The claim for the repayment of overpaid or erroneously paid tax amount by the purchaser under the special provisions on the payment by the purchaser is made by the purchaser.

The person entitled to claim the refund of value-added tax in principle is the person who supplies goods or services, or the person entitled to claim the refund of overpaid or erroneously paid tax under the special provisions on the payment by the purchaser.

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

Suwon District Court 2017Guhap66511

KimA

BB Director of the Tax Office

2018.03.06

2018.03.29

1. The plaintiff's claim is dismissed.

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

The defendant shall pay to the plaintiff 00,00,000 won of value-added tax for the second period of 2013, value-added tax for the first period of 2014,00,000,000 won of value-added tax for the second period of 2014, and 00,000,000,000 won of value-added tax for the second period of 2014, and 00,000,000 won of value-added tax for the first period of 2015, and 15% per annum from the day following the date of service of the application for modification of the lawsuit to the day of full payment.

1. Details of the disposition;

A. From November 13, 2013, the Plaintiff’s ○○-ro 00,000 (○○-dong) in Gyeonggi-do, ○○-gu, ○○○-ro (○○-dong).

A personal entrepreneur who is engaged in scrap metal and wholesale and retail business with the trade name of △△△△△.

B. The Plaintiff filed a value-added tax return for the taxable period from No. 2013 to No. 1, 2015 as follows:

C. The Plaintiff collected and paid the output tax amount on the said table from the purchaser during the second taxable period of 2013, but, in the taxable period from the first to the first taxable period of 2014, the former tax exception was made in the taxable period from the first to 2015.

Article 106-9 (2) of the Restriction Act (amended by Act No. 13560, Dec. 15, 2015; hereinafter the same) (hereinafter referred to as the "Special Provisions") did not collect the relevant output tax amount from the purchaser (hereinafter referred to as "the purchaser of this case") pursuant to Article 106-9 (2) of the Special Provisions, and instead, the purchaser deposited the corresponding amount of the "paid tax amount for the special case of the purchaser's payment of value-added tax" in the Plaintiff's account for payment of value-added tax in accordance with Article 3 (3) 2 of the Special Provisions of this case.

D. From October 0, 200 to October 00, 200, the director of the △△ Regional Tax Office issued or received a false tax invoice (hereinafter referred to as “the instant tax invoice”) without any real transaction to the Plaintiff, and notified the head of the △△ District Tax Office of the fact that the Plaintiff issued or received a false tax invoice (hereinafter referred to as “the instant tax invoice”) without any real transaction from October 0, 2000 to October 1, 200.

E. As indicated below, the head of △△ District Tax Office issued each decision on correcting the output tax amount related to the instant tax invoice and the input tax amount related to the instant tax invoice among the Plaintiff’s details of the return of value-added tax, and imposing additional tax on nonperformance of the tax invoice (hereinafter referred to as “the first decision of correction,” and “the second decision of correction following the second tax investigation”) and notified the Plaintiff of the decision. The already paid tax amount was not refunded to the Plaintiff on the ground that the Plaintiff was the data.

F. The Plaintiff filed a request for correction with the head of the tax office on October 1, 2000 for each of the first decision of correction with respect to the purport that the Plaintiff would request the Plaintiff to refund the amount calculated by subtracting the notified tax amount according to the above decision of correction from the already paid tax amount (hereinafter “instant tax amount”). On October 22, 2016, the head of the tax office having jurisdiction over the second decision of correction notified the Plaintiff of the rejection of each of the above request for correction on December 30, 2016.

G. On October 00, 200, the Plaintiff filed an appeal with the Tax Tribunal for revocation by asserting that the notice of refusal of correction by the head of the tax office on July 20, 2000 as to the tax invoice was an unlawful disposition and filed an appeal for revocation thereof. The Tax Tribunal rendered a decision to dismiss each of the above appeals by the Plaintiff on the grounds that the actual payer of the value-added tax related to the tax invoice of this case on October 00, 200 is the Plaintiff’s seller (Buyer) and that it is difficult to see that the person whose rights or interests have been infringed by being subject to unfair disposition or by failing to obtain necessary disposition as the Plaintiff, on the grounds that it is difficult to see that the said person was the Plaintiff.

