early trial 2013Government 0183 (2014.05)
Since the applicant corporation does not sell the completed related goods to the truster, but provides processing services according to the contract for processing with the truster, it is reasonable to determine the dutiable value in accordance with Article 35 of the Customs Act, so it is reasonable to determine the reasonable price calculated by adding the processing costs and wafer prices to the dutiable value.
Article 35 of the Customs Act
National High Court Decision 2007west2040
early trial 2018Government 0045 / early trial 2018Government 0207
In the imposition of value-added tax on March 28, 2013 and April 17, 2013 by the head of the OOO customs office, the value-added tax shall be revoked and the remainder shall be dismissed.
1. Summary of disposition;
A. The applicant corporation, as an operator of a bonded factory that manufactures and processes various non-main semiconductors, entered into a contract for the processing of semiconductor chips with the processing company, entered into such contract with the processing company for semiconductor chips without compensation, brought them into the bonded factory, and produced semiconductor chips (hereinafter referred to as "sp goods") through the fashion processing process, and filed an import declaration with the applicant corporation as a taxpayer at the time of filing the import declaration from February 20, 2008 to May 15, 2008, and filed an import declaration with the head of the OO-O (O-O) and 72 other related goods (the semiconductor I.C, No. 8542.31, No. 8542, No. 31, No. 00, value-added tax, and 10% of value-added tax). The head of the OO accepted the declaration.
B. Since then, the head of the OOO (hereinafter “Disposition Agency”) conducted a comprehensive review on October 9, 2012 with respect to the applicant corporation. Around March 28, 2013, and April 17, 2013, the applicant corporation confirmed that the applicant filed a report on the import price of the key goods and omitted declaration of the wafer price to be included in the dutiable value, and notified the applicant corporation of the correction and notification of the total amount of the value-added OO and the value-added tax OO and the additional tax OO.
C. The applicant filed an appeal on June 25, 2013.
2. Opinion of the requesting corporation and the disposition agency;
A. The claimant corporation's assertion
(1) The claimant corporation is a bonded factory operator that manufactures various non-semiconductors. It is a company that concludes a contract for discretionary processing with a domestic commission company and manufactures and supplies the controversial goods by mixing the main raw materials such as waferferers imported from a foreign country, i.e., e., g., e., g., f., c., c., c. c. c. s. f. c. f. c. f. f. f. f. f. f. f. f. f. f. f. f. f. f. f. f. f. f. f. f. f. f. f. f. f. f. f. f. f. f. f. f. f. f. f. f. f. f. f. f. f. f. f. f. f. f. f. f. f. f. f. f. f. f. f. f. f. f. f. f. f. f. f. f. f. f. f. f. f. f. f.
(2) AEO (a firm certified as an excellent firm for export and import safety management) was well aware of the fact that the applicant company was a company that was supplied with price-free waferers by a contracting processing company and manufactured the key goods, and then sold them to domestic commissioning companies or end-user through exportation and importation. Such transaction structure was well aware of the AEO (a firm certified as an excellent firm for export and import safety management) and the office of office that granted a license for a bonded factory, and it was well known that the price of waferers supplied without compensation at the time of the import of the key goods was not included in the import price of the key goods. At the Korea Customs Service’s accreditation, the applicant company was fully aware of this issue while examining the compliance with the laws and regulations, internal control system, financial soundness, stability management, etc. of the applicant company at the time of AEO accreditation, and thus, it was justifiable for the applicant company to grant AEO accreditation on September 15, 201 to the effect that it constitutes a violation of the public interest and good faith principle.
(3) Since this case’s transaction constitutes a sale for export to Korea and the applicant corporation was paid only the actual sales price after consultation with the actual domestic buyers and the pertinent industry taking into account the reality of the pertinent industry, the actual transaction price is consistent with the actual transaction price. Since the applicant corporation, other than the truster who provided wafers without compensation, imported as a purchaser and the customs clearance for the key goods, it cannot be added as production costs. Ultimately, since the dutiable value of the key goods conforms to the actual payment method under Article 30(1) of the Customs Act (hereinafter “1 method”), the determination method of dutiable value under Article 35 of the Customs Act (hereinafter “6 method”) should be excluded, and the determination method of dutiable value-added tax should not be applied in light of the fact-finding and customs practice of the pertinent transaction, and thus, it is unreasonable to determine the dutiable value of the pertinent goods at a different time by stipulating that it is difficult to apply the new method of sale without consideration, such as the de facto change in the customs value-added tax method and method stipulated in Articles 31 through 6(6).
