Cho Jae-2015-China-1519 (2015.05)

The input tax amount on the false tax invoice shall not be deducted, and the burden of proof for the fruits of duty on the buyer shall be the purchaser.

The input tax amount on the false tax invoice shall not be deducted, and the person who claims the deduction and refund of the input tax amount shall prove that the person who claims the deduction and refund of the input tax amount.

Article 39 of the Value-Added Tax Act

2015Guhap68247 Revocation of Disposition of Imposition of Value-Added Tax

AA

Head of △ District Office

June 28, 2016

August 9, 2016

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 value-added tax of KRW 00,00,000 against the Plaintiff on August 11, 2014 shall be revoked.

1. Details of the disposition;

A. From December 15, 1998, the Plaintiff is an individual entrepreneur who runs a non-ferrous metal wholesale and retail business with the trade name of ○○○○○ Dong 1200-○○, “W metal” from ○○○, 1998.

B. In the second taxable period of value-added tax in 2013, the Plaintiff received 12 copies of tax invoices equivalent to 00,000,000 won (hereinafter “each of the instant tax invoices”) from GGG Co., Ltd. (the representative director ParkJ, the business operator’s registration number ○○-○○○○○○○○○○, hereinafter “GGGG”), and reported and paid the value-added tax by deducting the input tax amount according to each of the instant tax invoices from the output tax amount at the time of filing the value-added tax return.

C. However, as a result of the investigation into GGG, etc., the Defendant determined that the GGG was merely the data and that the supply of the non-ferrous to the Plaintiff was an unsound company, and on August 18, 2014, the Defendant deducted the input tax amount pursuant to each of the instant tax invoices on the grounds that each of the instant tax invoices was different from the fact, and notified the Plaintiff of KRW 00,000,000 for value-added tax for the second period of 2013 (hereinafter “instant disposition”).

D. On November 11, 2014, the Plaintiff filed an objection to the Defendant, but the application was dismissed on April 22, 2016. On March 5, 2015, the Plaintiff filed a request for an inquiry with the Tax Tribunal, but the judgment dismissing the Plaintiff’s request was issued by the Tax Tribunal on June 5, 2015.

Facts that there is no dispute over recognition, Gap evidence 1, 2, Eul evidence 1, 8, the purport of the whole pleadings, and the purport of the whole pleadings.

2. Summary of the plaintiff's assertion

A. Since the Plaintiff was actually supplied with the Dong-dong from GG, each of the instant tax invoices.

No tax invoice shall be deemed a false tax invoice.

B. Even if each of the instant tax invoices falls under a false tax invoice, even if the supplier’s entry is false, the Plaintiff commenced the transaction after confirming that the GGGG was a normal business entity, such as verifying the Plaintiff’s business registration certificate, national tax payment certificate, copy of passbook, etc., and deposited the amount corresponding to the amount stated in each of the instant tax invoices into the account in the name of GGGG. Since the Plaintiff did not particularly collect the waste agreement purchased from the GGG from the Plaintiff compared to the normal unit price, the Plaintiff was unaware of the fact that the GGGG was not the actual supplier, and was not negligent.

3. Relevant statutes;

The entries in the attached Table-related statutes are as follows.

4. Determination on the legitimacy of the instant disposition

(a) Facts of recognition;

In full view of the entries and the purport of the whole pleadings in Gap's evidence 5, 11, 15, 26, 27, Eul evidence 9-1 through 6, Eul evidence 10, and Eul evidence 10, the following facts may be acknowledged:

1) GIST Co., Ltd. (business registration number: ○○-○○-○, and ○○○○, as seen below, merged with GGG as a separate company separate from the foregoing GGG, and terminated, as seen earlier; hereinafter “GGGGG prior to the merger” was established on December 2, 2005, and entered into an account on December 22, 2005, and entered into an office of GGY2, which was located in the business of GGY3, for the purpose of registration of defilating, high-, non-ferrous scrap metal retail business, such as mercury, kyel, mercury, mercury, kye, kye, lame, and telecommunication, and it was incorporated into the RGR, Inc., Ltd., on December 3, 2010. After that, RRR’s trade name was changed to “GGGG at the same location as that of the former GGGGGG, and its new YG 2GGGH’s.

2) From May 2013, at the time of the tax investigation, new KK stated that it dealt with closed-dong transactions at the GG Seoul branch located in the place of business of HHH, and that the said GG Seoul branch did not have a load station and did not have any facilities such as the valley, etc.

