Cho Jae-2013-China-3826 ( November 15, 2013)

An input tax amount of a tax invoice entered differently from the supplier shall not be deducted.

It is reasonable to view that the closing Dong is a supplier other than the supplier under the tax invoice, and the purchase tax invoice of this case constitutes a tax invoice entered differently from the fact by the supplier.

Article 16 (Tax Invoice)

2014 disposition of revocation of the imposition of value-added tax

○ ○

○ Head of tax office

November 14, 2014

2015.01.09

1. The plaintiff's claims against the defendants are all dismissed.

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

Cheong-gu Office

Defendant ○○ Head of the tax office’s imposition of KRW 5,958,340 for the second term portion of value-added tax in January 9, 2013, and KRW 33,48,920 for the first term portion of value-added tax in 2011, and Defendant ○ Head of the tax office’s imposition of KRW 1,130,950 for the global income tax in 2010 for the Plaintiff on January 9, 2013.

1. Details of the disposition;

A. The Plaintiff is a person who runs a closed wholesale and retail business from June 1, 2010 to August 31, 201, with the trade name of “○○ Sheeting”.

B. From November 2010 to May 201, the Plaintiff received a purchase tax invoice of KRW 971,482,600 (hereinafter “purchase tax invoice”) in total from the supply price of KRW 971,482,60 (hereinafter “instant purchase tax invoice”) from 00,00,000 from 00,000,000, and issued the sales tax invoice of KRW 968,225,228 (hereinafter “the instant sales tax invoice”) to 00,00,000,000 from 00,000 electric wires, and 00,000.

C. In filing the instant purchase tax return on the second term portion in 2010, the first term portion in 2011, and the first term portion in 2011, the Plaintiff deducted the input tax amount related to the instant purchase tax invoice from the output tax amount, and appropriated it as necessary expenses.

D. As a result of the investigation of a person suspected of having committed a crime against the transaction partner of the instant case, the director of the regional tax office, etc. confirmed that the transaction partner of the instant case issued a processed tax invoice without a real transaction during the taxable period from 2010 to 1, 2011, and notified the head of the regional tax office having jurisdiction over the Defendant

E. Accordingly, on January 9, 2013, the head of Silung Tax Office issued a revised and notified the Plaintiff of KRW 33,48,920, respectively, of the value-added tax for the second period of 2010, by deeming that the purchase and sale transaction were conducted without real transactions.

F. On the other hand, on January 9, 2013, Defendant Busan District Tax Office also corrected and notified the Plaintiff of the global income tax of KRW 1,130,950, which reverts to the year 2011.

G. The Plaintiff appealed and filed a tax appeal on August 22, 2013, but the claim was dismissed on November 15, 2013.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1, 5, 13, Eul evidence Nos. 1 through 4, 8 (including branch numbers; hereinafter the same shall apply) and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

1) The Plaintiff purchased waste Dongs from the business partners of the instant case and supplied them to ○ Electric Cable, ○○○○, etc.

2) Even if the opposite contractual party who supplied the Plaintiff’s closing Dong was not a party to the instant transaction, the Plaintiff did not have been negligent in not knowing the fact of false name, and thus, constitutes a bona fide trader.

(b) Related statutes;

Attachment 'Related Acts and subordinate statutes' shall be as shown.

C. Determination

1) As to the first argument

A) Article 17(2)1-2 of the former Value-Added Tax Act (amended by Act No. 11129, Dec. 31, 201) that denies the deduction of an input tax amount for a tax invoice received in the course of transaction refers to a case where the necessary entries of a tax invoice do not coincide with those of the entity that actually supplies or is supplied with the goods or services, and the price and time of the goods (see, e.g., Supreme Court Decision 96Nu617, Dec. 10, 196); even if a transaction of supplying goods, etc. actually exists, the supplier constitutes a “tax invoice different from the fact that a tax invoice is issued by the issuer.”

