Suwon District Court-2016-Gu Partnership-6835 (2017.04.05)

Whether the claim for this case is legitimate

(As in the judgment of the first instance court, it is difficult to view that the actual payer of the value-added tax in this case is the purchaser and it is a person whose rights or interests are infringed due to unfair disposition or failure to receive necessary disposition, and therefore, it is unreasonable to conclude that the reported amount as the output tax amount of the tax invoice in question

Special Cases of Payment by Purchasers)

Seoul High Court 2017Nu4531 Disposition Rejecting Value-Added Tax Correction

Doo

Korea

Suwon District Court Decision 2016Guhap6835 Decided April 5, 2017

December 01, 201

January 12, 2018

1. The plaintiff's claim that is changed in exchange in the trial is dismissed.

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

The judgment of the first instance court is revoked. The defendant shall pay to the plaintiff the amount of KRW 417,617,261 and the amount of KRW 1.6% per annum from January 26, 2015 to the delivery date of a duplicate of the complaint of this case, and 15% per annum from the next day to the date of complete payment (the plaintiff sought revocation of the disposition of refusal of the disposition of the correction of value-added tax made by the head of the tax office at the first instance trial on February 17, 2016, but the purport of the claim for the correction of value-added tax made by the head of the tax office to the plaintiff on February 17

1. Basic facts

The reasons for this part of the judgment shall be the corresponding part of the judgment of the first instance except for the dismissal of the following:

Therefore, it is accepted in accordance with Article 8 (2) of the Administrative Litigation Act and the main text of Article 420 of the Civil Procedure Act.

Article 106-9 (3) of the Restriction of Special Taxation Act (amended by Act No. 12853, Dec. 23, 2014; hereinafter the same) provides that "Article 106-9 (3) of the former Restriction of Special Taxation Act (amended by Act No. 12853, Dec. 23, 2014; hereinafter the same shall apply)" shall be "Special Provisions of this case".

○ 3 pages 6, the Tax Tribunal has dismissed the plaintiff's request on June 1, 2016."

2. The assertion and judgment

A. The parties' assertion

1) The plaintiff's assertion

The instant tax invoice is specified in a false tax invoice and the instant value-added tax was paid without any grounds. Even if AA paid the instant value-added tax in accordance with the instant special provisions, the Plaintiff, the person liable to pay value-added tax, is entitled to claim the refund of the instant value-added tax, and the Defendant is obligated to refund the instant value-added tax to the Plaintiff.

2) The defendant's assertion

A) The value-added tax of this case is paid by AA, the purchaser, in accordance with the special provisions of this case, and thus the claim for refund of the value-added tax of this case belongs to AA, the purchaser, and thus, the Defendant cannot be deemed to have the obligation to refund the value-added

B) Although the Plaintiff issued the instant tax invoice by falsity and filed the instant value-added tax return based thereon, seeking refund of the instant value-added tax on the ground that the instant tax invoice was issued by falsity is not permissible against the principle of good faith under Article 15 of the Framework Act on National Taxes.

C) According to the Plaintiff’s assertion that the buyer actually supplied copper scrap to AA, the Plaintiff is liable to pay the instant value-added tax, and the Plaintiff cannot seek a refund of the instant value-added tax against the Defendant.

B. Relevant statutes

This part of the judgment is the same as the corresponding part of the judgment of the court of first instance except for the addition of the following contents. Therefore, it is acceptable to accept it in accordance with Article 8(2) of the Administrative Litigation Act and Article 420 of the Civil Procedure Act.

○ 7 3 pages. The following shall be added to:

Article 2 (Definitions)

The terms used in this Act shall be defined as follows:

3. The term "enterprisers" means any person who supplies goods or services independently for business, regardless of whether the business aims to make profit;

9. The term "person liable to pay taxes" means persons liable to pay national taxes under tax-related Acts (excluding an obligation to collect and pay national taxes);

10. The term "taxpayer" means persons liable to pay taxes (including persons jointly and severally liable for tax payment and persons secondarily liable for tax payment or guarantors if any obligation to pay taxes arises on behalf of a taxpayer) and persons liable to collect and pay national taxes under tax-related Acts;

Article 3 (Taxpayer)

Any of the following individuals, corporations (including the State, local governments, and local government associations), unincorporated associations, foundations, or other organizations are liable to pay the value-added tax pursuant to this Act:

1. An entrepreneur;

2. A person who imports goods.

Article 31 (Collection over Transaction)

Where an entrepreneur supplies goods or services, the value-added tax calculated by applying the tax rate under Article 30 to the value of supply under Article 29 (1) shall be collected from the person supplied goods or services.

Article 37 (Calculation of Amount of Tax, etc.)

(1) The output tax amount shall be calculated by applying the tax rate under Article 30 to the tax base under Article 29.

