early 209west 1983 (2010.30)

The imposition of penalty tax is legitimate because it is difficult to view that there is a justifiable reason that does not cause a neglect of duty to report.

The imposition of penalty tax on a person who reported value-added tax is legitimate because it is difficult to deem that there is a justifiable reason that he/she is not a business operator or fails to fulfill his/her duty to report.

2010Guhap42133 Revocation of Disposition of Imposing additional tax

KimA

○ Head of tax office

April 21, 201

May 26, 201

1. The plaintiff's claim is dismissed.

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

The Defendant’s imposition of the value-added tax against the Plaintiff on December 4, 2009 (the penalty tax amounting to KRW 3,937,390 and the penalty tax amounting to KRW 4,435,469) is revoked.

1. Basic facts

A. On April 2007, the Plaintiff sold Nos. 81025 and 1050 of ○○○○○○○-dong 1141, 1141 (in succession, hereinafter “instant Nos. 1 and 2”).

B. On June 1, 2007, with respect to all the 1 and 2 shops of this case, the registration of the real estate lease business (total 2 cases) by each store was completed in the name of the plaintiff.

C. The Defendant paid the Plaintiff the input tax amount of KRW 19,686,950, total of KRW 19,686,950, as the refund for the first shop of this case, according to the computation of early refund of the input tax amount under the name of the Plaintiff in relation to the first shop of this case ( ① a return filed on June 25, 2007: the supply value of KRW 11,747,894, the tax amount of KRW 78,874,874,792: the supply value of KRW 78,794, the tax amount of KRW 7,874,792, July 10, 2007; and KRW 7,874,790, the amount of KRW 19,686,950, as the refund for the first shop of this case.

D. According to the return of early refund of input tax amount under the name of the Plaintiff in relation to the second shop of this case ( ① the return on June 25, 2007: the supply value of 240,384,520 won; tax amount of 24,038,450 won; ② the return and supply value of 73,964,545 won; tax amount of 7,396,457 won on August 26, 2007; the Defendant paid to the Plaintiff KRW 24,038,450 on July 10, 2007; and KRW 7,396,450 on September 7, 2007; and KRW 31,434,900 on the total of 31,434,90 won as the refund of input tax amount for the second shop of this case.

E. On October 17, 2007, the Plaintiff did not report the value-added tax base while closing its business related to the first shop of this case. Accordingly, on December 4, 2009, the Defendant discontinued its business after receiving a refund of the input tax amount due to investment in facilities and did not report the value-added tax base within 25 days thereafter on the ground that the Plaintiff did not report the value-added tax base within 28,256,678 (value-Added Tax) on the Plaintiff.

19,686,950 won; 196,869 won; 3,937,390 won; and 4,435,469 won; and 4,469 won.

F. On February 19, 2010, the Plaintiff filed an objection with respect to the penalty tax in the disposition imposing the value-added tax, etc. on March 19, 2010, the Defendant corrected that the amount of penalty tax to be submitted on March 19, 2010 was reduced by KRW 196,869, but the remainder of the objection was not accepted (hereinafter the above portion of penalty tax to be imposed on KRW 3,937,390 and penalty tax to be paid in bad faith and KRW 4,435,469).

[Ground of recognition] Facts without dispute, Gap 1, 2, 3, Eul evidence 1-2, Eul evidence 2, Eul 2, 3, 4, Eul evidence 5-1, 2, Eul 6, 7, Eul evidence 8, 9-1, 2, each of the statements, and the purport of the whole pleadings, and the whole arguments.

2. Whether the imposition of additional tax in this case is legitimate

A. The plaintiff's assertion

Although the Plaintiff paid down payment to the non-party company for the purchase of the instant Nos. 1 and 2, but agreed with the non-party company to convert the down payment of KRW 50,00,000 into the intermediate payment of the instant No. 2 store, the non-party company voluntarily filed a report on multi-business registration and early refund of value-added tax with respect to the instant No. 1 store without informing the Plaintiff, thereby, the Plaintiff did not know that the sum of the refund of KRW 19,686,950, which was paid by the Defendant, constitutes part of the refund of the input tax to the instant No. 2 store, and thus, the value-added tax base should be reported. Accordingly, the liability for omission of the report is against the non-party company, not the Plaintiff, and thus, the disposition on imposition of the additional tax of this case is unlawful (the Plaintiff’s assertion that the aforementioned assertion is not an actual business operator related to the instant No. 1).

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

Under the tax law, penalty taxes are administrative sanctions imposed in accordance with the law in order to facilitate the exercise of the right to impose taxes and the realization of tax claims where a taxpayer violates a duty to report and pay taxes, etc. under the law without justifiable grounds, and it is not unreasonable for the taxpayer to be aware of his/her duty. Thus, unless there are justifiable grounds to believe that it is unreasonable for the taxpayer to be aware of his/her duty, or that it is unreasonable for the taxpayer to expect the fulfillment of the duty to pay taxes to the party concerned to do so, penalty taxes should be imposed for nonperformance of tax obligations (see, e.g., Supreme Court Decision 2001Du8100, Feb. 14, 2003).

In light of the above legal principles, the Plaintiff asserted that the sales contract for the first store of this case was cancelled on April 2007, but it is difficult to believe that the first store of this case was registered in the name of the Plaintiff and reported early refund of value-added tax amount to KRW 19,686,950. ② The Plaintiff did not proceed with the procedures for registration of the first store of this case and reporting early refund of value-added tax amount to the Plaintiff; ② even if the Plaintiff’s sales contract for the second store of this case was concluded on behalf of the Nonparty 1 and the second store of this case, the Plaintiff’s sales contract for the second store of this case was cancelled on April 1, 207. However, it is difficult to view that the Plaintiff’s sales contract for the second store of this case was cancelled on behalf of Nonparty 1 and the second store of this case without any justifiable reasons for the Plaintiff’s return of value-added tax amount to Nonparty 1 and the second store of this case (see, e.g., the Plaintiff’s new sales contract for the first store of this case.

3. Conclusion

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