Review Division 2008-0198 (Law No. 19, 2009)

False tax invoices concerning new construction of buildings;

The actual contractor is separate, and the corporation which has issued the tax invoice is a disguised entrepreneur who mainly engages in the lending of a dry business license.

The contents of the decision shall be the same as attached.

1. The plaintiff's claim is dismissed.

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

The imposition of value-added tax of KRW 132,379,200 on August 8, 2008 by the Defendant against the Plaintiff on August 8, 2008 shall be revoked.

1. Details of the disposition;

A. On October 1, 2003, the Plaintiff entered into a contract for construction of the instant building with AACC C&C (hereinafter “instant construction”) around August 2004 in order to operate the accommodation business under the trade name of KK (former LL) in the building located in Jongno-gu Seoul, Jongno-gu, Seoul (hereinafter “instant building”) and reported for the refund of value-added tax for the first period of 1, 2005 by receiving the tax invoice from AAC C&C in total of supply value of KRW 870,000,000 (hereinafter “instant tax invoice”) and deducting the input tax amount from the above output tax amount.

B. As a result of conducting a tax investigation on a suspicion of AAPC, the director of the mid-term Tax Office: (a) deemed that the Plaintiff entered into the construction contract for the construction of the instant building with APC; (b) however, the Corporation: (c) notified the Defendant of the taxation data that the actual supplier constitutes the processing tax invoice, which is not APC; and (d) on August 8, 2008, the Defendant issued a revised notice of KRW 132,379,200 for the first period of August 8, 2008 on the ground that the instant tax invoice constitutes a false tax invoice (hereinafter “instant disposition”).

[Reasons for Recognition] In without dispute, Gap evidence 1, Gap evidence 3-1 to Gap evidence 4-1, Gap evidence 12, Eul evidence 1-1, 2, Eul evidence 5, the purport of the whole pleadings

2. Whether the disposition is lawful;

A. The plaintiff's assertion

(1) In the process of constructing the instant building, the Plaintiff: (a) selected AAC CC as a contractor; (b) confirmed the personal information of TaeCC, a representative; and (c) concluded the instant construction contract; and (b) was a person who had been able to perform removal and civil engineering works before the instant construction; and (c) participated in the instant construction as a chief of the AACC project and the field manager; and (d) participated only in the instant construction in the name of the head of the field office. In addition, even though the Plaintiff transferred part of the transaction amount related to the instant tax invoice to a deposit account in the name of AAC, it was true that the Plaintiff transferred it from AAC CCC to the deposit account in the name of B; (b) it was not possible to use the corporate account due to legal disputes related to the construction site; and (c) was merely requested to deposit the construction price into the account of ChoB, a site manager, and transactions surrounding the instant construction project

(2) Even if the instant tax invoice is written differently from the facts, the Plaintiff was aware that ChoB was acting as the head of the AACC’s business and the head of the field office, and did not know that AACC CC was not actually engaged in construction. Thus, the instant tax disposition against the Plaintiff, a bona fide business entity, was unlawful.

(b) Fact of recognition;

(1) Since September 2004, after the conclusion of the instant contract for construction work, the MediationB took overall control of the construction site of this case from around September 2004, and received total of KRW 350 million from the Plaintiff to the subordinate company and paid it to the subordinate company. On November 2004, the Plaintiff did not pay the money that the Plaintiff received from the subcontractor at the end of the period of November 2004. As a result, upon the discontinuance of the instant construction work, the Plaintiff shall pay the construction cost directly to the subordinate company, and Kim GGG, who participated in the process of selecting the pertinent construction company, shall pay the construction cost by again transferring the money transferred by the Plaintiff to the subordinate company’s account, while the Plaintiff paid the value-added tax equivalent to the value-added tax on the instant construction project to the account in the name of NowonF, who was employed as the head of the headquarters of AAWC, and the details of the payment by account transfer and the following are as follows.

