The instant tax invoice constitutes a false tax invoice.

In light of the fact that there are many circumstances that it is difficult to see that the instant tax invoice constitutes a false tax invoice in light of the fact that: (a) the customer only received the tax invoice without a real transaction; and (b) the customer has fabricated financial transactions to conceal it; and (c) it is difficult to regard the business form and organization to create a separate added value, or there are many circumstances that it is difficult to deem

Article 16 of the Value-Added Tax Act

2015Guhap10865 disposition of revocation of the imposition of value-added tax

AAAA Corporation

BB Director of the Tax Office

March 2, 2017

April 13, 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 disposition of imposition of value-added tax against the Plaintiff on February 3, 2014 (including additional tax; hereinafter the same shall apply), KRW 3,790,00 for the second period of February 2005, KRW 2,530,00 for the second period of February 2006, KRW 29,729,860 for the first period of January 2007, KRW 12,414,440 for the second period of February 2007, KRW 20,242,840 for the first period of January 2008, KRW 19,954,490 for the second period of February 2008, and KRW 305,760 for the first period of January 5, 2009.

1. Details of the disposition;

A. The Plaintiff is a corporation established on May 13, 200 for the purpose of developing online games and mobile games.

B. After conducting a tax investigation on the Plaintiff, the Defendant received purchase tax invoices of an amount equivalent to KRW 2.37 billion, even though the Plaintiff did not engage in real transactions from January 2005 to January 2009, and issued sales tax invoices of an amount equivalent to KRW 1.66 million (hereinafter “instant tax invoice”), and issued the sales tax invoices of an amount equivalent to KRW 1.66 million (hereinafter “instant tax invoice”). On February 3, 2014, the Defendant denied the output tax amount, denied the input tax amount, and issued a correction and notice of the value-added tax amount of KRW 176,872,690 (including additional tax) as listed below (hereinafter “instant disposition”).

C. The Plaintiff dissatisfied with the instant disposition and filed an objection on June 2, 2014, but was dismissed on July 16, 2014, and the Plaintiff filed an appeal with the Tax Tribunal on October 15, 2014, but was dismissed on May 18, 2015.

[Ground of recognition] Facts without dispute, Gap evidence 1 to 3, Eul evidence 1 to 4 (including each number; hereinafter the same shall apply) and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

Although the instant tax invoice was issued and received in accordance with the actual transaction, it is unlawful that the Defendant rendered the instant disposition by deeming all of the instant tax invoices as arising from the processing transaction.

B. Relevant statutes

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

(c) Fact of recognition;

1) 원고의 사업장은 설립 당시 서울 **구**동 ***-* ****빌딩이었다가 2002. 3. 7. 서울 @@구 @@동 @@빌딩, 2002. 9. 10. 서울 $$구 $$동 $$$$빌딩, 2009. 7. 31. 서울 %%구 %%동 %%빌딩 3층으로, 2010. 11. 15. 서울 OO구 OO동 OO호로 각 이전하였고, 원고는 2013. 11. 30. 직권폐업되었다.

2) From June 29, 2012 to August 27, 2013, the Defendant: (a) conducted a tax offense investigation against the Plaintiff (the first investigation of part of value-added tax was conducted; (b) was changed to an investigation related to trade order; and (c) was converted to an investigation into a tax offense investigation on August 2013; (b) deemed that the Plaintiff was aware that the transaction amount was the actual transaction method by which the Plaintiff received a false tax invoice only with 15 companies listed below (hereinafter referred to as “the instant transaction partner; and (c) the indication of each company is omitted); and (d) received a false tax invoice without any real transaction, and immediately returned the transaction amount. The details of each transaction party and each taxable period identified by the Defendant are as listed below.

Table Omission of the Table

3) As a result of the tax investigation, it was confirmed that the Plaintiff and the instant transaction partner had been engaged in the capital movement in the following forms relating to the instant tax invoice transaction, and accordingly, the Defendant became final and conclusive as a processed transaction.

