Cho High Court Decision 2010Du1394 (Law No. 29, 2010)

being issued a false tax invoice by the supplier for the purchase of waste resources;

In purchasing waste resources as a manufacturer of raw materials Aluminium joints, the supplier received a false tax invoice, and the Plaintiff cannot be deemed a bona fide transaction party, and thus the disposition that did not deduct input tax amount is legitimate.

2010Guhap5814 Revocation of Disposition of Imposition of Value-Added Tax

XX Industry Corporation

O Head of tax office

June 10, 201

July 8, 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 47,822,030, which the Defendant rendered to the Plaintiff on January 11, 2010, shall be revoked.

1. Details of the disposition;

A. The Plaintiff is a company engaged in the manufacturing business of aluminium for raw materials.

B. In 2008, the Plaintiff reported and paid value-added tax by deducting the input tax amount pursuant to Chapter 15 (hereinafter “the instant tax invoice”) of the purchase tax invoice for waste resources (such as scrap iron and Alumin aluminium) equivalent to the supply value of 280,926,000 won from the supply value, which is the joint supply resources development (representative AA, Busan, XX-dong 57-21) of the draft supplier through the 2nd taxable period of the value-added tax.

C. On January 11, 2010, the Defendant denied the deduction of input tax amount for the second period of value-added tax (including additional tax 19,729,432) from the Plaintiff on the grounds that the waste resources supplier on the instant tax invoice did not develop a transit resources, but was tax invoices false from the fact, and subsequently, corrected and notified the Plaintiff on January 11, 201 (hereinafter “instant disposition”).

[Ground of recognition] Facts without dispute, Gap 2, 5 evidence, Eul 1 evidence, the purport of the whole pleadings

2. Whether the disposition is lawful;

A. The plaintiff's assertion

The Plaintiff asserts the following reasons, and the instant disposition, which did not deduct the input tax amount according to the instant tax invoice, is unlawful.

① The actual supplier of some of the instant tax invoices is XX development.

② There was no negligence in not knowing that the supplier of the instant tax invoice is different from the fact, and there was no negligence in not knowing the fact. In other words, the supply is incidental to the demand, and there is a limit in confirming the conformity between the supplier and the actual supplier under the practice of waste resources transactions that are not shipped out only at the supplier’s place of business. The Plaintiff, if the OM personnelCC, which is the former customer, has retired from the position of x development, has traded with the belief of suggesting the name of the development and the copy of the passbook under the name of the trader and the name of the representative, and thus is bona fide and without fault.

(b) Related statutes;

C. Determination

(I) Whether the entire tax invoice of this case was written differently from the fact

In light of the facts that Gap 1 through 8, No. 14, 15, and 16 (including each number B), and the purport of the entire testimony of the CC as a witness, the plaintiff, who had been in the name of the former business partner, was released from the KCC, and a copy of the YA’s business registration certificate and the deposit passbook under the name of the Gangwon-do Development, were issued at each time of the transaction of the pertinent goods (hereinafter referred to as the “instant transaction”), and there is no counter-proof regarding the fact that the supplier’s first sale of the relevant goods was in the name of the KB’s business operator, and that the supplier’s first sale of the said goods was in the name of the KB’s business operator, and that the supplier’s first sale of the said goods was in the name of the KB’s business operator, and that the supplier’s first sale of the said goods was in the name of the KB and the fact that the supplier was in violation of the provisions of the KBA’s first sale of the goods and its entire supply value of the goods.

(2) Whether the Plaintiff is a bona fide trading party

(A) Article 17(2)1-2 of the former Value-Added Tax Act (amended by Act No. 9268 of Dec. 26, 2008) provides that an input tax deduction shall not be granted in cases where the necessary entries of a tax invoice are entered differently from the facts, and the main purpose of this provision is to train the taxation data and secure the tax amount by securing the tax amount. Therefore, if a supplier and a supplier of a tax invoice are issued other tax invoices, the input tax amount cannot be deducted or refunded unless there is any special circumstance that the actual supplier and the supplier were unaware of the fact that they were not aware of the fact that they were issued other tax invoices, and that the person who received the tax did not know of the fact that they were not guilty of the fact that they were not aware of the fact that they were nominal (see, e.g., Supreme Court Decision 2002Du2277, Jun. 28, 2002).

(B) First of all, the Plaintiff’s departure from the former business partner (“SCC”) was received from the former business operator of the transaction partner and issued a certificate of measurement under the XX Development’s name at the time of the instant transaction (However, as seen in the evidence No. 8-2 and No. 4, there is still a measurement certificate that appears to have been made in the name of OM). If the above evidence and the purport of the entire pleadings are added to the statement of No. 5, the total purchase amount for the second half-term period of 2008, which the Plaintiff submitted in relation to the return of value-added tax was 7 billion won (one-year period, and the total purchase amount is similar to the above total purchase amount.). The total purchase amount of the instant transaction for which tax deduction was denied was limited to KRW 280,000,000,000,000, and the actual purchase amount of the goods by the supplier at the place of business is not acknowledged as having been directly supplied by the supplier at the place of business, and there is no possibility that the supplier may directly supply the goods at the place of business.

(C) However, comprehensively taking account of the overall purport of each of the above evidence, ParkB and ParkB as well as the direct supplier in the instant transaction, and the Plaintiff’s contact with the Plaintiff (Evidence No. 15) (the evidence No. 15 supplied to four companies, including the Plaintiff, only 140 million won that he purchased from △△ Metal and △△&AW, and the remainder is considered to have been ParkB, etc.). The above contents include the specific contents on the purchase, supply process, tax invoice issuance process, etc., specifying the volume and transport number of the non-ferrous supplied by the Plaintiff and the number of the vehicle, and thus, it is believed that the Plaintiff used only a part of the instant transaction, and that the Plaintiff had no contact with the Plaintiff during the instant transaction, nor had it confirmed that there was no other contact between the Plaintiff and the 200 OM prior to the commencement of the transaction, nor had it known that there was no other contact between the Plaintiff and the 2000 OCC’s prior to the instant transaction with the Plaintiff’s representative.

(D) In light of the facts found in Paragraph (c) above, it is difficult to find that the Plaintiff was unaware of the fact that the supplier of the tax invoice of this case was recorded differently from the fact without any negligence. Unlike the Plaintiff’s assertion, there is no evidence to acknowledge the Plaintiff’s good faith and negligence. Rather, the Plaintiff, who is employed in the high-end scrap metal industry with the possibility of disguised and processing as if the Plaintiff voluntarily expressed, continues to engage in the same transaction as that of the former business partner, can easily be seen through contact with the former business partner and the new business partner, such as whether the departure from employment or whether the new business partner is the actual transaction partner, and whether the new business partner is the actual transaction partner, and thus, it should have taken such measures at least to limit private autonomy. Moreover, as long as the Plaintiff’s demand for the duty of care is deemed to have been made not only between the actual transaction of this case and ParkB, it is difficult to deem that the Plaintiff did not have any negligence in view of the fact that it did not lead to the Plaintiff’s disguised transaction of value-added tax.

3. Conclusion

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