Cho High Court Decision 201Do0650 ( October 23, 2011)

The taxpayer’s circumstances do not affect the illegality of the disposition of an input tax deduction for a false tax invoice;

If a taxpayer receives a tax invoice without a real transaction, the input tax amount is not deducted because the supplier, supply price, etc. falls under a tax invoice different from the fact. Such a disposition not to deduct an input tax amount cannot be deemed to affect any illegality of the disposition by a disposition that has the nature of a binding act that does not have discretion to the disposition agency.

Article 17 of the Value-Added Tax Act

2011Revocation of disposition imposing value-added tax, 18649

right XX

Head of Mapo Tax Office

August 26, 2011

October 21, 2011

1. The plaintiff's claim is dismissed.

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

The disposition of imposition of value-added tax of KRW 14,007,80, which the Defendant rendered to the Plaintiff on October 11, 2010, shall be revoked.

1. Details of the disposition;

A. On November 20, 1997, the Plaintiff, who runs an electronic equipment wholesale business under the trade name of 'PST', received a tax invoice of 71.9 million won from ○○○ Esck (hereinafter "SP") during the first period of 2005 (hereinafter "the tax invoice of this case") and filed a return as an input tax amount.

B. On October 11, 2010, the Defendant issued a notice of rectification and correction of KRW 14,007,80,000, which was assessed against the Plaintiff on the ground that the instant tax invoice was based on a processed transaction and was based on a false tax invoice under Article 16(1) and Article 17(2)1-2 of the Value-Added Tax Act (amended by Act No. 8142, Dec. 30, 2006; hereinafter the same shall apply) on the ground that it was a false tax invoice (hereinafter “instant disposition”).

C. On October 28, 2010, the Plaintiff appealed and filed an appeal with the Tax Tribunal on February 14, 2010. The Tax Tribunal dismissed the Plaintiff’s appeal on March 23, 201.

[Ground of recognition] Unsatisfy private theory, Eul's entry of Nos. 1 (including paper numbers) and 6, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

In light of the fact that the Plaintiff received purchase tax invoices from the non-party corporation without real transactions, however, this case’s disposition is unlawful in light of the fact that the Plaintiff could not refuse the Plaintiff’s request from the Domen Electronic Co., Ltd., the sole seller of the Plaintiff, and thus, issued the processed sales tax invoices to the above company. Accordingly, the Plaintiff has no choice but to receive the instant tax invoices from the non-party corporation in order to process insufficient data on purchase, and that the instant disposition was excessive to the Plaintiff, a zero business entity, etc.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

Article 16(1)1 through 4 of the Value-Added Tax Act provides for the necessary entry of a tax invoice, and Article 17(2)1-2 of the Value-Added Tax Act does not allow the deduction of an input tax amount in cases where the necessary entry of a tax invoice is entered differently from the facts. Since the instant tax invoice is received by the Plaintiff from the non-party corporation without real transactions, it is clear that the input tax deduction is not allowed as it is different from the fact that the supplier, supply price, etc. is received from the non-party corporation. Furthermore, as alleged by the Plaintiff, the circumstances as alleged by the Plaintiff are difficult to view that it affects the illegality of the instant disposition, which has the nature of binding acts

3. Conclusion

Therefore, the plaintiff's claim is dismissed as it is without merit. It is so decided as per Disposition.