��CCCC 관련

- With respect to the first purchase (217 billion won) in 2005 and second sale (50 million won) in 2005, the amount that the Plaintiff paid toCC was transferred to the Plaintiff via DD and EE on the same day (the entire processing transaction).

��FFFF

- 2005년 1기부터 2009년 1기까지의 매입��매출[위 2)항 표 기재 각 금액]과 관련하여 원고가 FFFF에 이체한 것과 동일한 금액이 같은 날짜에 다른 거래처를 거쳐 다시 원고에게 이체되었다(전부 가공거래로 확정).

��GGGG

- 2006년 1기부터 2009년 1기까지의 매입��매출[위 2)항 표 기재 각 금액]과 관련하여 원고가 GGGG에 이체한 것과 동일한 금액이 같은 날짜에 다른 거래처를 거쳐 다시 원고에게 이체되었다(전부 가공거래로 확정).

��HHHH

- With respect to the first sale (70 million won) of 2006, KRW 66 million was repeatedly deposited and withdrawn on the same day in the form of “HH ? FFF ? HHH” (wholly finalized by full processing transactions).

- With respect to the second sale (130 million won) in 2006, KRW 333 million has been repeatedly deposited and withdrawn in the form of FFF ? I ? HH ? Plaintiff ? FFF, and other deposits have not been inquired of the details of the deposits, and even if the outstanding amount remains, there has not been any confirmation of any particular measure regarding the recovery of the outstanding amount (wholly confirmed as a total processing transaction).

- With respect to the first sale (145 million won) in 2007, KRW 110 million on April 24, 2007 was repeatedly deposited in the form of the JJJJ ? Plaintiff ? JHH ? JJ ? The entire process transaction is finalized).

- With respect to the second sale (82.5 million won) in 2007, HH on March 21, 2008, an amount equivalent to KRW 120 million that HH paid to the Plaintiff was re-transfered to HH through repeated entry and withdrawal with other business partners (wholly determined by full processing transactions).

��KKKK

- With respect to the second sale (76 million won) in 2005, KRW 28.6 million has been repeatedly deposited and withdrawn on the same day in the form of “Plaintiff ? LLL ? KKK ? Plaintiff ?” and KRW 52.8 million has been repeatedly deposited and withdrawn on the same day in the form of “Plaintiff ? MMM ? NNNN NN ? KK KK ? Plaintiff.”

(with full processing transaction).

- With respect to the first sale of January 2006 (64 million won), KRW 22 million paid by the Plaintiff to the PPP on June 28, 2006, and KRW 33 million paid on July 3, 2006, were transferred to KK on the same day, and the Plaintiff re-transfered to the Plaintiff. On November 29, 2006, the Plaintiff transferred KRW 11 million paid to GGG on the same day, and was transferred to KK on the same day (wholly confirmed as a full processing transaction).

- 2006년 2기분 매출(1억 2,700만 원)과 관련하여 4,300만 원이 원고, QQQQ, FFFF, EEEE, KKKK 간에 동일 날짜에 반복적으로 입출금되었다(4,300만원 가공거래로 확정).

- With respect to the second-term sale (13 million won) in 2007, KRW 44 million was repeatedly deposited and withdrawn between the Plaintiff, III I, GG, VV, VV, FF, and KK (determined to KRW 44 million).

- With respect to the first installment of January 2008 (74 million won), KRW 43 million has been repeatedly deposited and withdrawn on the same day between many business partners (determined to KRW 43 million).

- With respect to the two-term purchase (52 million won) and sale (36 million won) in 2008, KRW 15 million was deposited and withdrawn repeatedly on the same day in the form of “RR ? GGG ? KK ?”, KRW 17 million, and “KK ?” in the form of “R ?GGG ? 17 million,” and there was no particular measure to recover the outstanding amount, even though it was not inquired of the details of deposits, and there was no particular measure to recover the outstanding amount (wholly confirmed as a processing transaction).

