Cho High Court Decision 2006west0846 (Law No. 30, 2006)

Whether a tax invoice different from the fact related to the gold bullion transaction has been received

It is difficult to readily conclude that a transaction of gold bullion is not a supply of goods subject to value-added tax solely on the pretext of the fact that the gold bullion is delivered and the appearance of payment is made only for the actual transaction, solely on the basis of the fact that the gold bullion is traded within a short period of time until the gold bullion is imported and exported, and that there is a bomb in the interim phase.

The contents of the decision shall be the same as attached.

1. The Defendant’s imposition disposition of KRW 58,614,240 for the first term of 2003 against the Plaintiff on September 14, 2007, each of the imposition disposition of KRW 10,003,141,420 for the second term of 203, and KRW 1,731,517,90 for the corporate tax of 2003 shall be revoked.

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

The same shall apply to the order.

1. Details of the disposition;

A. AA precious metal company (hereinafter referred to as "AP metals") is a company engaged in wholesale and export business of gold bullion (referring to gold bullion with at least 995/100 as raw materials, such as metal, gold bar, and gold bar). The plaintiff is an actual operator of AAP metal. (b) Seoul regional tax office, during the second taxable period from 103 to 200, 30 precious metal companies (hereinafter referred to as "the purchase price of this case"), 40, 309, 197, 209, 209, 30, 209, 30, 300, 197, 209, 40, 207, 209, 300, 197, 209, 201, 30, 300, 197, 209, 201, 300, 197, 209, 201.

D. The Plaintiff dissatisfied with the instant disposition and filed an appeal with the Tax Tribunal on June 26, 2008, but the Tax Tribunal dismissed the Plaintiff’s appeal on December 3, 2008.

[Grounds for Recognition] Facts without dispute, Gap 1-5 evidence, Eul 1-3 evidence (including each number), the purport of the whole pleadings

2. Whether the instant disposition is lawful

(a) Related Acts and subordinate statutes;

It is as shown in the attached Form.

(b) Fact of recognition;

(1) From around December 2002 to December 31, 2004, the Special Tax Treatment Control Act was amended to abuse the zero-rate or zero-rate tax exemption system among the precious metal companies located in Seoul as Seoul, thereby converting the gold bullion into the so-called "large carbon company" through various stages of zero-rate or zero-free tax exemption, and then converting it into the tax amount. In other words, it is exported to distribute it as a taxable amount through a variety of stages of wholesalers. The exporter did not pay the value-added tax, and the exporter extended the so-called "large coal business" to refund the value-added tax that has not been paid by the large coal company.

(2) The Plaintiff purchased most gold bullion from the instant purchaser, sold them, and deducted the input tax amount. The instant gold bullion was all imported from a foreign country and distributed as a tax-free gold, and was converted from an importing company to the Plaintiff, and the Plaintiff received a variety of stages of wholesale businesses from the importing company to the Plaintiff. The breadth coal companies that converted the tax-free gold into a tax-free gold in the distribution process all of which purchased gold bullion are 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 sales business.

(3) All transactions from the import of the instant gold bullion to the export are conducted within 20 days from the date of import (on the date of partial import). The Plaintiff sold all the instant gold bullion on the date of purchase. In addition, a large number of the instant gold bullion, within one hour, was completed in the reverse order in all stages from the Plaintiff to the importing company.

(4) The Plaintiff was sentenced to imprisonment with prison labor for three years and fine for 60 billion won on January 15, 2009 from Seoul High Court (2008No3054) to a total of value-added taxes during the period from March 20, 2001 to April 13, 2004 by an implied or net public offering with the actual operator and was involved in the crime of evading value-added tax by the bomban company. The above punishment became final and conclusive around that time.

