Whether the key sales are false sales

It is difficult to view the sales of the issue as false sales in light of the fact that the sales of the sales revenue at the pre-trial stage is true, and that the sales revenue at the new issue is alleged to be false, and that if the sales revenue is recognized to be omitted, the sales revenue at issue exceeds twice the omitted sales amount.

Article 13 of the Value-Added Tax Act

1. All of the plaintiff's claims are dismissed.

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

The Defendant’s disposition of imposition exceeding KRW 46,82,720 of value-added tax for the second period of 2001 against the Plaintiff on October 2, 2004, exceeding KRW 85,735,270 of value-added tax for the second period of 201, exceeding KRW 39,780,390 of value-added tax for the first period of 2002, exceeding KRW 39,376,770 of value-added tax for the second period of 2002, exceeding KRW 49,39,393,770 of value-added tax for the second period of 2002, exceeding KRW 135,478,80 of value-added tax for the first period of 203, exceeding KRW 92,498,040 of value-added tax for the second period of 203, KRW 44,076, KRW 650,750 of value-added tax for the second period of 203.

1. Details of the disposition;

A. The Plaintiff is a corporation that mainly manufactures and sells heavy equipment parts for construction from May 1, 1999 to ○○○-dong, Seoul, ○○○○○-dong, ○○○-dong, ○○○-dong.

B. The Defendant conducted a tax investigation with respect to the Plaintiff on June 24, 2004 to August 10, 2004 on the ground of information on the Plaintiff’s employee’s tax evasion of KRW 302,925,681,682,216,081, 207, 2050, 207, 207, 205, 207, 207, 205, 207, 207, 305, 205, 207, 207, 205, 207, 205, 205, 207, 305, 207, 205, 207, 205, 207, 305, 207, 205, 205, 207, 305, 207, 207, 2005, 3635, 207, 37, 25,

D. Based on the Plaintiff’s objection and audit records, the Defendant respectively reduced and corrected value-added tax of the second quarter value-added tax of 2001, value-added tax of 33,430 won, value-added tax of the first quarter of 2002, value-added tax of 387,700 won, value-added tax of the second quarter of 2002, value-added tax of 193,750 won, value-added tax of the second quarter of 2003, value-added tax of 141,390 won, value-added tax of the second quarter of 203, value-added tax of 203, respectively.

E. On December 9, 2005, the Plaintiff again filed a request for review with the Commissioner of the National Tax Service on May 29, 2006, and the Defendant received a decision of reduction of part of the tax amount on May 29, 2006. According to the above decision, on June 27, 2006, the Defendant imposed a reduction of value-added tax on the second term portion of value-added tax in 2001, KRW 3,653,870, value-added tax on the first term portion in 202, KRW 9,173,540, value-added tax on the second term portion in 202, KRW 16,198,020, value-added tax on the first term portion in 203, KRW 94,410, value-added tax on the second term portion in 203, and KRW 6,225,980 on the second term of value-added tax on the Defendant on October 2, 2004.

[Ground of recognition] Evidence Nos. 1-1 to 3, Evidence Nos. 1-1 to 6-4, and the purport of the whole pleadings

2. Determination on the legality of the instant disposition

A. The plaintiff's assertion

The Defendant imposed each of the instant dispositions on the basis of the sales details recorded in the instant computer CD. However, among the sales details recorded in the said computer CD, the part of KRW 1,153,286,950 listed in X-01 (cash-seller) is recorded in the content of counseling with customers. ② X-02 (Credit Card Company) is an item of settlement with an existing credit card, and ③ KRW 232,070,665, which is indicated in the name of the company is merely a non-defluence of the previous credit claim, and thus, it is unlawful for the Defendant to impose each of the instant dispositions on each of the instant dispositions on each of the instant parties (hereinafter referred to as “instant sales”).

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

The Plaintiff did not dispute the authenticity of the instant computer CD itself, and as long as the Defendant obtained the said computer CD from reliable intelligence, the sales details recorded in the said computer CD itself are deemed to be reliable. As such, the Defendant cannot be deemed unlawful to render the instant disposition based on the sales details recorded in the instant computer CD. If there are different parts in the content of the said computer CD, the fact that the Plaintiff, who had evidentiary materials, did not actually sell should prove that there was no actual sales.