(4) Although the General Customs Clearance Regulations are applied mutatis mutandis to goods brought into a bonded factory under the Customs Act, they shall be applied to general cases. It shall be recognized that a person does not neglect his/her obligations unless there are special circumstances, such as transactions in which the price of the wafer supplied wafers is unknown, and transactions difficult to determine the tax base under the Customs Act and the Value-Added Tax Act. Moreover, after the applicant is transferred to the OO group as a foreign-invested enterprise, there is no distribution of profits, and there is no continued growth by re-investment in the Republic of Korea. It shall be an exemplary enterprise that has increased in the number of revenues from the domestic factory. It shall be considered that there is no possibility that additional taxes will be refunded by the National Tax Service to the extent that there is no risk that additional taxes would be purchased by the OOO or the OO's increase in the number of new factory until 2020. It shall be considered that there is a lack of risk that additional taxes would have to be purchased by the 250 new sales in the bonded factory.
(b) Opinions of disposition agencies;
(1) As a person operating a bonded factory, the applicant corporation selected a product taxation method under Article 188 of the Customs Act while manufacturing, processing, and importing various non-mefics of semiconductors, combining waferers supplied without compensation by a truster and foreign countries. Examining the product taxation method under Article 188 of the Customs Act, goods mixed with domestic and foreign goods in a bonded factory fall under “foreign goods” under Article 2 subparag. 4 of the Customs Act until an import declaration is accepted as “goods arriving in Korea from a foreign country”, and goods shipped into Korea after the import declaration by the applicant corporation constitutes “import” under Article 2 subparag. 1 of the Customs Act, and thus, the total amount of the goods are subject to customs duties. Accordingly, the tax base for the goods at issue falls under the category of “import” under Article 30 through 35 of the Customs Act, and the goods supplied by the truster and the importer who supplied the goods to the Republic of Korea without compensation after being supplied with goods by the truster and the importer who supplied the goods to the buyer is not subject to customs duty imposition of the goods.
(2) In addition, when goods manufactured and processed in a bonded factory are combined with foreign goods in the Republic of Korea after filing an import declaration, the value-added tax is imposed pursuant to Article 8 of the Value-Added Tax Act. Under Article 13 of the Value-Added Tax Act, the tax base of value-added tax is calculated by adding customs duties, etc. to the dutiable value of the goods. The "import goods" under the Value-Added Tax Act and "imported goods" under the Customs Act are the same subject of taxation. If the applicant corporation files an application for product taxation under Article 188 of the Customs Act, domestic goods combined with the disputed goods are also subject to value-added tax. In this case, considering the characteristics of the bonded factory, there are different ways to impose value-added tax in the product taxation method, customs duties are imposed only on foreign goods among the imported goods and the subsequent value-added tax is levied only on foreign goods, and thus, the input tax base of the applicant corporation should be deemed unreasonable to impose value-added tax on the imported goods and the input tax base of the domestic goods supplied by the applicant.
(3) AEO’s official approval refers to cases where there is no violation or disqualification of relevant laws and regulations, financial soundness is good, and self-compliance with autonomous laws and regulations related to export and import activities, and it is not an appropriate determination of the filing price for individual import declaration. AEO’s determination of the appropriateness of the filing price for individual import declaration is conducted by a comprehensive examination conducted by an enterprise approved by AEO, such as this case. Therefore, it cannot be deemed that there was an explicit or implied declaration of non-taxation for this case at the time of the filing corporation’s approval, and it is reasonable to find and notify the applicant corporation of the omission of the filing corporation’s import declaration at the time of the filing corporation’s comprehensive examination of AEO’s import declaration in this case, and thus, it is not reasonable to hold the applicant corporation’s assertion that the filing corporation constitutes retroactive taxation. Moreover, it is not reasonable to have determined the method of tax exemption because it is not possible to report only raw materials imported from a foreign country as the dutiable value of the domestic materials supplied by the entrusting corporation without compensation.
3. Hearing and determination
(a) Points in dispute;
(1) Whether value-added tax may be imposed on the ICT that has been manufactured in a bonded factory after being supplied with wafers without compensation by the entrusting corporation when bringing in the bonded factory.