[Reasons for Recognition] Facts without dispute, Gap 5-79 Evidence, Eul 1-3, 5, and 6 (including each number), the purport of the whole pleadings

C. Determination

(1) Article 1(1)1 of the Value-Added Tax Act provides that "the supply of goods as taxable subject to value-added tax" and Article 6(1) provides that "the supply of goods shall be a delivery or transfer of goods on all contractual or legal grounds." In light of the fact that value-added tax has characteristics as multi-stage transaction tax, delivery or transfer under Article 6(1) of the Value-Added Tax Act includes all acts of causing the transfer of authority to use and consume goods, regardless of the actual profits gained. In this case, the issue of whether a specific transaction constitutes the supply of goods under the Value-Added Tax Act shall be determined individually and specifically by taking into account all the circumstances such as the purpose, process and mode of the transaction by each transaction party, ownership of profits, and payment of consideration, and the burden of proving that a tax invoice received in the transaction process is denied on the grounds that the specific transaction is a nominal transaction without a substantial delivery or transfer of goods (see, e.g., Supreme Court Decision 200Du1781, Jul. 28, 2001).

In light of the above legal principles, as seen earlier, the pertinent gold bullion was actually distributed from the importer to the exporter, and the Plaintiff purchased each of the instant gold bullion from the purchaser on the date of purchase from the first taxable period of the value-added tax in 2003 to the taxable period of the value-added tax in 2003, and received it on the date of purchase, and received it in full, and then received the instant tax invoice from the purchaser. Since it can be known that the instant gold bullion was exported or supplied to the domestic gold bullion wholesale business, a series of entire transactions until the date of import and export of the instant gold bullion were conducted within a short period of time until the import and export of the gold bullion. Since the Plaintiff purchased the gold bullion exempted from value-added tax at the interim stage, and prepared and delivered a tax invoice for gold bullion subject to value-added tax, and did not pay the amount equivalent to the value-added tax, it is difficult to readily conclude that the Plaintiff’s act of tax evasion was not a transaction related to the purchase of goods under the pretext of the final and conclusive judgment.

Therefore, it is difficult to view the instant tax invoice received through the instant transaction as falling under “illegal tax invoice,” as it is written differently from the actual supplier on the invoice.

(2) The defendant added the argument that the disposition of this case is justifiable, but it cannot accept all of the following reasons.

(A) First, the Plaintiff received the instant tax invoice for the purpose of tax evasion in collusion with the Plaintiff in trading the instant gold bullion, and received the final judgment of conviction. Such transactional act constitutes a criminal act and thus constitutes null and void pursuant to Article 103 of the Civil Act. As such, the instant tax invoice is deemed null and void pursuant to Article 103 of the Value-Added Tax Act. Thus, the Plaintiff’s assertion that the instant transaction cannot be deemed as a tax invoice on the supply of goods under Article 16 of the Value-Added Tax Act. However, the said final judgment and the evidence submitted by the Defendant alone cannot be deemed null and void pursuant to Article 103

(B) Second, the Plaintiff’s instant gold bullion transaction is a series of illegal acts committed by a bombing company for the purpose of unlawfully refunding the value-added tax evaded by the bombing company. Therefore, the Plaintiff’s assertion that the input tax deduction cannot be allowed in order to prevent damage to the State caused by illegal acts. However, under the principle of tax law, the Plaintiff’s assertion on this part cannot be accepted as it denies the input tax deduction without any legal basis under the pretext of preserving the State’s damage liability

(C) Third, the Plaintiff’s tax invoice is a criminal act that is a tax evasion, and the content of the tax invoice exists and the Plaintiff’s input tax deduction for the Plaintiff who knows such defect is unreasonable. However, as seen earlier, it cannot be deemed that any defect exists in the content of the instant tax invoice indicated in the actual transaction content, and it cannot be determined as to whether to deduct the input tax according to the motive or purpose of the transaction in light of the intent of the tax invoice system. Therefore, this part of the claim is without merit.

(D) Fourth, the Plaintiff asserts that there is no entry of the tax amount under the instant tax invoice, since it traded gold bullion through a public offering with a bombing coal company and entered the value-added tax amount. However, it is clear that the instant tax invoice and the statement of transaction (see, e.g., evidence No. 5-1, No. 2, etc.) are different from the value of supply and the amount of tax, and the argument that the instant tax invoice does not have any entry

(3) Therefore, the instant disposition, based on the premise that the instant tax invoice is false, was unlawful, for which the input tax amount was not deducted or the additional tax provision for the failure to receive documentary evidence was applied, was unlawful.

3. Conclusion

Therefore, the plaintiff's claim of this case is reasonable, and it is so decided as per Disposition by the assent of all participating Justices.