Whether the purchase tax invoice of gold bullion constitutes a false tax invoice

The disposition of non-deduction of input tax amount is legitimate because it is deemed that gold bullion received false tax invoices without actual purchase, but the disposition of imposing additional tax is insufficient to recognize it as a processing sales.

All appeals are dismissed.

Costs of appeal shall be borne by each party.

The records of this case and the judgment of the court below and the grounds of appeal were examined. However, the grounds of appeal on the appellant are not included in the grounds prescribed in each subparagraph of Article 4(1) of the Act on Special Cases Concerning the Procedure of Appeal or are recognized as groundless. Thus, all appeals are dismissed pursuant to Article 5 of the same Act. It is so decided as per Disposition by

[Seoul High Court Decision 2007Nu6399, April 17, 2008]

1. The part of the judgment of the court of first instance against the plaintiff that ordered revocation shall be revoked next.

2. The Defendant’s disposition of imposition of value-added tax of KRW 391,527,430 against the Plaintiff on December 1, 2003 shall be revoked.

3. The plaintiff's remaining appeal is dismissed.

4. The total costs of the lawsuit shall be ten minutes, which shall be borne by the plaintiff, and the remainder shall be borne by the defendant.

The decision of the first instance is revoked. The defendant's imposition of value-added tax of 151,482,80 won for the first term of 1998 against the plaintiff on December 1, 2003 and value-added tax of 391,527,430 won for the first term of 1999 shall be revoked.

1. Details of the disposition;

A. Since around 1983, ○○, the representative director of the Plaintiff, was engaged in the wholesale business at ○○, a wholesale market in Korea, the largest gold market, and was established and operated on June 23, 1993 for the purpose of gold and retail business.

B. The Plaintiff received the purchase tax invoice of KRW 1,082,00,000 (hereinafter “the purchase tax invoice of this case”) from ○○ in the taxable period of the base value-added tax in 1998. The Plaintiff issued the purchase tax invoice of KRW 19,576,372,064 (hereinafter “the sales tax invoice of this case”) to the supply price of KRW 19,576,372,064 in the taxable period of the base value-added tax in 1999. The Plaintiff issued the purchase tax invoice of KRW 243,012,00 in the supply price to ○○○○ in the taxable period of the base value-added tax in 1999. Meanwhile, the Plaintiff received the purchase tax invoice of KRW 1,128,878,000 in the supply price from ○○○.

C. On the following grounds, the Defendant issued an additional correction and notification of KRW 151,482,80 for the first period of 1998 as value-added tax, KRW 2,075,910 for the second period of 198 as value-added tax, and KRW 394,130,060 for the second period of 1999, KRW 232,529,270 for the second period of 1999, and KRW 270 for the second period of 1999 (hereinafter referred to as “first disposition”).

① Sales and return of an amount equivalent to KRW 47,692,910 on ○○ Industry Co., Ltd. (hereinafter referred to as “○○ Industry”) shall be deemed to have been made and omitted, and such sales and return shall be included in the tax base of value-added tax (Articles 1 and 2, 198 and January 2, 199).

② As to the transaction corresponding to the purchase tax invoice and the sales tax invoice of this case, the input tax amount shall not be deducted for the said purchase portion on the grounds that the entries in the tax invoice are different from the facts as to the purchase portion on the report, and the additional tax shall be imposed on the said portion by buyer pursuant to Article 22(3)2 of the former Value-Added Tax Act (amended by Act No. 7007 of Dec. 30, 2003) on the grounds that the entries in the tax invoice are different from the facts as to the list of the total tax invoice submitted by the Plaintiff at the time of filing the value-added tax return (the above purchase portion shall be one year portion for January 1, 1998 / the above sales portion shall be

(3) Sales and purchase tax invoices related to ○○○ company shall be deemed false tax invoices, and the input tax amount shall be deducted, and additional tax shall be imposed on the non-performing entry of the aggregate tax invoices (as for the second period, 199).

D. On February 25, 2004, the Plaintiff dissatisfied with the request for adjudication, and the National Tax Tribunal made a decision to exclude sales and purchase statements received from ○○ company’s transaction from the omission of sales, and to revise the tax base and tax amount by deducting the relevant input tax amount from the application of additional tax. Accordingly, on November 15, 2005, the Defendant reduced all of the value-added tax for 2 years 1998 and 2 years 199 from the value-added tax originally notified, and reduced 394,130,060 won for 391,527,430 won for 1998 (the amount imposed for 151,482,00 won for 198 from ○○ company’s initial disposition, and the remaining amount imposed for 199 years from 199 to 19 years from 390, 199.

E. On June 20, 2006, on the third preparation date of the court of the first instance, the Defendant maintained the first reason (the portion of the sales on 00 juice is different from the facts stated in the list of the total tax invoice submitted by the Plaintiff at the time of filing a value-added tax return, and thus, it is well known that even if the sales on 00 juice does not constitute the processing transaction, the Plaintiff would not export the above sales on 10% of the sales on 10% of the sales on 2006, since it is well known that the Plaintiff would not export the sales on 2006 at the time of the zero-rate transaction. Accordingly, the Plaintiff added the reason for disposition by asserting that the above sales on 2nd disposition is within the legitimate tax amount.