��IIII

- With respect to the first sale in 2006 (114 million won), 5 million won has been repeatedly deposited and withdrawn on the same day between the Plaintiff, GGFF, FF, DD, KK, and I, and 27.5 million won in relation to the purchase (52 million won) was repeatedly deposited and withdrawn on the same day between the Plaintiff, III, III, FF, and GGG on the same day (which became final as KRW 55 million in the sale, and 27.5 million in the purchase).

- With respect to the first purchase of the year 2007 (55 million won), KRW 25 million has been repeatedly deposited and withdrawn between the Plaintiff, III, GG, and KK (25 million Won).

- With respect to the second purchase (98 million won) in 2007, KRW 19.5 million was repeatedly deposited and withdrawn between the Plaintiff, III, and HH, etc. (determined to KRW 19.5 million).

��JJJJ - 2007년 1기 매입(1억 원)과 관련하여 1억 1,000만 원이 「JJJJ → HHHH → 원고 → JJJJ」 형태로 반복적으로 입출금되었다(전부 가공거래로 확정).

��EEEE

- With respect to the second sale (124 million won) in 2005, the entrance and exit amount of KRW 75 million was repeated between the Plaintiff, LLL, and EE from November 8, 2005 to November 10, 2005. From February 14, 2006 to February 17, 2006, the entrance and exit amount of KRW 55 million was repeated between the Plaintiff, FF, and EE (wholly finalized).

- With respect to the first sale (43 million won) in 2006, KRW 34.1 million has been repeatedly deposited and withdrawn between the Plaintiff and EEE (wholly confirmed as all processed transactions).

- With respect to the second sale (138 million won) in 2007, the details of deposits in addition to the details of deposits in KRW 66.3 million have not been inquired, and even if the outstanding amount remains, it has not been verified that any particular measure related to the recovery of the outstanding amount has not been confirmed (determined to KRW 71.7 million).

��TTTT

- With respect to the second purchase (62 million won) in 2005, the Plaintiff transferred 68.2 million won, which was transferred to TT on November 8, 2005 and on the 15th of the same month, to the Plaintiff via FF, again, via the FF (wholly confirmed as all processing transactions).

��DDDD

- With respect to the second sale (60 million won) in 2005, the Plaintiff transferred 55 million won, paid toCC on July 22, 2005 and August 11, 2005, to the Plaintiff via DD (wholly confirmed processing transaction).

- On April 26, 2006, with respect to the first purchase (60 million won) in January 2006, KRW 33 million transferred by the Plaintiff to DD on April 26, 2006, through KK and I III, re-transfered to the Plaintiff via KK and I III (the confirmation of the original processing transaction) (33 million won).

- The amount relating to the second sale (65 million won) and second sale (20 million won) in 2006 was immediately deposited in cash after cash transfer, and the amount relating to the second sale (41 million won) in 2006 was confirmed to have been immediately deposited in cash after cash transfer (total processed transaction confirmation).

��LLLL

- With respect to the second purchase in 2005 (192 million won) from November 8, 2005 to November 10, 2005, the amount of KRW 75 million has been repeatedly deposited and withdrawn between the Plaintiff, LLL, and EE from November 10, 2005 and the Plaintiff, LLL, FF, and UUU from October 28, 2005 to November 3, 2005 (wholly processed transactions).

��UUUU

- With respect to the second sale (80 million won) in 2005, the amount of deposit and withdrawal was repeated between the Plaintiff, LLL, FF and UU during the period from October 28, 2005 to November 3, 2005 (the confirmation of KRW 65 million).

��VVVV

- With respect to the second purchase (70 million won) in 2007, the Plaintiff transferred KRW 20 million to VV on January 15, 2008 to the Plaintiff via FF and KK, and the Plaintiff transferred KRW 30 million to VV on February 18, 2008 and the 19th day of the same month to the Plaintiff via FFF, KK, and EE (determined to KRW 50 million).

