early 208 Heavy2901 (2009.04.01)

Special cases of input tax deduction when collecting waste resources, etc.

Where a non-registered business operator who is unable to issue a tax invoice acquires waste resources, the special provisions on input tax deduction shall not be applied.

The contents of the decision shall be the same as attached.

1. Of the instant lawsuit, the part seeking revocation exceeding KRW 1,754,645 of the imposition disposition of KRW 2,306,480 in 2005 and the part seeking revocation exceeding KRW 88,368,080 of the imposition disposition of KRW 9,670,880 in 2006 and the part seeking revocation exceeding KRW 23,915,080 in 27,030,970 in 2006 are all dismissed.

2. The plaintiff's remaining claims are dismissed.

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

The defendant revoked each disposition of value-added tax of KRW 2,306,480 for 205 against the plaintiff on January 10, 2008, value-added tax of KRW 99,670,880 for 1 year 2006, and value-added tax of KRW 27,030,970 for 271 year 2006 (the date January 12, 2008 appears to be a clerical error as of January 10, 2008).

1. Circumstances of the disposition;

A. The Plaintiff purchased scrap metal equivalent to KRW 1,394,257,230 from 30 registered business operators, etc. (hereinafter “registered business operators of this case”) during the taxable period from February 2, 2005 to February 2, 2006, and reported value-added tax by applying special provisions on deduction of input tax amount for recycled waste resources under Article 108 of the Restriction of Special Taxation Act to the purchase price.

B. The Defendant, on January 10, 2008, imposed each value-added tax stated in the Plaintiff’s claim on the Plaintiff on January 10, 2008, on the following grounds: (a) the Plaintiff’s input tax amount (No. 2 period 1,754,648 won in 2005, No. 1 period 79,091, 321 won in 2006, and No. 2712,432,344 won in 206) by deeming that the instant unregistered business operators constituted a general business operator who is not a simplified taxable person

C. The Plaintiff filed an appeal with the Tax Tribunal on August 6, 2008, and the Tax Tribunal decided on April 1, 2009 as follows.

1) Each imposition of value-added tax of KRW 2,306,480 for the second period of value-added tax of KRW 2,306,480 for the Plaintiff on January 12, 2008, KRW 99,670,880 for the first period of value-added tax of KRW 1,206 for the second period of value-added tax of KRW 27,030,970 for the second period of value-added tax of KRW 206 for the second period of tax of KRW 2005 for the second period of tax of KRW 23,687,750 for the supply price of KRW 23,687,750 for the second period of tax of KRW 20 for the second period of tax in 2005 and KRW 48,616,790 for the supply price of recycled waste resources for the Plaintiff during the first period of tax in 206 through KRW 20 for the second period of tax year of 200 for the tax year.

2) The remainder of claims shall be dismissed.

D. Accordingly, according to the decision of the above Tax Tribunal, the defendant revoked the return and late payment for the second period of 205 51,830 won, 11,302,800 won for the first period of 2006 1,306, and 3,115,890 won for the second period of 206 3,115,890 won for the second period of 2005 1,754,645 won, 9,670,80 won for the second period of 205 88,368,00 won for the second period of 206, and corrected the amount of value-added tax to 23,915,080 won for the second period of 205 as 88,368,00 won for the second year of 206 (hereinafter referred to as "the disposition of imposition in this case").

[Ground of recognition] The purport of Gap evidence 1-3-1 to Eul evidence 3-3, Eul evidence 1-1 to 3, Eul evidence 2-1 to 2-3, and Eul evidence 2-1 to 3

2. From among the imposition disposition of value-added tax of KRW 2,306,480 in 2005, the part seeking revocation exceeding KRW 1,754,645 in excess of KRW 9,670 in 206, the part seeking revocation in excess of KRW 88,368,080 in the imposition disposition of KRW 9,670,880 in 2006, and the part seeking revocation in excess of KRW 23,915,080 in 27,030,970 in 206, ex officio determination as to the legitimacy of the lawsuit seeking revocation in excess of KRW 23,915,080 in the imposition disposition of KRW 2,306,480 in 205, KRW 9,670,80 in 206, value-added tax in 207, value-added tax in 208, KRW 2086 in each of the above imposition disposition of KRW 3060,5085,6085,2060.