[Reasons for Recognition] Unsatisfy, Gap evidence 1, 2, 3, 5, Eul evidence 1, each

Each entry, the purport of the whole pleadings, including branch numbers,

2. Related statutes;

It is as shown in the attached Form.

3. The parties' assertion

A. The plaintiff

If the instant sales tax invoice is based on a false tax invoice, the first and second revisions were made on the premise that the instant tax invoice is a false tax invoice, the instant tax invoice constitutes the amount of taxes paid without cause to the Defendant. Moreover, even in the case of the first and second half years from 2014 to 1, 2015, to which the instant special provisions apply, the right to receive the value-added tax paid without cause is the Plaintiff as the supplier. Accordingly, the instant tax invoice ought to be refunded to the Plaintiff pursuant to Article 51(1) of the Framework Act

B. Defendant

Where the special provisions of this case apply, a purchaser, other than the Plaintiff who supplied copper scrap, etc., directly pays the value-added tax to the designated account, and thus, the Plaintiff cannot be deemed a taxpayer. Therefore, the Plaintiff did not have the right to claim the refund of

In addition, since the value-added tax for the second period of 2013, which was prior to the enforcement of the special provisions of this case, was paid by the Plaintiff to conceal the illegal act as data, the Plaintiff’s claim for refund is not permissible as it violates the duty of good faith under Article 15 of the Framework Act on National Taxes.

4. Determination

A. Whether the key issue tax amount of the instant case was paid without any grounds

As a matter of principle, taxes in the method of tax payment such as value-added tax, in which a taxpayer voluntarily determines a tax base and the amount of tax and the amount of tax and the payment thereof are specifically determined by the taxpayer’s act of filing a return, and the State or a local government holds the amount of tax paid based on the final tax claim. As such, the State or a local government cannot be deemed as unjust enrichment unless the taxpayer’s act of filing a return is void as a matter of course due to a significant and apparent defect. Here, as to whether a defect in filing a return falls under the invalidity as a matter of course due to a significant and apparent defect, the purpose, meaning, function, and legal remedy for the defect in filing a return shall be examined as a basis for the act of filing a return, and at the same time, it shall be reasonably determined by individually identifying the specific circumstances that arise from filing a return (see, e.g., Supreme Court Decision 2004Da6

The following circumstances are acknowledged in light of the aforementioned evidence and evidence No. 6-1 and No. 6-2’s overall purport of the pleadings. In light of such circumstances, even if each tax investigation result related to the key tax amount of this case conforms to objective facts, the issue of whether the Plaintiff, as a supplier, is a business entity that actually supplied goods to the sales office or not constitutes a matter that can only be identified after accurately grasping the facts through the investigation of the relevant transaction details, etc. Furthermore, the Plaintiff’s objection to the non-prosecution disposition of the relevant case and the decision of correction premised on the falsity of the relevant tax invoice is also inconsistent with the aforementioned tax investigation. Accordingly, even if the Plaintiff’s defect was found in the return of value-added tax, it cannot be deemed as an apparent apparent case, and thus, it does not constitute an invalidation as a matter of course. As such, the Plaintiff’s assertion that the key tax amount of this case was paid without the cause of invalidity of the return is without merit.

① As seen earlier, the Director of △△ Regional Tax Office, upon the Plaintiff’s submission of a tax invoice, notified the Plaintiff of the results of the investigation to the head of △△ District Tax Office, which is the tax authority, to the effect that the instant tax invoice was issued falsely without real transactions. The first tax investigation subject to value-added tax from the second to the second in 2013 was conducted for about six months, and the second in 2015 for about two months.

