Cho Jae-2017-China-5005 ( October 30, 2018)

Whether the payment of the price for the provision of services under the service contract is a tax invoice received.

The tax invoice of this case is the tax calculation of processing received without real transaction, and the exclusion period for imposition is 10 years because it constitutes a case where the national tax is evaded or refunded by fraud or other unlawful act.

Article 39 of the Value-Added Tax Act

2018Guhap64253, a lawsuit claiming revocation of imposition, including value-added tax

Aaaaa

AA Head of the Tax Office

November 1, 2018

December 6, 2018

1. The plaintiff's claim is dismissed.

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

Cheong-gu Office

The Defendant’s imposition of KRW 150,514,00 of value-added tax for the second year of February 1, 2011, and KRW 292,981,250 of corporate tax for the year 2011, as well as KRW 150,00 of the bonus for the year 2011, and KRW 292,981,250 of income tax for the year 201 and KRW 2,000 of income for the income earner B, respectively, shall be revoked.

1. Details of the disposition;

A. On December 30, 2011, the Plaintiff engaged in real estate consulting business filed a return on the tax base and amount of value-added tax for the second period of 201, and filed a return on the tax base and amount of tax for the business year of 2011 by deducting the input tax amount under the tax invoice (hereinafter “instant tax invoice”) which is KRW 700,000,000 for the supply value received on December 30, 201 from the stock company BB (hereinafter “BB”) (hereinafter “instant tax invoice”) from the output tax amount, and filing a return on the amount of value-added tax payable, by including the key amount in deductible expenses.

B. As a result of the Defendant’s tax investigation conducted on the Plaintiff from December 9, 2016 to December 28, 2016, the Defendant deemed that the instant tax invoice constituted a processed tax invoice received without real transaction, and notified the Plaintiff of the rectification of the value-added tax amounting to KRW 150,514,00 (including additional tax) that reverts to the second business year of 201 and the corporate tax amounting to KRW 292,981,00 (including additional tax) that reverts to the Plaintiff for the business year of 2011 (hereinafter “instant disposition imposing the value-added tax and the corporate tax”), b, the representative of the Plaintiff, as bonus in the business year of 2011 (hereinafter “instant notice of change in the amount of income”).

C. On October 20, 2017, the Plaintiff dissatisfied with each of the instant dispositions, filed an objection on February 21, 2017, and filed an appeal with the Tax Tribunal on October 20, 2017, but the appeal was dismissed on January 30, 2018.

Facts without any dispute, Gap's evidence 1 through 4, Eul's evidence 1 through 3 (including numbers for each case; hereinafter the same shall apply), and the purport of the whole pleadings.

2. Whether each of the dispositions of this case is legitimate

A. The parties' assertion

The Defendant asserts that each of the dispositions of this case is lawful on the grounds of the disposition and the relevant statutes. The Plaintiff asserted as follows and asserted that each of the dispositions is unlawful.

First, the Plaintiff entered into a service contract with BB in November 201 with the supply price of KRW 700,000,000 with respect to the AAC-dong shopping mall construction business (hereinafter “instant business”), and received the instant tax invoice after being provided with the services, so the instant tax invoice is a tax invoice for the actual transaction.

Second, even if the tax invoice of this case is different from the facts, the plaintiff was acting in good faith since it concluded a service contract with the belief that d'd representative director of BB would provide the service, and only paid the amount at the service price and received the tax invoice, and did not know that the transaction was not a normal transaction.

Third, since the Plaintiff did not evade taxes by fraud or other unlawful acts, the exclusion period for imposition of five years shall apply. Therefore, each of the dispositions of this case taken after January 25, 2017, which was five years from January 25, 2012, which was the date of filing the report, was unlawful since the exclusion period for imposition expires.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

1) Determination on the plaintiff's first and second arguments

A) Relevant legal principles

Article 17(2)1 of the Value-Added Tax Act provides that an input tax amount in a case where the entries of a tax invoice are different from the fact, shall not be deducted from the output tax amount. In this case, the meaning that it is different from the fact is the name of income, profit, calculation, act or transaction which is the object of taxation, and if there is another person to whom it actually belongs, the person to whom it actually belongs shall be liable to pay taxes in light of the purport of

Notwithstanding the formal descriptions of a transaction contract, etc. prepared between the parties to the goods or services, the input tax amount may be deducted only when the other party to the transaction was unaware of the fact that the other party to the transaction was not the actual supplier of the goods or services. In addition, the input tax amount may not be deducted from the output tax amount of the party who received the goods or services, in a case where the party to the transaction was not aware of the fact that the other party to the transaction was not the actual supplier of the goods or services, and where the tax invoice entered differently from the fact is delivered, the input tax amount cannot be deducted from the output tax amount of the party who received the goods or services (see, e.g., Supreme Court Decision 96Nu617, Dec. 10, 19

B) the facts of recognition

(1) From September 8, 201 to February 10, 2012, the Plaintiff sent the sum of KRW 620,000,000 to the sum of KRW 620,000.

