Cho Jae-2014-China 4313 ( December 22, 2014)

The denial of input tax deduction for false tax invoices is legitimate.

It means that the entries of a tax invoice are different from the facts, notwithstanding the formal entries, if the entities that actually supplies or are supplied with the goods or services and the price, time, etc. do not coincide with those of the supplier.

Article 16 of the Value-Added Tax Act

2015Guhap62508 Disposition of Disposition of Imposing Value-Added Tax

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Head of Suwon Tax Office

January 12, 2016

February 16, 2016

1. The plaintiff's claim is dismissed.

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

Cheong-gu Office

On February 24, 2014, the Defendant’s imposition of value-added tax for the second quarter of 2010 against the Plaintiff, the first quarter of 201, the △△△△△△△△△△△△△△△△△△ in 201, and the second quarter of 201, shall be revoked.

1. Details of the disposition;

A. From November 2007, the Plaintiff is a business operator who is engaged in the automobile public assistance software development business in the name of the name of the AAA information system in the Gowon-dong Complex, Suwon-si, Suwon-si, and the Defendant, while filing a value-added tax return during the taxable period from the second to the second period from 2010 to the second period from 2011, deducted the total value of the tax invoice issued in the name of BB (hereinafter referred to as “instant tax invoice”) from the input tax amount (=△△△△△△△△△△ KRW 200 in 2010 + KRW 10 in 201 + KRW 201) as input tax amount.

B. The Defendant determined that the instant tax invoice was supplied by CCC or DD, not by BB as the supplier of the said tax invoice, but by CB. Accordingly, on February 24, 2014, the Defendant did not recognize the input tax deduction on the ground that the instant tax invoice was a tax invoice different from the fact, and notified the Plaintiff of the second quarter of value-added tax, the value-added △△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△ for the first quarter of 2011, the second quarter of value-added tax for the second quarter of 201, and the second quarter of value-added tax for the second quarter of 201 (including additional taxes; hereinafter the same shall apply) respectively (hereinafter the “instant disposition”).

C. On March 2014, the Plaintiff filed an appeal seeking the revocation of the instant disposition with the Tax Tribunal on August 2014, 2014, but the Tax Tribunal rendered a decision to dismiss the said claim on December 2014.

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The Plaintiff actually traded with BB, such as the entry of the instant tax invoice:

The tax invoice of this case does not constitute a false tax invoice.

B. Determination

1) The former Value-Added Tax Act (amended by Act No. 11608, Jan. 1, 2013; hereinafter the same)

Article 17(2)2 of the Framework Act on National Taxes provides that input tax shall not be deducted from the output tax amount in cases where the entries of a tax invoice are different from the fact. Here, meaning that the entries of a tax invoice are different from the fact. In light of the purport of Article 14(1) of the Framework Act on National Taxes stipulating that if the ownership of income, profit, calculation, act or transaction subject to taxation is merely nominal and there is a separate person to whom such ownership belongs, the person to whom such entry is in fact belongs shall be liable to pay taxes, it refers to a case where the necessary entries of a tax invoice are inconsistent with those of the person to whom the goods or service is actually supplied or the person to whom the goods or service is supplied, or the price and time of the transaction, regardless of the formal descriptions such as the transaction contract made between the parties to the goods or service (see, e.g., Supreme Court Decision 96Nu617, Dec. 10, 196).

2) Based on the above legal principles, each description and changes in the health class Nos. 2 and 3 in the instant case

In full view of the following circumstances, i.e., (i) BB opened on July 2010, and closed ex officio on October 201, 2011; (ii) there was no data or facility to verify that the project was actually conducted in Bupyeong-gu, Bupyeong-gu, BB’s place of business; (iii) the owner of the said place of business did not know of the CCC; (ii) the BB reported the total purchase amount to KRW △△△△△△△△△△△△ in the taxable period from 2010 to 2011; and (iii) the Plaintiff’s submission of BB from AA information to BB to subcontract the construction work to BB; and (iv) the Plaintiff and the Plaintiff’s submission of data on the sales of the instant service to BB, including the Plaintiff and the Plaintiff’s deposit account, and the Plaintiff’s submission of data on the sales of the instant transaction to BB, including the Plaintiff’s deposit account, to the Plaintiff and the Plaintiff’s deposit account.

3. Conclusion

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