Whether it is a good faith trading party

A person who is supplied with goods and services is not obligated to actively investigate whether the other party is a disguised business operator. As such, there are sufficient circumstances to suspect that the other party is a disguised business operator, but the other party is negligent in not knowing that the other party is a disguised business operator.

Article 32 (Tax Invoice, etc.)

Article 39 of the Value-Added Tax Act

2018Nu4787 Revocation of Disposition of Imposing Value-Added Tax

AA Corporation

BB Director of the Tax Office

September 6, 2019

October 11, 2019

1. Revocation of a judgment of the first instance;

2. Each disposition of imposition of value-added tax of KRW 613,420,940, and value-added tax of KRW 80,844,440, which the Defendant imposed on the Plaintiff on November 1, 2016, and KRW 80,844,440, which was imposed on the Plaintiff on November 1, 2016,

3. All costs of the lawsuit are borne by the Defendant.

the Gu Office's place of service and place of service

The same shall apply to the order.

1. Details of the disposition;

A. From December 1, 2010 to June 29, 2016, the Plaintiff is a company that engaged in scrap and steel wholesale business in Daegu-gu odong 00, which was closed ex officio by the head of the competent tax office.

B. The Plaintiff was issued a tax invoice of KRW 3,768,727,100 (hereinafter referred to as “instant tax invoice”) during the period of value-added tax from the first period (from January 1 to June 30) to the second period (from July 1, 2014 to December 31) in 2014.

As indicated below, the Plaintiff deducted the quarterly input tax amount including the input tax amount under the tax invoice of this case from the quarterly output tax amount of each quarter, and reported and paid the first half of 2014 and the second half of 2014.

C. As a result of the Defendant’s tax investigation on the Plaintiff from July 11, 2016 to September 11, 2016, the Defendant determined that the actual supplier of scrap metal transactions under the instant tax invoice constituted a tax invoice stating the business operator’s registration number and name or title differently from the fact that the business operator’s registration number and name or title are entered in the Steel ▽△△ (CC). Accordingly, the instant tax invoice constitutes a tax invoice stating differently from the fact that the business operator’s registration number and name or title are entered. Accordingly, on November 1, 2016, the Defendant did not deduct the input tax amount under the instant tax invoice from the output tax amount pursuant to Article 39(1)2 of the Value-Added Tax Act, but did not correct and notify the Plaintiff of the input tax amount under the instant tax invoice of KRW 613,420,940 (including additional tax) and the value-added tax of KRW 80,844,440 (including additional tax) for 2014 (hereinafter referred to as “instant disposition”).

D. The Plaintiff dissatisfied with the instant disposition and filed an appeal with the Tax Tribunal on April 19, 2017, but the appeal was dismissed on July 6, 2017.

Facts that there is no dispute over recognition, Gap's 3, 4, 8, Eul's 1 through 4, 6 (including branch numbers), the purport of the whole pleadings.

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

Since the plaintiff was normally traded with BBS industry and was issued with the tax invoice of this case, it cannot be said to be the "tax invoice stating the necessary entries differently from the facts" under Article 39 (1) 2 of the Value-Added Tax Act.

Even if the supplier of the tax invoice of this case constitutes a tax invoice that contains different descriptions from the actual supplier, the Plaintiff was unaware of such descriptions and was unaware of such descriptions.

Therefore, in determining the amount of value-added tax for the first and second years 2014, the Defendant is obliged to deduct the input tax amount under the instant tax invoice from the output tax amount. However, the Defendant is obliged to deduct the input tax amount under the instant tax invoice from the output tax amount, and the said tax amount is light

