Cho High Court Decision 2016Do2005 ( November 21, 2016)

The registration number of the person who is provided with the requisite entry of the tax invoice of this case shall not be written by mistake.

In addition, it is difficult to deem that the tax invoice to be entered in error by the supplier of each of the instant tax invoices, and if the content of the tax invoice to be entered is not true, it is not directly related to the principle of substantial taxation.

Article 17 (Payable Tax Amount)

2017Guhap55060

O Stock Companies

O Head of tax office

September 28, 2017

October 26, 2017

1. The plaintiff's claim is dismissed.

2. The costs of lawsuit shall be borne by the Plaintiff.

Cheong-gu Office

The Defendant’s imposition of the value-added tax o(including additional tax) on March 21, 2016 against the Plaintiff on March 21, 2016 shall be revoked.

1. Details of the disposition;

A. The Plaintiff is a corporation established by A (hereinafter referred to as “A”) through full investment in capital to conduct the acquisition and disposal of unused materials of the military, and the acquisition and disposal of disused materials of public and general enterprises.

B.O.O.O. A is entrusted by F with work, such as removal of O.O.O.O. A and disposal and sale of all materials, wastes, etc. generated from OO-dong O-type OO-type OO-type O-type O-type O-type O-type O-type O-type O-type O-type O-type O-type O-type O-type O-type O-typeO-typeO-typeO-typeO-typeO-typeO-typeO-type-typeO-type-type-type-type-type-type-type-type-type-type-type-type-type-type-type-type-type-type-type-type-type-type-type-type-type-type-type-type-type-type-type-type-type-type-type-type-type-type-type-type-type-type-type-type-of-

C. F issued each of the electronic tax invoices listed as “O.O.O. supplier A” and “O.O.O. supplier A” respectively (hereinafter collectively referred to as “each of the tax invoices of this case”).

D. The Plaintiff received each of the instant tax invoices from F during the second period of 2012, and reported and paid value-added tax by deducting each of the input tax amounts.

E. The Defendant confirmed that each of the tax invoices of this case that the Plaintiff reported from F was an electronic tax invoice issued by F as the recipient of A, and that this constitutes an “tax invoice different from the fact” and subsequently, issued O.O.O. on the ground that the input tax amount was deducted, and revised and notified O.O.O. (including additional tax) for the second period of value-added tax No. 2012 to the Plaintiff (hereinafter “instant disposition”).

F. The Plaintiff was dissatisfied with the instant disposition and filed an appeal with the Tax Tribunal, but O.O.O.O.O. was dismissed.

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

1) The formal contractor and purchaser of the instant contract participated in the process of negotiations and conclusion of contracts A and perform their duties as a contracting party, so the actual contractor and purchaser of the instant contract are the Plaintiff. Although each of the instant tax invoices stated as “A”, it was due to occupational mistake, and the Defendant could sufficiently confirm the fact that the party receiving the instant tax invoices are not A but the Plaintiff. Therefore, pursuant to the proviso of Article 17(2)2 of the former Value-Added Tax Act (amended by Act No. 11873, Jun. 7, 2013; hereinafter referred to as “former Value-Added Tax Act”), Article 60(2)2 of the Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 24359, Feb. 15, 2013; hereinafter referred to as “former Enforcement Decree of the Value-Added Tax Act”), the supply price stated in each of the instant tax invoices should be deducted from the output tax amount of the Plaintiff.

2) The transaction related to each of the instant tax invoices is deemed to have been concluded between A and F, and the actual transaction party is the Plaintiff. As such, the supply price stated in each of the instant tax invoices under the principle of substantial taxation should be deducted from the Plaintiff’s output tax amount.

B. Relevant statutes

It is as shown in the attached Form.

(c) Fact of recognition;

1) The Plaintiff reported that two copies of the tax invoices other than the electronic tax invoices (the paper tax invoices) were issued by F in return for the return of the 2nd value-added tax base in 2012, which became the total amount of supply OO and tax OO won, from F.

2) Each of the tax invoices of this case is written as registration number 'O-O-OOO', trade name 'O', 'name 'O-O', 'O-O', 'O-O building', 'O-dong 'O-O building', 'O-O', 'O-type 'O', 'O-type 'O', 'O-type 1' column 'O-type 'O', 'O-type 'O-dong', 'O-dong 'O-dong '.'

3) The main contents of the instant contract, etc. are as follows.

4) The representative of the plaintiff's business registration is o.O.O.O., the opening date of the business place is 'O.O.O.O.', the business registration number is 'O-O-O', 'O-O', 'O-O' in the type of the business, 'string, etc.', 'O-O' in the type of the business, 'string, etc.', 'OO' in the case of A' (the former representative is o.O., 'O.,' in the case of the opening date, 'O.O.,' in the case of the business registration, 'O.O.,' in the case of the place of business, 'O.O.,', 'O., in the case of the business, 'O.o.,', 'O.,' in the type of business, 'O.,' in the case of the type of business.

