If it is possible to grasp the sales omitted and the sales reported with tax exemption after investigating the electronic data, an unfair under-reported penalty can be imposed.

If the meat processing company entered the entire sales amount on the electronic book, but reported the omission of sales at the time of reporting the additional tax, and the tax authorities subsequently clarified the omitted sales amount as a result of the tax investigation, it is legitimate to impose an unfair under-reported additional tax on the omitted sales amount.

Suwon District Court 2016Guhap6675

( principal)○○○○

Head of Gyeonggi Mine District Office

February 28, 2017

Mar. 28, 2017

1. All of the plaintiff's claims are dismissed.

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

Cheong-gu Office

The defendant's decision that each of the corresponding monetary amounts stated in the "request amount of the same list" column of the corresponding value-added tax imposed on the plaintiff on December 1, 2015 shall be revoked.

1. Details of the disposition;

A. On April 21, 2006, the Plaintiff’s representative director, AA, etc. registered his/her business with the trade name of BB distribution from Mapo City through Do, retail business, etc., such as meat packaging processing, etc., and operated the business. On December 19, 2014, the trade name was changed to B B B B (the representative: AA) and transferred the place of business to 1st floor in Sipopo City, Gunposi, and thereafter closed the business on February 29, 2016.

B. Meanwhile, on May 1, 2012, BBP Co., Ltd. (hereinafter referred to as “BP”) moved its business to 9-20,000,000,000,000,000,000,000,000,000,000,000,000,000,000,0000,0000,000,000,0000,0000,0000,0000,0000,0000,0000,0000

C. The Plaintiff, a newly established corporation on February 16, 2012, engaged in the business after registering the business as the Do. Retail Business, 59, Hanam-si, Hanam-si, Hanam-si. The Plaintiff purchased livestock products and sold them to the business partner in the original state, or the processed meat manufactured at BB BB Med, and supplied them to the business partner, and thereafter the Plaintiff closed the business on February 15, 2016.

D. As a result of conducting a general consolidated investigation on the taxable year from August 26, 2015 to November 20, 2015 (hereinafter “instant investigation”) with respect to the Plaintiff during the period from August 26, 2015 to November 20, 2015, the Defendant confirmed that: (a) the Plaintiff sold the items subject to value-added tax (e.g., solar meat), but issued a invoice by setting a unit price excluding value-added tax; (b) the Plaintiff issued a tax invoice by setting a unit price excluding value-added tax; or (c) the Defendant issued a tax invoice (taxable KRW 3,21 million, KRW 1 million, KRW 1.1 million, KRW 1,561, KRW 1,561, KRW 1,561, KRW 3,1260, KRW 1260).

E. On December 1, 2015, the Defendant issued a notice to the Plaintiff on December 1, 2015, each of the value-added tax for the first period between January 2012 and February 2014 (hereinafter “each of the instant dispositions”).

F. On February 15, 2016, the Plaintiff filed an appeal with the Tax Tribunal on February 15, 2016, but the Tax Tribunal rendered a decision to dismiss the claim on June 23, 2016.

Facts without any dispute, Gap's 1, 2, 3, 6 through 13, Eul's 1 through 4 (including paper numbers), and the purport of the whole pleadings.

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

For the following reasons, each corresponding part of the Disposition in the Schedule 1 (1) of this case shall be revoked.

1) Upon receipt of an order for processed land from a customer, the Plaintiff purchased the growth and requested the consignment processing to BB B B B B B B B B B B B B B B B B B B B B B B B B B B B B B B B B B, which is practically a single company. However, the Plaintiff and BB B B B B B B BD was inevitably separated from B B B B B B B B B due to an objection by the business members related to calculating operating allowances. The above consignment processing transaction between the Plaintiff and B B B B B B B B B B B B B B B B B B B B B B B B B B, merely is an internal transaction, and the transaction volume supplied by the Plaintiff to B B B B B B B B B B B B, which is merely an internal transaction. Thus, the transaction volume supplied by the Plaintiff to B B B B B B B B, cannot be deemed the supply of goods. Therefore, the value-added tax