② In accordance with the results of each tax investigation, the head of △△ District Tax Office filed a request to the effect that the pertinent tax invoice was unlawful on July 9, 2015, on the following grounds: (a) the first and second decision of correction was defective in denying the output tax amount related to the instant tax invoice and the input tax amount; and (b) the Plaintiff filed a request to the effect that the pertinent decision of correction was unlawful on the grounds that the instant tax invoice was not falsely prepared with the Tax Tribunal on November 8, 2016, since the said tax invoice was not falsely prepared with the Tax Tribunal.

③ The Plaintiff was investigated under suspicion, such as violation of the Act on the Aggravated Punishment, etc. of Specific Crimes (issuance, etc. of False Tax Invoices) that he/she issued or received false tax invoices in relation to value-added tax from the second to the first half of 2013. However, in light of the statements of relevant persons, the Plaintiff was issued a non-prosecution disposition on the grounds that it is difficult to readily conclude that the said suspicion exists (defluence of evidence).

B. We examine whether the right to claim the refund of the portion of the key tax amount in question, to which the special provision in this case applies, is admitted to the Plaintiff, inasmuch as the Plaintiff’s filing of value-added tax with the right to claim the refund of the key tax amount does not fall under the invalidity of a law as a matter of course. The Plaintiff’s assertion, if the Defendant assumed that the key tax amount in this case is possessed without any cause, then we examine whether the right to claim the refund of the portion of the key tax amount in

1) The person claiming the refund of value-added tax in principle

The main text of Article 51(1) of the Framework Act on National Taxes provides that "if a taxpayer has erroneously paid or overpaid the amount paid as a national tax, additional dues or disposition fee for arrears, or there is any refund amount to be refunded under the tax-related Acts, the head of a tax office shall immediately determine such erroneous amount, excess amount or refund amount as national tax refund."

In addition, according to Articles 51(6) and 2 subparag. 10 of the same Act, the defendant is obligated to pay the taxpayer the amount remaining after appropriation of national taxes overpaid or erroneously paid, and the taxpayer is obligated to collect and pay national taxes under the tax law and the person liable to collect and pay national taxes under the tax law. As such, in the case of value-added tax, the person liable to claim the refund of value-added tax is, in principle, the person liable to pay the goods or services (Article 3 subparag.

2) The claimant for refund of value-added tax to which the special provisions of this case apply

However, in light of the following purport and specific contents of the special provisions of this case, in case where the value-added tax deposited by the person supplied with copper scrap, etc. due to the application of the special provisions of this case falls under the amount of erroneous payment and the grounds for refund arise, it is reasonable to deem that the right to claim the refund thereof belongs to the purchaser of this case who is not the seller, but the other party to the transaction. Therefore, the plaintiff's assertion on this part is without merit

A) The value-added tax is a tax imposed on the added value generated at each stage of production and distribution. As seen earlier, a person liable to pay value-added tax under the Value-Added Tax Act is an entrepreneur who supplies goods or services, but an entrepreneur is obligated to collect value-added tax from the supplier of goods or services (Article 31 of the Value-Added Tax Act). In this case, the amount of tax payable by an entrepreneur is calculated by deducting the input tax amount, etc. from the output tax amount (Article 37 of the Value-Added Tax Act and the Act on the Tax Credit at Former Stage), and ultimately, the burden of value-added tax is transferred to a final consumer. However, in the case of special goods such as copper scrap, etc., the “one person who evades the tax by closing the business without paying the value-added tax collected by the transaction,” and the special provisions of this case were newly enacted on May 10, 2013 in order to prevent the evasion of the output tax.

