitimate tax calculated based on this reflected is as follows:

① In the instant disposition, the value-added tax amount of KRW 00,000,000 (the input tax amount exceeding the output tax amount) was recognized in the instant disposition, but there is no amount recognized as the principal tax on the grounds that the input tax amount is additionally recognized as more than 0,00,000,000 as stated in the attached Table 2, and there is no amount recognized as the principal tax on the grounds that there is no excess of the input tax amount. Accordingly, there is no additional tax for over-reported refund and for in-faith refund. Accordingly, there is no additional tax for over-reported refund. The penalty tax for issuance of false tax invoices = (=(00,000,000 – 0,000,000,0000) x 2%)

② Additional tax amount of value-added tax of 00,000,000 won for the second year of 2012: Additional tax of 00,000,000 won for the issuance of a false tax invoice (=((00,000,000 won –00,000,000,000) x 2%). Here, 00,000 won for the deduction of the already paid tax amount of 0,000,000 won

③ In the instant disposition, the value-added tax amount of KRW 0,000,000 is recognized as the principal tax of the value-added tax for the first year, 2013: Provided, That inasmuch as the input tax amount of KRW 0,000,000 is additionally recognized and the excess of the input tax amount does not occur, there is no amount recognized as the principal tax. Accordingly, there is no penalty tax for excess refund return and penalty tax for insincere refund. Accordingly, there is no penalty tax for excess refund return. The penalty tax for issuance of false tax invoice = [(00,000,000 – 0,000,000] x 2%]

④ Additional tax amount of value-added tax of 00,000,000 won for the second year of 2013: Additional tax of 00,000,000 won for the issuance of a false tax invoice (=(00,000,000 won –00,000,000 won) x 2%). Here, 00,000,000 won for the deduction of the already paid tax amount of 0,000,000 won

(5) Corporate tax for the year 2012 shall be calculated as follows (in cases of corporate tax taxation, it was imposed on the premise that the processed purchase was larger than the processed sale, but there was no portion of corporate tax imposition since the processed purchase was lower than the processed sale in this case).

3. Conclusion

Thus, among the plaintiff's claims, the imposition disposition of the amount exceeding KRW 00,000,000 for the principal tax of value-added tax for the first year 2012 and the imposition disposition of the amount exceeding KRW 000,000 for the second year of 2012, the imposition disposition of the amount exceeding KRW 00,000 for the additional tax of value-added tax for the second year of 2013, the imposition disposition of the amount exceeding KRW 00,000 for the principal tax of value-added tax for the first year of 2013 and the imposition disposition of the amount exceeding KRW 00,000 for the amount exceeding KRW 0,000 for the additional tax for the second year of 2013, and the imposition disposition of KRW 0,000 for the corporate tax for the second year of 20,000 for the second year of 20

s) The claim is dismissed, and the judgment of the court of first instance is so unfair as to have a different conclusion, and thus, both parties are justified.

Each court's appeal is accepted in part, and the judgment of the first instance is modified as above.