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

C. As to whether the instant tax invoice is false

In full view of the following facts and circumstances revealed by adding the whole purport of the pleadings to the statements in the evidence Nos. 8, 9, 11, 14, 15, 16, and 20 of the Value-Added Tax Act, the instant tax invoice is acknowledged as having been written as if the supplier supplied the B/L industry (D) even though the supplier had been △△ Steel (CCC), and it can be recognized that the business operator’s registration number, name, or title, which is stipulated as a necessary entry in the tax invoice under Article 32(1)1 of the Value-Added Tax Act, is a tax invoice stating differently from the fact. Thus, the Plaintiff’s assertion that the requisite entry under Article 39(1)2 of the Value-Added Tax Act does not constitute a tax

① Even though the ▽▽ steel actually supplied scrap metal to the Plaintiff during the process of tax investigation and prosecution investigation, the CCC stated to the effect that it was issued a tax invoice from DD to the effect that it lent the name of business registration of the Bright industry to the Plaintiff as if the Bright industry supplies scrap metal to the Plaintiff.

② DD also made consistent statements to the effect that “Y and its representative director, at the request of CCC, lent the name of business registration of BBB industry to CCC and issued only tax invoices without gathering all the transaction details with the Plaintiff,” in the process of tax investigation and investigation, criminal cases related to the receipt of false tax invoices against the Plaintiff and the Plaintiff’s representative director FF, and the criminal cases related to the receipt of false tax invoices against EE.

③ Even if it is not bound by the facts established in the original civil or administrative litigation, the facts recognized in the judgment of the relevant criminal case are significant evidence in civil or administrative litigation, and thus it cannot be recognized that the facts opposed to the facts recognized in the relevant criminal case, barring any special circumstance (see, e.g., Supreme Court Decision 81Nu324, Sept. 13, 1983).DD, CCC, May 20, 2016, from the Busan District Court (2015Da274, 736, Feb. 4, 2014) to June 30, 2014, the facts were found to be between Busan and the Busan District Court (2015Da5274, 736, a consolidation) and the public prosecutor’s appeal were dismissed.

D. As to whether the Plaintiff was bona fide and without fault

1) An actual supplier and a supplier of a tax invoice may not deduct or refund an input tax amount unless there is any negligence on the part of the person who received the tax invoice in the name of the person who received the tax invoice. The fact that the person who received the tax invoice was not aware of the fact that there was no negligence on the part of the person who received the tax invoice in the absence of any negligence on the part of the other person, must prove that the person who asserts the deduction or refund of the input tax amount is not liable (see, e.g., Supreme Court Decision 2002Du2277, Jun. 28, 2002). Meanwhile, the person who received the goods or services is not obligated to actively investigate whether the other party is a disguised business. Therefore, in determining whether the other party is a person eligible for a transaction based on the facts revealed in the process of collecting the data to determine whether the other party is a person eligible for a transaction, it should be deemed that there is a negligence on the part of the other person who did not know the fact that the other party is a disguised

2) In full view of the facts acknowledged earlier and the aforementioned facts and circumstances, comprehensively taking account of the following facts and circumstances, the Plaintiff did not know that the name of the supplier of the instant tax invoice is different from that of the actual supplier, and was not negligent in having known such facts. It is reasonable to deem that the Plaintiff was not negligent in having known that the name of the supplier of the instant tax invoice was different from that of the actual supplier, and that there was no negligence.

① During the tax investigation process, the Plaintiff et al., who was the sales partner of the first Bright industry in 2014, stated that the CCC was aware that it would issue a tax invoice under the name of the business operator of the Bright industry. In the investigation process, the Plaintiff et al. stated that “F, the representative director of the Plaintiff, was actually supplied scrap steel, etc., but explained the reason why it issues a tax invoice in the name of Bright industry.” However, the Plaintiff and its representative director, as a witness of the criminal case related to the receipt of false tax invoices against FF (Seoul District Court 2017Hahap130), stated that “F would be supplied as Bright industry instead of delivering it to BrightF,” thereby notifying the Plaintiff of the fact that the Plaintiff was aware of such fact.