However, it is difficult to believe that the testimony by ○○○○○○, which corresponds to the Plaintiff’s assertion that the instant sales amount is false, is the testimony of the Plaintiff’s accounting employee, and it is evident that the Plaintiff’s business is separate from the Plaintiff’s business, and even if the sum of the sales amount is calculated by adding it, insofar as there is no evidence to support the fact that the Plaintiff did not use another passbook in the course of the transaction, and that there was no cash or any transaction by using other means of payment, it is difficult to conclude that the instant sales amount is false on the ground of the foregoing circumstances, and there is no evidence to support the Plaintiff’s assertion otherwise.

Rather, the Plaintiff did not submit at all the inventory register or electronic data on the inventory management records recorded at the time of the imposition period of each of the instant value-added tax (the Plaintiff alleged that there was no other book other than the instant computer CD, but it appears that there was a separate account book which manages the inventory quantity by item, or at least the means to verify the details of the past inventory management using the computer program). At the pre-trial proceeding stage, the Plaintiff asserted that there were several issues for the reduction of value-added tax imposed upon the instant tax disposition. However, at the time, the Plaintiff did not at all assert the assertion that the sales of the instant case were false. Rather, the Plaintiff’s assertion that the sales of the instant case were calculated on the basis of the fact that the sales of the instant case were true (transport cost, overpaid payment, refund money, and borrowed sales amount, etc.) and that the Plaintiff’s assertion that the sales of the instant case were false at least 25 times the Plaintiff’s purchase volume omitted and 270 times the Plaintiff’s purchase amount, compared with the Plaintiff’s allegation that the Plaintiff’s purchase sales amount exceeded 26136.

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and it is so decided as per Disposition.

Relevant statutes

former Value-Added Tax Act (amended by Act No. 8142 of Dec. 30, 2006)

Article 13 (Tax Base)

(1) The tax base for value-added taxes on the supply of goods or services shall be the aggregate of values falling under each of the following subparagraphs (hereinafter referred to as "value of supply"): Provided, That value-added taxes

1. Where payments are given in money, the payments;

2. Where payments other than money are given, the current market price of goods or services supplied by the supplier;

3. Where payments for the supply of goods are unjustifiably low or no payments are made, the current market price of goods supplied by the supplier himself/herself;

3-2. Where payments for the services rendered are unjustifiably low, the current market price of such services rendered by the relevant supplier; and

4. Where the business is closed down, the current market price of inventory goods.

(2) The following amounts shall not be included in the tax base:

1. The amount of discount;

2. The value of returned goods;

3. The value of goods which are damaged, damaged, or destroyed before they reach the person receiving the supply;

4. National subsidies and public subsidies;

5. Overdue interests as prescribed by the Presidential Decree among those paid due to delay in the payment of supply proceeds.

(3) The discounted amount, loss, bounty, and other amounts similar thereto on the value of supply after the goods or services are supplied shall not be deducted from the tax base.

(4) The tax base of value-added taxes on import of goods shall be the aggregate of the dutiable value of customs duties, special consumption taxes, liquor taxes, education taxes, traffic taxes and special rural development taxes.

(5) Necessary matters concerning the calculation of the tax base other than those under paragraphs (1) through (4) shall be prescribed by Presidential Decree.

Article 21 (Settlement and Correction)

(1) The head of a district tax office having jurisdiction over a place of business, the Commissioner of the competent Regional Tax Office or the Commissioner of the National Tax Service shall determine or correct the tax base of value-added tax or tax amount

1. Where the final tax return is not filed;

2. Where there are any mistakes or omissions in details of the final tax return;

3. Where the list of the total tax invoice by buyer or the total tax invoice by buyer is not submitted in the final tax return, or all or part of the submitted list of the total tax invoice by buyer is not entered or

4. Where there is a possibility of evading the value-added tax due to the causes as determined by the Presidential Decree other than subparagraphs 1 through 3.

(2) Where the head of a district tax office having jurisdiction over a place of business, the Commissioner of the competent Regional Tax Office or the Commissioner of the National Tax Service determines or revises the tax base and amount of tax payable or refundable for each taxable period pursuant to paragraph (1), he/she shall do so on the basis of tax invoices, account books and other evidence:

1. Where tax invoices, account books, and other evidence necessary for calculating the tax base do not exist or important parts are incomplete;

2. Where the contents of tax invoices, account books, and other evidence are obviously false in light of the scale of facilities, the number of employees, and the market prices of raw materials, commodities, products, or various charges;

3. Where the contents of tax invoices, account books, and other documentary evidence are obviously false in light of the quantity of raw materials used, power used, and other operational conditions.

(3) Where any error or omission is found in the tax base and tax amount paid or refundable in accordance with paragraphs (1) and (2), the head of the competent district tax office having jurisdiction over the place of business or the Commissioner of the National Tax Service shall immediately correct it.