(2) The president and the branch of the Plaintiff’s account related to BB are as follows.

The service contract of this case

(3) On August 12, 201, the Plaintiff paid KRW 150,000,000, which was stated as advance payment, to BB on the president and branch office of each of the above accounts.

(4) On December 30, 201, the Plaintiff received the instant tax invoice from BB, which is KRW 700,000,000 (value-added tax 70,000). The president of BB, as the Plaintiff had paid a large amount of taxes from B, dB had the Plaintiff paid taxes, dB paid the Plaintiff’s taxes from bB, upon request of e, who was a management director at the time, ordered e to issue the instant tax invoice.

(5) Upon D’s instruction, e issued the instant tax invoice to the Plaintiff, although the Plaintiff did not have any actual service supplied to the Plaintiff.

(6) In 2012, e drafted a service contract (hereinafter “instant service contract”) with respect to the instant project retroactively from September 8, 201, in order to disguised the instant tax invoice with legitimate tax invoices, as follows: (a) written evidence No. 8 of the instant service contract.

○ The instant service contract

1. Business name: tentative cdong COPEEX commercial facilities;

2. The target area: The AA-gu cdong c. 5 c. In case ofCC.

3. Amount of service: A set of KRW 700,000 per day (70,000,000) - Additional tax rate.

4. Period of service: From September 8, 201, to December 31, 2011;

In order to review the feasibility of a commercial facility in the AAC Dong cdong 5, the plaintiff representative director bb (hereinafter referred to as "A") and BB representative director d (hereinafter referred to as "B") will examine the feasibility of the above target area closely and prepare a business report and prepare a service contract to report and submit it to "A" and keep two copies of each service contract in one copy to verify it.

(7) At the time of receiving KRW 620,000,000 from the Plaintiff, BB entered into an account of “debt” as the date of deposit, but thereafter, BB corrected the instant service agreement to the “sale account” account on March 2012.

(8) On January 6, 2017, BB issued a false tax invoice of this case to the Plaintiff even though dB, the actual operator of BB, had not supplied goods or services to the Plaintiff on or before January 9, 2012, with respect to the suspected crime, BB was subject to a non-prosecution disposition (suspension of indictment) by taking into account the fact that dB was aware of the suspected crime, and that dB requested a summary order on the same day, and that the suspect was closed at the present time.

Facts that there is no dispute over recognition, Gap's evidence 7 through 9, Eul's evidence 1 to 13, witness

e’s testimony, purport of the whole pleading

C) Determination

As to this case, in full view of the following circumstances, the tax invoice of this case is a processed tax invoice received without a real transaction, and the plaintiff's above assertion on a different premise is without merit. In full view of the above circumstances, the tax invoice of this case is a processed tax invoice received without a real transaction.

① During the Defendant’s tax investigation, the Plaintiff’s representative director stated that the amount at issue is “investment funds paid to BB in connection with the complex commercial facility development project,” and consistently stated that D and e issued the instant tax invoice, which is a false tax invoice without real transactions, at the request of B and e.

② The sum of the value of supply and value-added tax on the instant tax invoice corresponds to the sum of KRW 620,000,000 that the Plaintiff remitted to BB and KRW 150,000,000 paid to B (=620,000,000 + KRW 150,000).

③ Since the instant service contract appears to have been ex post facto drafted around 2012 in order to conclude that the instant tax invoice had been issued and that there had been actual services, BB cannot be deemed as evidence for the provision of services to the Plaintiff.

④ In order for BB to pay the Plaintiff the cost of attracting overseas brand pursuant to the instant service contract, there is little difference between the time of request for funds stated in the written request for funding (Evidence A9) and the time when the Plaintiff actually paid the money to BB. However, the date of preparation of the written request for expenditure of the above funds is written that “in fact before the instant service contract was actually prepared,” and its content is not credibility.

⑤ In light of the fact that B/D, the representative director of the Plaintiff, directly asked D to issue the instant tax invoice, the Plaintiff cannot be deemed as a bona fide counterpart with regard to the fact that the instant tax invoice was a processed tax invoice.

2) Judgment on the third assertion by the Plaintiff

In light of the above facts and the following circumstances, the Plaintiff received the instant tax invoice, which is a processed tax invoice under the collusion with or agreement with the other party to the transaction, and subsequently intended or recognized the intent to reduce the State’s tax revenue due to the above acts, the Plaintiff’s act of not having received the instant purchase tax invoice, which is the purchase tax invoice, from BB, and including the amount in the deductible expenses at the time of the return of the corporate tax return, and including the amount paid to the representative in the deductible expenses, on the other hand, the Plaintiff’s act of omitting the income paid to the representative, constitutes a “Fraud or other unlawful act” under Article 26-2(1)1 of the Framework Act on National Taxes, and thus, the exclusion period for imposition of tax should be ten years.

Therefore, each disposition of this case, which was made within the exclusion period of imposition, is legitimate, and the plaintiff's above assertion is without merit on different premise.

3. Conclusion

Thus, the plaintiff's claim is dismissed as it is without merit.