Cho-2017-China-550 (Law No. 21, 2017)

A claim against a previously corrected resolution is a rejection of refund, which is not a subject of appeal litigation.

As long as there is a correction resolution already indicating the amount of tax refund, a request for correction cannot be filed again, and it shall be deemed a refusal of refund, and the refusal of refund shall not be subject to appeal litigation.

Special Cases concerning payment of value-added tax for copper scrap, etc. under Article 106-9 of the Restriction of Special Taxation Act

2017Guhap6078 Disposition Rejecting Value-Added Tax Correction

AA

BB Director of the Tax Office

September 19, 2017

October 24, 2017

1. The instant lawsuit shall be dismissed.

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

Cheong-gu Office

The Defendant’s rejection disposition against the Plaintiff regarding each claim for correction of value-added tax of KRW 397,209,861, and value-added tax of KRW 397,209,861, October 13, 2016, which was made on October 13, 2016 on October 22, 2016, as of October 13, 2016, respectively, of KRW 1,579,203,468, and KRW 1,579,203,468, which was made on October 22, 2016, as of October 22, 2016, shall be revoked.

1. Basic facts

A. From January 14, 2015 to May 31, 2016, the Plaintiff engaged in non-ferrous and scrap metal wholesale business with the trade name of ○○○○○○-ro 126 and 1st floor “CC metal.”

B. During the value-added tax period from January 2015 to January 2016, 2016, the Plaintiff issued sales tax invoices of KRW 42,086,546,314 in total of the supply values as follows, and reported and paid KRW 4,104,231,91 in total of value-added taxes upon receipt of purchase tax invoices of KRW 1,074,414,881 in total of the supply values (hereinafter “each of the above tax invoices”).

C. The Plaintiff did not collect the output tax amount from the purchaser pursuant to Article 106-9(2) of the former Restriction of Special Taxation Act (amended by Act No. 13797, Jan. 19, 2016) and deposited the relevant value-added tax amount into the value-added tax management account opened in a new bank by the purchaser of the copper scrap scrap under Article 106-2(3) of the same Act.

D. As a result of conducting a tax investigation with respect to the Plaintiff on two occasions (the period subject to investigation: the period subject to investigation from January 1, 2015 to May 31, 2016), the commissioner of a regional regional tax office verified that each of the instant tax invoices was received by falsity without actual transactions. Based on this, the amount of the output tax, the amount of the input tax, and the amount of the input tax, were reduced in full, and the amount calculated by subtracting the additional tax, etc. to be issued from the amount of the tax previously declared and paid after issuance of the processed tax invoice was 3,238,061,269 won (i.e., the amount calculated by subtracting the additional tax, etc. to be issued from the amount of the tax previously declared and paid after issuance of the processed tax invoice: 1,207,209,861 won + 1,579,203,468 won for two years in 2015 + 1,261,647,940 won (hereinafter referred to as “instant resolution”).

E. On May 27, 2016 and September 21, 2016, the Defendant notified the Plaintiff of the results of each tax investigation to the effect that the pertinent tax amount would be refunded.

F. On October 12, 2016, the Plaintiff filed an application for correction with the Defendant for refund of the amount of value-added tax of KRW 397,209,861 and value-added tax of KRW 1,579,203,468 for the first term portion of value-added tax in 2015, and KRW 1,579,203,468 for the second term portion of value-added tax in 2015, and KRW 1,261,647,940 for the first term portion of value-added tax in 2016.

G. On the ground that “the value-added tax is not refunded to the head of the competent tax office after processing only a tax invoice without supplying the goods or services subject to value-added tax, the Defendant issued a notice of rejection of a request for correction regarding the amount of value-added tax for the first and second years on October 13, 2016, and each of the value-added tax for the first and second years on December 22, 2016 (hereinafter “each notice of this case”).

H. On January 2, 2017, the Plaintiff filed an appeal with the Tax Tribunal on January 2, 2017. However, the Tax Tribunal rejected the decision on August 21, 2017, on the ground that: (a) the actual payer of the disputed tax amount is the seller (buy purchaser) and the Plaintiff is merely merely the receipt of the controversial tax amount from the other party (buy purchaser) through the management account under the Act on Special Cases Concerning the Payment of Purchase.

Facts that there is no dispute over recognition, Gap's 1 through 7 (including paper numbers), Eul's 1, and the purport of the whole pleadings.