(2) On August 28, 2006, TaeCC, following the tax investigation conducted by the director of the Central Tax Office, stated as follows:

① The instant Corporation did not have received orders from AACC and, around March 4, 2004, knew that the NF lent its name (construction business license) to the NF and that the NF only lent its name to the company.

② Since the principal was entirely unaware of the instant construction works at the time the contract for the instant construction works was concluded, he did not appear at the place of the contract on the date of the conclusion of the said contract, and the seal imprint of AAC C&C affixed the written contract for the instant construction works has affixed the NoF on his own knowledge.

③ AB is not an employee of AAC and even if he/she was aware of whether AB carried out the instant construction, and the issuance and receipt of tax invoices related to the instant construction were led by the NF.

(4) Although it is presumed that the LaborF received money from the Plaintiff from the Plaintiff to the account, it is presumed that it was paid as a value-added tax, it is well known as the actual reason for it.

⑤ At the instant construction site on April 2005, 2005, after the accident was discovered and the tax office had failed to pay taxes, and the contact between the Plaintiff and the LaborF, the owner of the construction project, as an office, could engage in construction by using the company’s name. The Plaintiff prepared a false written confirmation that the Plaintiff had engaged in construction on the condition that the Plaintiff would be able to handle taxes.

(3) In addition, on July 25, 2006, the maximum amount of D, which is responsible for electrical construction, etc. in relation to the instant construction project, was present at the Central Tax Office and stated as follows.

① The Plaintiff introduced a section BB, which was well known to the same child as his/her child, to enable him/her to engage in electrical construction while introducing a section B, which is entrusted with construction work while constructing the instant building, and the Plaintiff and his/her sectionB entered into a subcontract.

② On the ground of the amount of construction contract value of KRW 95 million, the amount of construction contract was almost not paid to ChoB, and the amount of construction contract was locked by ChoB thereafter, the Plaintiff and the remainder of construction work was carried out in the form of receiving materials value, etc., and received approximately KRW 45 million from the Plaintiff.

(4) On July 19, 2006, Park E-E in charge of building design, supervision, etc. related to the instant construction project was present at the Central Tax Office and stated as follows.

① The constructor of the instant construction was a memberB, and both the subcontractor and the subcontractor were aware of the fact that the contractor was a memberB until the end of 2004 was not executed.

② The instant construction contract was concluded in around August 2004 when the removal of the building was completed and the civil engineering works commenced, and was concluded in the presence of the Plaintiff, the site supervisor, KimGG and himself.

(3) At the time, the contractor was a company AAPC or his/her related persons, and the constructor was the same as B.

(5) On the other hand, on April 23, 2007, the FF stated the instant tax invoice in the prosecutor’s investigation process in relation to the suspected charge that was issued falsely.

① Around December 2004, the instant building is the site where a construction business operator, who is ChoB, destroyed the existing innB from the Plaintiff, and borrowed a construction license of AAC C&C upon receiving a request from the Plaintiff for construction of a new innb.

② On August 204, 2004, upon receipt of a request from ChoB to lend AAC C&C construction license, the principal and ChoB entered into a contract for the instant construction works on behalf of the Plaintiff, respectively, with the permission of the DaeCC, who is the representative director of AAC C&C, at the AAC office.

③ The instant tax invoice is directly prepared and issued by the principal, and the actual issue date of the tax invoice dated January 28, 2005 and March 20, 2005 is around April 20, 2005, which is the value-added tax reporting period of 171, 2005. The actual issue date of the tax invoice dated April 28, 2005 and June 14, 2005 is around July 20, 2005, which is the value-added tax reporting period of 1, 2005.

④ Around April 10, 2005, ChoB did not receive money from the Plaintiff, the owner of the building, and had talked with the Plaintiff. On the other hand, the Plaintiff would be entitled to refund the value-added tax amounting to KRW 40 million if the Plaintiff first talks about the tax return and once issued the tax invoice equivalent to KRW 400 million. The Plaintiff purchased data from the data and reported the purchase and sales to the end, and then received KRW 40 million from the Plaintiff later.

