The legitimacy of the assertion that the actual gold bullion was purchased on the disposition by the processing transaction

Since ownership cannot be deemed to have been transferred merely as a nominal transaction, the issue is that a tax invoice is prepared without a real transaction or prepared differently from the actual transaction by at least the supplier.

Tax amount paid under Article 17 of the Value-Added Tax Act

1.The judgment of the first instance shall be modified as follows:

A. Of the instant lawsuit, the part concerning the revocation of the disposition imposing additional dues and aggravated additional dues is dismissed.

B. The plaintiff's remaining claims are dismissed.

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

The judgment of the first instance shall be revoked. The defendant shall revoke each disposition of imposition of value-added tax of 1,381,825,270 won (including additional tax of 39,783,830 won, increased additional tax of 15,913,530 won) for the first period of 2004 against the plaintiff on October 10, 2005, value-added tax of 146,647,790 won (including additional tax of 4,222,100 won, increased additional tax of 1,68,840 won) for the second period of 204, corporate tax of 329,346,40 won (including additional tax of 9,482,140 won, increased additional tax of 3,792,850 won) for each year of 204.

1. Details of the disposition;

A. From January 19, 2004, the Plaintiff is a corporate entity that has engaged in the wholesale business of gold bullion (referring to gold bullion with at least 995/100 in the state of raw materials, such as gold du○○○-dong ○○○○○○○ ○○○○○ ○○○○○ ○○○○○ ○○○○○, etc. in this case) from January 19, 204.

B. From the time of its establishment to December 31, 2004, the Plaintiff received tax invoices on the purchase of gold bullion of KRW 14,428,028,00 (hereinafter referred to as “first purchase tax invoice of this case”) in total from 7 gold bullion wholesalers other than stock companies (hereinafter referred to as “○○ gold”). From February 11, 2004 to April 16, 2004, the Plaintiff exported the total export price of KRW 6,684,804,591 in total from 7 gold bullion export price of KRW 75,75,787 to the Hong Kong Hong Kong-si's export price of KRW 875,75,787 from April 27, 2004, the total export price of gold bullion exported from the Hong Kong-si Foreign Company located in Hong Kong to April 17, 2004, and the total export price of KRW 75,75,787 gold bullion export price.

C. In addition, in 2004, the Plaintiff issued a tax invoice for the purchase of gold bullion amounting to KRW 2,475,185,000 (hereinafter referred to as “the second purchase tax invoice of this case”) from two gold bullion wholesalers, and ○○ gold issued a tax invoice for the sales of gold bullion amounting to KRW 2,487,046,00 (hereinafter referred to as “the sales invoice of this case”) in three business entities of the stock company (hereinafter referred to as “○○ gold”). The Plaintiff issued the tax invoice for the sales of gold bullion amounting to KRW 2,487,00,000 (hereinafter referred to as “the second tax invoice of this case”).

D. Based on the purchase tax invoice No. 1 of this case, the tax invoice No. 2 of this case, and the above export facts, the Plaintiff reported to the Defendant each tax base and tax amount of the first quarter of 2004 and the second quarter of 2004 and the corporate tax belonging to 2004 business year.

E. However, from October 8, 2004 to August 23, 2005, the director of ○○ Regional Tax Office conducted a false investigation with respect to the plaintiff (hereinafter "the investigation of this case"). The purchase tax invoice of this case constitutes 'the tax invoice of this case' (the difference between the purchaser of the actual gold bullion and the issuer of the tax invoice) and recognized that the tax invoice of this case constitutes 'the processed tax invoice (the tax invoice without real transaction)' and notified the defendant of this case. On October 10, 2005, the defendant added 1, 326, 127, 910, 140, 736, 850, 204 for the second period of value-added tax of this case for 204 to 140, 736, 850, 204 to 204 to 316, 71, 450, and 204 to 204 to 200.