According to Articles 2 and 3, etc. of the Special Cases of this case, the operator of copper scrap, etc. is exempt from duty to collect transaction because he/she fails to collect value-added tax from the person being supplied with the copper scrap, etc., notwithstanding Article 31 of the Value-Added Tax Act, and when the operator of copper scrap, etc. is supplied with another operator of copper scrap, etc., the value of copper scrap, etc. shall be deposited in the supplier using a transaction account for copper scrap, etc., and the value

In light of the background of introducing the special provisions of this case and the nature of the value-added tax as seen earlier and the taxation method thereof, the special provisions of this case are interpreted as the exception that the supplier (seller) shall pay the value-added tax directly to the purchaser instead of paying the value-added tax by collecting the transaction from the purchaser in order to prevent tax evasion and achieve the purpose of convenient tax collection.

B) As seen earlier, the instant special provisions stipulate that the purchaser shall pay the value-added tax due to the supply of goods, instead of allowing the supplier of copper scrap, etc. to pay the value-added tax through the transaction collection. Therefore, unlike the general case of the payment of value-added tax, the Plaintiff, the supplier, is merely a taxpayer who is a supplier, and the supplier does not have the obligation to collect the value-added tax from the purchaser, and does not have the obligation to “payment” to the Defendant.

However, if the purchaser actually pays the value-added tax, the purchaser would form only the indirect tax law relationship by terminating the Plaintiff’s tax liability pursuant to the formal tax liability on the Defendant.

On the other hand, the purchaser bears the obligation to pay the value-added tax directly to the Defendant through the management of the bank pursuant to paragraphs (3) 2 and (10) of the special provisions of this case, and if the obligation is not fulfilled, the value-added tax arising from the transaction is not deducted as the input tax amount (Article 5 of the special provisions of this case). In addition to the value-added tax amount to be collected (Article 7 of the special provisions of this case) by adding the amount calculated by multiplying the period from the date following the date of receipt of the copper scrap, etc. to the date of deposit of the value-added tax by the interest rate prescribed by Presidential Decree to the date of deposit of the value-added tax amount. Therefore, it is reasonable to view that the purchaser pays the value-added tax to perform its obligation in accordance with the tax law relationship

Therefore, pursuant to the special provisions of this case, the purchaser who has paid the value-added tax can be deemed as the taxpayer under Article 2 subparagraph 9 of the Framework Act on National Taxes rather than the simple taxpayer on the value-added tax. In this case, the "tax liability" is established pursuant to the special provisions of this case, and it can be deemed as the "actual tax liability" in the sense that the Plaintiff bears the obligation to pay the value-added tax corresponding to the payment obligation of the output tax amount in the general case that the Plaintiff

C) The Plaintiff asserts that the claim for refund is accepted by the Plaintiff based on Paragraph (8) of the Special Cases of this case and Paragraph (1) of Article 48-6 of the Enforcement Rule of the Restriction of Special Taxation Act. However, in calculating the tax amount of value-added tax on the premise that the copper scrap, etc. is supplied, the term “payment of value-added tax” refers to the refund of the value-added tax that is returned to the taxpayer with the excess amount as the refund tax when the input tax amount exceeds the output tax amount in the taxable period. This is a concept separate from the “payment of overpaid or erroneously paid or overpaid tax that is returned to the taxpayer out of the amount paid by the taxpayer as national tax, additional dues or disposition fee for arrears” due to the lack of the Plaintiff’s claim as the cause of the refund. Therefore, it cannot be deemed that

D) In a case where a party to a contract directly provides a third party who has a different contractual relationship with the other party by means of the reduction of the performance process through the instruction of the other party to the contract, etc., the payment is not only the performance to the other party to the contract, but also the performance to the third party to the other party. As such, a party to the contract may not file a claim for restitution of unjust enrichment against a third party on the ground that he/she received payment without any legal cause (see, e.g., Supreme Court Decision 2006Da46278, Sept. 11, 2008). This legal doctrine purports that where a party has concluded a contract and then reduced the performance process by providing a benefit to a third party who has a different contractual relationship with the other party to the contract instead of providing a benefit to the other party to the contract, a party who has not directly entered into a legal relationship with the third party may not file a claim for restitution of unjust enrichment against a third party on the ground that the contract becomes void.