In addition, the CCC stated that it was known that it would issue a tax invoice under the name of the business operator of the BB industry even in the process of the tax investigation and investigation. However, the CCC made a statement that is different from the statement in the process of the tax investigation and investigation by testimony to the effect that "E, Kim 00 (YY purchase department of the Daejeon District Court Decision 2016Dahap242) would make an appearance as a witness of the case (YY purchase department of the Daejeon District Court Decision 2016Dahap242) which was prosecuted for the issuance of a false tax invoice by the KY and its representative director."

In light of such CCC’s attitude of statement, it is difficult for the Plaintiff’s representative director FF to believe that, despite the fact that the ▽△ Steel actually supplied scrap iron, etc. to the FF, it explained the reason why it issues a tax invoice in the name of the Bright Industry, and that the Plaintiff was aware of the fact that it was issuing a tax invoice under the name of Bright Industry.

Even in cases where the Plaintiff and its representative director FF were prosecuted on charges of having received false tax invoices from the BBU industry, the court rendered a judgment of innocence against the Plaintiff and its representative director on the grounds that there is insufficient evidence to support that the Plaintiff and FF, a representative director of the Plaintiff, were aware of the fact that the Plaintiff and FF was not the Bright industry, a nominal owner, but the supplier of the instant tax invoice. The judgment became final and conclusive.

② On January 29, 2014, at the time of the commencement of transaction with the Bilateral Industry, the Plaintiff received the copy of the business registration certificate of the Bilateral Industry and the copy of the passbook of the business deposit account opened by DDD. According to the above business registration certificate, the Bilateral Industry is a scrap metal and non-retail retail business that was opened on June 23, 2008, and was not a sudden business at the time of the commencement of the instant transaction, but a business account that can be traded with DD’s signature, and thus, it cannot be deemed that there was any circumstance to doubt that the said deposit account was a disguised business operator in the process of verifying the above business registration certificate and copy of passbook.

③ At the time of the transaction with the Plaintiff, the place of business at the time of the transaction with the Plaintiff was Kimhae-si, Kimhae-si, 00 Dol 886-8. At the time of the transaction with the Plaintiff, the place of business was 00 Dol 00 Dol 00 Dol 891-1 (CC’s place of business was shut down ex officio by the head of the competent tax office on May 22, 2014). The Plaintiff’s representative director FF visited 00 Dol 891-1 place of business at Kimhae-si, and confirmed that the place of business was in the actual operation of B/L industry at the time of the transaction with the Plaintiff, and it was difficult to find that the place of business was in the above 00 place of business, and that the actual establishment was in the name of 00 Dol Dol Don-si, which was in the name of the Plaintiff, and was in the name of 00 Dol Gan Don 2.

④ The Defendant asserts to the effect that, as the location of Bright Industry’s business registration certificate was indicated as “Yejin-gu Busan Metropolitan City 00 Dong-gu 858-2300, Busan, Busan, Busan, and that the above 00 establishment was not the place of business, but the place of business operated by CCC, there was a circumstance to suspect that the place of business was the place of business in the name of the Steel operated by CCC. However, as many as it can be confirmed in the statements in the evidence No. 18-1 through No. 7, the scrap metal retailers collected separately from the location of the place of business registration certificate, which was the place for the selection and shipment. As such, the circumstance that the above 00 places of business were written differently from the location of the place of business registration certificate, cannot be deemed as a circumstance to suspect that B&S industry was the place of business in the name of the place of business in which B&S was located.

⑤ DD entered into a lease agreement with 00 pages of business place on one, which is to be used at 00, on one hand, sold its own vehicle and borrowed KRW 30 million to CCC as the funds for the purchase of scrap metal. In addition, the tax invoice of this case was directly issued by DD from 000, which is the location of the BBB industry, and the 0 bank account, which is the business account in the name of BBB industry, (Account number 000, and the Plaintiff received a copy of the above account passbook through facsimile at the time of commencing transactions with BBB industry) was withdrawn. In short, DD appears to be a considerable part of DD’s business in BBB industry.