[Basis] Facts without dispute, Gap evidence 1-3, Gap evidence 2-1-3, Eul evidence 1-3, Eul evidence 2-3, Eul evidence 2-3, the purport of the whole pleadings

2. Whether a lawsuit seeking revocation of a disposition imposing additional dues and aggravated additional dues is legitimate;

If national taxes are not paid by the payment deadline, the additional dues and increased additional dues are a kind of incidental taxes imposed as a interest on arrears if national taxes are not paid by the payment deadline, and the amount of national taxes are naturally incurred if national taxes are not paid by the payment deadline without the confirmation procedure of the person having the authority to impose taxes, and it is possible to demand the payment of the national taxes in order to commence the collection procedure. Thus, if the payment demand is unlawful, it is possible to bring an action for cancellation of the disposition to collect the additional dues and increased additional dues, but the tax authority has notified the purport that the additional dues and increased additional dues are to be collected by the payment deadline if national taxes are paid by the payment deadline. However, if there is no demand for the payment after the payment deadline, there is no additional dues and increased additional dues. Thus, a lawsuit seeking cancellation of the disposition to impose additional dues and increased additional dues should be deemed unlawful. Thus, as seen earlier, even in the case of this case, the defendant merely requested the payment of each additional dues and increased additional dues and the purport of collecting them by the payment deadline.

3. Whether each of the dispositions of this case is legitimate

A. The plaintiff's assertion

(1) The Plaintiff actually traded the same contents as the purchase tax invoice No. 1 of this case and the tax invoice No. 2 of this case, and there was no bid for the purpose of unfair refund of value-added tax. The Plaintiff conspired with the so-called so-called "exploitan enterprise, etc. to unlawfully refund value-added tax" is merely the Defendant's trend without any evidence. The Plaintiff did not intend to evade taxes jointly with other gold bullion enterprises, but did not know the other companies' activities. Accordingly, each of the dispositions of this case, which was based on the premise that the purchase tax invoice No. 1 of this case and the tax invoice No. 2 of this case were false, or that the Plaintiff knew or could have known of

(2) According to the Defendant’s assertion, since the Plaintiff’s transaction of the gold bullion in this case constitutes a transaction of entire processing (in the absence of actual goods, etc.), no value-added tax shall be levied on the Plaintiff on the grounds that there is no supply of goods

(3) The instant case does not constitute “the supply of goods or services and the failure to receive documentary evidence” under Article 76(5) of the Corporate Tax Act, and thus, it is unlawful to impose penalty tax for the failure to receive documentary evidence by applying the aforementioned provision.

(b) Related statutes;

It is as shown in the attached Form.

(c) Fact of recognition;

The following facts may be acknowledged, either in dispute between the parties, or in combination with the whole purport of the pleadings of evidence Nos. 2 through 11, 14 through 18, Eul evidence No. 19-1 through 7, Eul evidence No. 20-1 through 16, Eul evidence No. 21-1 through 13, Eul evidence No. 22 and 23:

(1) A general form, etc. of an irregular gold bullion transaction for the purpose of tax evasion

(A) According to Article 11(1)1 of the Value-Added Tax Act, the zero-rate tax rate shall apply to the supply of exported goods. In addition, according to Article 24(2)1 of the former Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 17827, Dec. 30, 2002; 2003. from July 1, 2003) Article 24(2)1 of the former Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 17827, Jul. 1, 2002), the gold bullion business operator may be subject to the zero-rate tax rate even where the gold bullion business operator receives gold bullion from the foreign exchange president on the basis of the export-related documents and received a written confirmation of purchase from the gold bullion wholesaler. According to Article 11(1)1 of the former Enforcement Decree of the Value-Added Tax Act and Article 106-3 of the former Enforcement Decree of the same Act (amended by Presidential Decree No. 3730, Dec. 17, 2017, 2008).