However, as seen earlier, insofar as the legal relationship between the Defendant and the purchaser pursuant to the special provisions of this case is deemed to have been formed, the purchaser cannot be deemed to be merely the person who provided the reduction of the value-added tax of this case on behalf of the Plaintiff, and thus, the purchaser cannot be deemed to have provided the Defendant with the right to claim the return of unjust enrichment on the basis of the aforementioned legal doctrine

E) Article 106-9(11) of the Restriction of Special Taxation Act (amended by Act No. 1527, Dec. 19, 2017; effective January 1, 2018; hereinafter “the Restriction of Special Taxation Act”) provides that “The amount paid erroneously or in excess of the value-added tax paid by the purchaser pursuant to Article 106-9(3) shall be refunded to the purchaser, notwithstanding Article 51(1) of the Framework Act on National Taxes,” and Article 32(2) of the Addenda provides that “The amended provisions of Article 106-9(11) shall also apply to the amount paid erroneously or in excess before this Act enters into force.” In light of the purport of the foregoing special provision, the purport of the new provision appears to clearly stipulate that the amount paid erroneously or in excess of the value-added tax paid by the purchaser pursuant to the special provision on the payment by the purchaser should be refunded to the purchaser.

5. Conclusion

Thus, the plaintiff's claim of this case is dismissed as it is without merit.

Related Acts and subordinate statutes

【National Tax Basic Act

The definitions of terms used in this Act shall be as follows:

9. The term "person liable to pay taxes" means persons liable to pay national taxes under tax-related Acts (excluding an obligation to collect and pay national taxes);

10. The term "taxpayer" means persons liable to pay taxes (including persons jointly and severally liable for tax payment and persons secondarily liable for tax payment or guarantors if any obligation to pay taxes arises on behalf of a taxpayer) and persons liable to collect and pay national taxes under tax-related Acts;

Article 51 (Appropriation and Refund of National Tax Refund)

(1) If a taxpayer erroneously pays or overpaid national taxes, surcharges, or expenses for disposition on default, or if there is any amount of tax to be refunded under tax-related Acts (referring to any remaining amount after deduction, if any, from the amount of tax refundable under tax-related Acts), the head of a tax office shall immediately determine such erroneously paid, overpaid, or refundable amount as a refund of national taxes. In such cases, any claim for refund due to erroneous or double payment shall be governed by Presidential Decree.

(2) The head of a tax office shall appropriate the amount determined by the national tax refund for the following national taxes, additional dues, or disposition fee for arrears, as prescribed by Presidential Decree: Provided, That the appropriation for the national taxes under subparagraphs 1 (excluding cases falling under reasons for collection prior to the due date of tax payment under Article 14 of the National Tax Collection Act) and 3

1. National taxes paid by a duty payment notice;

2. National taxes, additional dues, and disposition fees for arrears (including national taxes, additional dues, and disposition fees for arrears in another tax office);

3. National taxes voluntarily paid under tax-related Acts;

(3) Where any appropriation under paragraph (2) 2 is made, the national tax, additional dues or disposition fee for arrears and the national tax refund shall be deemed to have been extinguished on an equal amount retroactively to the time of late out of the statutory due date of payment of the national tax in arrears and the date of occurrence

(4) Where a taxpayer is entitled to tax refund under tax-related Acts, the taxpayer may request that such tax amount be appropriated for the national tax under paragraph (2) 1 and 3. In such cases, it shall be deemed that national tax is paid when the taxpayer requests such appropriation.

(5) Where a withholding agent has any refund from the amount of tax withheld and paid, he/she shall refund any remaining amount after appropriating for the amount of tax payable by the withholding agent (a appropriation for the amount of tax withheld on other items of tax may be made only when a report on current status of tax withholding under the Income Tax Act includes details of appropriation and adjustment thereof) through withholding: Provided, That where the withholding agent requests immediate refund, or there is no amount of tax payable through withholding, it shall be immediately refunded.