3) All of the tax invoices issued by the Plaintiff from May 2013 to August 2013 are issued by the Plaintiff. Purchase tax invoices and sales tax invoices issued by the Plaintiff were issued from May 2013 to August 2013. The purchase tax invoices and sales tax invoices issued by the Plaintiff were made on the same day as indicated below [Attachment], and the purchase and sales tax invoices were made on the same day, and some of the tax invoices were issued within two hours, and the time for the issuance of the purchase and sales tax invoices was earlier than

[Attachment]

Purchase Tax Invoice

Sales Tax Invoice

Date of Preparation

Customer

Amount of supply (kg)

Date of Preparation

Customer

Amount of supply (kg)

July 1, 2013 18:01

AAAA

00,000

July 1, 2013: 17:46

00,000

July 8, 2013 10:37

0,000

July 8, 2013 10:38

0,000

July 10, 2013: 15:49

00

July 10, 2013: 15:47

00

July 30, 2013 9:45

00,000

July 29, 2013 19:20

00,000

July 30, 2013 9:46

00,000

July 29, 2013 19:42

00,000

July 30, 2013 13:30

0,000

July 30, 2013: 13:27

0,000

4) According to the investigation conducted by the ○○ Regional Tax Office, “AAAAA”, which is a purchaser of each of the instant tax invoices, is a company having no ability to supply actual waste, such as the issuance of electronic tax invoices using the same computer as other two business operators, after registering its business operator on January 15, 2013, and then changing its place of business two times for about eight months until the closure of business on September 16, 2013. The place of business is a public room, there is no door-to-door, and it is established for the mass exhibition. There is no data related to high-/non-ferrous transactions, and the representative is insolvent, and the payment is made in the sales office.

5) On June 28, 2013, with GGG, the Plaintiff submitted a measurement verification certificate prepared by DGG, a certified business entity located in ○○○○○dong, as a result of the transaction on July 8, 2013, with respect to the transaction on July 28, 2013. Despite approximately 2 km in the same SGG, the Plaintiff and GGG had the total weight of the above transaction measured first and then the weight of the vehicle was measured. The Plaintiff submitted a measurement certificate prepared by the GG non-Iron Co., Ltd. located in the same business place as that of the GGG for the subsequent transaction on July 26, 2013. On the other hand, the Plaintiff received a certificate of DG measurement certification issued by DG from the purchasing entity located outside of the SGGG, as well as other purchasing entities.

6) The Plaintiff’s transfer of the closed debt amount to the account in the name of GG was immediately remitted to the AAAA, etc., the buyer of the GG, and the said money was returned again to the purchaser of HH rain metal, GG resources, W industry, and TT metal, and immediately withdrawn in cash.

7) The benefits received by GGG from the purchaser in the course of purchasing and selling from the purchaser to the seller, including the Plaintiff, shall be equal to KRW 00 per km in substitution, without any difference between the purchaser and the timing of purchase.

B. Whether each of the instant tax invoices constitutes a false tax invoice

1) Article 39(1)2 of the Value-Added Tax Act provides that input tax amounts shall not be deducted from the output tax amount in cases where the details of a tax invoice are different from the fact. Here, meaning that the contents of a tax invoice are different from the fact. In light of the purport of Article 14(1) of the Framework Act on National Taxes that provides that if the ownership of income, profit, calculation, act or transaction, which is subject to taxation, is the nominal title, and there is another person to whom it actually belongs, the person to whom it actually belongs shall be liable for tax payment and the other person to whom the tax invoice is applied, the requisite contents of the tax invoice are inconsistent with those of the person to whom the goods or service is actually supplied or supplied, regardless of the formal contents of the transaction contract, etc. prepared between the parties to the goods or service, (see, e.g., Supreme Court Decision

In addition, it cannot be readily concluded that the pertinent tax disposition was an unlawful disposition that failed to meet the taxation requirements unless the pertinent facts are proven that the facts at issue were not eligible in light of the empirical rule in the specific litigation process, although the burden of proving the facts of taxation requirements exists in a lawsuit seeking revocation of tax imposition, but if it is proved that the facts at issue were presumed to have been in conformity with the empirical rule in light of the empirical rule (see, e.g., Supreme Court Decision 2009Du6568, Sept. 24, 200

2) According to the following circumstances that can be recognized by comprehensively taking account of the above facts recognized and the evidence presented prior thereto, each of the instant tax invoices issued by the supplier of GGG as a person who actually supplied the closed Dong is difficult to recognize it as GGG as stated in each of the instant tax invoices, and thus, constitutes a tax invoice written differently from the facts.

(A) Major products handled by GGGG prior to the merger are non-ferrouss, such as nitrok, nitrok, lead, copper, aluminium, kinum, lambden, Rimbden, kin, and telecommunication lines, and does not include waste Dongs.

B) The GGG and AAAAA, its purchaser, are deemed to have no ability to operate a closed-dong wholesale and retail business in light of the career, corporate size, equipment, etc. as seen earlier.

C) In the case of normal transactions, the measurements shall be conducted in the upper and lower instances, and if necessary, an additional official measurement shall be conducted. In many cases, the transactions between the Plaintiff and the GGG have been conducted only with the overall official measurement. In the case of ordinary transactions, the Plaintiff measured the total weight before and after the upper end, and measured the total weight after the upper end. The measurement certificate submitted by the Plaintiff was conducted after the total weight was measured, and the later end of the vehicle was changed. In addition, the pictures of the trucked vehicle, which is an explanatory material, submitted by the Plaintiff, are merely those taken by the Plaintiff’s workplace, and there is no sign of or confirmation on the upper end of the GGGG. Accordingly, it is difficult to view that the closed end of the vehicle supplied by the Plaintiff, which was substituted by the business place of the GGGGG.