(2) The amount of tax payable shall be the amount obtained by deducting the input tax amount under Article 38 and the input tax amount deducted under this Act and other Acts from the output tax amount under paragraph (1) (referring to the amount computed by subtracting the bad debt tax amount under Article 45 (1)). In such cases, the input tax amount for the portion exceeding the output

The following shall be added at the bottom of 10 vehicles at the end of the nine pages:

- Restriction of Special Taxation Act (amended by Act No. 15227, Dec. 19, 2017)

Article 106-9 (Special Cases of Payment of Value-Added Tax by Purchasers of ices, etc.)

(11) The amount of value-added tax paid by the person supplied under paragraph (3) which has been erroneously paid or overpaid shall be refunded to the person provided, notwithstanding Article 51 (1) of the Framework Act on National Taxes.

Addenda

Article 1 (Enforcement Date)

This Act shall enter into force on January 1, 2018: Provided, That the amended provisions of Article 126-2 (limited to the parts related to books, performance and use) shall enter into force on July 1, 2018, and the amended provisions of Article 106-10 shall enter into force on January 1, 2019.

Article 32 (Application of Special Cases concerning Payment of Value-Added Tax by Purchasers of Scoops, etc.)

(2) The amended provisions of Article 106-9 (11) shall also apply to the portion paid erroneously or in excess before this Act enters into force.

○ 10. The last 10.00 shall include the following:

- Enforcement Regulations of the Restriction of Special Taxation

Article 48-6 (Special Cases for Payment of Value-Added Tax by Purchasers of ices, etc.)

(1) A person designated by the Commissioner of the National Tax Service pursuant to Article 106-13 (4) of the Decree may refund the value-added tax deposited by the relevant business operator within the scope of the value-added tax amount deposited by the purchaser pursuant to Article 106-9 (3) of the Act to the relevant business operator, as determined by the Commissioner

C. Whether the Plaintiff is the person entitled to claim the refund of the value-added tax of this case

1) The main text of Article 51(1) of the Framework Act on National Taxes provides that “if a taxpayer has mistakenly paid or overpaid the amount paid by the taxpayer as national tax, additional dues or disposition fee for arrears, or there is a refund tax to be refunded under the tax-related Acts, the head of a tax office shall immediately determine the amount paid in error, the amount paid in excess, or the amount of refund to be refunded under the tax-related Acts.” Meanwhile, according to Articles 51(6) and 2(10) of the Framework Act on National Taxes, the defendant is liable to pay the remainder of the national tax erroneously paid or overpaid to the taxpayer, and the taxpayer is liable to collect and pay national taxes under tax-related Acts and the taxpayer is liable to pay taxes. In the case of value-added tax, in principle, the person liable to pay

2) However, in light of the following circumstances, which are acknowledged by adding the respective descriptions and arguments in the evidence Nos. 6 through 9 to the above facts, in light of the following circumstances, it is reasonable to view that the value-added tax deposited by the person supplied with copper rap, etc. due to the application of the special provisions of this case falls under an erroneous or erroneous payment, and thus, the claim for the repayment thereof belongs to AA rather than the Plaintiff, the seller, and thus, the Plaintiff’s assertion on a different premise is without merit.

A) The value-added tax shall be levied on the added value generated at each stage of production and distribution.

As a tax, a person liable to pay value-added tax under the Value-Added Tax Act is an entrepreneur who supplies goods or services (Article 3 subparag. 1 and Article 2 subparag. 3 of the Value-Added Tax Act); an entrepreneur shall collect value-added tax from the person who receives the goods or services (Article 31 of the Value-Added Tax Act); and in such case, the amount of tax payable by an entrepreneur is calculated by deducting the input tax amount, etc. from the output tax amount, and the burden of value-added tax is ultimately transferred to a final consumer (Article 37 of the Value-Added Tax Act; Article 37 of the Value-Added Tax Act); however, in the case of special goods such as copper scrap, etc., the “one person who evades the tax by closing the business without paying the value-added tax collected,” and the special provision of this case was newly enacted on May 10, 2013 in order to prevent the evasion of the output tax due to the amendment to the Restriction of Special Taxation Act.

According to Articles 2 and 3, etc. of the Special Provisions of this case, the operator of copper scrap, etc. is entitled to the Value-Added Tax Act.

Notwithstanding Article 31, if an operator of copper scrap, etc. is supplied with copper scrap, etc. from another operator of copper scrap, etc., the value of copper scrap, etc. shall be deposited in the supplier using a transaction account for copper scrap, etc., and the value-added tax shall be deposited in the person designated by the Commissioner of the National Tax Service.

In light of the background of introducing the special provisions of this case and the nature of the value-added tax as seen earlier, and the method of taxation, the special provisions of this case are interpreted as an exception that the supplier (seller) shall collect the value-added tax from the purchaser instead of paying the value-added tax, in order to prevent tax evasion and achieve the purpose of convenient tax collection.

