Seoul Administrative Court 2010Guhap986 (2010.08)

early 209west3813 ( December 15, 2009)

The non-deduction of input tax amount is illegal because there is no negligence on the part of the person who was not aware of the fact of the name.

Even if the tax invoice is proved to be different from the actual supplier and the supplier on the tax invoice, the non-deduction of the input tax amount is unlawful, since it is not negligent due to the failure to know the name of the supplier as well as the negligence.

1. Revocation of a judgment of the first instance;

2. The Defendant’s disposition of imposition of value-added tax of KRW 14,170,490 on October 1, 2009 against the Plaintiff on October 1, 2009 shall be revoked.

3. All costs of the lawsuit shall be borne by the defendant.

The same shall apply to the order.

1. Details of the disposition;

A. [Return and payment of value-added tax for the first period of 2007] The Plaintiff is a business entity that ○○○○ ○○ ○○ ○○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○. The Plaintiff entered into a contract with the 1st taxable period of 2007, after deducting the input tax amount from the output tax amount on June 30, 207, and paid the value-added tax for the first period of 1st year of 2007.

B. [Notification of Defendant’s Correction and Notice of Value-Added Tax] Around September 2008, the head of the Geumcheon District Tax Office prepared a data-based investigation report stating that the tax invoice in the name of the non-party company appears to have been issued without a real transaction as a result of investigating the non-party company as a suspect of material facts. Accordingly, the Defendant deemed the tax invoice in the name of the non-party company as a processing tax invoice, and subsequently, on October 1, 2009, deducted the above input tax amount, and corrected and notified the Plaintiff of value-added tax amounting to 14,170,490 for the first period of 207 (hereinafter “instant disposition”).

[Reasons for Recognition: Gap, 2, 11, 13, 15, 24, Eul-1 to 3]

2. Relevant statutes;

3. Whether the disposition is lawful;

A. The parties' assertion

(1) The plaintiff's assertion

On May 2007, the Plaintiff entered into the instant construction contract with the agent of the non-party company. The YA completed the instant construction project while serving as the site manager of the non-party company.

The Plaintiff paid 77,80,000,000 won for the construction price to YellowA, and the YellowA issued and issued the instant tax invoice in the name of the non-party company to the Plaintiff. Therefore, the instant tax invoice is issued in the said ordinary transaction.

Even if the instant tax invoice is deemed to be a real transaction tax invoice, the Plaintiff did not know the disguised fact in the name of the tax invoice, and was not negligent on the part of the Plaintiff.

Ultimately, even though the value of supply stated in the tax invoice of this case should be deducted as the input tax amount, the Defendant’s disposition that did not deduct the input tax amount is unlawful.

(2) The defendant's assertion

The non-party company issued a processed tax invoice without actually running the business. The construction of this case was not the non-party company but the sulfurA executed by the non-party company. The issue of whether the tax invoice was issued after the construction of this case was completed, it is merely the issuance and delivery of the processed tax invoice in the name of the non-party company to the Plaintiff.

(b) Fact of recognition;

(1) Status of the non-party company

(A) On April 3, 2006, the non-party company was established for the purpose of integrating construction materials and retail business, manufacturing machinery parts, manufacturing and wholesale business, and related incidental business, etc. on July 11, 2007, added construction business and interior construction business to the purpose business, and it was ex officio on December 31, 2007.

(B) On May 2007, Yellow A had registered as an individual entrepreneur and engaged in the business of chairing, facility, landscaping planting, etc. However, it is difficult to conduct the business any longer under its status as a person with bad credit standing, and entered into an oral partnership agreement with the non-party company with the non-party company on July 11, 2007, and registered as a director on the corporate register of the non-party company as a director on July 2007.

(2) Conclusion of the instant construction contract

The YellowA entered into three cases of the instant popular water repair contract on behalf of the non-party company on behalf of the non-party company as follows.

(A) Contract date: on May 7, 2007, construction work details: Repair works, etc. of salt banks, sugar waters rooms, etc., and construction period: on May 7, 2007; on June 30, 2007; on June 30, 2007; on construction work price of KRW 50 million (excluding value-added tax)

(B) Date of contract: Results of construction on May 10, 2007; hereinafter referred to as the “FFFFFFFFFFFY : Removal and manufacture, etc., of the Red Sea Sea, the Waste Tank, the period of construction: May 10, 2007; the date of the contract at the time of June 30, 2007; the cost of construction: 24 million won (excluding value-added tax): May 25, 2007; the details of the project: the cleaning of the hot water tank and the period of construction: On May 25, 2007; - June 30, 2007; the cost of construction: 3.8 million won (excluding value-added tax).

(3) Payment of construction cost

(A) On May 7, 2007, the Plaintiff paid the construction price of this case in the amount of KRW 5 million, KRW 15 million on May 10, 2007, KRW 17 million on May 14, 2007, KRW 18,5 million on May 18, 2007, KRW 7 million on May 25, 2007, KRW 1.5 million on May 31, 2007, KRW 1.5 million, KRW 150,00 on May 31, 2007, KRW 1.50,000, KRW 376,00 on June 6, 2007, KRW 230,000 on June 12, 2007, KRW 37 million on June 17, 2007, KRW 6.7 million on June 2, 2007, KRW 37 million on June 17, 2007.

