Seoul High Court 2008Nu13493 ( October 10, 2008)

No trade shall be deemed a nominal transaction on the ground that a bombane company was opened in connection with the transaction of gold bullion.

It is difficult to readily conclude that the instant transaction, one of the entire transactions, is not a nominal transaction, on the sole basis of the fact that there is a wide carbon company in the middle stage, etc., which is a day until gold bullion is imported and exported.

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

Article 17 of the Value-Added Tax Act

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The judgment below is reversed and the case is remanded to Seoul High Court.

쇠鹬 쇠鹬 3000 쇠鹬 3000

We examine the grounds of appeal.

Article 1(1)1 of the Value-Added Tax Act provides that "the supply of goods as taxable subject to value-added tax" and Article 6(1) provides that "the delivery or transfer of goods shall be a delivery or transfer of goods on all contractual or legal grounds." In light of the characteristics of value-added tax as multi-stage transaction tax, "delivery or transfer" under Article 6(1) of the Value-Added Tax Act includes all acts of causing the transfer of rights to use and consume goods, regardless of the existence of profits actually acquired (see, e.g., Supreme Court Decisions 85Nu286, Sept. 24, 1985; 9Du9247, Mar. 13, 201; 9Du9247, Mar. 13, 2001). In such a case, the issue of whether a specific transaction constitutes the supply of goods as provided for in the Value-Added Tax Act shall be determined by taking into account the purpose and circumstances of each transaction, the ownership of profits, and the denial of the payment relationship between two parties.

However, according to the facts duly confirmed by the court below and the records, the plaintiff purchased gold bullion of 1,159 kilograms (hereinafter "the gold bullion of this case") in total from 7 business operators, including Alley, Co., Ltd. (hereinafter "the supplier of this case") from April 1, 2004 to October 1 of the same year, and received delivery of the gold bullion of this case on the date of purchase, and then received payment (hereinafter "the tax invoice of this case") from the supplier of this case. The plaintiff exported the gold bullion of Hong Kong on the date of purchase to the import of Hong Kong on the date of purchase of the gold bullion of this case, and received the tax invoice of this case 51 (hereinafter "the tax invoice of this case").

Examining these facts and records in light of the legal principles as seen earlier, the entire transaction between the instant gold bullion and its export is conducted on a daily basis, and it is difficult to conclude that the instant gold bullion, which is one of the instant series of transactions, is not the supply of goods subject to value-added tax, as a nominal transaction for the purpose of forging the actual transaction, even if the instant transaction was received only by issuing a tax invoice or is delivered with the actual gold bullion or paid the price, and thus, it is difficult to deem that the instant tax invoice received from the instant transaction as a different invoice and the actual supplier are written differently from the relevant invoice.

Nevertheless, the lower court determined that the instant tax invoice constituted a different tax invoice from the fact on the ground that the instant transaction was merely a nominal transaction without supplying goods, on the grounds that the instant transaction was included in the entire transaction of this case, in which the so-called wide coal company was opened. In so doing, the lower court erred by misapprehending the legal doctrine on the “supply of goods” and “tax invoice different from the fact,” thereby adversely affecting the conclusion of the judgment.

Meanwhile, according to Articles 76 (5) and 116 (2) 2 of the former Corporate Tax Act (amended by Act No. 8141 of Dec. 30, 2006), "the head of the district tax office having jurisdiction over the place of tax payment shall collect an amount calculated by adding an amount equivalent to 2/100 of the unpaid amount as corporate tax in cases where a corporation is supplied goods by an entrepreneur in connection with its business and fails to receive a tax invoice under Article 16 of the Value-Added Tax Act," and Article 16 of the former Value-Added Tax Act (amended by Act No. 8142 of Dec. 30, 2006) provides that if an entrepreneur registered as "the person liable for tax payment supplies goods, he/she shall deliver a tax invoice stating the registration number, name or title of the entrepreneur, the registration number of the recipient, the value of supply, value of value-added tax, etc."

As seen earlier, insofar as it cannot be readily concluded that the instant transaction is not a supply of goods subject to value-added tax, it is difficult to conclude that the instant tax invoice received accordingly is not a legitimate tax invoice under Article 16 of the former Value-Added Tax Act. However, the lower court determined that the instant corporate tax disposition was lawful on the premise that the instant tax invoice is “unlawfully different tax invoices” from the supplier. Accordingly, the lower court erred by misapprehending the legal doctrine on the additional tax received, thereby adversely affecting the conclusion of the judgment.

The ground of appeal pointing this out is with merit.

Therefore, the lower judgment is reversed, and the case is remanded to the lower court for further proceedings consistent with this Opinion. It is so decided as per Disposition by the assent of all participating Justices on the bench.