Daejeon District Court 2013Guhap3025

National High Court 2013 Jeon 1649 ( September 11, 2013)

Disposition Imposing Value-Added Tax

Direct business registration, closure, lease, business contract, etc., and all transactions have been conducted, and the disposition of imposition based on the premise that the income is an effective owner of the income is legitimate.

2014Nu10682 Revocation of Disposition of Imposition of Value-Added Tax, etc.

Economic Zone

XX Head of tax office

Daejeon District Court Decision 2013Guhap3025 Decided May 22, 2014

October 30, 2014

December 4, 2014

1. Revocation of a judgment of the first instance;

2. The plaintiff's claim is dismissed.

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

1. Purport of claim

The Defendant’s imposition of value-added tax for the second term of December 10, 2012, KRW 48,810,940, and value-added tax for the first term of December 2010, which was imposed on the Plaintiff on December 10, 2012, shall be revoked.

2. Purport of appeal

The same shall apply to the order.

1. Details of the disposition;

A. On October 31, 201, the Plaintiff registered the petroleum selling business with the trade name called S Gas station in the Ro-dong, Ro-si, Ro-si, Sin-si (hereinafter “instant gas station”). On January 31, 2010, the Plaintiff closed its business.

B. On December 10, 2012, the Defendant issued a disposition to increase the value-added tax amount of KRW 48,810,940 for the second term portion in 2009 and to impose the value-added tax of KRW 19,911,270 for the first term portion in 2010 on the Plaintiff on the ground that “the Plaintiff unfairly deducted the input tax amount by receiving a fake tax invoice that does not have any real transaction from F Energy Co., Ltd. and HH at the time of filing a value-added tax return (hereinafter “instant disposition”).

C. The Plaintiff appealed and raised an objection on February 27, 2013, and thereafter requested an inquiry to the Tax Tribunal on April 1, 2013, but was dismissed on September 11, 2013.

[Ground of recognition] Facts without dispute, Gap evidence 1, 2, Eul evidence 1 (including paper numbers; hereinafter the same shall apply), the purport of the whole pleadings

2. The parties' assertion and judgment

A. The parties' assertion

1) Summary of the Plaintiff’s assertion

The Plaintiff received a monthly wage of 2 million won from the gas station in this case upon the request of the CCC, and only lent its name to the CCC, and is not the actual business operator of the gas station in this case. Nevertheless, the Defendant’s disposition in this case on the premise that the actual business operator of the gas station in this case is the Plaintiff is illegal.

2) Summary of the defendant's assertion

The Plaintiff directly reported the closure of business, including business registration, lease, and petroleum supply contract under the name of the Plaintiff. The Plaintiff did not prove that CCC, other than the Plaintiff, is the actual business operator of the instant gas station. Therefore, the instant disposition made by the Defendant against the Plaintiff, who is the nominal owner of the instant gas station, is lawful.

B. Determination

1) The principle of substantial taxation prescribed in Article 14(1) of the Framework Act on National Taxes, if there is a person to whom such title belongs differently from that of income, profit, property, and transaction, is to be the person to whom such title belongs rather than the person to whom such title belongs, on the ground of form or appearance. Therefore, if the title holder lacks the ability to control and manage the property, and there is another person who substantially controls and manages the property through the control, etc. over the nominal owner, and such disparity arises from the purpose of tax evasion, income on the property shall be deemed to have been reverted to the person who actually controls and manages the property, and if there is no such disparity between title and substance, the income on the property shall be deemed to have been reverted to the person to whom the income belongs (see Supreme Court Decision 2012Du1646, Jul. 10, 2014). However, if the existence and substance of such title and substance are different from that of the tax authority, the determination of whether the tax authority bears the burden of proof, such as the content of the agreement between the nominal and the nominal, degree of involvement, internal liability, and independent liability for taxation.

2) We examine the instant case in light of the aforementioned legal doctrine.

In full view of the purport of Gap's evidence Nos. 2, 9 through 12, Eul evidence No. 3 and Eul evidence No. 9, and testimony of witness BB of the court of first instance, (1) CCC's identification card was attached to the applicant for the registration of the business of the gas station in the name of the plaintiff, and CCC's spouse was a joint guarantor of the above contract. (2) CCC borrowed the business funds of the gas station in the process of door-to-door with the defendant's employee on July 2, 2012, 10 million won to BB, and 10 million won was paid to the plaintiff at the time of closure of the gas station's business, and 20 million won was reported to CCC's 10,000 won to 30,000 won, and 100,000 won was reported to CCC's 20,000 won, and 10,000 won,00 won, more than the date of statement.

However, the facts of recognition under paragraph (1), Gap evidence Nos. 6 through 8, and Eul evidence Nos. 3 through 9 are as follows, i.e., the registration of the operator of the gas station of this case was terminated under the plaintiff's name; the plaintiff made a report on the closure of the business of the gas station of this case; the lease contract and the oil supply contract, etc. for the gas station site and facilities of this case were concluded under the plaintiff's name; the plaintiff himself was the actual business operator on June 21, 2012; the CCC was the BBB was the actual business operator on July 5, 2012; the reason why the CCC continued to reverse the claim that it was the actual business operator on July 12, 2012; the plaintiff prepared the total report of the gas station of this case and kept it up to the date, ④ the funds management was made; ⑤ The plaintiff did not have any evidence to prove the difference between the amount of the rent and the value-added tax deposited by the plaintiff 20 months after receiving it.

Therefore, the disposition of this case based on the premise that the plaintiff is the beneficial owner of the income by operating the gas station of this case is legitimate, and the plaintiff's assertion is without merit.

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and since the judgment of the court of first instance is unfair with different conclusions, the defendant's appeal is accepted and the judgment of the court of first instance is revoked and the plaintiff's claim is dismissed as per Disposition.