(2) Appropriateness of the imposition of additional tax
(b) Related statutes;
(1) Customs Act;
The definitions of terms used in this Act shall be as follows:
1. The term "import" means shipping foreign goods into the Republic of Korea (including any foreign goods shipped from the bonded area in cases of those passing through the bonded area) or consuming and using them (including the consumption and use of foreign goods within the means of transportation, but excluding the consumption and use of foreign goods falling under any of subparagraphs of Article 239) in the Republic of
4. The term "foreign goods" means any of the following goods:
(a) Goods which arrive in Korea from any foreign country before an import declaration thereon under Article 241 (1) is accepted;
Article 4 (Imposition and Collection of Local Taxes, etc.) (1) With respect to the imposition, collection, refund and disposal of value-added tax, local consumption tax, individual consumption tax, liquor tax, education tax, traffic, energy, environment tax and special rural development tax (hereinafter referred to as "in-house national taxes, etc.") imposed and collected by the head of a customs office on imported goods, but including additional dues, additional taxes and disposition fees for arrears such as internal taxes, etc., the provisions of this Act shall take precedence over the provisions of this Act (hereinafter referred to as "paragraph (2)").
Article 30 (Principles of Determination of Dutiable Value) (1) The dutiable value of imported goods shall be the transaction price adjusted by adding up the following amounts to the price actually paid or payable by a vendee of goods sold to be exported to Korea: Provided, That the addition of the following amounts shall be based on objective and numerical data, and if such data are unavailable, the dutiable value shall be determined using the methods provided for in Articles 31 through 35 instead of using the methods provided for in this Article:
3. When a vendee supplies, directly or indirectly, goods and services prescribed by Presidential Decree, free of charge or at a reduced price, for the production of the relevant goods and export transaction thereof, the price or the difference in the reduced price;
(1) When the head of a customs office collects a shortage of customs duties pursuant to Article 38-3 (1) or (3), he/she shall collect a penalty tax by adding up the following amounts: Provided, That this shall not apply to cases prescribed by Presidential Decree, such as where a duty return was filed on the basis of a provisional dutiable value return and the amount of customs
In the event that any work is performed using foreign goods, foreign goods and domestic goods as raw materials or materials under Article 188, the goods accruing therefrom shall be deemed goods arriving in Korea from any foreign country: Provided, That in the event that the foreign goods and domestic goods are mixed with other goods after obtaining approval therefor from the head of a customs office as prescribed by Presidential Decree, the goods equivalent to the quantity or value of the relevant foreign goods
(2) Enforcement Decree of the Customs Act
Article 39 (Additional Tax) (2) (proviso) (1) of the Act shall be as follows in the event that no additional tax is imposed pursuant to the provisions of the proviso of Article 42 (1) of the Act:
5. Where there is any justifiable reason for the taxpayer for a shortage, etc. of the returned and paid tax amount.
(3) Value-Added Tax Act;
Article 1 (Taxable Objects) (1) Value-added Tax shall be imposed on the following transactions:
(b) Import of goods;
Article 8 (Import of Goods) The import of goods shall be those brought into the Republic of Korea (if goods pass through a bonded area, those brought into the bonded area) any of the following goods:
1. Goods which come into Korea from a foreign country;
Article 13 (Tax Base) (4) The tax base for the import of goods shall be the aggregate amount of customs duties, customs duties, individual consumption tax and individual consumption tax.
Article 23 (Collection) (3) The value-added tax on import of goods shall be collected by the customs collector in the same manner as customs duties are collected.
(4) Notice of determination of dutiable value of imported goods
Article 5-1 (Principles of Appraisal of Special Goods) (1) In principle, the determination of the dutiable value of goods referred to in Article 29 (3) of the Decree shall be applied in the order of Articles 1 through 6.
(2) The provisions of each subparagraph of Article 29 (1) of the Decree shall apply to the methods specified in the preceding paragraph, but the methods specified in Articles 5-2 through 5-11 shall apply where it is impracticable or impracticable to apply such methods.
(1) The dutiable value of goods shipped into a bonded factory into the Republic of Korea pursuant to the main sentence of Article 188 of the Act shall be determined by the methods prescribed in Articles 30 through 35 (Method of 1 through 6) of the Act.
(2) The dutiable value of goods manufactured with approval for mixing domestic and foreign goods pursuant to the proviso to Article 188 of the Act shall be the price determined pursuant to paragraph (1) 】 Foreign goods price (foreign goods + domestic goods price) 】 and the price of foreign and domestic goods shall be determined by the following methods:
1. The price of foreign goods used in the manufacture shall be determined by the method as prescribed in Articles 30 through 35 of the Act;
2. The price of domestic goods used for manufacture shall be the price purchased in the relevant bonded factory: Provided, That in cases where the buyer and the seller have special relations provided for in each subparagraph of Article 23 (1) of the Decree or there is a fact that they have provided production support provided for in each subparagraph of Article 18 of the Decree, the domestic sale price (the domestic sale price in the transaction stage to which the relevant bonded factory belongs) of the goods identical or similar
3. The prices referred to in subparagraphs 1 and 2 shall be confirmed when a report on use is filed in accordance with Article 186 (1) of the Act, and the prices in Korean won shall be determined respectively.