3. Whether the imposition disposition of the instant case is lawful; and

A. The plaintiff's principal

(1) The Plaintiff cannot verify whether the annual supply proceeds of the non-registered business entity of this case exceed 48 million won, and thus, if the Plaintiff acquired waste resources from the non-registered business entity who is unable to issue a tax invoice, the special provisions on input tax deduction should be applied.

(2) Even if the sales proceeds per calendar year by the non-registered business operators who supplied scrap metal to the Plaintiff cannot be deducted from the input tax amount exceeding 48 million won, the period of non-deduction shall not be said to have been the first taxable period of the following year from the second taxable period of the year following the year in which the supply was conducted pursuant to Article 74-2(1) of the Enforcement Decree of the Value-Added Tax Act.

(b) Related Acts and subordinate statutes: To be stated in attached Form;

C. Determination

Comprehensively taking account of the relevant provisions such as Article 108 of the Restriction of Special Taxation Act, Article 110 of the Enforcement Decree of the same Act, Articles 5 and 25 of the Value-Added Tax Act, and Articles 74 and 74-2 of the Enforcement Decree of the same Act, where an entrepreneur who collects recycled waste resources, etc. acquires recycled waste resources, etc. from a simplified taxable person, and manufactures, processes, or supplies them, a certain amount of amount may be deducted as his input tax. A simplified taxable person, a simplified taxable person (hereinafter referred to as a “general simplified taxable person”), a individual entrepreneur whose total amount of supplies for the calendar year to which the date of commencing a new business falls short of 48 million won, is anticipated to fall short of the total amount of supplies for the calendar year to which the date of commencing a new business falls, and thus, a person who has filed a report on the application of a simplified taxable application with the head of the competent tax office along with his business registration (hereinafter referred to as a “person who has filed a simplified taxable application”).

However, according to each of the above evidence, the registered business operators of this case are both the Plaintiff and other recycled waste resources business operators whose total value of supplies for the calendar year exceeds 48 million won and not the simplified taxable person (it is not a general simplified taxable person or a simplified taxable person unless the registered business operators have registered their business), and even if the unregistered business operators of this case are not eligible to issue a tax invoice, special provisions on the deduction of the above input tax amount cannot be applied.

In addition, according to Article 74-2 of the Enforcement Decree of the Value-Added Tax Act, the chief of the competent tax office shall notify the relevant entrepreneur of the fact not later than 20 days prior to the commencement of the taxable period that the provisions concerning the simplified taxable person apply or not to the simplified taxable person, and shall deliver the business registration certificate by the date prior to the commencement of the taxable period. With respect to the entrepreneur to whom the provisions concerning the simplified taxable person apply, regardless of the above notification, the provisions concerning the simplified taxable person apply to the entrepreneur who is not subject to the provisions concerning the simplified taxable person, and the provisions concerning the simplified taxable person apply to the entrepreneur not subject to the above notification until the taxable period whereto belongs the date of receipt of the notification. However, the above provisions concerning the time of application for such simplified taxable person and general taxation apply to the simplified taxable person who has completed business registration or

4. Conclusion

Therefore, the part of the lawsuit of this case seeking revocation exceeding KRW 1,754,645 of the imposition disposition of KRW 2,306,480 of value-added tax 2,2005 and the part seeking revocation exceeding KRW 88,368,080 of the imposition disposition of value-added tax 9,670,880 of value-added tax 1,2006 and the part seeking revocation exceeding KRW 23,915,080 of value-added tax 27,030,970 of value-added tax 27,030,970 of the disposition of this case is unlawful, and all of them are dismissed. The remaining claims of the plaintiff seeking revocation of the disposition of this case are without merit, and they are dismissed. It is so decided as per Disposition.