(6) The amount of national tax refund remaining after appropriating under paragraph (2) shall be repaid to the taxpayer within 30 days after the determination of the national tax refund, as prescribed by Presidential Decree.

(7) The Bank of Korea shall refund the national tax refund under paragraph (6) from among revenues under the jurisdiction of the head of a tax office as prescribed by Presidential Decree.

(8) Where the head of a tax office claims the return of the amount already appropriated or paid as a result of revocation of the determination on refund of national taxes, the provisions of the National Tax Collection Act shall apply mutatis mutandis

director of the former Restriction of Special Taxation Act (amended by Act No. 13560, Dec. 15, 2015)

Article 106-9 (Special Cases of Payment of Value-Added Tax by Purchasers of Copper Scrap, etc.)

(1) Any business operator who intends to supply or to be supplied with any of the following goods (hereinafter referred to as "raw scrap, etc.") or any business operator who intends to import copper scrap, etc. (hereinafter referred to as "business operator of copper scrap, etc.") shall open an account for transaction of copper scrap, etc. (hereinafter referred to as "transaction account for copper scrap, etc.") as prescribed by Presidential Decree:

1. Cyrings in the form of leader manufactured from the waste and scrap of copper or from the waste and scrap of remelted melting copper in the Integrated Tariff and Statistics Schedules publicly announced by the Minister of Strategy and Finance pursuant to Article 84 of the Customs Act;

2. Coppers and scraps containing copper, of which the volume of copper content is not less than 40/100.

(2) Notwithstanding Article 31 of the Value-Added Tax Act, no value-added tax shall be levied on the person supplied with the copper scrap, etc. when the operator of copper scrap, etc. supplies it to another business operator of copper scrap, etc.

(3) When the operator of copper scrap, etc. is supplied with the copper scrap, etc. from another operator of copper scrap, etc., the amount referred to in subparagraph 1 shall be deposited in the supplier of copper scrap, etc. using a transaction account for copper scrap, etc., and the amount referred to in subparagraph 2 shall be deposited in the person prescribed by Presidential Decree: Provided, That where the price of copper scrap, etc. is settled by means prescribed by Presidential Decree, such as a loan for financing business purchase, only

1. The value of copper scrap, etc.;

2. The amount computed by applying the tax rate under Article 30 of the Value-Added Tax Act to the tax base under Article 29 of the same Act (hereafter in this Article, referred to as value-added

(4) Notwithstanding Article 50 of the Value-Added Tax Act, the value-added tax on the import of copper scrap, etc. may be paid by the method prescribed by Presidential Decree using a transaction account for copper scrap, etc.

(5) Where an operator of copper scrap, etc. supplied with copper scrap, etc. fails to deposit the value-added tax pursuant to paragraph (3) 2, the tax amount entered in a tax invoice issued by the operator of copper scrap, etc. who supplied copper scrap, etc. shall not be deemed an input tax amount deducted from the output tax amount, notwithstanding Article 38 of the Value-Added Tax

(6) Where the price of copper scrap, etc. is settled without using a trade account for copper scrap, etc. under paragraph (3), 20/100 of the price of the relevant copper scrap, etc. shall be collected as an additional tax from the operator of copper scrap, etc. who supplies or is supplied with the relevant copper scrap

(7) Where the operator of copper scrap, etc. supplied with copper scrap, etc. fails to deposit the value-added tax pursuant to paragraph (3), the head of the competent tax office shall collect an amount calculated by multiplying the amount of value-added tax by the interest rate prescribed by Presidential Decree for the period from the date following the date of receipt of the copper scrap, etc. to the date of deposit of the value-added tax (referring to the date when the tax base return deadline under Articles 48, 49 and 67

(8) The value-added tax amount paid by a person supplied with copper scrap, etc. under paragraph (3) shall be deducted from the amount of tax payable by the business operator, such as copper scrap, etc. who supplies copper scrap, etc.