(B) By abusing the above zero-rate or zero-rate tax exemption system, gold bullion is imported and distributed as zero-rate or zero-tax exemption through multiple stages wholesalers, and it is converted into the so-called so-called so-called "large carbon business" (the company that has no economic ability but closes its business with the intention of evading tax, and is called "large coal business" as it discontinues its business with the intention of evading tax burden) and then re-exported it through multiple stages of wholesalers, and "large coal business" is exported. The so-called "large coal business" in the form of "large coal business" in which the value-added tax collected is evaded, and the exporter is entitled to receive the unpaid value-added tax, from around 202 to 002. It is further detailed about the form of "large coal business" made under the value-added tax exemption system.

1) In appearance, gold bullion is distributed through the stages of “foreign enterprises ? importer ? Tax-free wholesalers ? ? Tax-free wholesalers ? Tax-free wholesalers ? ? Tax-free wholesalers ? ? Export enterprises ? Foreign Enterprises ? The transaction amount is paid in sequence from the exporter to the importer, but in particular, the taxable wholesalers are only issuing tax invoices according to the orders of specific persons or specific enterprises, and they do not actually trade or transport gold bullion.

2) After purchasing gold bullion as tax-free gold and selling it as tax-free gold, "explosion business" evades the value-added tax by withdrawing, concealing, and closing its profit within a short period of time. "explosion business" sells gold bullion at a price lower than the purchase price. However, since the value-added tax added to the value-added tax is higher than the purchase price, and the value-added tax collected by adding the value-added tax is not paid, the difference between the purchase price and the purchase price is expected to be obtained. Meanwhile, the value-added tax collected by the "explosion business" is successively transferred by each of the following stages of business using the tax invoice delivered from the immediately preceding stage of business to deduct the input tax amount. Accordingly, the ultimate source of the value-added tax paid by the "explosion business" is the difference between the export price and the domestic sales price of the "explosion business" and the domestic sales price of the "explosion business" is the difference between the domestic sales price and the domestic sales price.

3) In order to maximize profits, the term "large amount of gold bullion business" means distributing the maximum quantity of gold bullion within a short time in order to maximize profits. ① In order to prevent disputes, loss of price, etc. among the participating companies that may arise therefrom, most of the same states (referred to as "money owners" means those who prepare for the import fund of gold bullion first from the outside of the wide carbon business network) operate both the exporter and the importer at the same time, ② to place the former owner in direct transactions with "explosion"; ③ to determine the volume, unit price, and margin of the transaction at each stage of transaction; ④ to ensure that the former owner actually determines the volume of the transaction, unit price, and the series of transactions from the importer to the exporter at a very short time, ④ to immediately transport the gold bullion directly with the exporter (it is nothing more than a transportation disguisedly conducted in normal transactions even if the actual gold bullion is transported every stage of transaction).

(C) Upon the amendment of the Restriction of Special Taxation Act by Act No. 7322 on Dec. 31, 2004 in order to prevent tax evasion by the above method, if the head of the competent tax office deems it necessary to preserve the value-added tax, the security system was newly established that allows gold bullion wholesalers, etc. to request the provision of security (Article 106-3(11)). Since April 1, 2005, the gold bullion import volume was 268 tons, export volume was 233 tons, export volume was 56 tons of import volume in 2005, and export volume was 19 tons in export volume.

(2) The details of establishment of the Plaintiff

(A) ○○○, the representative director of the Plaintiff, was the Plaintiff’s 1970s students, and ○○, from around December 1995 to May 196, 196, operated a remote area, market market, wholesale and retail business in Yananan City, and closed down the business after doing so. From August 1997 to January 2004, 200, ○○ established the Plaintiff Company on January 17, 2004. At the time of the investigation of the instant case, ○○ stated that the representative director of ○○○ and ○○○○○○ was established by taking account of the fact that ○○ and ○○○○○ had paid money from both the representative directors to wholesale and retail business in the name of his spouse.