2) The Plaintiff did not issue a tax invoice or issued a tax invoice subject to tax exemption under the practice of the same industry, and there was an inevitable aspect that the Plaintiff was evading the issuance of a tax invoice or issuing a tax invoice subject to tax exemption, and the Plaintiff recorded the actual sales details in the computerized system and managed the price as the Plaintiff’s business account. Thus, it is possible to verify at any time when the Defendant analyzes or conducts a tax investigation on the pertinent details of value-added tax. The Plaintiff did not “an act significantly difficult to impose and collect taxes” under Article 47-3(2) of the former Framework Act on National Taxes (amended by Act No. 12848, Dec. 23, 2014; hereinafter the same). As such, the portion exceeding the ordinary under-reported penalty tax out of the unfair under-reported penalty taxes in each of the instant dispositions is unlawful.

B. Relevant statutes

Attached Form 3 is as shown in the relevant statutes.

C. Determination

1) Determination on the first argument

Since value-added tax should be reported and paid at each workplace, a person who is not a unit taxable business operator shall register his/her business at each workplace (Article 3 subparagraph 1, Article 6 (1), and Article 8 (1) of the Value-Added Tax Act), Article 4 subparagraph 1 of the Value-Added Tax Act provides that value-added tax shall be imposed on the supply of goods or services conducted by a business operator, and Article 9 (1) provides that the supply of goods shall be delivered or transferred according to all contractual or legal grounds.

In full view of the above relevant provisions and evidence revealed as above, ① BB distribution is registered as a business operator in Do. Retail City with meat packaging, etc.; ② on December 19, 2014, its trade name is changed to BB B B B (representative: AA) and it is an individual business place with 9-20 first floor, which moves its business to 101 Si Gun Gun Gun Gun Gun Gun Gun Gun Gun Gun Gun Gun Gun Gun Gun Gun Gun Gun Gun Gun Gun Gun Gun Gun , ② the Plaintiff was a newly established corporation on February 16, 2012, and operated a business with its business registration as a retail business. Considering that BB distribution is reasonable, it is reasonable to deem that the Plaintiff’s business is not only a separate business operator from B B B B, but also a different business establishment as an indirect tax imposed for each distribution stage of value-added tax (see, e.g., Supreme Court Decision 90Do3220, supra.).

2) Judgment on the second argument

In full view of the regulatory structure, language, content, and legal nature of the penalty tax for underreporting, etc. under Article 47-3 of the former Framework Act on National Taxes, where Article 47-3(2) of the former Framework Act on National Taxes conceals or disguises all or part of the fact, which serves as the basis for calculating the tax base or the amount of national tax, it is understood that the imposition and collection of tax is either impossible or considerably difficult, and thus, a sanction is intended to impose penalty tax for any general underreporting that is much higher than the case of an illegal underreporting that is not based on the “unfair method” to induce the taxpayer to faithfully report the tax base. Therefore, in cases of underreporting the tax base through active acts, such as making it difficult to detect the taxation requirements of the national tax or making it difficult to discover a false fact, and thereby, the purpose of tax evasion, such as avoiding the progressive tax rate and the application of the provisions on carried-over losses (see, e.g., Supreme Court Decision 2012Du32638, Dec. 23, 2013).

In light of the following circumstances, according to the above facts and the aforementioned facts, the Plaintiff reported the value-added tax for the first term to the second term of 2012, by distinguishing the processed meat sales subject to value-added tax from the sales of the growth exempt from value-added tax and the sales of the growth exempt from value-added tax. ② The Plaintiff did not issue a tax invoice or issue a tax invoice according to the practice although he knows that the invoice, etc. subject to tax exemption issued by him is different from the facts, ③ the Plaintiff appears to have sufficiently known that his act would result in the reduction of national tax revenue. ④ The Plaintiff caused the reduction of national tax revenue by issuing a tax invoice or omitting sales, etc. ④ The actual sales revenue was separately managed in the Plaintiff’s computer system, and ⑤ The Plaintiff’s act appears to have been considerably difficult to verify the data on the computerized system of the Plaintiff until analyzing the data on the computerized system of the Plaintiff through the instant investigation by the tax authority, and thus, it is reasonable to deem that the Plaintiff’s act was considerably difficult to impose or collect the tax invoice by means of issuing a false tax exemption or by other unlawful means.

3. Conclusion

Therefore, all of the plaintiff's claims are dismissed. It is so decided as per Disposition.