Cho High Court Decision 2010Du2172 ( October 22, 2011)

A tax invoice received under the name of the lessor even if the lessee was newly built, shall be deemed to be a false tax invoice.

Where a land lessee constructs a new building on the ground under a condition that he/she uses it for a certain period and registers it in the name of the land owner, a person supplied with new construction services shall constitute a tax invoice prepared by the lessor, which is different from the fact.

Article 17 (Payable Tax Amount)

2011Revocation of revocation of the imposition of value-added tax

XX

The head of Yangcheon Tax Office

August 26, 2011

September 23, 2011

1. The plaintiff's claim is dismissed.

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

The Defendant’s imposition of value-added tax of KRW 163,062,750 on March 5, 2010 against the Plaintiff was revoked.

1. Details of the disposition;

The following facts may be acknowledged as either in dispute between the parties or in combination with the purport of the entire pleadings in each entry in Gap evidence Nos. 1 and 2:

A. The Plaintiff is an individual entrepreneur who has run real estate rental business from July 2, 2007 to Yangcheon-gu, Seoul, Yangcheon-gu, 000-2.

B. The Plaintiff received each of the purchase tax invoices of KRW 30,00,000 in total supply value of KRW 30,000 from the AA, and the purchase tax invoices of KRW 920,00,000 in total supply value from the OO Construction of Co., Ltd. (hereinafter “each of the instant tax invoices”) and filed a return of value-added tax for the second period in 2007, and deducted the input tax amount of each of the instant tax invoices from the output tax amount.

C. Around October 2009, the director of the Seoul Regional Tax Office conducted an individual consolidated investigation against the Plaintiff. As a result, each of the instant tax invoices was judged to be false and notified to the Defendant.

D. Accordingly, on March 5, 2010, the Defendant did not deduct the input tax amount under each of the instant tax invoices, and notified the Plaintiff of KRW 163,062,750, which was the second value-added tax for the year 2007 (hereinafter “instant tax disposition”).

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The supply price according to each tax invoice of this case is related to the new construction of the building 2nd above ground 00-2, Yangcheon-gu, Seoul (hereinafter "the building of this case"). The defendant considered all the costs of the new construction of the building of this case as prepaid rent that the plaintiff received from YB and imposed value-added tax and general income tax on the plaintiff. Therefore, even though it is reasonable to deem that the costs of the new construction of the building of this case were to have been borne by the plaintiff, the defendant is deemed to have borne the costs, and therefore, the tax invoice of this case was determined as a tax invoice different from the fact,

B. Relevant statutes

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

C. Determination

In full view of the purport of the arguments in Eul evidence Nos. 2 through 4, the Plaintiff, the owner of the land B, 000-2, 191 square meters (hereinafter referred to as the "land of this case") on April 7, 2007, entered into a lease contract with 200,000,000 monthly rent, and the lease contract for the land of this case with 60,000,000, respectively, with the view to the fact that B constructed parking lots and stores on the land of this case and issued 20,000,000,000 won for each of the above 30,000,000,000,000,000 won for the above 20,000,000,000,000,000,000,000,000,00,000,00,00,000,00.

Ultimately, inasmuch as the registration number of the Plaintiff, other than the registration number of B, is indicated in the registration number column of 'B' of the party who received the tax invoice of this case, it constitutes a tax invoice which is different from the fact from 'the registration number of the party who received the supply', which is the necessary entry of the tax invoice under Article 16 (1) 2 of the Value-Added Tax Act. Accordingly, there is no error in the disposition of imposition by the Defendant, which did not deduct the input tax amount under each of the tax invoices of this case.

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and it is so decided as per Disposition.