6) The Plaintiff prepared a purchase transaction ledger and the head of the purchase transaction ledger in accordance with the transaction with Bilateral Steel Industry. The Plaintiff commenced the transaction with Bright Industry and paid the advance payment before receiving the scrap metal from Bright Industry. If Bright Industry was aware of, or had any circumstance to suspect, the fact that it was the business operator in the name of Bright Steel, then there is no reason to pay the advance payment.

7) The Plaintiff paid all the transaction amounts, including value added tax, to the Bright Industrial Account in transactions with the Bright Industrial Complex, and there is no reason to deem that the Plaintiff was partly refunded or the unit price of scrap metal, which is the object of the transaction, is less than the ordinary market price. As such, the Plaintiff does not make any economic benefit, other than the ordinary profit, in transactions with the B right Industrial Complex. As such, even though the Plaintiff, who cannot obtain any particular economic benefit, knew of the fact that B right Industrial is a disguised business operator, or even if there are sufficient circumstances to suspect such doubt, he did not find any motive to conduct a transaction with B right Industrial Complex, while taking the risk of non-deduction of

8) In fact, even if scrap metal is sold through intermediate merchants for the reduction of transportation costs and convenience in transactions, the actual goods are to be transported as an agent for the final consumption without being sold to the intermediate merchant. Instead, the Plaintiff’s intermediate merchant, such as the Plaintiff, reported the entry status into the instructor, and verified the supply volume and supply value, etc. of the scrap metal. The above entry status includes the number of trucks transporting the scrap metal with the delivery date and the scrap metal. The Plaintiff, as seen above, did not supply the actual goods to the 00 Special Dental Co., Ltd. (hereinafter referred to as “O0 Special D”) which is an instructor, and it is difficult to view that the Plaintiff was aware of the registration number of the Plaintiff’s truck in relation to the above 00 Special D&D industry as an employee of B/L industry, but it is difficult to view that the Plaintiff was aware of the registration number of the Plaintiff’s truck in relation to the above 00 Special D&D industry’s delivery of the cargo goods to the 00-type Special D&D industry.

9) On June 24, 2015, the Plaintiff: (a) received a confirmation document on the refund of the advance payment of the scrap metal borrowed from AAAASethyl; and (b) received from DD on June 24, 2015, stating that “I will confirm that I will not refund the advance payment of the scrap metal borrowed from AAASethyl; (c) as of June 24, 2015, the Plaintiff was liable for the failure to pay the advance payment of the scrap metal borrowed from DD; and (d) received the confirmation document on the refund of the advance payment of the LASethylethyl; and (e) confirmed that D would not bring about a civil and criminal issue as to whether I will pay the advance payment of the scrap metal borrowed from DD.

However, in light of the fact that at the time of the preparation of the above certificate, there was a tax investigation into the BBB industry, and that there was a prosecution against DD and CCC issued false tax invoices, and that FF at the time of DD also made a request to prepare and change the "written confirmation of refund of the advance payment of the scrap metal" as the data required for the Plaintiff's accounting declaration, it is acceptable to accept the Plaintiff's assertion that DD only lent the name of DD and will not be held responsible for the process of receiving the "written confirmation of refund of the advance payment of the scrap metal" due to the lack of possibility to recover the advance payment due to the lack of possibility of recovery, and that FF made efforts to investigate the details of DD's assets to receive the refund of the advance payment of the scrap metal paid to the industry.

E. Sub-committee

Therefore, the Plaintiff’s assertion that the instant tax invoice is not a false tax invoice is not acceptable, but the Plaintiff was unaware of the fact that the instant tax invoice constitutes a false tax invoice, and the Plaintiff’s assertion that there was no negligence on the part of the Plaintiff’s failure to know it is reasonable. Ultimately, the instant disposition based on a different premise is unlawful

3. Conclusion

The plaintiff's claim of this case is accepted on the grounds of its reasoning, and the judgment of the court of first instance is unfair, and it is so decided as per Disposition by cancelling the judgment of the court of first instance and cancelling the disposition of this case.