The instant tax invoice does not infringe on its essential functions, thereby allowing the input tax deduction.

In principle, input tax deduction based on a tax invoice prepared and issued based on the place of business that does not actually provide a service should be denied, but such tax invoice also needs to be relieved of taxpayer damage by allowing input tax deduction to the extent that it does not impair the essential function of the tax invoice. This is consistent with the nature of the VAT system, the substance over form principle, and the principle of fair taxation.

Article 16 (Tax Invoice)

2017Guhap74511 Revocation of Disposition of Imposition of Value-Added Tax

AAAA et al.1

○○ Head of Tax Office et al.

May 17, 2018

June 21, 2018

1. The imposition disposition of each value-added tax (including additional tax) stated in the “tax amount” column against the plaintiffs on each date listed in the [Attachment] shall be revoked.

2. The costs of the lawsuit are assessed against the defendant.

Cheong-gu Office

The same shall apply to the order.

1. Details of the disposition;

(a) The Plaintiff, AAA (hereinafter referred to as “Plaintiff AA”) is a holding company of the group of the AAA;

Plaintiff AABBB (hereinafter referred to as “Plaintiff BBB”) is a corporation established for the purpose of carrying on research and technology development services and is liquidated on November 7, 2014, and AAAAAACC (hereinafter referred to as “AAAACC”) is a corporation that manufacturesCC and turine.

On the other hand, the location of the head office AAACC is ○○-dong ○○○○, ○○-dong, ○○.

B. On June 22, 2010, AAACC newly built ○○○○○○○○ Dong 21st floor building (hereinafter “instant real estate”). On January 1, 2011, Plaintiff AACC leased part of 20th floor out of the instant real estate to Plaintiff AAA, and on January 1, 2011, Plaintiff BB leased part of 11th floor out of the instant real estate.

C. Plaintiff AAAA made, from AACC in 201, a tax invoice of KRW 00 on rent, etc. for the first taxable period of 2011; and Plaintiff BBB received from AAACC a tax invoice of KRW 00,00 in total of supply values for rent, etc. for the first and second taxable periods of 2011 (hereinafter collectively referred to as “each of the instant tax invoices including the said tax invoices received by Plaintiff AAA and Plaintiff BBBBB”); and the Plaintiffs filed a value-added tax return by deducting the relevant input tax amount from the output tax amount.

D. In the tax investigation with respect to AAACC, the director of the regional tax office confirmed that AAACC issued each of the tax invoices of this case with its head office as a supplier without being subject to separate business registration, and notified the Defendants of taxation data that each of the tax invoices of this case constitutes a false tax invoice. For the above reason, the Defendants did not deduct the relevant input tax amount on the basis of Article 17(2)2 of the former Value-Added Tax Act (amended by Act No. 11129, Dec. 31, 201; hereinafter referred to as the “Value-Added Tax Act”), and notified the Plaintiffs of the correction and notification of the value-added tax (including additional tax) as stated in the “tax amount” column (hereinafter referred to as the “each of the instant dispositions”).

E. The Plaintiffs were dissatisfied with each of the dispositions in this case and filed an appeal with the Tax Tribunal. However, with respect to Plaintiff AA, the Plaintiffs were dismissed on July 26, 2017, and with respect to Plaintiff BBB on May 19, 2017.

(c)

[Ground of recognition] Facts without dispute, Gap evidence 1 through 5, Eul evidence 1 and 2 (including each number; hereinafter the same shall apply), the purport of the whole pleadings

2. Whether the disposition is lawful;

A. The plaintiffs' assertion

For the following reasons, each of the dispositions of this case is unlawful.

1) Each of the instant tax invoices reflects the actual transactional relationship between the AAACC and the Plaintiffs that the AAACC was issued as the principal business registration number because the AACC did not make business registration at the location of the instant real property, and that the AACC and the Plaintiffs were processed or other projects were conducted.

In addition, since each of the instant tax invoices was issued by mistake of AACC and the fact that transactions were confirmed in view of the remainder of the entries, the input tax amount related to each of the instant tax invoices should be deducted pursuant to the proviso of Article 17(2)2 of the Value-Added Tax Act and Article 60(2)2 of the former Enforcement Decree of the Value-Added Tax Act.