B) The instant special provisions require suppliers of copper scrap, etc. to add the instant special provisions through transaction collection.

In lieu of having to pay the value-added tax, the purchaser of the goods directly pays the value-added tax due to the supply of the goods. Thus, unlike the general case of the payment of value-added tax, the Plaintiff, a supplier, is merely a formal taxpayer, and does not have the obligation to collect the value-added tax from the purchaser, and does not have the obligation to do so to pay it to the Defendant. However, as the value-added tax is paid between the Defendant and the purchaser, only the indirect tax law relationship is formed in the way that the Plaintiff’s tax liability (tax liability) terminates

On the other hand, in the case of a purchaser, the bank manages the bank pursuant to paragraphs (3) 2 and (10) of the special provisions of this case, and bears a substantial obligation to pay the value-added tax directly to the defendant. If the purchaser fails to implement it, the value-added tax due to the relevant transaction shall not be deducted as the input tax amount pursuant to paragraph (5) of the special provisions of this case, and the amount calculated by multiplying the period from the date following the date of receipt of the copper scrap, etc. to the date of deposit by the interest rate prescribed by Presidential Decree pursuant to paragraph (7) of the special provisions of this case is added to the value-added tax to the period from the date of deposit of the value-added tax, and it is reasonable to deem that the purchaser pays the value

Therefore, the purchaser who paid the value-added tax pursuant to the special provisions of this case can be deemed as the taxpayer under Article 2 subparagraph 9 of the Framework Act on National Taxes, rather than the simple taxpayer on the value-added tax. In this case, the "tax liability" is established pursuant to the special provisions of this case, and it can be deemed as the "tax liability in the sense that the Plaintiff bears the obligation to pay the value-added tax corresponding to the payment obligation of the output tax amount in the general case that the Plaintiff

C) The Plaintiff asserts that the claim for refund is recognized on the ground of Paragraph (8) of the Special Cases of this case and Paragraph (1) of Article 48-6 of the Enforcement Rule of the Restriction of Special Taxation Act. However, in calculating the amount of the payable value-added tax on the premise that the copper scrap, etc. is supplied, the term “Refund of value-added tax” refers to the refund of value-added tax that is returned to the taxpayer when the input tax amount exceeds the output tax amount in the taxable period as the refund tax amount. This is distinguishable from the “Refund of the amount of the erroneously paid or overpaid tax that is returned to the taxpayer out of the amount paid by the taxpayer as national tax, additional dues or disposition fee for arrears” under the Framework Act on National Taxes because there is no supply of copper scrap, etc.

D) Meanwhile, in a case where a party to a contract directly provides a third party who has a different contractual relationship with the other party by shortening the performance process through the instruction of the other party, etc., the other party to the contract may not claim restitution of unjust enrichment against the third party on the ground that the party to the contract received payment from the third party without any legal cause (see, e.g., Supreme Court Decision 2006Da46278, Sept. 11, 2008). This legal doctrine purports that where a party to the contract reduced the performance process by providing a benefit to a third party who has a different contractual relationship with the other party instead of performing the payment to the other party, the party may not claim restitution of unjust enrichment against the third party on the ground that the contract becomes null and void if it was not directly related with the third party.

However, as seen earlier, insofar as a tax legal relationship between the Defendant and the purchaser pursuant to the special provisions of this case is deemed to have been formed, the purchaser cannot be deemed to be merely the person who reduced the value-added tax of this case on behalf of the Plaintiff, and thus, the purchaser’s right to claim restitution of unjust enrichment against the purchaser’s value-added tax cannot be denied on the basis of

E) Article 106-9(11) of the Restriction of Special Taxation Act (amended by Act No. 1527, Dec. 19, 2017) provides that "the amount paid erroneously or in excess of the value-added tax paid by the purchaser provided under paragraph (3) shall be refunded to the purchaser, notwithstanding Article 51(1) of the Framework Act on National Taxes," and Article 32(2) of the Addenda provides that "the amended provisions of Article 106-9(11) shall apply to the amount paid erroneously or in excess before this Act enters into force." In full view of the above circumstances, the aforementioned new provisions clearly stipulate that the amount paid erroneously or in excess of the amount paid by the purchaser shall be refunded to the purchaser, among the value-added tax paid by the purchaser of copper scrap, etc. according to the special provision on payment by the purchaser. Therefore, it seems clear that the right to claim the refund of the amount paid by the purchaser under the special provision on payment by the purchaser belongs to the purchaser.

3. Conclusion

Therefore, the plaintiff's claim of this case that was changed in exchange at the trial of the party is dismissed as it is without merit (the judgment of the court of first instance was invalidated by changing the plaintiff's claim in exchange for exchange). It is so decided as per Disposition.

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