2. Judgment on the defendant's main defense

A. The defendant's main defense

The defendant asserts that the lawsuit of this case seeking revocation of each notification of this case rejecting the refund of the tax amount by asserting that if the plaintiff is confirmed on the data, the amount of the tax to be refunded should be refunded, and that even if the value-added tax was paid according to the special case of the purchaser, the person liable for payment does not change to the purchaser. The defendant asserts that each notification of this case rejecting the refund of the tax amount of this case is not a disposition rejecting the correction but merely a notification of refusal of refund.

B. Relevant statutes

[Attachment] The entry in the relevant statutes is as follows.

C. Determination

1) The main sentence of Article 45-2(1) of the former Framework Act on National Taxes (amended by Act No. 14382, Dec. 20, 2016) provides that a person who has filed a tax base return by the statutory deadline for return shall file a request with the head of the competent tax office for determination or correction of the tax base and amount of national tax, if the tax base and amount of tax recorded in the tax base return (referring to the tax base and amount of tax after the determination or correction is made, if any, pursuant to the tax-related Acts) exceed those to be reported under the tax-related Acts

However, inasmuch as there is no express provision that recognizes the right to demand correction under the Framework Act on National Taxes or individual tax-related Acts, the right to demand correction cannot be acknowledged. Thus, even if the tax authority rejected a request for correction not based on the tax-related Acts of the person liable for payment, it cannot be deemed a rejection disposition subject to appeal (see, e.g., Supreme Court Decision 2003Du7651, May 12, 2006).

Meanwhile, under Article 51(1) of the former Framework Act on National Taxes, the head of a tax office shall immediately determine the amount of excess payment, etc., among the amount paid by a taxpayer as a national tax, additional dues, or disposition fee for arrears, as the national tax refund. The above amount of excess payment refers to the amount of tax reduced in whole or in part by revocation or correction, even though the return or disposition is not null and void as a matter of course, and thus, the said amount of excess payment constitutes unjust enrichment received or held by the State without any legal cause even though all the tax liabilities were

Therefore, a taxpayer’s right to claim a refund of unjust enrichment is determined at the time all or part of a tax obligation is extinguished by revocation or correction of a return or imposition in cases of an excessive payment. Article 51 of the Framework Act on National Taxes, etc. does not only stipulate the procedures for refund of a national tax refund, etc. for which a taxpayer’s right to claim a refund has already become final and conclusive by the tax authority as an internal administrative procedure, but also a right to claim a refund only after the refund of a national tax under the above provision (including additional dues) decision is not confirmed. Thus, the above decision to refuse a refund of a national tax refund or a request for a refund is not a disposition that specifically and directly affects the existence or scope of the taxpayer’s right to claim a refund, and it cannot be deemed a disposition subject to an appeal litigation (see, e.g., Supreme Court en banc Decision 88Nu6436, Jun. 15, 1989; Supreme Court Decision 2001Du8780, Nov. 8, 2010).

2) On the other hand, the Plaintiff issued sales tax invoices of KRW 42,086,546,314 in aggregate of the supply values during the taxable period of value-added tax from January 2015 to January 2016, and reported and paid KRW 4,104,231,91 in aggregate of value-added tax after receiving purchase tax invoices of KRW 1,074,414,881 in aggregate of the supply values. The Plaintiff confirmed that each of the above tax invoices was received through a tax investigation by the Plaintiff and confirmed that the amount of the output tax, the amount of the input tax, the amount of the input tax, the amount of the input tax, and the amount of the tax already declared and paid after the issuance of the processing tax invoice was reduced by the amount of the tax refundable, and thereafter, the Plaintiff requested the Defendant to refund the issue amount of value-added tax on the issue of value-added tax for the period from January 20, 2015 to January 1, 2016.

According to the above facts, there is no express provision recognizing the right to claim a correction of the Framework Act on National Taxes or the individual tax-related Acts on the refund of the amount of duty at issue which has already been determined through the resolution of correction of this case. Each of the notification of this case is a decision rejecting the plaintiff's claim for a refund of the amount of duty at issue which has already been determined through the resolution of correction of this case. Therefore, each of the notification of this case is not a disposition that specifically and directly affects

3) Therefore, the instant lawsuit seeking revocation of each of the instant notifications is unlawful.

3. Conclusion

Therefore, the lawsuit of this case is unlawful and thus, it is so decided as per Disposition.