On the other hand, in a case where a tax invoice submitted by a taxpayer for value-added tax as a basis for input tax deduction is falsely prepared without a real transaction, or is proved to be different from the fact by the tax authority that it is an actual purchase or the authenticity of the entries in the tax invoice is disputed. In a case where a transaction with a supplier stated in the tax invoice claimed by the taxpayer is proved to be reasonable, it is necessary to prove that it is easy for the taxpayer to present data, such as books and evidence, regarding the fact that the transaction with the supplier stated in the tax invoice was actually conducted with the supplier (see, e.g., Supreme Court Decision 2007Du1439, Aug. 20

B) Comprehensively taking into account the following circumstances, comprehensively taking account of the respective descriptions of Gap evidence Nos. 2, 8, and Eul evidence Nos. 3 through 7 and the purport of the entire pleadings, it is reasonable to view that even if the plaintiff was actually supplied with closed Dongs listed in the purchase tax invoice, the customer who supplied the plaintiff as the supplier is not the supplier indicated in the tax invoice. Therefore, the purchase tax invoice of this case constitutes a tax invoice that is written differently from the fact by the supplier, and thus, the plaintiff’s assertion on

① The KimA (00 non-ferrous metal) and KimB (00) that are registered as the business owner of the instant transaction parties are considered to have no economic ability to trade the value of supply on the sales tax invoice issued by those who have no record of engaging in wholesale and retail business.

② There is no evidence to deem that the place of business of the instant transaction parties recorded on each business registration certificate had an openter or empty container stuff office, etc. equipped with essential facilities, equipment, human resources, etc. for running a scrap metal business, such as a open container yard, a high steel bars, and a house stud, etc. Rather, ○○○, which is the location of the place of business of ○○ non-ferrous metal, had been engaged in historical business for the same period from 59 to ○○○, ○○, a place of business of ○○○, a place of business of ○○, a place of business, stated to the effect that there was no permanent entry of ○ non-ferrous metal or KimA in the course of the tax investigation, and that there was no lack of a large truck in the process of the tax investigation on the part of ○○, a place of business of ○○, a place of business of ○○, a place of business of ○

③ The Plaintiff received the payment from the sales office and received the payment from the sales office, and immediately remitted the payment from the sales office to the customers of the instant case, and the customers of the instant case withdrawn the payment in cash immediately after the payment was made. The representative Kim ○○ stated to the effect that the Plaintiff was unable to confirm the details of the payment made in the bank at the time of the transaction, despite asserting that the Plaintiff actually traded the closed Dong in the process of the tax investigation, and was unable to observe the details of the payment made in the bank at the time of the transaction. This is difficult to view it as a legal transaction behavior to be done by the business entity engaging in the business as a normal transaction, and rather, it appears that the transaction behavior or deposit withdrawal behavior ordinarily appeared to have been committed on the

④ As to the issuance of the purchase tax invoice in this case, KimB was charged with a violation of the Act on the Aggravated Punishment, etc. of Specific Crimes, and was convicted and the judgment became final and conclusive. However, even if the above criminal facts were to be established, it is difficult to view that the business parties in this case supplied the Plaintiff the closed Dong as indicated in the purchase tax invoice in this case.

C) On the other hand, the Plaintiff argues to the effect that the sales tax invoice of this case does not constitute a "tax invoice different from the facts" as it supplied the closing Dong normally to ○○ Electric Cable and ○○○ L and other business partners.

In this case, the evidence presented by the Defendant alone is not sufficient for the Plaintiff to use the sales tax of this case without actual transactions.

In light of the following circumstances, the Plaintiff, in the course of the investigation into the crime of violating the Punishment of Tax Evaders Act against the Plaintiff, supplied ○○ Electric Cable and the business partners such as ○○○○○el, etc., and alleged that the representative of ○○ Electric Cable and ○○○○ L was supplied with the closed Dongdong from the Plaintiff. In light of the fact that the Plaintiff was revealed as a normal closed-dong business operator during the investigation into the instant business parties, the Plaintiff appears to have supplied the closed-dong to the ○○ Electric Cable and ○○○ L, etc., the Plaintiff appears to have supplied the closed-dong to the ○○ Electric Cable and ○○○ L.

