National High Court Decision 2007No4540 (No. 25, 2008)
An applicant is a person liable to pay value-added tax, who supplies independently goods for business, since he/she was supplied with drugs by a corporation and sells medicines independently to a seller under the responsibility and calculations of the applicant.
Article 2 of the Value-Added Tax Act / Issuance of tax invoices in cases of consignment sale, etc.
National Treasury 2006 to 4070/Sgd.
I dismiss the appeal.
1. Summary of disposition;
A. As the agency has conducted a tax investigation with respect to OOO drugs (hereinafter referred to as “non-claiming corporation”) which is engaged in wholesale and retail business and notified taxation data, it purchased drugs equivalent to KRW 1,889,686,826 (the supply price of KRW 1,717,897,115, the supply price of KRW 1,797,115; hereinafter referred to as “market purchase price”) in the taxable period of value-added tax from the non-claim corporation in 1,889, 202 to 203, 207, 897, 208, 207, 207, 208, 307, 208, 205, 207, 307, 208, 205, 207, 207, 301, 205, 207, 208, 207, 2005, 207
B. The appellant appealed and filed an appeal on October 31, 2007.
2. Opinions of the claimant and disposition agency;
A. The claimant's assertion
(1) The claimant was provided with drugs at a discount amount than the insurance standard, and sold them to individual pharmacies, and the difference between the sales price and the discounted amount was served as a business employee who received the difference in the piece-rate rate, and the value-added tax was borne by both the parties to the claim and the claimant was assessed as an independent business operator. Thus, this disposition is unreasonable.
(2) In a case where deemed the claimant as an independent business operator and deemed the key sales amount as the claimant’s sales amount, the input tax amount related to the key purchase amount should be deducted as the claimant’s input tax amount under the principle of substantial taxation and the principle of double taxation.
(b) Opinions of disposition agencies;
(1) The claimant is registered as a business employee of the applicant extra-party corporation, and the type Gap earned income tax or health insurance premium are assessed against half-yearlyly. However, without receiving a certain monthly wage, the drug supplied at a discounted amount from the applicant extra-party corporation to the individual pharmacy is sold to the individual pharmacy under his/her own account and responsibility, and the applicant is paid a discounted amount to realize the profit equivalent to the difference, and the work relationship between the applicant and the applicant extra-party corporation constitutes an independent business relationship in a special consignment contract relationship, not a simple employment relationship, but a special consignment contract relationship. Thus, the issue of this case's sales amount is justified.
(2) In addition, the claimant did not receive the tax invoice in relation to the issue purchase amount, and the tax invoice issued by the claimant to the person who is supplied with the individual pharmacies designated by the claimant is not the claimant but the person who is supplied with the individual pharmacies is different from the fact. Therefore, it is difficult to deduct the input tax amount under the tax invoice as the claimant's input tax amount.
3. Hearing and determination
A. Key issue
(1) Whether the claimant is a businessman under the Value-Added Tax Act
(2) Whether the claimant can deduct the input tax amount related to the issue purchase amount as the input tax amount of the claimant if the claimant considers the applicant as the business operator.
(b) Related statutes;
(1) The Value-Added Tax Act (amended by Act No. 7007 of Dec. 30, 2003)
【Person Liable for Tax Payment】 (1) A person who independently supplies goods (referring to goods as provided for in Article 1; hereinafter the same shall apply) or services (referring to services as provided for in Article 1; hereinafter the same shall apply) on a business basis, regardless of whether it is for profit making any profit (hereinafter referred to as a “business person”) shall be liable to pay value
(2) The following input tax amounts shall not be deducted from the output tax amount:
1-2. An input tax amount, in case where the tax invoice as provided in Article 16 (1) and (3) is not delivered, or the whole or part of the matters to be entered under Article 16 (1) 1 through 4 (hereinafter referred to as a “necessary entry item”) is not entered or entered differently from the fact on the delivered tax invoice: Provided, That the input tax amount in such case as prescribed by the Presidential Decree shall be
Article 21 (Rectification Correction) (1) The head of a district tax office having jurisdiction over a place of business, the head of a district tax office having jurisdiction over a place of business, or the Commissioner of the National Tax Service shall correct the tax base or
1. Where the final tax return is not filed;
2. Where there are any mistakes or omissions in details of the final tax return;
(2) The Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 18175, Dec. 30, 2003)
Article 58 (Delivery of Tax Invoice in Case of Commission Sales, etc.) (1) In case of sale by consignment or agent, if the trustee or agent delivers the goods, the trustee or agent shall deliver the tax invoice, and when the truster or the principal delivers the goods directly, the truster or the principal may deliver the tax invoice. In this case, the registration number of the trustee or agent shall be additionally stated.
(2) In cases of purchase by consignment purchase or by agent, a supplier shall issue a tax invoice to the truster or a person supplied with the principal. In such cases, the registration number of the trustee or agent shall be stated additionally.