(6) On April 23, 2007, TaeCC also stated the following in the process of being investigated by the prosecution in the case of suspected violation of the Punishment of Tax Evaders Act.

① According to the reasoning of the above, if a license was lent to NAB, 5% of the construction cost of KRW 870,000,000 should be paid to NAB. It was known that NAB would be deducted from the start-up period in the name of AAC C&C during the next month, and that the start-up period would expire. However, the labor office came to the construction site of this case, and the representative director came to enter, and the building of this case was completed in the name of AA&C, and it became known that NAF issued a tax invoice of KRW 400,000 to the Plaintiff as her own mind.

② After that, there was no choice but to issue an additional tax invoice amounting to KRW 470,000,000 if the Plaintiff did not have to issue a tax invoice to the principal.

(7) On July 26, 2007, NF and TaeCC were convicted of the instant tax invoice by committing a crime that was issued falsely. The said judgment was rendered by the appellate court on May 21, 2008, and became final and conclusive around that time.

(8) The Plaintiff did not receive a tax invoice from the subcontractor with respect to the instant construction project, and ChoB also did not receive the price for the provision of labor from AAC C&C during the period from 2004 to 2005.

[Reasons for Recognition] In without dispute, Gap evidence 4-2, Gap evidence 14-1, 2, Gap evidence 17-2, Gap evidence 22, 23-2, Gap evidence 32-3, 6, Eul evidence 7-1, 2, Eul evidence 10-2, Eul evidence 11-2, 15-3, Eul evidence 15-2, and 15-3, the purport of the whole pleadings

C. Determination

(A) In light of the various circumstances revealed in the above facts, especially in the process of tax investigation conducted by the Central Tax Office, in light of the contents as stated by DaeCC, DoD, and Park E in the process of investigating as a suspect in the case under violation of the Punishment Act committed by DaeCC and NF as well as the details as stated in the process of investigating as a suspect, it is reasonable to deem that the person who provided the service related to the construction of the instant case to the Plaintiff as a witness bB, not AAC, and the witness bB, contrary thereto, each testimony of the witness bE and DaeCC is not believed, and the testimony of Gap 5-1 through 3, Gap 10-4, Gap 12-1, Eul 13-1, Gap 15, 16-1, Gap 19-4, and Nos. 25-27-27, there is no evidence to acknowledge that the Plaintiff constitutes a person who provided the service of this case differently from the facts stated in the contract for the construction of the instant case.

(B) Unless there is any special circumstance that the actual supplier and the supplier on a tax invoice are unaware of the fact that the supplier was unaware of the fact that the supplier was unaware of the name of the tax invoice, and that the supplier was not negligent in not aware of the fact that the supplier was not aware of the fact that the supplier was not negligent, a person who asserts the deduction or refund of the input tax amount must prove that the supplier was not negligent (see, e.g., Supreme Court Decision 2002Du2277, Jun. 28, 2002).

However, there is no evidence to prove that the Plaintiff was unaware of the circumstances that are different from the actual ones of the supplier listed in the instant tax invoice, and rather, in light of the above facts, even if the Plaintiff did not know of the fact that AAC C&C lent a construction business license to ChoB at least at least at the time of the issuance of the instant tax invoice, there were sufficient circumstances to suspect that the Plaintiff was the actual contractor of the instant construction, and that AAC C&C was not a disguised business operator who mainly lends a construction business license, and thus, it cannot be said that the Plaintiff was negligent with regard to the fact that the other party was not aware of the fact that the Plaintiff was a disguised business operator. Thus, the instant tax disposition that deemed that the Plaintiff could not deduct the input tax amount by stating different portions of the supplier of the instant tax invoice is lawful.

3. Conclusion

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