Seoul High Court 2008Nu13004 ( November 20, 2008)

The meaning of supplying goods related to the purchase of gold bullion

The transfer of goods is an act of transferring the right to consume the goods, regardless of the existence of profits, and it is difficult to deem that the supply of goods is not of supply on the sole basis of the fact that there is an enterprise which purchases gold bullion exempted in the middle and does not pay the value added tax after purchasing it in the short period.

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

Article 6 of the Value-Added Tax Act

The part of the judgment below on imposition of value-added tax is reversed, and that part of the case is remanded to Seoul High Court.

The defendant's appeal is dismissed.

We examine the grounds of appeal.

1. Plaintiff’s ground of appeal

Article 1(1)1 of the Value-Added Tax Act provides that "the supply of goods as taxable subject to value-added tax" and Article 6(1) provides that "the delivery or transfer of goods shall be a delivery or transfer of goods on all contractual or legal grounds." In light of the characteristics of value-added tax as multi-stage transaction tax, "delivery or transfer" under Article 6(1) of the Value-Added Tax Act includes all acts of causing the transfer of rights to use and consume goods, regardless of the existence of profits actually acquired (see, e.g., Supreme Court Decisions 85Nu286, Sept. 24, 1985; 9Du9247, Mar. 13, 2001; 9Du9247, etc.). In this case, the issue of whether a specific transaction among a series of transactions constitutes the supply of goods as provided for in the Value-Added Tax Act shall be determined on the grounds that there are no specific transaction under Article 29(1)2 of the Value-Added Tax Act, including the purpose and attitude of each transaction party, the payment of profits, and the payment.

According to the facts duly established by the court below and the records, the plaintiff purchased each gold bullion amounting to KRW 52,342,612,840 (hereinafter "the gold bullion of this case") from eight business operators including the stock company, etc. (hereinafter "the supplier of this case") from July 11, 2003 to November 11, 2004, and received each of the tax invoices of this case (hereinafter "tax invoices of this case") from the supplier of this case after receiving delivery of the gold bullion of this case on the date of purchase, and received all of the price (hereinafter "the transaction of this case"), and the plaintiff received each of the tax invoices of this case from the supplier of this case (hereinafter "tax invoices of this case"). The plaintiff can find that immediately after the purchase of the gold bullion of this case, it exported all of them to the importer of Hong Kong.

이러한 사실 및 기록에 나타나는 여러 사정을 앞서 본 법리에 비추어 살펴보면, 이 사건 금지금이 수입되어 수출되기까지 일련의 전체거래(이하 '이 사건 전체거래'라 한다)가 모두 하루 혹은 2˜3일의 단기간에 이루어지고, 그 중간 단계에 부가가치세가 면제되는 금지금을 매입한 다음 면세추천 받지 아니한 자에게 부가가치세 과세대상이 되는 금지금으로 공급하면서 세금계산서를 작성・교부하고 그 부가가치세 상당액을 납부하지 않는 이른바 폭탄업체가 존재하고 있는 점 등의 사정만으로는 이 사건 전체거래 중의 하나인 이 사건 거래가 명목상의 거래로서 부가가치세 과세대상이 되는 재화의 공급이 아니라고 단정하기는 어렵다 할 것이다.

Nevertheless, the court below held that the transaction of this case was merely a nominal transaction without supplying goods, such as a single transaction included in the entire transaction of this case where the so-called wide coal company was opened. Thus, the court below erred by misapprehending the legal principles on "supply of goods" and "tax invoices different from the facts", which affected the conclusion of the judgment.

The ground of appeal pointing this out is with merit.

2. As to the Defendant’s ground of appeal

According to Articles 76(5) and 116(2)2 of the former Corporate Tax Act (amended by Act No. 8141 of Dec. 30, 2006), "the head of the district tax office having jurisdiction over the place of tax payment shall collect an amount calculated by adding an amount equivalent to 2/100 of the unpaid amount to the corporate tax in cases where a corporation is supplied with goods from a businessman in connection with its business and fails to receive a tax invoice under Article 16 of the Value-Added Tax Act," and Article 16 of the former Value-Added Tax Act (amended by Act No. 8142 of Dec. 30, 2006) provides that "if an entrepreneur registered as a taxpayer supplies goods, he shall deliver a tax invoice stating the registration number, name or title, registration number, value-added tax number, value-added tax amount, etc. of the supplier to the person who receives the supply."

As seen earlier, insofar as the instant transaction cannot be deemed to be a supply of goods subject to value-added tax, it is reasonable to view that the instant tax invoice received accordingly is also a legitimate tax invoice under Article 16 of the former Value-Added Tax Act. Accordingly, the lower court’s determination that the Defendant’s disposition of imposing corporate tax based on the provision on additional tax that was not received by deeming the instant tax invoice as “unlawfully different tax invoice” is unlawful on the ground that the provision on additional tax that was received by the Defendant cannot apply the provision on additional tax that was not received by evidence for the nominal transaction that was disguised

The court below did not err in the misapprehension of legal principles as to the penalty tax provision for lack of evidence, as alleged in the grounds of appeal.

3. Conclusion

Therefore, the part of the judgment below on the imposition of value-added tax is reversed, and that part of the case is remanded to the court below for a new trial and determination, and the defendant's appeal is dismissed. It is so decided as per Disposition by the assent of all participating Justices.