(B) With respect to the source of the Plaintiff’s paid-in capital of KRW 100,000,000,000,000,000 for the Plaintiff’s company’s ○○○○○○○○○ (hereinafter “○○○○○”) stated that the Plaintiff paid-in capital of KRW 45,000,000,000,000,000,000. However, with respect to the source of KRW 45,5,000,00,000,000, the Plaintiff’s ○○○○○○ (hereinafter “○○○○○”) stated that the Plaintiff’s ○○○○○○○○○ was a senior fluor of ○○○○○○○○○○○’s work at packaging, and ○○○○ was in possession of 15,000,000,000,000,000,000,000).

(C) The Plaintiff leased its office KRW 10 million, monthly rent of KRW 1.2 million, and KRW 1.2 million. In relation to the source of the lease deposit, this ○○ stated that the office was paid in cash at the time of the instant investigation, and that the source was no longer disclosed.

(D) On March 29, 2004, KRW 120 million was deposited in cash in the funeral branch account in the Plaintiff’s name. At the time of the instant investigation, ○○○○○ borrowed money from a kind of imprisonment and stated that the personal information of the punishment cannot be disclosed. In addition, on June 29, 2004, KRW 10 million was withdrawn in cash from the above account and KRW 50 million was deposited in the account at the closing of ○○○ bank account in the Plaintiff’s name; on July 23, 2004, KRW 15 million was deposited in the above account in cash; KRW 43 million was deposited in the same account on September 1, 2004; KRW 20 million was deposited in the Dong branch account in the Plaintiff’s name on September 15, 2004; and KRW 50 million was deposited in the account on September 15, 2004; and on April 29, 2004, 2002.

(E) ○○○ is registered as a shareholder in the register of shareholders, and is registered as a director in the register of shareholders. With regard to the details thereof, ○○ stated that ○○ invested KRW 20 million in the first time around November 2003 at the time of the investigation of the instant case, but later, the statement that ○○ invested KRW 30 million in the register of shareholders around April 30, 2003 was reversed.

(3) Specific details of the instant gold bullion transaction

(A) According to the flow and remittance of the tax invoice, the gold bullion No. 1 in the purchase tax invoice of this case was all purchased by the importing company through a tax-free wholesale at two to three stages after the import by the importing company, and the conversion was made to the tax amount, and was subsequently purchased by the Plaintiff through a wholesale at one to eight stages of taxation, and most of the gold bullion was exported after the purchase to the Plaintiff. In most of the transactions from the import to the export was made within one day, and when the Plaintiff remitted the purchase amount to the purchasing agency, the payment was remitted to the importing company via the “explosioner” in the reverse direction during the adjacent time zone.

(B) The 'exploitation enterprise' has no value-added tax (However, the total value-added tax was not paid for 14 companies and 14.3 billion won in total), and its representatives have no business experience in the field of precious metal, and most of them have no family or ownership property, and some of them are mentally ill persons.

(C) At the time of the instant investigation, ○○○ stated that, with respect to the source of the purchase fund for which the Plaintiff first purchased gold bullion, KRW 45 million had been paid KRW 100 million from the account receivable of the child uniform wholesale business and KRW 130 million borrowed from ○○○○, one of the total amount of KRW 100 million borrowed from her own, but this stated that ○○○ was not 130 million from her own money but her own money, and that the said statement was false because ○○ requested transfer with cash, rather than ○○○○○, it was apparent that the said statement was made by her request for transfer with her own money. However, it was reversed that the said KRW 130 million was borrowed from her other person, but it could not be said that it was borrowed from her account, and as seen earlier, it was rejected to disclose this.

(D) When the Plaintiff exports gold bullion, it was entrusted to a large-scale precious metal transport business entity, but it was not proper to use the precious metal transport business entity when the Plaintiff purchased gold bullion, and at the time of the instant investigation, the ○○○ stated that the representative or employee of the business entity directly visited the Plaintiff and delivered gold bullion to the Plaintiff business entity.

