Taxpayers of value-added taxes and Article 15 of the Value-Added Tax Act

Article 2(1) of the Value-Added Tax Act provides that a person who supplies goods and services independently for business purposes is liable for value-added tax (the so-called person who receives the goods and services is not a person liable for tax payment under tax law) and Article 15 of the same Act provides that if an entrepreneur supplies goods and services, an amount equivalent to value-added tax shall be collected from the person who receives the goods and services, the amount equivalent to value-added tax shall be transferred in sequence to the person who receives the goods and services, and ultimately, the final consumer shall be liable for the burden of the amount of value-added tax collected by the entrepreneur. The above provision does not provide that the person who receives the goods and services does not have a duty to pay or pay value-added tax to the other party or the State of the transaction,

Articles 2 (1) and 15 of the Value-Added Tax Act

[Plaintiff-Appellant] Plaintiff 1 and 1 other (Law Firm Han-chul, Attorneys Park Jae-soo et al., Counsel for plaintiff-appellant)

Yellow Jincheon (Attorney Park Young-soo, Counsel for the defendant-appellant)

Head of the Do Tax Office

Seoul High Court Decision 89Gu11802 delivered on July 6, 1990

The appeal is dismissed.

The costs of appeal are assessed against the plaintiff.

We examine the grounds of appeal.

Article 2(1) of the Value-Added Tax Act provides that a person who supplies goods and services independently for business purposes is liable for value-added tax (the so-called person who receives the goods and services is a taxpayer under tax law and is not a taxpayer under tax law) and Article 15 of the same Act provides that if an entrepreneur supplies goods and services, an amount equivalent to value-added tax shall be collected from the person who receives the goods and services, the amount equivalent to value-added tax collected by the entrepreneur will ultimately be transferred in sequence to the final consumer who is ultimately liable for the payment of the value-added tax, and the above provision does not require the person who receives the goods and services to pay value-added tax to the other party to the transaction or the State (see Supreme Court Decision 82Meu500, Mar. 27, 1984). However, according to the evidence adopted by the court below, since the Plaintiff, who operates wholesale and retail business of vehicle parts and parts for this case, supplied the other party to the transaction of this case, the lower court did not have any other reasons to determine the amount of value-added tax by the Plaintiff’s discretion.

Therefore, the appeal shall be dismissed and all costs of appeal shall be assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices.

Justices Park Jong-dong (Presiding Justice)