A disposition that deducts input tax amount by deeming it as a false tax invoice (a prohibited amount)

Since the instant transaction is merely a nominal transaction and cannot be deemed to have been transferred the actual ownership, the issue is that the tax invoice is prepared without a real transaction or is prepared differently from the actual transaction by at least the supplier, and constitutes a “tax invoice different from the actual transaction.”

Tax amount paid under Article 17 of the Value-Added Tax Act

1. The plaintiff's claim is dismissed.

2. The costs of lawsuit 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 450,270,420 against the plaintiff on November 9, 2005 shall be revoked.

The court's explanation on the instant case is identical to the reasoning of the first instance court's judgment, and thus, citing it in accordance with Article 8 (2) of the Administrative Litigation Act and Article 420 of the Civil Procedure Act.

Therefore, the judgment of the first instance court is justifiable, and the plaintiff's appeal is dismissed as it is without merit. It is so decided as per Disposition.

[Seoul Administrative Court 2006Guhap42365 ( August 17, 2007)]

1. The plaintiff's claim is dismissed.

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

The Defendant’s imposition of value-added tax of KRW 450,270,420 against the Plaintiff on November 9, 2005 shall be revoked.

1. Details of the disposition;

A. The Plaintiff, a business operator operating gold bullion wholesale, etc., purchased gold bullion 1,545 kilograms (total supply price of KRW 22,486,883,00) from ○○ Company, etc. during the taxable period of the value-added tax for the second half of 2003, and around that time, issued sales tax invoices (the instant tax invoice) by deeming that it sold gold bullion 22,513,521,000 won to ○○ Trade Co., Ltd. (former trade name: ○○ Global) as tax-free.

B. On November 9, 2005, the Defendant: (a) viewed the instant tax invoice as a false tax invoice without real transaction; and (b) decided and notified the Plaintiff of KRW 450,270,420 on 203 as value-added tax (hereinafter the instant disposition).

Facts that there is no dispute over recognition, Gap evidence 1-2, Eul evidence 1-2, and the purport of the whole pleadings.

2. Whether the disposition is lawful;

A. The plaintiff's assertion

The transaction with the Plaintiff and the Plaintiff was conducted in such a way that the Plaintiff did not use the gold bullion transport company, and the 00 ordinary employees directly take over gold bullion at the Plaintiff’s office. The instant tax invoice is illegal to impose value-added tax by deeming it as a false tax invoice solely on the ground that the Plaintiff was related to the normal transaction in which the Plaintiff actually sold and delivered gold bullion, and that there was no document evidencing transportation by a specialized

(b) Fact of recognition;

(1) Upon the implementation of the "tax exemption system under the Restriction of Special Taxation Act" from July 1, 2003, among gold bullion distributors, the gold bullion distributors shall put the so-called wide coal company into the distribution mid-term distribution stage until the export of the imported gold bullion through several stages of distributors, and sold gold bullion distributed to all stages of the wide coal distributors by the wide coal distributors, the amount equivalent to the value-added tax of 10% should be added to the total amount of the gold bullion. After withdrawing the profit within a short period of time in cash and then closing the business without paying the value-added tax, the distributors after the large coal coal distributors cannot collect the value-added tax. The exporters after the payment of the tax invoice at each stage of the tax invoice and the amount of the input tax deduction at the final stage are exported to the zero-rate tax rate and after receiving the value-added tax refund from the government, the central government shall eventually bring about losses equivalent to the value-added tax refund paid by the exporters and foreign gold bullion distributors and exporters and importers of gold bullion by dividing the profits of the gold bullion."

Revenue

Business Operators

? ?

Tax Exemption

Intermediate Award

? ?

Bombomb

Enterprise

? ?

Taxation

Intermediate Award

? ?

Wholesale

Enterprise

? ?

Export

Enterprise

? ?

Export

(2) In comparison with the average sales from the Plaintiff’s opening date to the closing date of business ( September 30, 2005), the sales volume of the gold bullion significantly increased during the 2003 taxable period. The Plaintiff purchased most of the relevant gold bullion on the day on which it was imported. The said gold bullion was delivered to the Plaintiff through a specialized transportation company, and the said gold bullion was sold to the Plaintiff through the specialized transportation company on the date of purchase, and the said specialized transportation company traded with the ○○ commercial transport company.

(3) Meanwhile, in relation to the sales of gold bullion from the Plaintiff’s trade, the Plaintiff did not take charge of transportation, and the employees of ○○ Trade have received and transported gold bullion directly. The above ○○ Trade sold the pertinent gold bullion purchased to ○○○○○○○○ Co., Ltd., and the transaction was conducted in the form of payment to the Plaintiff after receiving the price from said ○○○○○○ and then paying it to the Plaintiff.

(4) The above ○○ World, which converted the instant gold bullion into a taxable gold in the course of its distribution, sold the gold bullion purchased at a price lower than the purchase price (However, the amount added to the value-added tax, i.e., the price for supply, higher than the purchase price), and did not fulfill the obligation to pay value-added taxes by closing the business.

(5) Meanwhile, it was found that the actual operator of the above ○○ World was convicted of criminal facts regarding the evasion of tax, and that most of the companies involved in the transaction with the Plaintiff during the taxable period of the value-added tax for the second half of 2003 were accused of such criminal facts.

Each description of evidence of heading 4, 5, Eul evidence of heading 2 through 4 (including above number), 5-1, 2, 6 through 11 (including above number) of the evidence of heading 5

C. Determination

In light of the circumstances revealed through the above facts of recognition, namely, the distance between the date of purchase and sale of the gold bullion of this case, the amount of the price of the goods of this case and the unique nature of the payment method thereof, whether the value-added tax is evaded in the intermediate transaction, the progress of criminal litigation against the parties concerned, the fact that there is no substantial data on the transportation of the specialized transportation business entity, which can be used as a normal transportation method in light of the size and characteristics of the transaction of this case, and the trend of the Plaintiff’s sales change after the implementation of the tax exemption system, etc., the tax invoice of this case received by the Plaintiff is merely the creation of the appearance of transaction without the supply of goods, transaction,

Therefore, the plaintiff's assertion on different premise is without merit.

3. Conclusion

Therefore, the plaintiff's claim is dismissed as it is without merit. It is so decided as per Disposition.