(E) The export price of gold bullion exported by the Plaintiff is either equal to or lower than the import price, and is lower than the domestic market price. In addition, since most gold bullion exported by the Plaintiff were imported on the day, its export constitutes a “original export,” its export constitutes a refund of customs duties paid at the time of import (3% of the import tax base) upon filing an application for refund of customs duties with the certificate of subdivision attached thereto. In total 17 exports, the Plaintiff renounced customs refunds equivalent to KRW 392 million by failing to file an application for refund of customs duties in relation to the remaining 16 exports except for the exports from September 7, 2004.

(F) Upon the commencement of the instant investigation, the Plaintiff did not export gold bullion any longer after suspending the export of gold bullion.

(g) According to the results of the investigation on 165 g of gold bullion 165 g, which the Plaintiff purchased as indicated in the purchase tax invoice of this case, and sold in Korea as indicated in the sales tax invoice of this case, ○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○ Company, respectively, in the order of 204 ○○○○○○○○○○○○○”).

(h) When the Plaintiff sells gold bullion in the Republic of Korea, it did not use a precious metal transport specialized company, and at the time of the investigation of the instant case, ○○ stated that he/she delivered gold bullion to the seller with it.

D. Determination

(1) Whether each disposition of value-added tax of this case is legitimate

Generally, even if there is no direct evidence of the facts requiring taxation in a lawsuit seeking revocation of disposition imposing tax, if it is possible to presume the existence of a taxation requirement based on an indirect factual basis that can be reasonably explained based on the empirical rule, etc. Therefore, insofar as an indirect fact can be acknowledged in light of the empirical rule in the course of a specific lawsuit, it cannot be readily concluded that the other party to the disposition imposing tax is an unlawful disposition that fails to meet the taxation requirement in question, unless it proves that the other party to the disposition imposing tax is not subject to the empirical rule or that there are special circumstances that may exclude the application of the empirical rule as above in the pertinent case (see Supreme Court Decision 2006Du6383, Sept. 22, 2006). Moreover, inasmuch as there is no knowledge of the facts requiring taxation, a person who actually supplies goods or services, such as the person who delivers or provides goods or services, who did not know of the fact that the person who actually supplied the goods or services, and the person who actually supplied the goods or services, who did not know of the fact constitutes an input tax invoice or service under 20.

6. Regarding the instant case, since the Plaintiff had been aware of the fact that ○○○ Industries had already been engaged in the gold bullion wholesale business at the time of its establishment, the Plaintiff’s ○○○○○○○ also appears to have been able to know the fact through each representative director of the instant gold bullion; ② the export price of the gold bullion seems to have been ever lower than the import price or domestic market price; ③ the Plaintiff’s transfer of gold bullion to the Plaintiff is difficult to find that the Plaintiff would have received gold bullion at the time of its initial purchase or sale without any close cooperative relationship with the Plaintiff, even if it was difficult for the Plaintiff to use the gold bullion at the time of its initial purchase or sale of gold bullion at the time of its initial purchase or sale.

Therefore, the imposition of the value-added tax on the first purchase tax invoice of this case, based on the premise that the second purchase tax invoice of this case constitutes the "processing Tax Invoice", is legitimate.

(2) Whether the imposition of additional tax is legitimate

The defendant imposes additional tax on the 1st purchase tax invoice of this case by applying Article 76 (5) of the Corporate Tax Act to the transaction related to the 1st purchase tax invoice of this case. In this case, even though the plaintiff was actually supplied with gold bullion, and the 3th purchase tax invoice was received from another business operator, but the actual supplier of the gold bullion did not receive the tax invoice. Thus, even according to the 1st purchase tax invoice interpretation, it is clear that the above provision constitutes "the case where the goods or services are supplied by the business operator prescribed by the Presidential Decree, which is subject to the additional tax on the 1st purchase tax invoice of this case, and the evidentiary documents

In addition, Article 76 (5) of the above Article 76 provides that a corporation supplied with goods or services shall bear the additional tax in cases where it fails to receive regular expenditure documents is to enhance transparency in the content of the corporation's expenditure and induce the other party's business operator to cultivate the tax base. Since it is difficult to achieve such legislative purpose merely by imposing the other party's duty of faithful return on the other party's business operator subject to the training of tax base, it shall receive regular expenditure documents and impose sanctions on the corporation being supplied with the goods or services to pay an amount equivalent to a certain percentage of the amount not received in relation to the violation of the duty of due diligence (see Constitutional Court Order 2004HunGa7, Nov. 24, 2005; Order 2006HunBa88, May 31, 2007). In light of such legislative purpose, it shall be deemed that the additional tax is subject to the collection of evidence in cases where the actual supplier's tax base is concealed by receiving different tax invoices as above.

