2013Guhap684 Disposition to revoke the imposition of value-added tax

A Stock Company

Law Firm Busan Dong-dong, Counsel for the plaintiff-appellant

Attorney Park Ho-ho

A person shall be appointed.

January 9, 2014

February 13, 2014

1. The Defendant’s disposition of imposing KRW 216, 847, and 120 on the Plaintiff on April 2, 2012 is revoked.

2. The costs of lawsuit are assessed against the defendant.

The order is as set forth in the text.

1. Details of the disposition;

A. From May 10, 2006, the Plaintiff was engaged in the construction business in the documents in Ulsan-gun, Ulsan-gun, and was engaged in the scrap metal and the sales business after changing the type of business from July 26, 2010. The Plaintiff issued 5,422,968,250 won in total from four companies including 00 metal,00 metal,00,000,000 metal, and 00,000,000 won in the second taxable period of the value-added tax in 2010 (hereinafter “the purchase places of this case”). The Plaintiff issued 0,000,000 won in total, 00,000 won in total, 30,000, 00, 00, 00, 10, 50, 10, 50, 50, 10.

B. The Defendant issued a tax invoice of KRW 5,422, 968, and 250 without a real transaction, and issued a tax invoice of KRW 5,423,860, and KRW 00 on April 2, 2012 to the Plaintiff on April 2, 2012, pursuant to Article 22(3)2 and 3 of the former Value-Added Tax Act (amended by Act No. 11608, Jan. 1, 2013; hereinafter “former Value-Added Tax Act”), the value-added tax (additional tax) of KRW 216,847, and KRW 120 was corrected and notified (hereinafter “instant disposition”).

C. On September 28, 2012, the Plaintiff appealed to the Tax Tribunal, but was dismissed on December 28, 2012.

[Ground for recognition] Unsatisfy, Gap evidence 1, 2 (including Serial number; hereinafter the same shall apply), Eul evidence 1, 2, and 3, the purport of the whole pleadings and arguments

2. Whether the instant disposition is lawful

A. Party’s assertion

1) The plaintiff's assertion

The plaintiff traded the purchase price of this case and the sales price of this case and issued tax invoices lawfully in accordance with this, and issued them, and even though there were the details of the transaction following the transaction, the balance sheet, the measurement confirmation, and the entry and exit details, the defendant deemed the plaintiff as the material, and made the disposition of this case by judging that the tax invoice was merely received without any actual transaction.

2) Defendant’s assertion

In full view of the following circumstances, the Plaintiff received purchase tax invoices from the purchaser of this case without real transactions and issued tax invoices to the purchaser of this case. Accordingly, the instant disposition imposing value-added tax (additional tax in bad faith) is legitimate.

A) In 2010, the Plaintiff filed a tax invoice of KRW 616, 62, 00 from 00, 616, 662, 00, and KRW 227, 231, and 00 from 00, and 227, 231, and 4% of the total purchase amount for the second period in 2010, and filed a tax invoice with the said three companies. According to the above companies’ report of value-added tax, the Plaintiff was only the sales amount and the purchase amount are all free of charge, and the sales amount was determined by the tax authorities only after the return of value-added tax was filed, and the representative and the actual business operators filed a tax complaint of KRW 5,422, 968, 205, 208, 3065, 208, 206, 205, 208, 206, 208, 200.

B) A corrective disposition has already been taken against a large number of the instant sales offices, which did not deduct the input tax amount, and some companies paid the amount of the additional tax without any objection thereto. Moreover, the measurement confirmation submitted by the Plaintiff and the specifications of the transaction are capable of voluntarily preparing the transaction report, and it seems to have been falsely prepared in consideration of the time and time of the vehicle, the time and time required for the upper and lower parts of the vehicle, and the time indicated in the measurement confirmation.

C) Although a normal transaction is conducted, the purchase price of the goods shall be paid after the purchase of the goods and the sales price of the goods shall be remitted after the sale of the goods, the Plaintiff, after receiving the payment from the sales office of this case, remitted the payment to the purchase office of this case. The purchase office of this case immediately withdraws the remittance amount in cash and prevents cash flow. In light of such abnormal transaction behavior, the financial transaction seems to have been conducted to disguise the processing transaction merely.

(b) Relevant statutes;

Attached Form 3 is as shown in the "relevant Acts and subordinate statutes".

C. Determination

1) Generally, in a lawsuit seeking the revocation of a tax imposition disposition, the burden of proof as to the facts requiring a taxation exists on the person imposing the tax. However, if it is revealed that the facts alleged in light of the empirical rule in the specific litigation process are proved, unless the other party proves that the facts at issue were not eligible for the application of the empirical rule, it cannot be readily concluded that the pertinent tax disposition was an unlawful disposition that did not meet the taxation requirements (see Supreme Court Decision 2006-6604, Feb. 22, 2007, etc.).

2) In the instant case, in view of the following circumstances acknowledged by comprehensively taking account of the overall purport of the pleadings in each of the statements and videos stated in Gap evidence Nos. 4 through 8, 11, 13, 15 through 26, Eul evidence Nos. 2 through 5, 7, witness Nos. 000, and 00, it is difficult to view that the circumstances alleged by the Defendant alone indicate that the Plaintiff was issued a tax invoice without the future of the goods and that there was a fact to presume that the Plaintiff was issued the goods.