��MMMM

- With respect to the second purchase (50 million won) in 2005, 52.8 million won deposited from KK on February 8, 2006 was repeatedly deposited in the form of the Plaintiff ? MM ? NNN ? KK ? Plaintiff ? KK ? Plaintiff 2.8 million won was repeatedly deposited in the form of the Plaintiff’s “WM ? NN NN ?” (on full basis of a processing transaction).

��PPPP

- With respect to the first purchase in 2006 (68 million won), KRW 22 million paid by the Plaintiff to the PPP on June 28, 2006, and KRW 33 million paid on July 3, 2006, were transferred to KK on the same day, and re-transfered to the Plaintiff (determined to KRW 55 million).

[Ground of recognition] Facts without dispute, Gap evidence 1, 2, Eul evidence 1 to 4, the purport of the whole pleadings

D. Determination

1) Article 1(1)1 of the former Value-Added Tax Act (amended by Act No. 9915, Jan. 1, 2010) provides that “the supply of goods as a taxable object of value-added tax” and Article 6(1) provides that “the supply of goods shall be the delivery or transfer of goods on all contractual or legal grounds.” In light of the characteristics of value-added tax as a multi-stage transaction tax, “delivery or transfer” under Article 6(1) of the Value-Added Tax Act includes all acts of causing the transfer of the right to use or consume the goods, regardless of the actual profits gained, regardless of whether the specific transaction is a nominal transaction without actual delivery or transfer of the goods, it shall be determined individually and specifically (see, e.g., Supreme Court Decision 201Du8360, Nov. 15, 2012).

On the other hand, in a lawsuit seeking revocation of the disposition imposing tax, the burden of proving the facts of taxation requirements shall be deemed to be the imposing authority. However, if it is revealed that the facts of taxation requirements are presumed in light of the empirical rule in the specific litigation process, it cannot be readily concluded that the other party is an illegal disposition that fails to meet the taxation requirements, unless the other party proves that the facts at issue are not eligible for application of the empirical rule (see, e.g., Supreme Court Decision 2002Du6392, Nov. 13, 2002).

2) Comprehensively taking account of the following circumstances acknowledged by the health team, Eul's statement as to the instant tax invoice Nos. 4 through 11 and the purport of the entire pleadings, it is reasonable to deem that the instant tax invoice was issued without a real transaction. Thus, the instant disposition that the Defendant recognized the instant tax invoice as arising from a processing transaction is lawful, and the Plaintiff's above assertion on a different premise is without merit.

① The Plaintiff submitted a written contract, content of development, confirmation of inspection, etc. (Evidence A to 10, 13 through 188) with respect to the instant tax invoice as real transaction data. However, each of the above contracts is mainly related to the development of programs, etc., and it is difficult to grasp the contents of specific services, etc. solely with the content of the contract, which is too abstract and consistent with the content of the contract itself, and the content of the development and the confirmation of inspection are neither abstract nor abstract nor abstract, and each of the above documents alone is difficult to deem that the Plaintiff actually concluded and performed the contract by transaction party asserted by the Plaintiff. In addition, the Plaintiff did not submit all material transaction data related to the FFF, VV, UUUU, and TT among the instant transaction parties, and did not submit any material transaction data related to the instant transaction with theCC and GGG.

② In January 2007, the Plaintiff submitted the purchase tax invoice received from the JJ as well as the purchase tax invoice received from the JJ to the actual transaction, and accordingly submitted a written agreement concluded with the JJ as relevant material. However, in the course of the investigation, the payment tax invoice issued to the Plaintiff during the first period of 2007 and the purchase tax invoice received from HH from the Plaintiff during the first period of 2007 stated to the effect that it would remain due to the revolving transaction, and that it would remain due to the revolving transaction.

