Cho High Court Decision 2010Du2718 ( December 21, 2010)

It is difficult to readily conclude that it is a nominal transaction solely on the basis of all the circumstances, including the fact that there was a wide carbon company at a series of transactions.

It is difficult to conclude that the supply of goods subject to value-added tax is not a nominal transaction, solely taking the appearance of delivery and payment of gold bullion, solely for the purpose of receiving tax invoices solely on the sole basis of all the circumstances, including the fact that there was a bomb in a series of transactions of gold bullion, or disguised the trade of

2010Guhap41826 Disposition of revocation of Value-Added Tax Imposition

Doeng Co., Ltd

O Head of tax office

1. The Defendant’s imposition disposition of KRW 354,428,520 for the second period of value-added tax for the year 2005 against the Plaintiff on June 1, 2010, KRW 235,773,970 for the year 206, and KRW 42,261,050 for corporate tax for the year 2005, and KRW 28,589,060 for corporate tax for the year 2006 is revoked.

2. The litigation costs shall be borne by the defendant.

The same shall apply to the order.

1. Details of the disposition;

A. The Plaintiff is a corporation that runs wholesale and retail business such as gold bullion (referring to gold with a net level of at least 995/1,000 in the state of raw materials, such as gold bullion, gold bullion, and dudow) established around January 7, 2005.

B. On June 1, 2010, between July 19, 2005 and February 9, 2006, the Defendant: (a) deemed that the Plaintiff purchased gold bullion (hereinafter “instant gold bullion”) from BB Co., Ltd. (hereinafter “BB”) and received gold bullion; (b) as the case of “tax invoices of KRW 3,542,505,95 (hereinafter “instant tax invoices”) and as the case of different tax invoices; and (c) deemed that the Plaintiff’s tax invoices of KRW 3,542,50,95 (hereinafter “instant tax invoices”) were different tax invoices; (d) as the case of deduction of the input tax amount under Article 17(2)1-2 of the former Value-Added Tax Act (amended by Act No. 9268 of Dec. 26, 2008); and (e) deemed that there were no grounds for imposition of value-added tax for the second period of KRW 354,428,520; and (e.g. 2065 won and 2085 won.

2. Whether the instant disposition is lawful

A. The parties' assertion

(1) The plaintiff's assertion

Despite the Plaintiff’s normal transaction of purchasing the instant gold bullion from the second and the first period BBB in 2005, the Defendant: (a) deemed the Plaintiff’s tax invoice in connection with the instant gold bullion transaction as a “large Carbon Company (an enterprise evading the value-added tax by purchasing the prohibited amount at zero tax or tax exemption, and selling it with the tax exemption, and then withdrawing, concealing, and closing its profit within the short period after fully withdrawing, concealing, and closing its business within the short period)”; and (b) deemed it as a tax invoice prepared differently from the facts under the invitation with the CC or DDD and BBB; and (c) accordingly, disposed of the instant tax.

(2) The defendant's assertion

The Plaintiff did not purchase gold bullion in collusion with BB and a gas coal company, but only forged financial data such as purchase only in document form and paid the price. As such, the instant tax invoice constitutes a false tax invoice.

(b) Related statutes;

It is as shown in the attached Form.

C. Determination

Article 1(1)1 of the Value-Added Tax Act provides that “The supply of goods subject to taxation shall be either delivered or transferred by all contractual or legal grounds.” In light of the fact that the value-added tax has characteristics as multi-stage sales, delivery or transfer of goods include all underlying acts of transferring authority for use and consumption, regardless of actual profits,” the issue of whether a specific transaction constitutes the supply of goods under the Value-Added Tax Act should be determined individually and specifically by considering the following circumstances, including the purpose and manner of the transaction of each transaction, ownership of profits, and payment of the price, which are not based on the fact that the Plaintiff paid for the pertinent gold bullion import transaction at the time of the pertinent transaction.” However, the Plaintiff is not obligated to bear the burden of proof regarding the fact that the tax invoice was issued at the time of the pertinent transaction, based on the premise that the pertinent transaction was a nominal transaction without delivery or transfer of the goods (see, e.g., Supreme Court Decision 200Du1728, Jul. 1, 208).

3. Conclusion

Therefore, the plaintiff's claim of this case is reasonable, and it is decided as per Disposition by admitting it.