Seoul Administrative Court 2009Guhap8007 (Law No. 23, 2009)

The application of the principle of good faith to illegal gold bullion transactions is limited to purchase transactions related to zero-rate sales, such as exports.

If an exporter of gold bullion knew that there was an illegal transaction at all stages of the gold bullion or did not know such transaction due to gross negligence, his/her claim for input tax deduction or refund cannot be paid in violation of the good faith principle, but the above legal principle applies only to purchase transactions related to zero-rate sales, including exports.

2013Nu25360 Revocation of Disposition of Imposition of Value-Added Tax, etc.

IsaA

Head of the tax office;

Seoul Administrative Court Decision 2009Guhap8007 Decided July 23, 2009

The judgment of the court before remand

Seoul High Court Decision 1009Nu25080 Decided April 15, 2010

Supreme Court Decision 2010Du8515 Decided July 25, 2013

June 25, 2014

July 30, 2014

1. Of the judgment of the court of first instance, the part against the defendant, which exceeds the order to revoke under the following among the remaining parts (excluding the first period portion of 2010du8515, Jul. 25, 2013, and the second period of 2003, the part excluding penalty tax in unfaithful entry in a tax invoice, additional tax thereon, and increased additional tax) other than the part finalized by the judgment of remand (Supreme Court Decision 2010Du8515, Jul. 25, 2013).

On September 14, 2007, the part of the value-added tax for the first term portion of the value-added tax for the plaintiff on September 14, 2003 exceeding the OOOOO won for the second term portion of the value-added tax for the second term of 2003 and the part exceeding the OOOO won for the second term portion of the value-added tax is revoked.

2. The defendant's remaining appeal is dismissed.

3. Of the total litigation costs, 25% is borne by the Plaintiff, and the remainder is borne by the Defendant, respectively.

1. Purport of claim

The defendant's imposition of value-added tax for the first period of September 14, 2007 against the plaintiff on September 14, 2007, the first period of value-added tax for the second period of 2003, and the second period of value-added tax for the plaintiff is revoked.

2. Purport of appeal

The judgment of the first instance is revoked. The plaintiff's claim is dismissed.

1. Details of the disposition and scope of the trial for the political party after remand;

(a) Details of the disposition;

(1) BB precious metal companies (hereinafter referred to as “B precious metal companies”) are companies engaged in wholesale and export business of gold bullion (referring to gold whose net level is not less than 995/1,000). The Plaintiff is actual operator of BB precious metal; 2) Seoul Regional Tax Tribunal, during the taxable period from No. 1 to No. 203, 200, purchased gold bullion (hereinafter referred to as “the instant purchase price”) from 3 companies such as CCC, DD Co., Ltd., EEd, and 203 (hereinafter referred to as “the instant purchase price”), and the Plaintiff filed a claim for the imposition of KRW 200,000,000,000 for 20,0000,0000,000 won and 30,000,000,000 won and 20,000,000 won and 30,000,000,000 won and 20,000.

5) Accordingly, the Defendant appealed and dismissed the Defendant’s appeal before remanding. The Defendant filed a final appeal on July 15, 201, which was pending in the final appeal of this case. On July 15, 2011, the Defendant revoked ex officio, among the disposition imposing the value-added tax of this case, additional dues, increased additional dues, and increased additional dues, among the disposition imposing the corporate tax of this case, the amount remaining after the revocation of the disposition of this case, became the same as indicated in the final tax invoice column.

(unit, source)

Classification

Amount of initial imposition

The revocation tax amount of July 15, 201

Final Tax Amount

Value-added tax for 1 year 2003

Principal Tax

OOO

OOO

OOO

Additional Dues

OOO

OOO

OOO

Total

OOO

OOO

OOO

Value-added tax for 2 years 2003

Principal Tax

OOO

OOO

OOO

Additional Dues

OOO

OOO

OOO

Total

OOO

OOO

OOO

Corporate tax for the year 2003

Principal Tax

OOO

OOO

OOO

Additional Dues

OOO

OOO

OOO

Total

OOO

OOO

OOO

6) On July 25, 2013, the Supreme Court reversed the relevant part of the Defendant’s revocation ex officio and dismissed the lawsuit. With respect to the remaining part of the disposition imposing corporate tax, the Defendant’s appeal was dismissed on the ground that there is no legitimate ground for appeal. The Defendant’s appeal regarding the remaining part of the disposition imposing corporate tax was partially accepted, and the relevant part was reversed, and remanded to this court.

[Ground of Recognition] Facts without dispute, Gap evidence 1 to 5, Eul evidence 1 to 3 (including each number), the purport of the whole pleadings

B. Scope of adjudication

Therefore, the scope of judgment after remand is limited to each disposition of value-added tax (OOO on January 2003, 200, OOOOO on February 2003, 2003, and OOOOO on February 2, 2003) that has been reversed and remanded, except for the disposition of imposition of corporate tax already finalized by the Supreme Court and each disposition of imposition

2. Whether the disposition of value-added tax in this case is legitimate

A. Determination as to the defendant's assertion that the plaintiff's input tax deduction and refund claim violate the principle of good faith

Article 15 of the former Framework Act on National Taxes (amended by Act No. 9911, Jan. 1, 2010; hereinafter referred to as “the Framework Act on National Taxes”) declares that a taxpayer should drive away her good faith in performing his/her duties. This also applies to the case where a tax official performs his/her duties, thereby constituting a fundamental ideology in the field of tax law. Inasmuch as the Plaintiff, who is an exporter, knew of, or did not know, that the deduction and refund of the input tax amount to the Plaintiff would result in a decrease in tax revenues, it would not only be applied to the case where a malicious business operator takes part of the input tax amount to be distributed by a malicious business operator through the abuse of the input tax deduction and refund system, but also be subject to the imposition of the input tax amount to be deducted by 100,000,000,0000,0000,0000 won, 10,0000,000,000 won won.