Therefore, the imposition of penalty tax without receiving the evidence of this case is legitimate.

4. Conclusion

Therefore, the part of the claim for revocation of the disposition imposing additional dues and aggravated additional dues among the lawsuits in this case is unlawful and dismissed, and the remaining claims of the plaintiff are dismissed as it is without merit. Since the judgment of the court of first instance is partially unfair, the judgment of the court of first instance is modified as above, and it is so decided as per Disposition.

Related Acts and subordinate statutes

○ Supply of goods Article 6 of the Value-Added Tax Act

(1) The supply of goods shall be a delivery or transfer of goods pursuant to all contractual and legal grounds.

○ Supply of Article 7 of the Value-Added Tax Act

(1) The supply of services shall be either the supply of services or having others use the goods, facilities or rights, pursuant to all contractual and legal grounds.

○ Application of Article 11 of the Value-Added Tax Act

(1) zero tax rates shall apply to the supply of goods or services falling under any of the following subparagraphs:

1. Exported goods;

○ Tax invoice Article 16 of the Value-Added Tax Act

(1) Where an entrepreneur registered as a taxpayer supplies goods or services, he/she shall issue an invoice stating the following matters (hereinafter referred to as "tax invoice") to the person who receives the goods or services at the time prescribed in Article 9, as prescribed by Presidential Decree: Provided, That in cases prescribed by Presidential Decree, the delivery time may vary (amended by Act No. 8142, Dec. 30, 2006):

1. Registration number, name or denomination of the businessman who provides;

2. Registration number of the person who receives;

3. Supply value and value-added tax;

4. Date of preparation.

5. Matters as prescribed by the Presidential Decree other than those under subparagraphs 1 through 4.

○ Tax amount paid under Article 17 of the Value-Added Tax Act

(2) The following input taxes shall not be deducted from the output tax amount:

1-2. An input tax amount, in case where the tax invoice as provided in Article 16 (1) and (3) is not delivered, or the whole or part of the matters to be entered under Article 16 (1) 1 through 4 (hereinafter referred to as a "necessary entry item") is not entered or entered differently from the fact on the delivered tax invoice: Provided, That the input tax amount in the case as prescribed by the Presidential Decree shall be excluded (amended by Act No. 8826, Dec. 31, 2007);

○ Scope of export Article 24 of the Enforcement Decree of the Value-Added Tax Act

(2) The exported goods under Article 11 (1) 1 of the Act shall be deemed to include the following goods:

1. Goods supplied by an entrepreneur through a local letter of credit or a written confirmation of purchase as prescribed by the Ordinance of the Ministry of Finance and Economy (amended by the Presidential Decree No. 17827, Dec. 30, 2002);

1. Goods supplied by an entrepreneur through a local letter of credit or written confirmation of purchase as prescribed by the Ordinance of the Ministry of Finance and Economy: Provided, That gold bullion supplied by a written confirmation of purchase shall be excluded (amended by the Presidential Decree No. 17827, Dec. 30, 200

Article 9-2 of the former Enforcement Rule of the Value-Added Tax Act (amended by Ordinance of the Ministry of Finance and Economy No. 422 on March 11, 2005)

(1) The term "purchase confirmations under Article 24 (2) 1 of the Decree and Article 26 (1) 2-2 of the Decree means confirmations issued by the head of a foreign exchange bank under Articles 38-2 and 116 (14) of the Enforcement Decree of the Foreign Trade Act within 20 days after the end of the taxable period to which the time of supply for goods or services belongs, corresponding to a local letter of credit under paragraph (1) and stating the export letters of credit, etc., the number thereof, effective date, shipment date, etc.

