The nature of the additional tax on sales and purchase by customer, and whether the additional tax on false entry in the sales and purchase by customer may be imposed on the sales and purchase by deeming the supply value differently from the fact, in case where the entrepreneur enters the processing supply value due to the processing transaction in the total sum of the supply

Article 22(3) and (4) of the former Value-Added Tax Act (amended by Act No. 4663, Dec. 31, 1993; Act No. 4808, Dec. 22, 1994; Act No. 5032, Dec. 29, 1995); additional tax on non-performing entry of the list of total tax invoices in the list of total tax invoices in order to facilitate the exercise of taxation rights and the realization of tax claims, imposes an obligation to submit to the tax authority by stating exactly the entry of the list of total tax invoices in the list of total tax invoices. If an entrepreneur fails to enter or falsely enters all or part of the registration numbers or supply values by transaction parties in violation of the list of total tax invoices, without considering the entrepreneur’s intention or negligence. Additional tax is imposed on the convenience of collection procedure by adding the principal tax calculated by the relevant tax law to the input amount of the total tax invoices, regardless of whether the input amount of the total tax invoices in the list of total tax invoices is determined differently from the amount of the processed and total tax invoice.

Articles 20(1) and 22(3) and (4) of the former Value-Added Tax Act (amended by Act No. 4663, Dec. 31, 1993; Act No. 4808, Dec. 22, 1994; Act No. 5032, Dec. 29, 1995);

C&D Co., Ltd. (formerly: Busan High Court Decision 2006Na14488 delivered on May 2, 2007)

The director of the tax office

Seoul High Court Decision 2000Nu8280 delivered on February 7, 2001

The appeal is dismissed. The costs of appeal are assessed against the plaintiff.

The grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed).

Article 22(3) and (4) of the former Value-Added Tax Act (amended by Act No. 4663, Dec. 31, 1993; Act No. 4808, Dec. 22, 1994; Act No. 5032, Dec. 29, 1995); additional tax on non-performing entry of the aggregate tax invoice by customer in the list of total tax invoices in order to facilitate the exercise of taxation rights and the realization of tax claims should be imposed upon the tax authorities by accurately stating the entry of the aggregate tax invoice in the list of total tax invoices. If the entrepreneur fails to enter all or part of the registration numbers or supply values by customer in violation of the list of total tax invoices without justifiable grounds or enters them differently from the fact that the entrepreneur is liable to pay the aggregate of the total tax invoices by adding them to the principal tax amount calculated under the tax law as a national tax item under convenience in the collection procedure, and if the entrepreneur is obligated to pay the aggregate of the total tax invoice by customer and the amount of the processed tax invoice different from the total tax amount of each transaction determined by nature.

The judgment of the court below to the same purport is just, and there is no error in the misapprehension of legal principles as to the relationship between the additional tax and the principal tax, the processing transaction, the sales and the total tax invoice payment.

Supreme Court Decision 88Nu4522 delivered on June 26, 1990 cited in the ground of appeal is a precedent concerning additional tax for which the list of total tax invoices is not known before the establishment of the list of total tax invoices system, and its purpose differs from the case. Therefore, it is not appropriate to invoke this case.

Therefore, the appeal is dismissed. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Lee Ji-dam (Presiding Justice)