Seoul High Court Decision 2009Nu40416 (Law No. 23, 2010)

early 208west3780 ( December 29, 2008)

It is difficult to recognize that there is a malicious business operator in the middle stage of gold bullion transactions as a nominal transaction solely on the sole basis.

It is difficult to recognize purchase transaction as a disguised nominal transaction solely on the basis that transaction of gold bullion was conducted in a short period and is conducted in a series of transactions in which malicious business operators exist at that middle stage.

2010Du19058 Detailed and revocation of global income and revocation thereof.

HongA

○ Head of tax office

Seoul High Court Decision 2009Nu40416 Decided July 23, 2010

July 14, 2011

The appeal is dismissed.

The costs of appeal are assessed against the defendant.

We examine the grounds of appeal.

1. Regarding ground of appeal No. 1

According to the reasoning of the lower judgment, the lower court determined that it is difficult to recognize the instant purchase transaction as a nominal transaction that disguiseds the actual transaction, solely on the following grounds: (a) gold bullion transaction was conducted in a short period of time and without receiving purchase tax invoices; (b) gold bullion transaction was conducted in a series of transactions in which malicious business operators who do not pay the amount equivalent to the value-added tax exist; and (c) the instant purchase transaction was conducted in the course of a series of transactions in which gold bullion transaction was

The ground of appeal on this point is that the court below erred in rejecting the defendant's assertion on the above ground, but it is merely erroneous in selecting evidence or finding facts which belong to the exclusive authority of the fact-finding court, and it cannot be a legitimate ground of appeal.

2. Regarding ground of appeal No. 2

As seen earlier, the lower court rejected the Defendant’s assertion that the instant purchase transaction was nominal transaction, and maintained the first instance judgment that revoked the instant disposition, on the premise that the said purchase transaction was a processing transaction, by excluding the purchase amount from deductible expenses in the 2005 business year of LD Metal Co., Ltd., and disposing of it as the representative bonus, and imposing the comprehensive income tax equivalent to the said purchase amount on the Plaintiff.

The argument in the grounds of appeal on this point is that the judgment of the court below that recognized input tax deduction is unlawful in violation of the good faith principle stipulated in Article 15 of the Framework Act on National Taxes, since gold bullion change transactions related to malicious business operators seriously damage the foundation of the value-added tax system by abusing the zero tax rate system. However, the court below did not recognize input tax deduction related to calculating the tax base under the Value-Added Tax Act, on the ground that a representative recognition disposition based on the non-Inclusion of purchase amount as a representative under the Corporate Tax Act is unlawful. However, the court below merely revoked the disposition imposing global income tax on the plaintiff, who is the representative of LD metal company, and did not recognize the

3. Conclusion

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