D) The closed loan money deposited from the Plaintiff to GG was immediately remitted to the purchaser, and the money transferred to the said purchaser was transferred to the previous purchaser immediately thereafter, and the aforementioned transferred money was fully withdrawn from cash immediately after the payment was made. However, it is difficult to readily understand that the business entity normally engaged in the business withdraws all the money deposited to the transaction account in cash at all times.

E) The purchase and sale of GGG was made on the same day, and the price was fully collected on the same day or the next day, and was made in such a way that advance payment was made at the time of the first transaction with the first transaction partner and the advance payment was received at the time of the first transaction with the first transaction partner. This seems to be a special transaction method arising from the fact that it was not a normal transaction with a normal

F) In ordinary closed-dong wholesale and retail, the transaction price is determined by the negotiation on the basis of the large enterprise purchase notice, and the profit ratio by item and by customer is frequently changed, but the profits that the GGG takes place in the transaction with the sales office such as the Plaintiff are fixed to KRW 50 per 1 kilogram. The GGG is the so-called data that it issues only the processed tax invoice without the actual closure consent in order to train closed-dong sales without the actual closure consent, and it appears that it received the said money in the transaction process.

G) Although GGGG and ParkJ, its representative director, were found to have been subject to a disposition of non-guilty on the grounds of lack of evidence against the charges of violating the Punishment of Tax Evaders Act, it is merely insufficient evidence to prove the facts constituting the crime of GGG and ParkJ, and administrative trials are not necessarily bound by the prosecution’s non-prosecution disposition, but are opposed by free evaluation of evidence.

C. Whether the Plaintiff is a bona fide and without fault

1) An entrepreneur who actually supplies a tax invoice and another supplier’s tax invoice are not aware of the fact that the supplier was unaware of the name of the tax invoice, and barring any special circumstance where the supplier was unaware of the fact that there was no negligence on the part of the supplier, the input tax amount cannot be deducted or refundable. The person who received the tax cannot be aware of the fact that the supplier was unaware of the fact that the supplier was not aware of the fact that there was no negligence on the part of the supplier, and the person who asserts the deduction or refund of the input tax amount (see, e.g., Supreme Court Decisions 89Nu2134, Oct. 24, 1989; 2002Du2

2) Comprehensively taking account of the following circumstances revealed throughout the facts admitted as above, it is reasonable to deem that the Plaintiff had a sufficient reason to suspect the other party as a disguised business operator in light of the facts revealed in the process of collecting data to determine whether the other party is a qualified business operator. Therefore, the evidence submitted by the Plaintiff alone is insufficient to acknowledge that the Plaintiff was negligent in not knowing that the name of each supplier of the instant tax invoice was different from that of the actual supplier, and there is no other evidence to

A) On December 15, 1998, the Plaintiff appears to have expertise in the distribution of the closed metal as a personal entrepreneur who runs a non-ferrous metal wholesale retail business. As such, the Plaintiff appears to have been well aware of the fact that the closed Dong is in a situation where it is insufficient to supply waste resources with high-priced waste resources, the structure and distribution route of the waste consent supply agreement, the transaction conditions in the form of transaction and the data, and the risks thereof.

B) From May 2013, the Plaintiff began the waste transport transaction with GGG. At the time, the Plaintiff did not directly visit the location of the place of business of GGG to confirm whether the waste transport exists, or undergo verification procedures, such as receiving on-site photographs, etc. before July 2013, the Plaintiff did not conduct a specific on-site investigation even though it was conducted only by an officially certified business entity, other than GGG, on-site photographs, etc.

C) The Plaintiff, who had no experience in the high- and non-ferrous-related industry prior to the transfer of newK in charge of the waste transport transaction in GGG, appears to have been able to immediately dissipate that newK was a person with no experience in the distribution of waste Dongs in an interview with new KG, and there seems to have been sufficient circumstances to suspect that the GGG was a disguised business operator.

D) The Plaintiff submitted the certificate of business registration, the entire certificate of corporate registration, the certificate of corporate seal impression, the certificate of national tax payment, and the certificate of corporate passbook issued by GGG prior to commencement of the transaction with GG. However, the business registration certificate is issued by the business operator to the head of the competent district tax office in order to identify the taxpayer of value-added tax, etc. and to secure taxation data, and is merely a certificate proving the registration of the business fact, and does not recognize that the certificate meets the qualification or requirements for operating the business (see, e.g., Supreme Court Decision 2003Do6934, Jul. 15, 2005). The national tax payment certificate is merely a document proving that there is no national tax in arrears, and merely a copy of the corporate passbook opened a deposit account in the name of GGGG, and it does not prove that the GGGGGG is equipped with human and physical facilities that can supply the actual closed operation.

D. Sub-committee

Therefore, the disposition of this case which deemed that each of the tax invoices of this case constitutes a false tax invoice is legitimate, and the plaintiff's assertion against this is without merit.

5. Conclusion

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