(9) If the ratio of the sales amount of copper scrap, etc. during the pertinent preliminary and final return period to the purchase amount of copper scrap, etc. does not exceed the ratio prescribed by Presidential Decree, the head of the competent tax office may postpone the refund: Provided, That the same shall not apply in any of the following cases:

(10) A person prescribed by Presidential Decree who has received value-added taxes under the main sentence of paragraph (3) shall pay the value-added taxes to the National Treasury by no later than the 25th of the month following the end of each quarter after he/she deducts the taxes or adds the refundable taxes

(11) Matters necessary for the operation of the payment system by a purchaser referred to in paragraphs (1) through (10), such as the scope of the business operator of copper scrap, etc. who uses the transaction account for copper scrap, etc., the method of depositing the transaction account for copper scrap, etc., the processing of deposited value-added tax, the value-added tax of the business operator handling items such as copper scrap, etc., the management of reporting

director Restriction of Special Taxation Act (amended by Act No. 15227, Dec. 19, 2017)

Article 106-9 (Special Cases of Payment of Value-Added Tax by Purchasers of ices, etc.)

(11) The amount of value-added tax paid by the person supplied under paragraph (3) which has been erroneously paid or overpaid shall be refunded to the person provided, notwithstanding Article 51 (1) of the Framework Act on National Taxes.

Addenda

Article 1 (Enforcement Date)

This Act shall enter into force on January 1, 2018: Provided, That the amended provisions of Article 126-2 (limited to the parts related to books, performance and use) shall enter into force on July 1, 2018, and the amended provisions of Article 106-10 shall enter into force on January 1, 2019.

Article 32 (Application of Special Cases concerning Payment of Value-Added Tax by Purchasers of Scoops, etc.)

(2) The amended provisions of Article 106-9 (11) shall also apply to the portion paid erroneously or in excess before this Act enters into force.

(1) Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 26959, Feb. 5, 2016)

Article 106-13 (Special Cases for Payment of Value-Added Tax by Purchasers of Copper Scrap, etc.)

(1) The transaction account for copper scrap, etc. referred to in Article 106-9 (1) of the Act means an account meeting all the following requirements:

1. It shall be an account opened at a financial company, etc. designated by the Commissioner of the National Tax Service as deemed able to stably operate the special system of payment of value-added tax by purchasers, such as refund of value-added tax and deposit to the National Treasury, from among the financial institutions, etc. falling under any item

2. The trade name of the business operator shall be entered together in the indication of a holder of an account to be opened (limited to cases where a trade name exists);

3. The words "transaction account for copper scrap, etc." shall be indicated on the cover of the account to be opened.

(2) Any business operator may open at least two trade accounts for copper scrap, etc. for each place of business.

(3) Where the price has been settled by means of a transaction account for copper scrap, etc., it shall be deemed that a business account has been used pursuant to Article 160-5 of the Income Tax Act.

(4) "Persons prescribed by Presidential Decree" in the main sentence of Article 106-9 (3) of the Act means persons designated by the Commissioner of the National Tax Service as being able to stably operate the special system of payment of value-added tax by purchasers, such as refund of deposited value-added tax

(5) "Methods prescribed by Presidential Decree, such as loans for financing business purchases" in the proviso to Article 106-9 (3) of the Act means a bill of exchange, written request for collection of sales proceeds, exclusive-use card for business purchase, loan for security of credit sales claims, purchase loan system, and network theory system under Article 7-2 of the Act.

(6) "Methods prescribed by Presidential Decree" in Article 106-9 (4) of the Act means the method by which an importer separately files an import declaration of copper scrap, etc. and pays the value-added tax on such copper scrap, etc. only by the amount referred to in Article 106-9 (3) 2 of the Act.

(7) The interest rate prescribed by Presidential Decree under Article 106-9 (7) of the Act means 3/10,000 per day.

(8) For the purpose of the main sentence of Article 106-9 (9) of the Act, "ratio prescribed by Presidential Decree" means 70/100.