○ Article 76 of the Corporate Tax Act

(5) In case where a corporation (excluding such corporation as prescribed by the Presidential Decree) is supplied goods or services with an entrepreneur as prescribed by the Presidential Decree in connection with its business and fails to receive the evidential documents falling under any of subparagraphs of Article 116 (2), the chief of the district tax office having jurisdiction over the place of tax payment shall collect as corporate tax the amount calculated by adding an amount equivalent to 2/100 of the unpaid amount, except for the case where the provisions of

○ Receipt and safekeeping of documentary evidence of expenditure Article 116 of the Corporate Tax Act

(1) A corporation shall prepare or receive documentary evidence for all business-related transactions for each business year and keep them for 5 years from the date of the expiration of the time limit for report under the provisions of Article 60.

(2) In cases falling under paragraph (1), where a corporation is supplied with goods or services and pays the prices thereof from a business operator prescribed by Presidential Decree, it shall receive and keep the evidential documents falling under any of the following subparagraphs: Provided, That the same shall not apply to cases prescribed by Presidential Decree (Amended by Act No. 8141, Dec. 30, 2006>

2. Tax invoice under Article 16 of the Value-Added Tax Act;

○ Special taxation of value-added tax on gold bullion under Article 106-3 of the Restriction of Special Taxation Act

(1) The value-added tax shall be exempted until June 30, 2005 pursuant to the classification under paragraph (3) for the supply of gold bullion falling under any of the following subparagraphs (hereafter referred to as "tax-free gold bullion" in this Article), which is bullion equipped with the form, net altitude, etc. prescribed by Presidential Decree (hereafter referred to as "gold bullion" in this

1. Gold bullion supplied by the wholesalers and refiners of gold bullion prescribed by the Presidential Decree (hereafter in this Article, referred to as the "gold bullion wholesalers, etc.") to the gold craftsmen, etc. prescribed by the Presidential Decree (hereafter in this Article, referred to as the "gold craftsmen, etc.") after receiving tax-free recommendation from a person prescribed by the Presidential Decree (hereafter in this Article, referred to

(2) The value-added tax shall be exempted until June 30, 2005 on the gold bullion imported by the gold craftsmen, etc. and financial institutions after receiving a tax-free import recommendation from persons prescribed by Presidential Decree (hereafter referred to as "the head of tax office" in

(3) Special cases under the Value-Added Tax Act shall apply to the tax-free gold metals under paragraph (1) pursuant to any of the following subparagraphs:

2. Where any entrepreneur other than financial institutions supplies the tax-free gold bullion, the relevant entrepreneur shall be deemed the value-added tax taxable entrepreneur and subject to the application of the Value-Added Tax Act. In this case, the value-added tax amount borne at the time of purchasing the relevant gold bullion in connection with the supply of the tax-free gold bullion shall not be deemed the input tax amount eligible for the deduction under Article 17 of the Value-Added Tax Act, and the tax-free gold bullion gold metals manufactured and supplied by the gold bullion refiner from among the gold bullion wholesalers, etc. and the value-added tax amount borne by

(11) The head of the competent district tax office may, if deemed necessary for preserving the value-added tax, request the gold metal wholesalers, etc. and the gold craftsmen, etc. to offer security as prescribed by the Presidential Decree.

Newly Inserted by Act No. 6762 of Dec. 11, 2002

○ Special Taxation for Value-Added Tax on Gold Metal Trade under Article 106-3 of the former Enforcement Decree of the Restriction of Special Taxation Act (Presidential Decree No. 17829 on December 30, 2002

(1) For the purpose of the part other than the subparagraphs of Article 106-3 (1) of the Act, the term "any gold with the shape, degree, etc. prescribed by Presidential Decree" means gold with not less than 95/100 in the state of raw materials, such as gold ingots and pelbs.