Article 60 (Scope of Purchase Tax Amount) (2) Cases as prescribed by the Presidential Decree pursuant to the proviso of Article 17 (2) 1-2 of the Act means any of the following subparagraphs:
2. Where some of the requisite entries of the tax invoice delivered under Article 16 (1) of the Act are erroneously entered, but the fact of transactions is confirmed in view of the relevant tax invoice and other necessary entries or discretionary entries;
C. Facts and determination
(1) The director of the OO head of the tax office conducted a tax investigation on a non-claim corporation from December 5, 2005 to December 16, 2005 under the information that the non-claim corporation is evading taxes by means of concealment of sales, manipulation, etc. using the code, etc. of a virtual trader and a trading company already closed (the date of notification: November 14, 2005; the informant: the claimant) while engaging in the wholesale business of drugs, and conducted a tax investigation on the non-claim corporation from December 5, 2005 to December 16, 2005. On the following grounds, the non-claim corporation was not a business employee employed by the non-claim corporation, but a business
(A) In the criminal judgment (OOOOO, May 25, 2005) on the case where the claimant filed a criminal charge on the charge of occupational embezzlement (OOOOOO, May 25, 2005), the OOO district court held that "the claimant is supplied with medicine at a discounted amount on a certain basis than the insurance standard by the OOOOOOOOO, and sells it to the individual pharmacy under the responsibility and responsibility of the claimant, and only the discounted amount is paid to the non-claim corporation to realize the profit equivalent to the difference, the work relationship between the claimant and the non-claim corporation is not a simple employment relationship, but a special form of consignment contract."
(B) In the higher court judgment (OOOOOO, September 1, 2005) on the above judgment, the OOO district court held that the OOOOO district court held that “the Claimant is registered as an employee of the company other than the claim but is substantially independent transaction entity at the same time as the Claimant bears half of the Class A earned income tax and medical insurance tax without receiving a certain monthly wage, and thus, the Claimant and the Claimant are subject to transactions between the Claimant and the Claimant.”
(C) Even in the report on the claimant's tax evasion report, prescription is impossible to be sold without professional knowledge of the usage or volume, so it is prescribed in the Pharmaceutical Affairs Act so that it can be sold only on the hospital, pharmacy, and drug wholesaler (see Articles 35 through 41 of the Pharmaceutical Affairs Act). As such, a prescription wholesaler is employed as a so-called "business employee" to secure customers. In such a case, although a business employee is an employee of a drug wholesaler in the form of a drug wholesaler, there is a simple legal transaction in the manner that an individual operates his/her business without being ordered by the wholesaler's business instruction. In fact, even in the case of the requester, the applicant is given the name of the non-party corporation in the form of a personal business transaction with the name of the business employee and actually decided to conduct the business. The non-party corporation has been seeking the sale of prescription drugs by using the claimant.
(2) The disposition authority notified by the head of the OOO head of the tax office of taxation data shall regard the claimant as an independent entrepreneur and register the claimant ex officio as the taxable object of the value-added tax, and the claimant converted the omitted sales into the amount of the issue purchase that the claimant was supplied by the foreign corporation.
(3) We examine the issues (1).
(A) Article 2 of the Value-Added Tax Act provides that “A person who independently supplies goods or services for profit, regardless of whether they are for profit or not, shall be liable to pay value-added tax as a business operator.” The issue of whether a business operator falls under the category of business independent of his/her business, namely, whether he/she supplies goods or services for profit, and whether he/she supplies goods or services with continuous and repeated intent (the same meaning as OOOO2, 190, OOOOOOOOO, and majority of other businesses on February 6, 2007).
(B) According to the Pharmaceutical Affairs Act, the claimant is unable to register as a drug seller, and the above forms of transaction were traded as above. Since the above forms of transaction have become customary since 1945 established in the pharmaceutical market, the claimant cannot be deemed an independent business operator. However, according to the criminal judgment and the report of the claimant by the above OOO district court, the claimant was supplied (purchase) from the non-claim corporation and sold the drug independently to the seller under the name of the claimant's calculation and responsibility without receiving the instructions from the non-claim corporation (the claimant is confirmed to acquire the difference between the sales price of the drug and the sales price of the drug from the "special form of consignment sales contract (the so-called rebates)". Thus, the disposition imposing the value-added tax is determined to have not been erroneous, since the disposition authority independently supplied the applicant with the goods for business, who is deemed the taxpayer under the Value-Added Tax Act.
(4) We examine the issues (2).
(A) According to the provisions of Article 17 (2) 1-2 of the Value-Added Tax Act, the input tax amount in a case where the tax invoice is not delivered or the whole or part of the requisite entries under Article 16 (1) 1 through 4 are not entered or entered differently from the fact on the delivered tax invoice shall not be deducted from the output tax amount.
(B) The claimant asserts that the claimant should deduct the purchase tax amount on the purchase tax invoice related to the pharmaceutical products supplied by the non-party corporation in accordance with the principle of substantial taxation or the principle of the prohibition of double taxation, since the claimant has paid the value-added tax that should be collected from the individual pharmacy in relation to the purchase amount. However, the claimant did not have received the tax invoice from the non-party corporation while purchasing the pharmaceutical products. In relation to the issue purchase amount, it is difficult to deduct the purchase tax amount on the tax invoice as the claimant's input tax amount because the individual pharmacy designated by the claimant falls under the tax invoice different from the fact that the person receives the tax invoice from the non-party corporation.
This case shall be decided as ordered by the provisions of Article 81 and Article 65 (1) 2 of the Framework Act on National Taxes, because the petition is without merit as a result of the review.