Suwon District Court 2010Guhap653, 20108.17

Cho High Court Decision 2009J387 ( November 23, 2009)

It is issued a false tax invoice as a manufacturer and distributor of glass products;

As a manufacturer and seller of glass products, a supplier was issued a tax invoice different from the fact that the supplier entered false information, and even if he/she knew or was unaware of such fact, it is judged that there was negligence on the part of the supplier, and it is insufficient to recognize good faith and negligence. Therefore, the disposition imposing value-added tax is legitimate.

2010Nu31418. Disposition of revocation of imposition, including value-added tax

○○ Co., Ltd.

○ Head of tax office

Suwon District Court Decision 2010Guhap653 Decided August 17, 2010

o June 3, 201

June 17, 201

1. Revocation of a judgment of the first instance;

2. The plaintiff's claim is dismissed.

3. All costs of the lawsuit shall be borne by the Plaintiff.

1. Purport of claim

The Defendant revoked each disposition of KRW 100,859,850 for the first term portion of 2007 against the Plaintiff on August 19, 2009, the second term portion of 2007, and KRW 22,530,150 for the second term portion of 2007, and the corporate tax of KRW 14,40,000 for the business year of 207.

2. Purport of appeal

The same shall apply to the order.

1. Details of the disposition;

A. Since its establishment on February 24, 2006, the Plaintiff entered into a contract for the construction work for the construction work (hereinafter referred to as "the instant construction work") on the ground (hereinafter referred to as "the instant construction work") on July 18, 2006 with AC Co., Ltd. (hereinafter referred to as "non-party company") and ○○○○○○○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ 109 and on the ground (hereinafter referred to as "the instant construction work"), and received the tax invoice from the non-party company for the supply price of 300,000,000,000 won on March 22, 2007, the supply price of 150,000,000,000 won on May 17, 207, and the supply price of value-added tax for 130,007,000 won on the supply price of the instant construction work.

B. After conducting a tax investigation with respect to the non-party company, the Central Regional Tax Office confirmed that the non-party company lent only construction licenses and issued tax invoices without actually supplying construction services, and notified the Defendant of the fact that the instant tax invoice is false.

Accordingly, the Defendant, on August 19, 2009, deducted the input tax amount from the Plaintiff on the grounds that the instant tax invoice is false, and subsequently, revised and notified the Plaintiff on August 19, 2009, by applying the tax invoice of this case to KRW 100,859,850 for the first term of 2007 and the second term of 22,530,150 for the second term of 207, and the corporate tax of KRW 14,40,000 for the business year 207, by applying the additional tax on non-legal evidence under tax law to the instant tax invoice (hereinafter “instant disposition”).

[Ground of recognition] Facts without dispute, Gap evidence 1, 2, Eul evidence 1 to 4, 8, 9, the purport of the whole theory of change

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

1) After entering into the instant contract with the Nonparty Company, the Plaintiff received facility loans from the BB Corporation (hereinafter “Corporation”) under the said contract, and received the instant tax invoice by paying the construction cost to the Nonparty Company. Therefore, the instant disposition based on the premise that the instant tax invoice is a false tax invoice is unlawful.

2) Even if the instant tax invoice is different from the facts, the Plaintiff is a bona fide business operator who was unaware of the tax invoice and was unaware of the tax invoice, and thus, the instant disposition was unlawful.

B. Relevant statutes

It is as shown in the attached Form.

(c) Fact of recognition;

1) The reasons why the Central Regional Tax Office has judged Non-Party Company as material and the measures subsequent thereto

A) After ascertaining the following facts, the Central Regional Tax Office determined that the non-party company did construction work directly or through subcontracting only once, and without simply providing actual services, it issued false sales tax invoices without simply providing a construction license.

① The result of the investigation of the non-party company’s workplace, the non-party company started its business on May 20, 2005, and reported the suspension of business from December 5, 2005 to June 5, 2006, and reported the sales of KRW 1.6 billion for one year from July 6, 2006 to September 30, 2007.

However, the non-party company did not pay taxes of KRW 600 million and was disposed of as deficit.

② As a result of a financial survey on the basis of supporting materials for sales, the non-party company issued documents necessary for the construction license to the actual constructor, opened a bank account in the name of the non-party company for each construction site, and received 3-4% fees for the construction cost. The non-party company confirmed that the construction business operator directly withdrawn the construction cost deposited into the bank account in the name of the non-party company established at each construction site and paid the construction cost to the participants.

③ As a result of inquiring about the construction work experience of building engineers employed by the Korean Construction Engineers Association, the fact that the said building engineers were placed at the actual construction site during the period of their employment in the non-party company was not verified.

④ There is no evidence that the non-party company subcontracted the instant construction work upon entering into a subcontract with the subcontractor.

B) After confirming that the non-party company was data, the Central Regional Tax Office: (a) filed an accusation against the non-party company and its representative director, against the issuance of false sales tax invoices to the non-party company including the instant tax invoice issued to the Plaintiff; and (b) after investigating the above accusation case, the prosecutor filed a prosecution against the former District Court on the violation of the Act on the Aggravated Punishment, etc. of Specific Crimes (tax) with respect to the KimA on November 23, 2010. The above court convicted all the above charges against the non-party company on the crime of violation of the Act on the Aggravated Punishment, etc. of Specific Crimes (tax). Meanwhile, while KimA was registered as the representative director of the non-party company in the instant judgment, it was argued to the effect that only the name was lent, and there was no participation in the said crime.

2) Transaction patterns of the Plaintiff and the Nonparty Company

A) With respect to the instant work, the Plaintiff and the Nonparty Company: Amount of the contract: KRW 990,00,000 (the supply price of KRW 900,000,000, value-added tax amount of KRW 90,000,000): the construction period: September 25, 2006; the completion date of construction; June 25, 2007; the time and method of the completed portion payment: The period of warranty liability is replaced by the loans of the Corporation. The period of warranty liability: two years: 3/100; 3/100; 3/100; 3/1000; and 18 July 206.

B) If the Plaintiff deposited the money borrowed from the Corporation to the account of the non-party company, the account transfer was made from the account of the non-party company to the construction-related persons on the day or after 1-3 days. On March 29, 2007, KRW 300,000 from the Plaintiff’s account to the account of the non-party company was transferred from the non-party company to the account of the non-party company on the same day, and thereafter, the amount of KRW 118,422,00 was transferred from the non-party company’s account to the

C) The Plaintiff, upon confirmation of the progress rate of the instant construction work from the responsible supervisor, submitted an application for the progress payment for construction works to the Corporation, sent the employees to the Corporation at the site and deposited the construction cost (facility loan) with the Plaintiff’s account. During that process, the progress rate of the instant construction work, which was prepared or submitted by the Plaintiff, was 60% around March 15, 2007, around 80% around May 18, 2007, and 100% around June 2007.

D) On July 25, 2007, the Plaintiff received a written waiver of construction from the Nonparty Company that it would waive the instant construction work.

[Ground of recognition] Each entry of Gap evidence Nos. 4 through 7 (including paper numbers), Eul evidence Nos. 3 through 10 (including paper numbers), the purport of the whole pleadings

D. Determination

1) Whether a tax invoice is false

A) The meaning that the entries in the tax invoice under the Value-Added Tax Act are different from the facts is that the necessary entries in the tax invoice refer to cases where the contents of the tax invoice do not coincide with those of the person who actually supplied or is supplied with the goods or services, regardless of the formal entries in the transaction contract, etc. made between the parties to the goods or services.

B) In full view of the following circumstances revealed from the above fact of recognition, the Plaintiff cannot be deemed to have received the instant construction services from the non-party company, and eventually, the instant tax invoice constitutes a tax invoice entered falsely by the supplier.

① The non-party company did not have the ability to supply the actual construction services at all, and did not actually supply them, and it appears that it issued a tax invoice by lending only a construction license under its name.

② Since KimA, the representative director of the non-party company, issued a false tax invoice, he/she was convicted of the facts charged in violation of the Act on the Aggravated Punishment, etc. of Specific Crimes (tax) including the fact that the court of first instance issued a false tax invoice in the name of the non-party company as a result of investigation and criminal trial by the tax authorities. Although the appellate court of the case continues to exist, KimA merely addresses the fact that he/she was the representative director of the non-party company and did not participate in the crime, and it does not dispute that the tax invoice of this case is not false.

③ It is difficult to see that the non-party company directly used the account opened in relation to the instant construction project, and rather, the Plaintiff appears to have used the said account.

④ According to the documents submitted by the Plaintiff, the instant construction appears to have been carried out as soon as possible. On July 25, 2007, it is difficult to easily understand the reasons why the Plaintiff submitted a letter of waiver of construction that Nonparty Company would waive the instant construction work.

⑤ Furthermore, the Plaintiff was required to receive a written rejection of the waiver of construction work from the non-party company on the ground of the delay in construction work of the non-party company, and if so, according to the construction contract of this case, the agreement was made for liquidated damages, and the Plaintiff appears to have suffered losses due to the delay in construction work of the non-party company. Therefore, it is common to consider the Plaintiff’s claim for damages against

2) Whether the Plaintiff is bona fide or without fault

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 supplier, who was unaware of the fact that the supplier was unaware of the nominal name of the tax invoice (see, e.g., Supreme Court Decision 2002Du2277, Jun. 28, 2002).

The Plaintiff submitted evidence Nos. 5 and 10 (including each number) to prove that the Plaintiff was unaware of the name of the tax invoice of this case and was unaware of the fact that there was no negligence.

However, as seen earlier, the Plaintiff cannot be deemed to have received the instant construction services from the non-party company, and (2) considering the fact that the actual supplier cannot be deemed to have disguised the name of the non-party company under the circumstances where the actual supplier is unknown, it is only determined that the Plaintiff was negligent in not knowing that the Plaintiff was not the non-party company, even though he knew or was unaware of the fact that the Plaintiff was not the actual supplier of the instant construction services, and therefore, it is insufficient to recognize the Plaintiff’s good faith and negligence solely with each of the above documentary evidence.

3) Sub-determination

Since the instant tax invoice constitutes a tax invoice different from the fact, and it is insufficient to recognize that the Plaintiff is a bona fide and negligent person, it is legitimate to revise and notify each value-added tax for the first and second years of 2007, since the Plaintiff could not deduct input tax amount corresponding to the instant tax invoice. Moreover, it is evident that the Plaintiff merely received a tax invoice different from the fact that the Plaintiff was supplied by a third party, not the non-party company, despite having been supplied by the third party, and that it was evident that the Plaintiff did not receive all documentary evidence, such as the tax invoice, from the actual supplier. Therefore, it is legitimate to apply the provisions of Article 76(5) of the former Corporate Tax Act (amended by Act No. 8831 of Dec. 31, 2007) to correct and notify the corporate tax for the business year 2007.

Therefore, the disposition of this case against the plaintiff by the defendant is all legitimate.

3. Conclusion

Therefore, the plaintiff's claim is dismissed as it is without merit, and the judgment of the court of first instance is unfair with different conclusions, so the defendant's appeal is accepted, and the judgment of the court of first instance is revoked, and the plaintiff's claim is dismissed as per Disposition.