(B) After receiving the construction cost as above from the Plaintiff, the YellowA paid it as the instant construction cost, such as labor cost and material cost, and the material cost was approximately KRW 61,493,000, the total amount of which was about 79%.

(C) On July 27, 2007, the Plaintiff confirmed the fact that interior construction business, etc. was registered as a director in the corporate registry of the non-party company, and transferred KRW 7.8 million to the non-party company as the value-added tax on the construction price of the instant case.

(4) Issuance and issuance of the instant tax invoice

YellowA completed the instant construction, issued and issued the instant tax invoice in the name of the non-party company to the Plaintiff.

(5) Results of data research on the non-party company and confirmation of related criminal cases

(A) Around September 2008, the head of the Geumcheon District Tax Office investigated Non-Party Company on suspicion of violation of the Punishment of Tax Evaders Act. As a result, the non-Party Company issued sales tax invoices of KRW 115,690,000 to 18 business operators including the Plaintiff without supplying goods or services while it did not actually engage in the business during the 2nd taxable period of the Value-Added Tax in 2006 through 2007, and completed the investigation that the non-Party Company’s representative director, etc. accused of the violation of the Punishment of Tax Evaders Act.

(B) As a result of confirmation of the business place of the non-party company, the head of the Geumcheon Tax Office did not enter into a lease agreement with the non-party company on the ○○ △△-dong, 1659-21, which is the seat of the business office, and in relation to the tax invoice of this case, the Plaintiff paid the construction price in cash directly to the Yellow City, which is the construction manager, and transferred 7.8 million won equivalent to value-added tax to the non-party company, but the non-party company did not have the execution capacity and did not have the purchase performance related to

(C) The non-party company and its representative director appointedB, who actually supplied goods or services to many business partners, entered false information in the list of the total tax invoice, and submitted it while sentencing the value-added tax for the first period of 2007 on the list of the total tax invoice. The summary order was notified by the ○○nam District Court. The above summary order became final and conclusive around that time. The contents include the service of the Plaintiff as to the instant construction work.

[Grounds for Recognition: Evidence A to 26 Evidence A, Evidence B to 3 to 7, and Evidence A to YA and YellowCC of the first instance court

C. The actual business operator executing the instant construction

As seen earlier, the total amount of the construction cost of this case, excluding the value-added tax amount, was paid to sulfurA; the expenditure of the construction cost, including personnel expenses, was entirely processed by YellowA; YellowA required to act as a legitimate business entity due to bad credit standing; the construction business and interior construction business of the non-party company was added to the corporate register of the non-party company’s company’s construction business purpose; and yellowA’s name was recorded as a director around July 11, 2007 when the construction of this case was completed; yellowA had a career and ability to perform interior construction work like the instant project as a personal business entity; however, the non-party company or its representative director’s fixedB had no career and ability to perform such construction work; and in light of the fact that the non-party company or its representative director’s transactions were subject to criminal punishment for the issuance, etc. of the instant tax invoice, it is reasonable to deem the actual business entity that the construction of this case was not the non

Therefore, since the tax invoice of this case, which the service supplier of this case is the non-party company, is different from the facts, it cannot be subject to input tax deduction unless there are special circumstances otherwise.

D. Whether there was negligence by failure to know that the instant tax invoice was different from the fact

(1) In a case where the actual supplier of goods or services and the supplier on a tax invoice are different, the supplier may not be allowed to deduct or refund the input tax amount unless there is any special circumstance that there is no negligence on the part of the supplier in knowing the fact that the supplier was unaware of the nominal name of the tax invoice, and the fact that the supplier was not negligent in not knowing the fact that the supplier was unaware of the nominal name should be attested by the person who asserts the deduction or refund of the input tax amount (see, e.g., Supreme Court Decision 2002Du

(2) In the instant case, 1) Yellow City Co., Ltd. concluded the instant construction contract with Nonparty 1 at the time of Nonparty 7’s site manager, and then received construction expenses from the Plaintiff and disbursed the construction work normally. During that process, there is no controversy as to what the Plaintiff would have called Yellow City Co., Ltd. or who is the contractor, and 2) if the Plaintiff would have been aware of the fact that the actual contractor of the instant construction work would become a company under the name of Nonparty 7’s name, the Plaintiff would not have any economic benefits or special motive to conclude the contract. 3) The Plaintiff would not be deemed to have been aware of the fact that the Plaintiff would not have been aware of the fact that the Plaintiff would have been using a false tax invoice for the instant construction work, and the Plaintiff would not have any other reason to believe that the Plaintiff would have been aware of the fact that the Plaintiff would have been aware of the fact that the Plaintiff would have been using a false tax invoice for the instant construction work. However, the Plaintiff would have paid the total amount of value-added tax to Nonparty Co. 1.

(3) Therefore, the Defendant’s disposition of correcting and notifying the value-added tax is unlawful after deducting the input tax amount corresponding to the value of supply under the instant tax invoice.

4. Conclusion

If so, the plaintiff's claim is reasonable, and the judgment of the court of first instance is unfair with different conclusions. Accordingly, the plaintiff's appeal is accepted, and the judgment of the court of first instance is revoked, and the plaintiff's claim is accepted, and it is so decided as per Disposition.