Changwon District Court-2016-Gu Partnership-51267 ( October 24, 2017)

When a taxpayer trades goods subject to taxation without any intention to pay value-added tax at the time of the transaction, it shall be deemed that the transaction is made in an amount other than value-added

If value-added tax is waived by receiving only the value of supply in spite of the receipt of value-added tax separately, it cannot be deemed that the value of supply and the amount of tax are unclear.

Article 29 of the Value-Added Tax Act

(C)The revocation of the disposition imposing value-added tax, etc.

Park AA

The Director of the Z Tax Office

Changwon District Court Decision 2016Guhap51267 Decided January 24, 2017

June 28, 2017

August 23, 2017

1. The plaintiff's appeal is dismissed.

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

The judgment of the first instance shall be revoked. Each disposition of imposition of KRW 00 (including additional taxes), out of KRW 00 (including additional taxes), out of KRW 00 (including additional taxes), value-added tax for the first period of 2000, KRW 00 (including additional taxes) out of KRW 00, value-added tax for the second period of 2000, KRW 00 (including additional taxes) out of the value-added tax for the second period of 2000, KRW 00 (including additional taxes) out of the value-added tax for the first period of 200, KRW 00 (including additional taxes) out of the global income tax for the business year of 200, KRW 00 (including additional taxes) out of the global income tax for the business year of 200, and KRW 00 (including additional taxes) out of the global income tax for the business year of 200.

1. Quotation of judgment of the first instance;

This court's reasons are the same as the reasons for the judgment of the court of first instance except for the following '2. height of appeal'. Thus, it is accepted by Article 8 (2) of the Administrative Litigation Act and the main sentence of Article 420 of the Civil Procedure Act.

2. Parts in height:

The part below the judgment of the first instance court No. 5 (d) shall be reversed as follows.

D. Determination

1) Whether the omission of sales in the instant case includes value added tax

A) The value-added tax base for the supply of goods shall be the total amount of supply value of goods supplied in the pertinent taxable period (Article 29(1) of the Value-Added Tax Act); the value-added tax shall include any price, charge, commission, and all other things having monetary value, regardless of the pretext thereof, from the person who receives the goods, except for value-added tax (Article 29(2)); where it is unclear whether the amount received for the supply of goods includes value-added tax, an amount calculated by multiplying the amount received for the supply of goods by 10/110 (Article 29(7)); and if the value-added tax is not included in the amount received for the supply of goods, such price constitutes the tax base as the value-added tax.

B) In full view of the following circumstances that can be acknowledged by comprehensively taking account of the purport of the entire pleadings, the Defendant’s calculation of the entire amount omitted in the sales of this case as the supply price and the tax base of the disposition of this case is justifiable.

① The purpose of ParkA and the Plaintiff’s purchase tax invoice was to obtain oil from the CCC Korea, which is a normal oil distributor, and sell them as non-data at 00% to 00% or 00% of the supplied amount. The reason was that the purchase tax invoice was necessary in the process that ParkA and the Plaintiff purchased illegal oil, such as non-taxable oil embezzled by seafarers in foreign ships, at a price of about 00% of the normal price (excluding value-added tax) and distributed it as normal oil. Therefore, the instant transaction was established based on the amount calculated by subtracting the value-added tax from the beginning.

② ParkA clearly stated that the instant amount omitted in sales was not included in the amount of value-added tax in the course of a suspected criminal suspect’s newspaper, and that the said amount was explicitly indicated to the effect that value-added tax was nonexistent, and that this would only be viewed to the effect that B, etc. were not subject to value-added tax. As such, the circumstance in which a supplier did not collect value-added tax does not affect the establishment of liability for value-added tax (see, e.g., Supreme Court Decision 2003Da49153, Feb. 13, 2004).

③ In the process of investigation and trial of related criminal cases, ParkA recognized the fact that the amount omitted in sales of this case is not included in value-added tax, and accordingly, it became final and conclusive as criminal facts that evaded value-added tax based on the total omitted sales of this case. Even if it is not bound by the fact-finding of a criminal trial in an administrative trial, the facts recognized as a criminal judgment which became final and conclusive with respect to the same facts shall be deemed as significant evidence, barring any special circumstance where it is deemed difficult to adopt a factual judgment in a criminal trial in light of other evidence submitted in the administrative trial (see, e.g., Supreme Court Decisions 92Da31453, Jan. 15, 1993; 98Du10424, Nov. 26, 1999).

C) The Plaintiff asserts to the effect that 100/110 of the amount omitted from sales of this case’s oil supplied by ParkA and the Plaintiff constitutes the tax base under the former part of Article 13-48-1 of the Value-Added Tax Act, providing that the amount omitted from sales of this case’s oil is not indicated separately. However, as seen earlier, since ParkA and the Plaintiff excluded value-added tax from the amount omitted from sales of this case’s sales while performing the instant transaction, it cannot be said that the value omitted sales of this case’s oil and the amount of tax are not indicated separately. The Plaintiff’s assertion on the premise is without merit as to whether the said basic rules have legal effect or not.

2) Whether there exists a practice as to the value-added tax base in the case of non-data transactions

The Plaintiff asserts that it is a tax practice to treat non-data transactions as including value-added tax. However, where it is unclear whether each tax review decision, etc. submitted by the Plaintiff includes value-added tax, it is limited to the amount calculated by multiplying the amount of sales by 100/110 as the value of supply if it is not clear whether the amount of value-added tax is included in the amount of non-data transactions, and there is no evidence to acknowledge that the practice to regard the amount of non-data sales as the value of supply has been established even if the amount of sales

3. Conclusion

Then, the plaintiff's claim shall be dismissed as it is without merit, and the judgment of the court of first instance shall be dismissed.

In conclusion, the plaintiff's appeal is just and without merit, and it is so dismissed as per Disposition.