As seen earlier, the head of ○○ Tax Office imposed each value-added tax of this case on the Plaintiff after deducting the relevant output tax amount by deeming that the Plaintiff’s sales transaction was conducted without actual transactions. However, it is apparent that the Plaintiff’s value-added tax to be paid in the event that the pertinent sales were not deducted and is included in the tax base according to the Plaintiff’s details of return of value-added tax would exceed the tax amount under the imposition disposition of each of the value-added tax of this case. Therefore, it is difficult to view that the imposition disposition of each of the value-added tax of this case within the scope of a legitimate tax amount should be revoked as unlawful (see Supreme Court Decision 2004Du3823,

2) As to the second argument

A) Unless there are special circumstances, the actual supplier and the supplier on a tax invoice may not deduct or refund the input tax amount unless there is any negligence on the part of the person who received the other tax invoice in the name of the tax invoice, and the person who asserts the deduction or refund of the input tax amount shall prove that the person who received the tax amount was not negligent in not knowing the above fact of deception (see, e.g., Supreme Court Decision 2009Du1808, Jun. 11, 2009).

B) The evidence submitted by the Plaintiff alone is insufficient to recognize that the Plaintiff was unaware of the aforementioned facts and was not negligent due to the failure of such knowledge, and there is no other evidence to prove otherwise.

Rather, in full view of the following circumstances revealed by taking account of the overall purport of the evidence presented above, it is reasonable to deem that the Plaintiff was negligent in not knowing the above facts, and thus, the Plaintiff’s assertion on this part cannot be accepted.

① There are many cases where one-lane is collected as high-priced waste resources and traded without receipt of a tax invoice. In the process of a large-scale collection transaction from a small and medium-scale collection to a large scale, the input tax amount is deducted on the basis of the data that only aims to issue a tax invoice as a purchaser. On the other hand, the data is widely traded in the way of evading the tax by not paying the value-added tax imposed on him/her. The Plaintiff seems to have been well aware of the actual condition and risk of the transaction on the data.

② Although ○○ non-ferrous metal is an enterprise that runs side on September 30, 2010, and ○○ Resource is a business entity that runs side on January 31, 2011 and transactions with customers of the instant case are concentrated in a short period, the amount of the value of supply is approximately KRW 1 billion.0 billion. If the relevant business entity is well aware of the general forms of transaction of waste agreement, it is deemed that the circumstances are sufficiently reasonable to determine whether the instant transaction partner is not a disguised business entity.

③ Although the Plaintiff was in a situation in which it is difficult to identify who actually supplied a closed Dong by making a transaction by means of making a transaction by collecting only 1% or 2% commission from a sales customer, such as ○ Electric Cable and ○○○ L, and immediately transferring it to the sales customer of the instant case, the Plaintiff did not confirm whether each transaction was made or even prior to the commencement of the transaction, and whether the transaction partner of the instant case was equipped with physical facilities, etc. to supply the closed Dong. There is doubt that the transaction partner of the instant case was negligent in confirming whether he is a disguised business operator.

④ The Plaintiff asserted that the Plaintiff is a party to a transaction with good faith and negligence since it confirmed the business registration or the copy of passbook, etc. while commencing the transaction with the instant transaction parties. However, the business registration certificate is delivered by the Value-Added Tax Act to the head of the competent district tax office having jurisdiction over the relevant business in order to identify the person liable for the payment of value-added tax and secure taxation data, and it is merely merely a certificate proving the registration of the business fact, and it does not recognize that the certificate meets the qualification or requirement to conduct the business accordingly (see, e.g., Supreme Court Decision 2003Do6934, Jul. 15, 2005).

3. Conclusion

If so, each of the claims of the plaintiff in this case is without merit, all of them are dismissed. It is so decided as per Disposition.