Cho Jae-2013-China-4351 ( October 27, 2014)

The input tax amount on the false tax invoice shall not be deducted, and the burden of proof for the fruits of duty on the buyer shall be the purchaser.

The input tax amount on the false tax invoice shall not be deducted, and the person who claims the deduction and refund of the input tax amount shall prove that the person who claims the deduction and refund of the input tax amount.

Article 39 of the Value-Added Tax Act

2014Guhap60109 Disposition to revoke the imposition of value-added tax

KK

1. The head of △△ Tax Office;

2. ○ director of the tax office.

August 27, 2015

September 17, 2015

1. The imposition of value-added tax of KRW 00,00,000 on the second half-year basis against the Plaintiff on September 10, 2013 by the head of △△ Tax Office and the imposition of penalty tax of KRW 0,00,000 on September 10, 2013 by the head of ○○ Tax Office against the Plaintiff on September 10, 2013 shall be revoked, respectively.

2. The costs of lawsuit are assessed against the Defendants.

Cheong-gu Office

The same shall apply to the order.

1. Details of the disposition;

A. The Plaintiff engaged in the manufacturing business of non-metallic metals under the trade name of 'SSS metal' at ○○○○○-dong ○○○○○-○○○○○○○, ○○○○.

B. From August 2010 to November 2010, the Plaintiff received a purchase tax invoice in an amount equivalent to KRW 000,000,000 (hereinafter “instant tax invoice”) in total from YY to 14 times in the name of “EEEE”. The Plaintiff deducted the said input tax amount from the output tax amount at the time of filing the return of value-added tax for the second period of February 2010, and then appropriated the said purchase amount as necessary expenses at the time of filing the return of global income tax in 2010.

C. On September 10, 2013, on the ground that the instant tax invoice was written differently from the fact, Defendant 1 issued a revised and notified the Plaintiff as KRW 00,000 value-added tax for the second period of 20,000,000, by excluding the input tax amount on the said tax invoice from the deductible amount. Defendant 1 issued a revised and notified the Plaintiff by applying penalty tax on September 10, 2013, by adding KRW 0,000,000 to the global income tax for the year 2010 (hereinafter “each taxation disposition”).

D. The Plaintiff appealed to the request for a trial, but the Tax Tribunal dismissed the request on August 27, 2014.

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

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

1) The Plaintiff was actually supplied with YY and remitted the purchase price, and thus, the instant tax invoice does not constitute a false tax invoice.

2) Even if not, the Plaintiff was well aware of YY and SS, a Y and waste transporter, as the YW mar, as the YW mar mar, and was believed by the purchaser of the waste agreement as EE due to the transferor of Y and SS. As such, the Plaintiff was in good faith and without fault to verify whether Y actually supplies the waste mar, etc. to the business account opened by YY. As such, the Plaintiff constitutes bona fide and without fault.

B. Relevant statutes

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

C. Determination

1) Whether each of the tax invoices of this case is false

A) Relevant legal principles

The meaning that the tax invoice under the Value-Added Tax Act differs from the fact is that the necessary entries of the tax invoice refer to a case where the contents of the requisite entries of the tax invoice do not coincide with those of the person who actually supplied or is supplied with the goods or services, and the price and time of the goods or services, notwithstanding the formal entries of the transaction contract, etc. made between the parties to the goods or services (see, e.g., Supreme Court Decision 96Nu617, Dec. 10, 1996). Furthermore, the burden of proving that the entries of the tax invoice constitute a tax invoice different from the fact should be borne by the tax authority (see, e.g., Supreme Court Decision 2008Du973

B) In the instant case:

In light of the above legal principles, it is reasonable to view that the Plaintiff’s tax invoice received from YY constitutes a tax invoice prepared differently from the actual tax invoice, taking into account the following circumstances, comprehensively taking into account whether the entries in the instant tax invoice are different from the facts, as a whole, the following circumstances can be acknowledged by comprehensively taking into account each entry in the evidence Nos. 4, 6, and 11.

YY Around January 12, 2009, despite the occurrence of a considerable amount of sales within a short period after its business registration, Y did not pay value-added tax. EE was ex officio closed on September 16, 2011.

YY acknowledged that all transactions with UUUUU Co., Ltd and some transactions with ○○ non-stock are false during the second sale in 2010 at the time of the tax investigation, and Y was convicted of false tax invoices issued to the above companies.

③ YY argues that the sales of the Plaintiff are actual transactions. However, among the second purchase transactions of Y in 2010, the part purchased recycled waste resources from individuals was found false, and it is difficult to deem that there was actual purchase transaction, such as receipt of tax invoices and absence of evidentiary materials. In light of the fact that most of the money transferred by the Plaintiff to Y as waste rent was immediately withdrawn in cash, the sales of the Plaintiff seems not to have been actually supplied by Y.

2) Whether the Plaintiff is bona fide and without fault or not

A) Relevant legal principles

The actual supplier and the supplier on a tax invoice may not deduct or refund the input tax amount unless there is any special circumstance that the supplier was unaware of the fact that the supplier was unaware of the nominal name of the tax invoice, and that the supplier was not negligent in not knowing the false name of the supplier (see, e.g., Supreme Court Decision 2002Du2277, Jun. 28, 2002).