③ As seen earlier, as a result of the tax investigation into the Plaintiff and the instant transaction partner, it was confirmed that the circulation transaction of abnormal funds between the Plaintiff and the instant transaction partner was conducted repeatedly, such as (i) a transfer to the Plaintiff via another transaction partner on the same day or at the same time as, or similar to, the amount paid by the Plaintiff to the specific transaction partner at the same time or near, or (ii) a transfer to, the said transaction partner at the same time; and (iii) a transfer of the said money to the said transaction partner before the Plaintiff. However, even considering the unique nature of the IT industry asserted by the Plaintiff, this constitutes a flow of abnormal funds that is distinct from the general transaction practices, and (ii) the Defendant appears to be to pretend to make a real transaction through the verification of financial evidence regarding the processed transaction, and (iii) the Defendant became final and conclusive as a processing transaction by selecting only the transaction that was confirmed by the revolving of abnormal funds and the transaction for which any particular measure

④ As indicated in the table below, a large number of the instant tax invoices were issued prior to the time of supply under the contract by transaction partner and the certificate of inspection submitted by the Plaintiff, and the issuance of the tax invoice prior to the supply of the service is no exception, and there is no particular circumstance for the Plaintiff and the instant transaction partner to issue the tax invoice prior to the time of supply of the service (or, as it was issued prior to the taxable period to which the time of supply belongs, even if the actual transaction occurred, it is not subject to the input tax deduction).

⑤ In the process, most of the transaction parties of the instant case were accused of, or investigated into, data related to the issuance and receipt of a processed tax invoice. During that process, the transaction with the Plaintiff was deemed to be a processing transaction and thus the assessment of value-added tax was made in the case ofCC, III, JJ, JJ, EE, or LL among the transaction parties of the instant case. The said transaction parties did not proceed with any objection procedure.

6. In addition, there are many circumstances where it is difficult to regard the business type and organization to the extent that the transaction partner of the instant case may create a separate added value independently, or where it is difficult for the Plaintiff and the transaction partner of the instant case to regard the real transaction as having been engaged in the real transaction.

The actual operator of the FFF of the Do governor was confirmed by WW. WW is the spouse of the Plaintiff’s representative SS, and FF was not verified at all as a result of the tax investigation, and even after reporting the closure of the business, it was confirmed that the Plaintiff’s employee was prepared and submitted the document of tax invoice and opposite to the Plaintiff’s tax invoice among the actual transaction data related to the FF submitted by the Plaintiff at the time of the tax investigation (in relation to this, the Plaintiff asserted that it is a simple occupational error, but it is difficult to understand that the Plaintiff erroneously stated the party, which is an important content of the contract, by mistake).

㉡ GGGG의 대표자 성OO은 원고의 대표자 SSS의 동생이고, GGGG는 2006. 6. 2. 서울 $$구 $$동 $$$$빌딩 4층으로 이전하였는데, 이는 당시 원고의 사업장이 있던 장소이며, 세무조사 결과 GGGG가 텔레뱅킹으로 이체한 자금의 이체 실행자 전화번호 및 인터넷 뱅킹으로 이체한 자금의 이체 실행 컴퓨터 IP가 원고의 것으로 확인되었다.

B. During the tax investigation conducted against the Plaintiff, the Defendant requested the Plaintiff’s representative SS to submit and visit explanatory materials to verify the facts, but the SS delayed and rejected the submission of explanatory materials, and did not contact the investigator from the date of the investigation to the date of the investigation, which was committed on the date of the visit due to reasons such as business trip, disease, etc.

7) According to the statements in Gap evidence Nos. 4, 11, 12, and 189 through 192, it is recognized that the Seoul Central District Public Prosecutor's Office rendered a non-prosecution disposition for the suspicion of violation of the Act on the Aggravated Punishment, etc. of Specific Crimes (Delivery, etc. of False Tax Invoice) by the representative of the plaintiff and its representative, SS, FF, WW, GGGG and its representative, and RR and HHH. However, the same value as the final and conclusive criminal judgment cannot be given to the prosecutor's non-prosecution decision, and the administrative judgment is not bound by the prosecutor's non-prosecution decision, but is opposed by the court with free trial based on evidence (see, e.g., Supreme Court Decision 9Du2314, Jun. 9, 200). In light of the above circumstances, it is difficult to deem that the pertinent tax invoice was genuine solely on the ground that such non-prosecution disposition was rendered.

3. Conclusion

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