C. Facts and determination
(1) The applicant corporation, as an operator of a bonded factory in the OOO area, performs the business of creating semiconductor chips on behalf of an enterprise without semiconductor plant on the basis of circuit data designed by another person among semiconductors, which provides various semiconductors such as ICT, medical and industrial licenses, and radio communication expansion equipment, as its main customers. The applicant corporation performs the business of creating semiconductor chips on the basis of circuit data designed by another person among semiconductors. The principal customer is the OO, etc.; the applicant corporation is supplied with wafers free of charge from the entrusting enterprise under the ICP processing contract with such entrusting enterprise and the ICP processing enterprise, mixed with auxiliary raw materials imported from a foreign country, combined with the ICP (the ICP No. 8542.31-0%, and 10% of the value of raw materials imported from the foreign country, and then supplied them to the entrusting enterprise. The applicant corporation manufactures the imported goods at the time of filing an import declaration on the bonded factory with the applicant corporation 200 OM 208.
(2) Where goods are imported from a foreign country to Korea and brought them into Korea, value-added tax is imposed pursuant to Articles 1 and 8 of the Value-Added Tax Act. Where goods are imported by mixing domestic and foreign raw materials in a bonded factory, such goods manufactured pursuant to Article 188 of the Customs Act shall be deemed to arrive in Korea from foreign countries. On January 24, 2002, the Korea Customs Service provides that even if the operator of a bonded factory in the status determined by the purchaser of the goods manufactured in the bonded factory files an import declaration as the taxpayer for export sale under Article 30(1) of the Customs Act, the first method is applicable if the operator of the bonded factory files an import declaration declaration as the taxpayer for the goods manufactured in the bonded factory and clear customs clearance, “the Guidelines for Assessment of Goods Manufactured in the bonded factory (the comprehensive examination 45720-35)” (the duty imposition of additional tax may be deemed to be sale in the bonded factory without any justifiable reason for the taxpayer to whom the duty to taxation was not imposed on the customs duty payer. On the other hand, the duty imposition of additional tax can be determined by the Act without justifiable reason.
(3) Comprehensively taking into account the above facts and relevant provisions:
According to Article 30(1) of the Customs Act, in cases where the claimant corporation conducts processing in a bonded factory the waferer that was provided without compensation by the truster under the contract for the processing with the truster, and then re-supplys the disputed goods to the truster, the claimant corporation does not sell the finished issues to the truster, but provides the truster with the discretionary processing services, and thus, it does not constitute export sales under Article 30(1) of the Customs Act. In addition, in cases where the customs value is determined by the six methods due to the lack of the two or five methods, it is reasonable to determine a reasonable price calculated by adding the cost of processing and waferer to the customs value of the bonded factory. Furthermore, the claimant corporation is a person who operates the bonded factory, who manufactures and processes the waferferferer and foreign goods brought into Korea without compensation by combining them with the waferer and foreign goods brought in by the truster, and selects the product taxation method under Article 188 of the Customs Act, which is completed by mixing them with the goods imported from the foreign country, and thus, it constitutes "foreign goods subject to taxation" under Article 2 subparag.
In the case of the issue ②, it is difficult for the requesting corporation to expect the requesting corporation to make accurate assessment of the price of the waferer, such as that the applicant corporation, who is in the position of the trustee, under the practice of the same industry that does not disclose the price of the waferer as trade secrets, is unable to expect the performance of the accurate assessment of the value of the waferer, because the kinds and specifications of the waferer are so diverse and the defect rate are different. The disposition of the waferer is also unreasonable to expect the requesting corporation to make accurate declaration of the waferer to the extent that it is confirmed upon request by the truster because it is impossible to confirm the waferer price due to impossibility of confirming the waferer price from the requesting corporation. The requesting corporation does not deal with the waferer's processing to the waferer and return the waferer's price, and it is reasonable to determine that the wafer price of the waferer's price is a false declaration of the waferer's price.
This case shall be decided as ordered in accordance with Article 131 of the Customs Act and Article 81 and Article 65 (1) 2 and 3 of the Framework Act on National Taxes because the petition for adjudication has some reasons as a result of the review.