D. Determination

1) Relevant legal principles

Article 17 (2) 2 of the former Value-Added Tax Act provides that the whole or part of the matters to be entered under Article 16 (1) 1 through 4 (hereinafter referred to as "necessary entry items") are not entered or entered differently from the fact in the tax invoice issued shall not be deducted from the output tax amount. Article 16 (1) of the same Act provides that the business operator's registration number and name or title (title 1), the registration number (title 2), the price of supply and value-added tax (title 3), the date of preparation (title 4).

On the other hand, the main text of Article 17(2)2 of the former Value-Added Tax Act provides that input tax shall not be deducted in cases where all or part of the necessary entries of a tax invoice are entered differently from the facts, considering the fact that it is essential to mutually verify the input tax amount to be deducted by an entrepreneur at each transaction stage in each transaction stage under Article 17(1) of the former Value-Added Tax Act by comparing the input tax amount to the output tax amount to be collected by the former business operator at each transaction stage in each transaction stage by taxation period, and the legislative intent is to prepare a kind of sanctions to secure

(See Supreme Court Decision 2014Du35706 Decided February 18, 2016; Supreme Court Decision 2002Du4761 Decided December 11, 2003, etc.

2) Determination

A) Determination on the first argument

In full view of the following circumstances that are acknowledged as a whole by comprehensively taking account of the evidence and the purport of the entire pleadings as seen earlier, each of the instant tax invoices is erroneous in the registration number of the person who received the supply, which is a part of the requisite entries under Article 60(2)2 of the Enforcement Decree of the former Enforcement Decree, but cannot be deemed as a case where the fact of transaction is confirmed in view of other necessary entries or voluntary entries. Accordingly, the Plaintiff’s assertion on this part is without merit.

(1) If all or part of the requisite entry items of a tax invoice are entered differently from the fact, it is intended to prepare a kind of sanctions to secure the accuracy and truth of the tax invoice, which serves as the basis for the operation of the value-added tax system. Article 60(2)2 of the former Enforcement Decree of the Value-Added Tax Act provides that the input tax amount shall not be deducted in cases where the requisite entry items of the tax invoice are entered differently from the fact without the error, or where the fact of transaction is not verified in light of the fact, even if the requisite entry items of the tax invoice are entered differently from the fact, or where the transaction is confirmed

(2) However, in 2012, the Plaintiff reported that two copies of the tax invoices other than the electronic tax invoices were issued by F at the time of the scheduled return of value-added tax at the 2012, and that F issued the paper tax invoices to the Plaintiff, and there is no record that F issued the revised tax invoices to the Plaintiff (the Plaintiff requested the YF to issue the revised tax invoices on November 201, 201, but rejected the request). It is difficult to view that F issued the tax invoices to the Plaintiff by mistake.

(3) As the instant contract contains the name, address, and representative of A as the contractor, it is difficult to deem the F to have written A by mistake despite the fact that the contractor and the purchaser were the Plaintiff.

(4) In addition, the "person who receives each of the tax invoices of this case" includes the registration number, trade name (name of a legal entity), name, place of business, address, type of business, and category A. On the other hand, there are no grounds to know that the person receiving the tax invoices of this case is the plaintiff even if other matters are stated.

(5) In relation to the instant contract, the Plaintiff delivered F a request for the conclusion of a free contract and the intent to participate in the bid in the name of the Plaintiff. The bid bond was also paid to F after concluding an understanding and subcontract with C, which is the actual contractor, based on the premise of the instant contract, and the construction cost received from C was paid. In full view of the fact that the working staff of the contractor involved in the instant contract was the Plaintiff as the Plaintiff’s employee, the Plaintiff alleged that the entry of each of the instant tax invoices constitutes a case where the Plaintiff could have been known in light of the other entries. However, it is difficult to view that the understanding and subcontract, etc. entered into between the Plaintiff and C, as the supplier of each of the instant tax invoices, are not written between F, and that the registration number of the recipient of each of the instant tax invoices is erroneous merely because it is alleged by the Plaintiff.

B) Judgment on the second argument

However, Article 17(2)2 of the former Value-Added Tax Act, and Article 60(2)2 of the former Enforcement Decree of the Value-Added Tax Act do not intend to impose taxes on economic substance in the form of law, but rather, if the content of the tax invoice to be entered is not true, it would be unable to fulfill its function as an invoice for calculating the amount of tax payable under the Value-Added Tax Act, and as a result, if the tax invoice is entered differently in order to prevent the significant scambing of the basis of the value-added tax system, the input tax deduction for the relevant transaction is not allowed as a sanction method. Therefore, the above provisions do not directly relate to the principle of substantial taxation (see Constitutional Court Order 200HunBa50, 202HunBa56, Aug. 29, 2002). Accordingly, the Plaintiff’s assertion on this part is without merit.

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and it is so decided as per Disposition.