(9) The period during which the refund may be postponed under Article 106-9 (9) of the Act shall be within six months from the day following the date following the deadline for the relevant preliminary or final return.

(10) For the purpose of Article 106-9 (9) 1 of the Act, the term "amount prescribed by Presidential Decree" means five million won.

(11) In cases prescribed by Presidential Decree under Article 106-9 (9) 2 of the Act, the following requirements shall be met:

1. He/she shall not be punished as a tax offense for the last three years as of the end of the relevant report and payment deadline;

2. The taxpayer shall not have any fact of delinquency in national taxes for the last one year as of the end of the report and payment deadline;

3. The person shall not have received any deficit disposal for the last three years as of the end of the relevant report and payment deadline.

4. The transaction of copper scrap, etc. shall not have been made without using the transaction account for copper scrap, etc. for the last one year as of the end of the time limit for report and payment concerned.

5. Other cases deemed by the Commissioner of the National Tax Service that there is no possibility of tax evasion, considering the current status of return and payment of value-added tax.

(12) The management of value-added taxes deposited to a person designated by the Commissioner of the National Tax Service under paragraph (4) shall be governed by the Commissioner

(13) Detailed matters necessary for implementing the special system for payment of value-added tax by purchaser, such as deposit of copper scrap trade account and value-added tax amount and handling deposited value-added tax amount shall be prescribed by Ordinance of the Ministry

(1) Enforcement Rule of the Restriction of Special Taxation Act (amended by Ordinance of the Ministry of Strategy and Finance No. 555 on March 14, 2016)

Article 48-6 (Special Cases of Payment by Purchasers of Value-Added Tax for Copper Scrap, etc.)

(1) A person designated by the Commissioner of the National Tax Service pursuant to Article 106-13 (4) of the Decree may refund the value-added tax deposited by the relevant business operator within the scope of the value-added tax amount deposited by the purchaser pursuant to Article 106-9 (3) of the Act to the relevant business operator, as determined by the Commissioner

(2) Notwithstanding paragraph (1), when importing copper scrap, etc., the value-added tax amount paid to a customs office may be refunded by deeming it as the value-added tax amount deposited by the relevant business operator.

(3) If an importer of copper scrap, etc. intends to receive the refund of value-added tax paid to a customs office when he/she imports the copper scrap, etc. under paragraph (2), he/she shall submit an application for refund of value-added tax to the head of the competent tax office: Provided, That an application for refund need not be submitted where it is confirmed that the

(4) The head of the competent tax office shall, upon receipt of under paragraph (3), verify whether the value-added tax is paid and notify the designated person by the Commissioner of the National Tax Service under paragraph

/ Value-Added Tax Act

The definitions of terms used in this Act shall be as follows:

3. The term "enterprisers" means any person who supplies goods or services independently for business, regardless of whether the business aims to make profit;

Article 3 (Taxpayer)

Any of the following individuals, corporations (including the State, local governments, and local government associations), unincorporated associations, foundations, or other organizations are liable to pay the value-added tax pursuant to this Act:

1. An entrepreneur;

2. A person who imports goods.

Article 31 (Collection over Transaction)

Where an entrepreneur supplies goods or services, the value-added tax calculated by applying the tax rate under Article 30 to the value of supply under Article 29 (1) shall be collected from the person supplied goods or services.

Article 37 (Calculation of Amount of Tax, etc.)

(1) The output tax amount shall be calculated by applying the tax rate under Article 30 to the tax base under Article 29.

(2) The amount of tax payable shall be the amount obtained by deducting the input tax amount under Article 38 and the input tax amount deducted under this Act and other Acts from the output tax amount under paragraph (1) (referring to the amount computed by subtracting the bad debt tax amount under Article 45 (1)). In such cases, the input tax amount for the portion exceeding the output

(3) The amount of final or refundable tax by an entrepreneur based on the amount of tax payable under paragraph (2) shall be calculated according to the following formula: