Daejeon High Court (Cheongju)-2013-Nu-360 ( August 20, 2014)

The tax invoice of this case does not recognize the plaintiff's good faith and negligence as a false tax invoice.

The Plaintiff, in trading with the non-ferrous metal industry for a long time, has been aware of the actual state and risk of widely spreading material transactions in the above industry, and even if there are sufficient circumstances to suspect that the vehicle or article transported is a disguised business operator because the former trader and the new customer are the same, it is recognized that the Plaintiff did not take measures to confirm the fact.

Article 17 of the Value-Added Tax Act

2014du12703 Disposition of revocation of the imposition of value-added tax

AAmeral Corporation

Head of Chungcheong Tax Office

Daejeon High Court (Cheongju) 2013Nu360 decided October 20, 2014

on 15, 2015

All appeals are dismissed.

The costs of appeal are assessed against each party.

The grounds of appeal are examined.

1. As to the Plaintiff’s grounds of appeal (to the extent of supplement in case of supplemental appellate briefs not timely filed)

A. As to the first, second, and third points

After recognizing the facts as indicated in its reasoning based on its adopted evidence, the lower court determined that the instant tax invoice, which was issued in the second period of 2009 and the first taxable period of the value-added tax in 2010, was a different tax invoice from that of the actual supplier, on which the Plaintiff engaged in the manufacture, sale, etc. of non-ferrous metals, was a supplier.

Examining the reasoning of the lower judgment in light of the relevant legal principles and records, the lower court’s findings and determination are justifiable, and contrary to what is alleged in the grounds of appeal, there were no errors in the misapprehension of legal principles as to tax invoices different from those under the Value-Added Tax Act

B. On the fourth ground for appeal

Where a supplier and an actual supplier are different, an input tax amount pursuant to a tax invoice may not be deducted or refundable unless there is any special circumstance that the person who received the tax invoice was unaware of the fact that he/she was unaware of the fact that he/she was nominal. Furthermore, the fact that the person who received the tax invoice was not negligent in not knowing the fact that he/she was nominal should be attested by the party who asserts the deduction or refund of the input tax amount (see, e.g., Supreme Court Decision 2002Du2277, Jun.

The lower court, based on the circumstances indicated in its reasoning, determined that it was difficult for the Plaintiff to deem that the Plaintiff was unaware of, or was unaware of, the fact that he was unaware of the name of the Sejong High

Examining the reasoning of the judgment below in light of the above legal principles and records, the judgment of the court below is just, and there is no error in the misapprehension of legal principles as to "trade parties with good faith and negligence" subject to deduction of input tax under the Value-Added Tax Act

2. As to the Defendant’s ground of appeal

A. Article 47-3(2)1 of the former Framework Act on National Taxes (amended by Act No. 11124, Dec. 31, 2011; hereinafter the same) provides that an amount equivalent to 40/100 of the amount calculated by multiplying the calculated tax amount by the ratio of the amount equivalent to the underreported tax base to the tax base in an unjust manner shall be added to the payable tax amount or deducted from the refundable tax amount. In addition, Article 47-2(2) of the former Framework Act on National Taxes defines the meaning of the "unfair method" as "the method prescribed by Presidential Decree, as it violates the duty to report the tax base or the amount of national tax, on the basis of the concealment or pretending of all or part of the fact that serves as the basis for calculating the tax base or the amount of national tax," and Article 27-3(2)1 of the former Enforcement Decree of the Framework Act on National Taxes (amended by Presidential Decree No. 23592, Feb. 2, 2012; hereinafter referred to as "any fraudulent method or other fraudulent method").

B. On the grounds indicated in its reasoning, the lower court determined that it is difficult to readily conclude that the Plaintiff received the instant tax invoice for the purpose of tax evasion and received input tax deduction for the purpose of tax evasion, knowing that the instant tax invoice was different from that of the actual supplier on the relevant tax invoice, and that the Plaintiff’s under-reported return of value-added tax after deducting the relevant input tax amount constitutes “an act of underreporting the tax base by an unjust method” under Article 47-3(2)1 of the former Framework Act on National Taxes.

C. Examining the reasoning of the judgment below in light of the above provision and relevant legal principles and records, the judgment of the court below is just, and contrary to the allegations in the grounds of appeal, there are no errors in the misapprehension of legal principles as to unfair underreporting penalty

3. Conclusion

Therefore, all appeals are dismissed, and the costs of appeal are assessed against each party. It is so decided as per Disposition by the assent of all participating Justices on the bench.