Early High Court Decision 201J 0704 ( October 27, 2011)

If a return of the individual consumption tax borne by him/her was not filed, the tax invoice shall be deemed to have been entered differently from the fact.

In a case where the Plaintiff purchased liquefied petroleum gas from the non-party company and paid the individual consumption tax in addition to the value of the goods and returned the individual consumption tax to the Plaintiff after paying the individual consumption tax to the competent district tax office, the above individual consumption tax is excluded from the scope of calculating the input tax, and thus, insofar as the Plaintiff did not file a revised return, it constitutes the case where a part of the supply

Article 17 of the Value-Added Tax Act

2011Revocation of disposition imposing value-added tax, 11588

XX Stock Company

Head of Ansan Tax Office

March 2, 2012

March 30, 2012

1. The plaintiff's claim is dismissed.

2. The costs of lawsuit shall be borne by the Plaintiff.

The Defendant’s disposition of imposition of 00 won of value-added tax for the second period of February 2005 against the Plaintiff on November 15, 2010, 000 won of value-added tax for the first period of February 2006, 000 won of value-added tax for the second period of February 2006, 000 won of value-added tax for the first period of February 2007, 000 won of value-added tax for the second period of February 2007, 000 won of value-added tax for the first period of January 2008, 00 won of value-added tax for the second period of February 2008, 00 won of value-added tax for the second period of January 209, and 00 won of value-added tax for the second period of February 209 is revoked.

1. Details of the disposition;

A. From July 1, 2005 to December 31, 2009, the Plaintiff purchased liquefied petroleum gas from Non-Party XX Co., Ltd. (hereinafter “Non-Party Co., Ltd.”) from time to time and engaged in the business of exporting or selling domestic butane gas.

B. During the above period, the Plaintiff purchased liquefied petroleum gas from the non-party company and paid the price of the goods to the non-party company plus the individual consumption tax. The non-party company paid the individual consumption tax to the competent tax office, and the non-party company received a full refund of the tax amount under Article 20-2 (1) of the former Individual Consumption Tax Act (wholly amended by Act No. 9909, Jan. 1, 2010; hereinafter the same) and returned it to the Plaintiff. The amount of the individual consumption tax refunded by the non-party company during the transaction period reaches 00 won in total.

C. During the consolidated investigation of corporate tax against the Plaintiff, the director of the Seoul Regional Tax Office confirmed the above fact and deemed that the pertinent refundable tax amount out of the total purchase amount of the Plaintiff’s total purchase amount is subject to non-taxation of value-added tax under Article 17(2)1 of the former Value-Added Tax Act (wholly amended by Act No. 9915, Jan. 1, 2010; hereinafter the same shall apply) and notified the Plaintiff of the disposition of the value-added tax for 2 years, 2005, 00 won of value-added tax for 1 year, 2006, 200 won of value-added tax for 2 years, 2 years, 2006, 1 year, 200 won of value-added tax for 2 years, 2007, 1 year, 2000 won of value-added tax for 208, 2000 won of value-added tax for 2 years, 2009.

D. The Plaintiff dissatisfied with the instant disposition and filed an appeal with the Tax Tribunal on June 27, 201, but the said claim was dismissed.

[Ground of Recognition] Unsatisfy, Gap evidence 1 to 3 (including additional number), Eul evidence l to 10, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

(1) While the non-party company received a refund of the above individual consumption tax from the competent tax office and did not issue and deliver a revised tax invoice to the Plaintiff without any special reason. According to Article 16 of the former Value-Added Tax Act and the transaction practices, where the value-added tax base is changed due to subsequent causes such as refund of the individual consumption tax as in the instant case, only the non-party company that is the supplier can issue the revised tax invoice. Thus, if the non-party company does not issue it, it is impossible for the purchaser to submit a revised tax invoice for total tax invoice to the tax authority. Therefore, unless the plaintiff did not file a revised tax return due to inevitable reasons, it cannot be deemed that the Plaintiff constitutes “where the whole or part of the supply price is not entered in the revised tax invoice or entered differently from the fact” under Article 17(2)1 of the former Value-Added Tax Act. Nevertheless, it is unlawful for the Defendant to impose the value-added tax equivalent to the input tax amount not deducted on the Plaintiff by deeming it as the grounds for non-taxation

(2) At the time of the above transaction, the Plaintiff deemed that the total purchase amount is included in the individual consumption tax and paid the value-added tax on the portion of the individual consumption tax to the non-party company. The non-party company, the supplier, paid it to the Defendant, and the Defendant only subsequently refunded the individual consumption tax to the non-party company, but also did not refund the value-added tax on the above portion of the individual consumption tax. Therefore, the Defendant rendered the instant disposition imposing the value-added tax equivalent to the non-deductible input tax on the Plaintiff without considering the fact that the amount equivalent to the above value-added tax was unjust in relation to the Plaintiff. This is against the principle of tax equality, as it unfairly discriminates against the Plaintiff compared to the person who was normally

(3) Even if not, as seen earlier, the Plaintiff was unable to file a revised return of value-added tax because it did not receive the revised tax invoice from the non-party company. Therefore, there were justifiable grounds for not paying the value-added tax. Accordingly, the part regarding the penalty tax in the instant disposition is unlawful.