A) The Defendant asserted that an actual business owner of 00 metal and 00 metal among the instant purchasing places is 000 and that only a sales tax invoice was issued without any real transaction as a bomb among the data in its inner name. However, the Plaintiff’s 00 metal sales amount, which appears to be the actual business owner of 00 metal in the second quarter of 2010, in operation of “00 resources” around 201, purchased non-ferrous metals, etc. with no material and supplied them to the trading place, and issued sales tax invoices accordingly. After the Defendant was found guilty of evading value-added tax without paying the value-added tax, there was no punishment regarding the issuance of a tax invoice without real transaction. Accordingly, it is difficult to conclude that 00 metal or 00 metal were issued without any real transaction.

B) The Plaintiff’s financial transaction details are determined to have received the money that the Plaintiff appears to have first received from the instant buyer, and then remitted to the instant buyer the money that appears to have been paid for the scrap metal. However, in light of the Plaintiff’s balance sheet and the details of passbook transaction, most of the Plaintiff measured the scrap metal in the Plaintiff’s workplace or the instant buyer, etc. on the same day, and the Plaintiff received the said scrap metal from the instant buyer after a few times have elapsed, and then, the Plaintiff received the said scrap metal from the instant buyer, and then the Plaintiff received the said scrap metal first without paying the scrap metal from the instant buyer during the day, and then received the said scrap metal from the instant buyer, and received the said scrap metal from the instant buyer, and then settled the said scrap metal to the instant buyer, and it is also possible to conclude that it is a transaction with such process.

C) In the report of the Daegu regional tax office on the completion of its investigation into the instant purchasing places, the opinion that the determination of facts as to whether the customer who received the sales tax invoice from the instant purchasing places is an enterprise in good faith is reasonable by grasping the detailed circumstances at the competent tax office. However, if the instant purchasing places engage in the processing and issues the tax invoice, the customer who received the tax invoice from the Plaintiff cannot be bona fide. Thus, the tax authorities in charge of the investigation into the instant purchasing places do not conclude that the instant purchasing places engaged in the processing transaction.

D) The Plaintiff leased 3,209 square meters of land, 1,103 square meters of buildings, 103 square meters in front of the Seoul Special Metropolitan City, Ulsan-gun, Seoul-gun, and owned a valley and a vehicle exclusively used for the transportation of scrap 50 tons of mass total weight. During the investigation period of the instant disposition, the Plaintiff performed the work of separating and transporting scrap metal under employment of one female employee, two drivers, and two workers.

E) Although some of the sales offices of this case did not receive the deduction of the value-added tax input tax pursuant to the tax invoice issued by the Plaintiff, they did not raise an objection to the Defendant. However, the fact that the sales offices of this case engaged in the transaction of processing with the Plaintiff, or supplied scrap metal to another source does not directly appear to have been denied by the Defendant.

F) Although the Defendant accused the Plaintiff on charges of violating the Act on the Aggravated Punishment, etc. of Specific Crimes (such as issuance of false tax invoices), it was subject to disposition by the Ulsan District Prosecutors' Office to the effect that the Plaintiff was suspected of having been suspected.

3) Therefore, in this case, the Plaintiff issued a tax invoice without a real transaction. As long as it cannot be deemed that there was a fact to the extent that the fact of taxation requirements under Article 22(3) of the former Value-Added Tax Act is presumed to have been established, the burden of proof of the above fact of taxation exists in the Defendant, and otherwise, the Plaintiff was issued a tax invoice of KRW 5,422,968, and 250 from the instant purchaser without a real transaction, and there is no evidence to prove that the Plaintiff was issued a tax invoice of KRW 5,423,860,00 in total of the supply value to the instant seller. Accordingly, the instant disposition is unlawful as it misleads the fact and thus ought to be revoked.

3. Conclusion

In order to accept the plaintiff's claim, it is decided as per Disposition.

Judges Kim Jong-dae

Judge Senior Professor

Judges Min Il-young

Relevant statutes

(1) The former Value-Added Tax Act (Amended by Act No. 11608, Jan. 1, 2013)

Article 16 (Tax Invoice)

(1) Where an entrepreneur registered as a person liable for duty payment supplies goods or services, he/she shall issue an invoice stating the following paragraphs (hereinafter referred to as "tax invoice") to the person who receives the supply, as prescribed by Presidential Decree, at the time specified in Article 9 (referring to the time specified otherwise by Presidential Decree, if any). In such cases, where any ground prescribed by Presidential Decree, such as error or correction, occurs after the issuance of the tax invoice, a tax invoice may be revised and issued, as prescribed by Presidential Decree:

1. Registration number, name or denomination of the businessman who provides;

2. Registration number of the person who receives;

3. Value of supply and value-added tax;

4. Date of preparation;

5. Matters prescribed by Presidential Decree, other than those referred to in subparagraphs 1 through 4.

(2) Notwithstanding paragraph (1), corporate entrepreneurs and individual entrepreneurs prescribed by Presidential Decree shall issue tax invoices by electronic means (hereinafter referred to as "electronic tax invoices") prescribed by Presidential Decree: Provided, That corporate entrepreneurs may also issue tax invoices other than electronic tax invoices by December 31, 2010, and individual entrepreneurs by December 31, 2011.

Article 22 (Additional Tax)

(3) Where an entrepreneur falls under any of the following subparagraphs, an amount equivalent to 2/100 of the value of supply (in cases falling under subparagraph 2, referring to the amount entered in the relevant tax invoice) shall be added to the amount of additional tax payable or deducted from the amount of refundable tax:

2. Where he/she issues a tax invoice under Article 16 without supplying any goods or services;

3. Where a tax invoice under Article 16 is issued without being supplied with any goods or services. Finally,