2) In light of the fact that each of the tax invoices of this case is a tax invoice different from the fact, the Plaintiffs paid rent and value-added tax to AAACC along with the fact that the Plaintiffs did not have any reason to avoid double taxation, and that the same form of tax invoice was issued to other tenants than the Plaintiffs, the Plaintiffs did not know that each of the tax invoices of this case was entered differently from the fact, and there was no negligence as to the failure to know that each of the tax invoices of this case was entered differently, and thus, the input

3) In a case where one business owner’s place of business is multiple persons, even if the scope of the supplier’s place of business is broadly interpreted, it is interpreted in harmony with the principle of value-added tax to allow the deduction of the input tax amount in a case where the scope of the supplier’s place of business does not harm the function of the tax invoice even if the deduction of the input tax amount does not essentially impair the function of the tax invoice, and does not cause moral hazard to the market participants. Therefore, even if the Plaintiffs were issued each of the instant tax invoices listed as the supplier, it does not constitute a false

B. Relevant statutes

It is as shown in the attached Form.

(c) Fact of recognition;

1) Lease agreements made between the plaintiffs and AAACC

The main contents of the lease agreement entered into between AAA and AACC on January 1, 2011) are as follows:

The same shall apply.

On the other hand, the main contents of the lease agreement entered into between Plaintiff BB and AACC on January 26, 201 are as follows.

2) Issuance of each of the instant tax invoices by AAACC

A) The details of the tax invoice issued by the Plaintiff AAACC during the first period of 2011 are as follows (the content of the tax invoice is the same if it excludes the value of supply or the amount of tax, etc.).

B) The details of the tax invoice issued by Plaintiff BB from AAACC during the first and second years of 2011 are as follows (the same shall apply if the content of the tax invoice is not the value of supply or the amount of tax, etc.:

(3) Business registration, etc. of AAACC

AAACC on April 1, 2004, at the location of the place of business and the location of its principal office ○○-gu ○○○○-dong.

○○ (Road name address: ○○○○○-ro, ○○○○-ro, ○○○○○-ro, ○○○○○○○○), and registered a business (registration number: ○○-○-○, ○○-○) on the ground that the pertinent real estate did not have registered a business on the instant real estate, and received an additional tax on the ground that it was not registered, and on July 22, 2016, the place of business of ○○-dong, ○○-dong (Road name address: ○○, ○, and the location of the instant real estate) was registered.

4) DNA, which is in charge of accounting as a staff member of AACC, was present in this Court and stated for the following purposes:

[Ground of Recognition] Unsatisfy, Gap evidence 2 to 5, 8, Eul evidence 2, witness DD

testimony, the whole purport of the pleading

D. Determination

1) Article 4(1) of the Value-Added Tax Act provides that "value-added tax shall be reported and paid at each place of business," and Article 5(1) provides that "any person who intends to start a business at each place of business may register with the head of the competent tax office within 20 days from the date of commencement of the business, as prescribed by Presidential Decree." However, Article 4(2) provides that "any person who intends to start a business at each place of business may register with the head office or the head office of the competent tax office of the relevant place of business even before the date of

Meanwhile, the main text of Article 17(2)2 of the Value-Added Tax Act, considering the fact that it is essential to mutually verify the input tax amount to be deducted by an entrepreneur at each transaction stage by comparing the input tax amount and the output tax amount to be collected by the former business operator at each transaction stage according to each transaction stage under Article 17(1) of the Value-Added Tax Act, is providing sanctions to ensure the accuracy and accuracy of the tax invoice by restricting the tax amount deduction by a tax invoice that states the necessary entries differently from the facts. However, in cases where a tax invoice that states differently from the facts in the proviso of the same Article is deemed not to impede the normal operation of the pre-stage tax credit system or to undermine the essential functions of the tax invoice, permitting the deduction of the input tax amount is delegated to the Enforcement Decree. Article 60(2)2 of the former Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 23595, Feb. 2, 2012; hereinafter referred to as the “Enforcement Decree of the Tax Act”) as one of the requisite entry items under Article 16 of the Act.

As a result, transaction is confirmed in view of the fact that the relevant tax invoice and other necessary matters or discretionary matters are stated in the tax invoice.

