The purport of introducing the electronic tax invoice system under the former Value-Added Tax Act / Where the list of the total tax invoices issued is submitted with respect to the portion of the electronic tax invoices issued for which it is unnecessary to submit the list of the total tax invoices, but the part of the transaction is related to the electronic tax invoices issued falsely, whether the act of submitting to the Government the list of the total tax invoices by seller under the Value-Added Tax Act constitutes “the act of falsely stating the

Article 8-2 of the Act on the Aggravated Punishment, etc. of Specific Crimes, Article 10 (3) 1 and 3 of the Punishment of Tax Evaders Act, Article 16 (2) (see current Article 32 (2) and (3) (see current Article 32 (3)), Article 20 (1) (see current Article 54 (1) and (2)) of the former Value-Added Tax Act (Amended by Act No. 9915, Jan. 1, 2010); Article 32 (2) and (3), Article 54 (1) and (2) of the Value-Added Tax Act; Article 32 (2) and (3), Article 54 (1) and (2) of the former Enforcement Rule of the Value-Added Tax Act (Amended by Ordinance of the Ministry of Strategy and Finance No. 218, Jun. 23, 201); Article 16 (2) (see current Article 32 (2)); Article 32 (3) (3)); Article 20 (1); attached Form 3) (1); attached Form 3 (1); 3) [Attachment 1) [Attachment 3]

Defendant

Defendant

Law Firm Rating, Attorneys Hong-chul et al.

Seoul High Court Decision 2017No8 decided August 17, 2017

The judgment below is reversed and the case is remanded to Seoul High Court.

The grounds of appeal are examined.

1. The former Value-Added Tax Act amended by Act No. 9268 of Dec. 26, 2008, effective January 1, 2010, introduced an electronic tax invoice system for the purpose of reducing excessive tax payment cooperation costs and tax administration costs related to value-added tax, which is the method of collecting the transaction, and enhancing transparency in transaction. Accordingly, the current Value-Added Tax Act requires corporate entrepreneurs and individual entrepreneurs prescribed by Presidential Decree to issue the electronic tax invoice and shall transmit the details of issuance to the Commissioner of the National Tax Service (Article 32(2) and (3). If the electronic tax invoice is issued or issued and the details of issuance are transmitted to the Commissioner of the National Tax Service by not later than 11 of the month following the end of the taxable period or the scheduled return period to which the relevant goods or services belong (Article 54(2) of the former Value-Added Tax Act). The former Enforcement Rule of the Value-Added Tax Act only stipulates that the list of total tax invoices issued and supplied in the form No. 210, other than the electronic tax invoice issued (attached Form 21).

In light of the purport of the introduction of the electronic tax invoice system as above and the fact that there is no obligation to submit a list of total tax invoices by seller with respect to the portion of the electronic tax invoices issued by the Commissioner of the National Tax Service for which the details of issuance are transmitted to the Commissioner of the National Tax Service, and that even if submitted, the list of total tax invoices under the Value-Added Tax Act is not required to submit the list of total tax invoices, even if the list of total tax invoices was submitted with respect to the portion of the electronic tax invoices issued without any need to submit the list of total tax invoices, it is difficult to evaluate that the list of total tax invoices under the Value-Added Tax Act is submitted by entering the list of total tax invoices in a false manner. Therefore, even if

2. Review of the reasoning of the lower judgment and the record reveals the following facts.

A. The Defendant issued or received sales and purchase tax invoices in the holding of the lower judgment, which amount to KRW 62,729,449,943 (hereinafter collectively referred to as “each of the instant tax invoices”) from March 18, 2013 to June 29, 2015, even though there was no transaction of goods or services by using ten business entities, including Nonindicted Co., Ltd., Ltd. (hereinafter referred to as “instant tax invoices”).

B. However, the total amount of supply value of each of the instant tax invoices issued or received by the lower court through the processing transaction as above is added to the supply value for “the portion transmitted by no later than the 11th day of the month following the end of the taxable period” indicated in the “the portion transmitted by no later than the 11th day after the end of the taxable period,” which was submitted by the Defendant for the preliminary or final return of value-added tax for the pertinent taxable period in the name of each company.

3. We examine the above facts in light of the legal principles as seen earlier.

A. In light of the fact that the total value of supply of each of the instant tax invoices is added to the value of supply for the remaining portion of tax invoices issued by the 11th of the month following the end of the taxable period, among the total sum column of each of the instant tax invoices, each of the instant tax invoices appears to have been transmitted to the Commissioner of the National Tax Service by the 11th of the month following the end of the taxable period in which the relevant goods or services are supplied.

B. Therefore, with respect to the portion of KRW 62,729,449,943 corresponding to the portion of supply value of each of the instant tax invoices submitted by the Defendant, even if each of the instant tax invoices with respect to the partial transaction is false, it cannot be deemed as constituting “the act of submitting to the Government a false list of total tax invoices by seller and by seller under the Value-Added Tax Act” under Article 10(3)3 of the Punishment of Tax Evaders Act, and the calculation of “total amount of supply value, etc.” under each subparagraph of Article 8-2(1) of the Specific Crimes Aggravated Punishment Act should be excluded from calculation.

C. Nevertheless, the lower court determined the applicable scope on the premise that the supply value corresponding to each of the instant tax invoices issued in the instant case among the aggregate of supply values, etc. under Article 8-2 of the Specific Crimes Aggravated Punishment Act, without examining whether each of the instant tax invoices was exempted from the duty to submit a aggregate of tax invoices by transmitting the details of issuance as an electronic tax invoice to the Commissioner of the National Tax Service. In so determining, the lower court erred by misapprehending the legal doctrine on the submission of a aggregate of tax invoices concerning the portion of tax invoices issued, the scope of establishment of a violation of the Punishment of Tax Evaders Act, the meaning of “total amount of supply values, etc.” under Article 8-2 of the Specific Crimes Aggravated Punishment Act, and the requirements for summing up

4. Therefore, without further proceeding to decide on the remaining grounds of appeal, the judgment of the court below is reversed, and the case is remanded to the court below for a new trial and determination. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Ko Young-han (Presiding Justice)