B) Criteria for determining whether good faith or negligence has been committed

Article 17(2)2 of the Value-Added Tax Act does not allow the deduction of input tax in cases where the necessary entries of a tax invoice are entered differently from the facts. The main purpose of Article 17(2)2 of the Value-Added Tax Act is to secure tax revenues through the training of taxation data under our Value-Added Tax Act, which takes all stages of tax credit. However, even if there are such a kind of police functions in the tax invoice, it is difficult for the other party to know the fact that the other party is a nominal business, and the failure to deduct the input tax to the business operator who bears the input tax is the final consumer’s share as the consumption tax and is not the intermediate business operator who pays the value-added tax, not only contravenes the basic principle of the Value-Added Tax Act, but also causes harsh consequences to taxpayers. As such, the person who bears the input tax upon receipt of goods cannot be said to have the duty to actively investigate whether the other party is a disguised business. Thus, there is sufficient reason to suspect that the other party is a disguised business when determining based on the facts revealed in the process to determine whether the other party is a disguised business (see Supreme Court Decision 97Nu.

In any case, whether good faith and without fault can be recognized shall be determined individually in a specific case by comprehensively taking into account all the circumstances. However, it may be based on ① the course and career of the person liable for duty payment, ② the other party to the document or remittance collected from the supplier, ③ the confirmation of the place of business, ④ the period and scale of the transaction, ④ the transaction unit, ⑤ the transaction unit, ⑤ the accuracy of the statement of the measurement certificate, ② the confirmation of the transport engineer, and the result of the criminal case

C) In the instant case:

In light of the following circumstances, it is reasonable to view that the Plaintiff was negligent in not knowing that the Plaintiff was unaware of, and did not know of, the nominal name of the tax invoice received from Y, in light of the following circumstances: (a) evidence Nos. 2 through 18, 21 through 34, (b) evidence Nos. 3 and 12; and (c) fact-finding with respect to the Plaintiff’s W metal representative; and (b) evidence Nos. 3 and 12; and (c) facts-finding with respect to the entire argument, it is difficult to deem that there were sufficient circumstances to suspect that YY was not an actual supplier; and (b) therefore,

① The Plaintiff became aware of YY while Y was working in JBP, and Y commenced collection and sale of Y in the name of YE on October 12, 2009, when Y commenced collection and sale of Y in the name of YE.

② As the Plaintiff started a transaction with the Y, it verified that the Plaintiff received a name from the Y, verified the Y’s business registration certificate, and confirmed that the address indicated on the business registration certificate (○○○○○○-○○○) was consistent. The Plaintiff transferred most of the purchase price of the Y from the Y to a corporate bank account opened by the Y as a business account.

③ YY’s place of business, the Plaintiff visited and confirmed, appears to be ○○○○○, a place of business relocated after the first half of 2009, YY’s place of business, and YY’s place of business is YY’s place of business, but JBS’s place of business is YY’s place of business, but it is difficult to view that the Plaintiff was a disguised business entity solely on the ground that YY did not have an independent place of business, solely because YY did not have an independent place of business.

④ From August 2010 to November 201, 2010, the Plaintiff engaged in purchase transactions worth 000,000,000 won over Y and 14 times is not deemed to have engaged in large-scale transactions for the same period (including transactions in the instant tax invoice) compared with the Plaintiff’s size of the transaction for the same period (including the amount equivalent to 0 billion won in the second period sales in 2010, and 0 billion won in the purchase amount). There is no evidence suggesting that the Plaintiff’s unit price of the waste agreement purchased from Y from Y is particularly low compared with other purchasing places.

⑤ When the Plaintiff wishes to purchase waste Dongs from the YY, the Plaintiff’s YY is as follows. The YY enters the waste Dongs into W metal Co., Ltd. (hereinafter referred to as “W metal”), which is a melting company that requested the melting of the waste consent, with W metal melting them, and transporting it into theCC industry, which is the pressure-generating company that the Plaintiff requested processing, and if theCC industry re-deliverys it after pressure-processing, the Plaintiff manufactures and sells it to the Plaintiff. In this process, the Plaintiff submitted a copy of the waste sheet prepared by W metal employees, along with the specifications of the transaction, and transferred the purchase price from W metal to the account.

6) The YY or SS’s name and contact details are accompanied by a photographic image taken by W metal employees, along with the date and time of measurement, the weight of the waste put into storage, vehicle number, and waste transport, and the name and contact details of the YY or SS. In the receipt issued to the Plaintiff, the quantity and loss (Losss) quantity are written in detail, in addition to those written by the Plaintiff. The details of the Y or acceptance certificate are consistent with the tax invoice details of this case. In addition, in the course of the tax investigation, the Plaintiff submitted a book in which the details of transactions with W metal andCC industry are written.

7) The Defendant accused the Plaintiff of the charge of violating the Punishment of Tax Evaders Act on the ground that the Plaintiff’s purchased waste Y from the Y was a disguised transaction. However, on February 29, 2012, the Defendant issued a disposition to the effect that there was no evidence to acknowledge the suspected fact in light of the sales data, account statement, account balance sheet, and account statement, etc. submitted by YY.

8) On the ground that the Defendant’s Y as a transport engineer’s YY’s employee is unclear, and that the Plaintiff did not verify the Plaintiff’s bona fide and without fault on the ground that it was insufficient to recognize the Plaintiff’s bona fide and without fault. However, it is difficult to view that the Plaintiff, who purchased waste waste, as a recycling resource, has a duty of due care to confirm the aforementioned matters within the control area of the supplier.

D) Sub-determination

Therefore, the Plaintiff’s taxation disposition of this case by the Defendants on a different premise is unlawful, since it constitutes a transaction party with good faith and negligence, and the Plaintiff’s failure to provide documentary evidence also constitutes justifiable grounds.

3. Conclusion

Therefore, the plaintiff's claim is reasonable, and all of them are accepted, and it is so decided as per Disposition.