3) On the other hand, the Defendant asserts that, even in cases where an illegal trader and an exporter are involved in an illegal transaction, if an entrepreneur conspireds with the illegal trader and actively participated in the illegal transaction, the input tax deduction and refund cannot be asserted by applying the above principle of trust and good faith to not only the purchase transaction related to the export transaction but also the domestic tax transaction. According to each of subparagraphs 5-1 through 4, the Plaintiff may be found guilty of the violation of the Act on the Aggravated Punishment, etc. of Specific Crimes (tax) and the violation of the Punishment of Tax Evaders Act (including the instant purchase tax invoice) due to a series of gold bullion transactions in which the purchase tax invoice in this case is included. However, the Plaintiff’s assertion that the difference between the input tax amount and the domestic tax transaction in this case is not acceptable, on the other hand, since the portion related to the domestic tax transaction in this case was paid with the input tax amount including the value-added tax, and it is extremely difficult for the Defendant to accept the input tax amount deduction and the Plaintiff’s assertion that it is necessary to apply the input tax amount to the National Treasury.

(b) Scope of the tax invoice denied, and the value-added tax amount based thereon;

1) In full view of the above evidence and the statements in Eul evidence Nos. 4 through 22 (including each number), the following circumstances are recognized.

① The purpose of the transaction of gold bullion for the purpose of deduction and refund of value-added tax is: (a) gold bullion imported in the form of gold bullion in Hong Kong, etc., i.e., 50 km per day through a tax-exempt company 1,2, breadth enterprise, and various taxable enterprises; (b) it is re-exported through an exporting company in its original form within a short period of this frame; and (c) thereby, all the companies participating in the transaction obtain profit equivalent to the value-added tax evaded by the gas company within a short period of time; (b) on April 9, 2013, which was 1, 203, the Plaintiff purchased 30 km gold bullion from the same company and exported 50 km per day after purchasing 1,50 g gold bullion from the same company; (d) the purchase details of gold bullion purchased from the same company on 203, on the same date, on the 3rd anniversary of the purchase date of the gold bullion; and (e) the purchase details of the gold bullion on the same date.

Therefore, in light of the above overall circumstances and the ordinary forms of the gold bullion trade, it is reasonable to view that it is extremely low that BB precious metal used for the export for the purpose of deducting and refunding value-added tax for the purpose of deducting and refunding the gold bullion normally purchased through the bB precious metal business. Therefore, if there is no clear showing any circumstance to view otherwise, it is reasonable to deem that all the gold bullion that it purchased immediately before the above export date (the gold bullion that passed through the bom business) purchased through a series of processes for such export. In such a purport, it is reasonable to deem that BB precious metal purchased through a series of processes for such export. Accordingly, it is confirmed that the 50 km purchased from CCC also was confirmed that BB precious metal purchased from CCC as of October 203 and 21, 2013 were supplied the same quantity as BB precious metal on the same day to II, and thus, it is excluded from the list of purchase tax invoices that is denied by the Plaintiff.

2) Ultimately, comprehensively taking account of all the above circumstances, the details of purchase for which input tax deduction and refund are not allowed under the principle of trust and good faith are as shown in attached Table 1, and the value-added tax (including additional tax) on BB precious metals calculated by denying the purchase tax invoice and the legitimate tax amount due according to the disposition of imposition by the secondary tax obligor against the Plaintiff is as follows.

○ Amount of legitimate tax for the first year 2003

- Principal amount of value-added tax on BB precious metal: OOO won (=OOOO + OOOOO won)

· The input tax amount for the export-related input tax: OOO

· Additional duties for failure to report (OOOO members x 10%): OOO members.

additional tax for insincere payment: OOO

- Additional dues (OOOO x 3%): OOO

- On March 22, 2006, the amount obtained by deducting the additional charges and increased additional charges from among the total amount of OO of the total amount paid until that time (from the month following the month in which BB precious metal, the original payer, is delinquent, x1.2%x1.2% = x4 months = OOO) from the additional charges and increased additional charges.

- Aggravated additional dues (OOO(OOO - OOOO) x 1.2% x 18 months): OOO

- Total : OOO(=OOOO(OOO - OOO) + OOO directors)

○ Amount of legitimate tax for the second period of 2003

- Principal value-added tax on BB precious metal: OOO(=OOO + OOOOO)

· The input tax amount for the input tax related to export: OOO

· Additional duties for failure to report (OOOO members x 10%): OOO members.

Additional Tax for Indecent Payment: OOO

- Additional dues (OOOO x 3%): OOO

- Aggravated additional charges (OOOwonx 1.2% x 22 months): OOO

- Total amount: OOO(=OOOwon + OOOOwon + OOOOwon)

3. Conclusion

Therefore, the part of the disposition of this case rendered by the Defendant against the Plaintiff on September 14, 2007, excluding the part which became final and conclusive by the judgment of remand, is just, and the part which exceeds the above shall be revoked in an unfair manner. Therefore, the part of the judgment of the court of first instance against the Defendant falling under the above shall be revoked, and the plaintiff's claim corresponding to the revoked part shall be dismissed. It is so decided as per Disposition by the assent of all participating Justices.