Seoul High Court 2009Nu33654 (Seoul High Court 2010.05.27)

Cho High Court Decision 2008Do1842 (Law No. 887.14)

The mere fact that a malicious business operator was conducted in a series of transactions in which he/she exists cannot be viewed as a nominal transaction.

The mere fact that a transaction was made with an enterprise accused of material facts or a purchase and sale transaction was close to a short period of time, and was made in a series of transactions in which a malicious business operator who does not pay the amount equivalent to the value-added tax exists, cannot be deemed as a nominal transaction for the purpose of disguised transaction.

The revocation of revocation of imposition, including value-added tax, 2010du12705

○○ Co., Ltd.

○ Head of tax office

Seoul High Court Decision 2009Nu33654 Decided May 27, 2010

July 14, 2011

The appeal is dismissed.

The costs of appeal are assessed against the defendant.

The grounds of appeal are examined.

Article 1(1)1 of the former Value-Added Tax Act (amended by Act No. 9915, Jan. 1, 2010) provides that "the supply of goods is the delivery or transfer of goods on all contractual or legal grounds" and Article 6(1) provides that "the supply of goods shall be the 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 former Value-Added Tax Act includes all underlying acts of transferring the authority to use or consume the goods, regardless of the existence of profits actually acquired. In such cases, 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 comprehensively taking into account all the circumstances such as the purpose and circumstance of each transaction, the subject to whom profits accrue, and the payment relationship of consideration for each transaction, and the tax invoice under Article 6(1) of the former Value-Added Tax Act provides that "the tax invoice under Article 6(1608(2)1)4) of the former Value-Added Tax Act shall be declared.

Examining the reasoning of the judgment below in light of the records and the above legal principles, the court below is justified in holding that the part of the purchase and sale transaction in this case other than that recognized by the court below as a processing transaction cannot be viewed as a nominal transaction for the purpose of disguised transaction, solely on the ground that the plaintiff traded with the company accused of material facts or traded with the purchase and sale transaction in this case within a short time and was conducted in a series of transactions in which malicious business operators who do not pay the value-added tax amount exist. In addition, the court below did not err by exceeding the bounds of the principle of free evaluation of evidence and exceeding the bounds of the principle of logic and experience or failing to exhaust all necessary deliberations as alleged in the ground of appeal. The ground of appeal is without merit.

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.