2) In light of the following circumstances, AAACC is not a business operator who is not a business operator who is registered as a business operator at the principal office of the pertinent business operator pursuant to Article 5(2) of the Value-Added Tax Act. Since each of the tax invoices of this case was not registered at the place of business where the pertinent real estate is supplied at the time of issuing each of the tax invoices, each of the tax invoices of this case constitutes a false tax invoice. However, in addition to the following circumstances acknowledged by comprehensively taking into account the above facts and the overall purport of the arguments, the issuance of each of the tax invoices of this case by AAACC may be deemed as not impeding the normal operation of the tax credit system of the pre-stage stage or impairing the essential functions of the tax invoice, and it is reasonable to view that the facts of transactions are verified by considering the pertinent tax invoice and other necessary or discretionary entries of the tax invoice issued pursuant to Article 16 of the Enforcement Decree of the Value-Added Tax Act as the requisite entry of the pertinent tax invoice, and thus, the remaining dispositions of each of the plaintiffs are more unlawful and unlawful.

This part of the plaintiffs' assertion is justified.

(1) The Value-Added Tax Act requires a person newly commencing a business to register matters concerning the business within a fixed period for each place of business with the head of the competent tax office having jurisdiction over the business, including the personal information of the business operator, current status of the place of business, important matters of the business, etc. In practice, business registration is deemed to be based on the time a business operator files an application for registration with the head of the competent tax office having jurisdiction over the place of business, and business registration is to promote convenience in taxation administration

Furthermore, the purpose is to realize fair taxation and to add to the receipt of the tax invoice.

Value-added tax is an essential factor to effectively implement the taxation system. In particular, value-added tax is collected from suppliers of goods and others for each transaction and paid to the Government.

In addition, it is very important for the tax authority to accurately understand the business operator compared to other tax items because it is a structure for the business operator to deduct the input tax collected to the other party when the business operator is supplied with goods (the Constitutional Court Order 201Hun-Ba168, Nov. 28, 2013).

However, a tax invoice is a document evidencing the determination of value-added tax, which is issued and issued as a basis for its place of business, not only to guarantee the truth of the documentary evidence, but also to maintain the function of mutual verification between taxpayers that facilitate the dissemination of income tax and corporate tax as well as value-added tax by exposing transactions between the parties under the current VAT system adopting the Act on Tax Credit at Former Stage. Therefore, in principle, an input tax deduction based on a tax invoice prepared and issued as a basis for a place of business that does not supply goods or services should be denied. However, even if such a tax invoice is a tax invoice, to the extent that it does not harm the essential function of the said tax invoice, it is necessary to allow a tax deduction to relieve taxpayers from damages by allowing the said tax invoice. Such a tax invoice accords with the essence of the current VAT system and the principle of substantial taxation, and the principle of

② The issuance of each tax invoice of this case is a new construction of the instant real estate by AACC and is the location of the principal office without registering the business at the location of the place of business, which is the location of the instant real estate.

The AAAACC was issued in the name of the business entity of the head of the chapter, and the AAACC was under priority on the appropriateness of the rent for the real estate of this case for affiliate companies, including the plaintiffs.

The relationship with the real estate leasing business is separate for the lease business following the new construction of the real estate in this case

It seems that AAACC did not know that it should be registered, and therefore, it seems that the supplier's registration number is different from the fact by mistake as to the necessity of business registration for the provision of lease services following the new construction of the real estate in this case.

③ Although each tax invoice of this case contains the supplier’s registration number as “○○-○-○○○○○○○,” the supplier’s trade name is written as “AAAACC” and the representative as “EE”, as well as the supplier’s trade name is written as “AAAACC” and “rent or management fee” in the remarks column of each tax invoice of this case, it is easily confirmed that the supplier is AAACC and that the issuance of each tax invoice of this case was due to the provision of real estate rental services to the Plaintiffs.

④ The supply value and tax amount of each of the instant tax invoices are identical to the facts, and the issuance of each of the instant tax invoices seems to have never enjoyed or omitted benefits, such as unfair refund of tax, etc. by the AACC or the Plaintiffs. The State’s authority to impose taxes on the Plaintiffs.

It is difficult to deem that restrictions have occurred on exercise.

3. Conclusion

Therefore, each claim of the plaintiffs is justified, and it is decided as per Disposition by admitting it.