(b) Related statutes;

It is as shown in the attached Form.

C. Determination

(1) As to the Plaintiff’s first argument

Article 17(1) of the former Value-Added Tax Act provides that an entrepreneur shall pay as value-added tax an amount calculated by deducting the amount of tax (purchase) imposed on the supply of goods used or to be used for his/her own business from the amount of tax on the goods supplied by him/her. Articles 16(1), 17(2)1, and 20(1) of the former Value-Added Tax Act provide that where an entrepreneur registered as a taxpayer supplies goods, a tax invoice stating the value of supply and value-added tax shall be issued to the person who receives the supply, and the entrepreneur to whom the tax invoice is issued shall submit a list of total tax invoices stating the total amount of supply value and the amount of tax for the transaction period along with the relevant preliminary or final return. If the whole or part of the supply value in the list of total tax invoices by customer is not entered or entered differently from

In this case, the Plaintiff paid the individual consumption tax to the non-party company upon purchasing the individual consumption tax from the non-party company, and the non-party company paid the individual consumption tax to the tax office having jurisdiction over the individual consumption tax and returned the tax amount to the Plaintiff after receiving the full refund thereof in accordance with the special provisions on refund of the individual consumption tax. In light of the contents of each provision and legislative intent thereof, it is reasonable to view that the portion of the above individual consumption tax out of the total purchase amount of the Plaintiff’s total purchase amount is excluded from the scope of calculating the input tax amount under the Value-Added Tax Act. Therefore, insofar as the Plaintiff did not file a revised return on the value-added tax for excluded the scope of calculating the input tax amount after receiving the above individual consumption tax refund, even if the Plaintiff submitted the aggregate purchase tax invoice according to the details of the tax invoice that the Plaintiff received from the non-party company prior to

(2) As to the second argument of the Plaintiff

A taxpayer of value-added tax is a business entity, and the other party to the transaction to whom goods or services are supplied has the status as a de facto taxpayer and not a taxpayer under tax law. Furthermore, even if the situation where the State should refund the value-added tax that the State received from the business entity and the State can be deemed to have accrued, it is not due to the taxpayer’s act of filing and paying the value-added tax, nor due to the act that the taxpayer collected the amount equivalent to the value-added tax from the other party to the transaction prior to the filing and payment of the value-added tax. Therefore, the person eligible for filing a claim for return of unjust enrichment against the State on the premise that the act of filing and paying the value-added tax is null and void is the taxpayer who reported and paid the value-added tax. The Plaintiff cannot seek a return of unjust enrichment against the State (see, e.g., Constitutional Court Order 2009Hun-Ba

Based on the above legal principles, even if the Defendant did not refund the value-added tax on the above portion of the total supply value of the non-party company, the amount equivalent to the value-added tax cannot be deemed unjust in relation to the Plaintiff, and the Defendant does not have any legal obligation to deduct the value-added tax from the total value-added tax base. Therefore, the Plaintiff’s assertion on a different premise is without merit.

(3) As to the third argument by the Plaintiff

In order to facilitate the exercise of taxation rights and the realization of tax claims, additional tax under tax law is an administrative sanction imposed under the conditions as prescribed by the Act in cases where a taxpayer violates a return, tax claim, etc. as prescribed by the Act without any justifiable reason, and thus, it is unreasonable for the taxpayer to be unaware of his/her duty. Thus, unless there are justifiable grounds that it is unreasonable for the taxpayer to be aware of his/her duty, or there is a circumstance that it is unreasonable for the taxpayer to expect the performance of his/her duty to do so, it shall be imposed on the taxpayer to perform his/her duty (see, e.g., Supreme Court Decision 2001Du8100, Feb. 14, 200

In light of the above legal principles, it is insufficient to recognize that there is a justifiable reason for the Plaintiff to not file a revised value-added tax return on the instant case only by examining the case, Gap evidence Nos. 4-1 through 62. Therefore, the Plaintiff’s above assertion is without merit.

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit. It is so decided as per Disposition.