Daegu District Court 2010Guhap2915 ( October 26, 2011)

Cho High-depth 2010Gu0179 ( October 21, 2010)

The zero tax rate shall apply only to a purchase certificate issued within 20 days after the end of the taxable period.

If 20 days have elapsed after the end of the taxable period to which the date of issuance of a purchase certificate belongs, the disposition that excludes the zero tax rate is legitimate, and Article 9-2(2) of the Enforcement Rule of the Value-Added Tax Act, which is the basis of taxation, does not violate the principle of no taxation, substantial taxation,

2011Nu557 Revocation of Disposition of Imposition of Value-Added Tax

Doeng Co., Ltd

○○ Head of tax office

Daegu District Court Decision 2010Guhap2915 Decided January 26, 2011

June 17, 2011

July 22, 2011

1. The plaintiff's appeal is dismissed.

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

The judgment of the first instance shall be revoked. The defendant's imposition of value-added tax of KRW 759,81,690 against the plaintiff on November 1, 2009 shall be revoked.

1. Details of the disposition;

"A. The plaintiff is a corporation that is engaged in the business of manufacturing automobile parts, from June 1, 2009 to the 30th of the same month, supplied the supply price of 6,234,977,521 won to BB Co., Ltd. (hereinafter referred to as "the transaction in this case"), attached a purchase confirmation issued by the head of CCF branch office on July 24, 2009 at the time of final return of value-added tax for the first year 2009, and applied for early refund by applying the zero-rate tax rate for the transaction in this case." However, the defendant confirmed that the date of issuance of a purchase confirmation, which is the basis for applying zero-rate tax rate for the transaction in this case, was 20 days after the end of the taxable period in which the goods were supplied, and confirmed that the zero-rate tax rate was not applied to the plaintiff on July 24, 2009, and notified the plaintiff on November 1, 2009.

C. The Plaintiff appealed and filed an appeal with the Tax Tribunal on December 31, 2009, but the Plaintiff’s claim was dismissed on June 21, 2010.

[Reasons for Recognition] Facts without dispute, Gap evidence 1, Gap evidence 2-1, 2, Gap evidence 7, Eul evidence 1 and 2, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The disposition of this case is based on the provisions of Article 9-2 (2) of the Enforcement Rule of the Value-Added Tax Act, which is invalid as follows.

(1) Article 9-2(2) of the Enforcement Rule of the Value-Added Tax Act limits the time limit for issuance of a purchase certificate subject to zero tax rate to 20 days from the expiration date of the taxable period, which provides for the restriction on the application of zero tax rate unfairly without any basis under the upper law, and provides for items and rates of tax by administrative legislation other than the law, which violates the principle of no taxation without law under Article 59 of the Constitution

(2) The application of the tax rate depends on the date of issuance of a purchase certificate is contrary to the principle of substantial taxation and the principle of fair taxation.

B. Relevant statutes

As shown in the attached Form.

C. Determination

(1) Whether it violates the principle of no taxation without law

(A) The principle of no taxation without law adopted in Article 59 of the Constitution provides for the requirements and procedures for the exercise of tax rights, such as the requirements and procedures for collecting taxes, by law enacted by the National Assembly, which is a representative organ of the people. However, matters concerning the requirements and procedures for taxation cannot be delegated to subordinate statutes, such as orders and regulations, but only specific and individual delegations are allowed in cases of delegation to subordinate statutes, and comprehensive and blank delegation is not allowed (see Supreme Court Order 94Du18, Sept. 30, 1994).

(B) Article 11(1)1 of the former Value-Added Tax Act (amended by Act No. 915, Jan. 1, 2010; hereinafter “former Value-Added Tax Act”) provides for the exported goods subject to zero-rate tax; Article 11(3) of the same Act provides for matters necessary for the scope of goods and services under Article 11(1) of the same Act; Article 24(2)1 of the Enforcement Decree of the Value-Added Tax Act provides that the exported goods under Article 11(1)1 of the Act include goods supplied by an entrepreneur through a local letter of credit or a written confirmation of purchase provided by Ordinance of the Ministry of Strategy and Finance; Article 9-2(2)1 of the Enforcement Rule of the Value-Added Tax Act provides that the head of a foreign exchange bank issues a written confirmation issued for export within 20 days after the taxable period to which the relevant goods or services belong, such as export letters of credit and the relevant date of supply, shall be specified.

(C) As such, the former Value-Added Tax Act delegates matters necessary for the scope of goods and services subject to zero tax rate to the Enforcement Decree, and the Enforcement Decree of the Value-Added Tax Act delegates to the Enforcement Rule, which is the Ordinance of the Ministry of Strategy and Finance, the scope of purchase certificates, while including goods exported by an entrepreneur through a purchase certificate. As such, Article 9-2(2) of the Enforcement Rule of the Value-Added Tax Act provides for the scope of purchase certificates, not only by specific and individual delegation of superior laws, but also by delegation of laws and regulations, the scope of purchase certificates, etc. according to delegation of laws and subordinate statutes

(2) Whether the substance over form and the principle of fair taxation are violated

(A) Under the value-added tax system, the application of zero tax rate is recognized as a matter of principle only for exports in accordance with the consumer taxation principle under the General Agreement on Tariffs and Trade (GT) in order to levy and collect value-added tax at the stage of production and supply in international trade of goods or services and prevent double taxation in cases where value-added tax is levied again in the country of importation, and even for domestic consumption, it is recognized as equivalent to the above exports to the extent that it is consistent with the national policy purpose of encouraging foreign exchange to the extent that it does not impair foreign exchange management and the order in collecting value-added tax (see, e.g., Supreme Court Decisions 2007Du22863, Apr. 9, 2009; 2005Du12718, Jun. 14, 2007).

(B) Article 9-2(2) of the Enforcement Rule of the Value-Added Tax Act comprehensively takes into account the management of foreign exchange, the collection order of value-added tax and the purpose of national policy into account, deeming that a part of goods supplied and consumed in the Republic of Korea may correspond only to exports based on a purchase certificate issued within 20 days after the end of the taxable period to which the relevant time of supply belongs, cannot be deemed as contrary

(3) Sub-decisions

Therefore, Article 9-2(2) of the Enforcement Rule of the Value-Added Tax Act does not violate the Constitution, and since there is no dispute between the parties as to the facts that the purchase certificate attached to the transaction of this case was issued on July 24, 2009 when the plaintiff filed a final return of value-added tax for the first time in 2009, or can be recognized by the evidence No. 1 and No. 3-1, the disposition of this case denying the application of zero-rate tax rate for the transaction of this case is lawful in accordance

3. Conclusion

The judgment of the court of first instance which dismissed the plaintiff's claim is just, and the plaintiff's appeal is dismissed.