[Adoption Evidence] Unsatisfy, Gap evidence Nos. 1, 2, 6, Eul evidence Nos. 1 and 21, the purport of the whole pleadings

2. Whether the disposition is lawful;

A. The plaintiff's assertion

In 198, the Plaintiff: (a) purchased the instant purchase tax invoice from ○○ in the taxable period of the value-added tax; and (b) supplied the instant sales tax invoice to ○○○○ in the taxable period of the value-added tax; and (c) supplied the instant tax invoice to ○○○ in the zero-rate tax rate based on the purchase approval during the 1999 taxable period of the value-added tax; and (d) the transaction with the Plaintiff, ○○, and ○○○” was not a normal transaction where the real property is available; and (b) the Plaintiff was unaware of the fact that ○○○ and ○○○○” was supplied to ○○○ in the zero-rate tax rate in accordance with the lawful purchase approval, and was not aware of the fact that it was not being exported. Accordingly, the instant disposition

(b) Related statutes;

c. Application of Article 11 of the Value-Added Tax Act (amended by Act No. 7007 of Dec. 30, 2003)

(1) The zero tax rates shall apply to the supply of the following goods or services:

1. Exported goods;

c. Tax amount under Article 17 of the Value-Added Tax Act (amended by Act No. 7007 of Dec. 30, 2003)

(2) The following input taxes 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

c. Submission of a list of total tax invoices under Article 20 of the Value-Added Tax Act (amended by Act No. 7007 of Dec. 30, 2003)

(1) Where an entrepreneur has delivered or received tax invoices under Article 16 (1) and (3), he/she shall submit a list of total tax invoices by customer and that by buyer stating the following matters (hereinafter referred to as "sales and total tax invoices by customer") along with the return on the relevant preliminary return or final return: Provided, That where the provisions of the main sentence of Article 18 (2) are applied, he/she shall submit

1. Registration number and name or denomination of the entrepreneur who supplies or is supplied;

2. Period of transaction;

3. Date of preparation;

4. The total amount of supply values and the total amount of tax during the period of transactions.

5. Matters prescribed by the Presidential Decree other than those under subparagraphs 1 through 4.

c. Determination and correction under Article 21 of the Value-Added Tax Act (amended by Act No. 7007 of Dec. 30, 2003)

(1) The Commissioner of the National Tax Service or the Commissioner of the National Tax Service of the competent regional tax office having jurisdiction over the place of business shall determine or correct the tax base and amount of value-added tax paid or refunded during the relevant taxable period

3. Where the list of the total tax invoice by buyer or the total tax invoice by buyer is not submitted, or all or part of the list of the submitted list of the total tax invoice by buyer is not entered or entered differently

○. Additional tax Article 22 of the Value-Added Tax Act (amended by Act No. 7007 of Dec. 30, 2003)

(3) Where an entrepreneur falls under subparagraphs 1 and 2, an amount equivalent to 1/100 for an individual, a corporation, or 2/100 for an individual with respect to the value of supply not entered or entered differently from the fact in the submitted list of the total tax invoice by buyer, an amount equivalent to 5/100 for an individual, a corporation, and an amount equivalent to 10/1,00 for a corporation, which falls under subparagraph 3, shall be added to the payable tax amount or deducted from the refundable tax amount: Provided, That this shall not apply to the value of supply for the portion, the transaction of which is confirmed under the conditions as prescribed by the Presidential Decree, in cases where

2. Where the whole or part of the registration number or supply value by transaction partner from among the entries in the list of the total tax invoice by buyer submitted under Article 20 (1) and (2) is not entered or entered differently from the fact

c. Scope of export under Article 24 of the Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 17827 of Dec. 30, 2002)

(1) Exports provided for in Article 11 (1) 1 of the Act shall be as follows:

1. Shipping domestic goods (including the fishery products collected by Korean vessels) from a foreign country;

(2) The goods exported under Article 11 (1) 1 of the Act shall be deemed to include the following goods:

1. Goods supplied by a businessman by means of a local letter of credit or a written confirmation of purchase;

c. Scope of local letters of credit, etc. under Article 9-2 of the Value-Added Tax Act;

(2) The term "purchase confirmations under Article 24 (2) 1 of the Decree and Article 26 (1) 2-2 of the Decree means confirmations issued by the head of a foreign exchange bank under Articles 38-2 and 116 (14) of the Enforcement Decree of the Foreign Trade Act within 20 days after the end of the taxable period to which the time of supply for goods or services belongs corresponding to a local letter of credit under paragraph (1) and on which the documents, such as the export letters of credit, their numbers, shipping date, etc.

C. Determination as to the legitimacy of the first disposition

(1) Facts of recognition

The following facts may be acknowledged by adding up the whole purport of pleadings to the statements in Gap evidence 8, Eul evidence 2, 3, 6 through 10, 13, 17, 23, and 24:

(A) On June 11, 1998, the Plaintiff received the instant purchase tax invoice concerning current transactions worth KRW 278,190,000, the supply value of KRW 279,708,00 on the 12th of the same month, the supply value of KRW 279,94,000, the supply value of KRW 279,994,000 on the 17th of the same month, the supply value of KRW 352,330,000, the total supply value of KRW 1,082,020,000.

(B) On September 2002, 2002, the Defendant started an investigation on the suspicion of the so-called data that issued the processed tax invoice, such as generating a high sales amount without purchase data, etc. The Defendant reported sales amounting to KRW 243,872,00 in the first taxable period of the value-added tax in 1998, and the Defendant reported sales amounting to KRW 243,872,00 in the second taxable period of the value-added tax in the second taxable period of the value-added tax in 1998. As a result, the Defendant confirmed the business place of the ○○○○○○○ (○○○○○○○○○○○○○-dong, ○○○○○○○○○) recorded in the instant purchase tax invoice (D-7,8) and confirmed that the ○○○ concluded a lease agreement between the lessor○○ and his own business place on April 198, but it was found that he was missing without paying any loan.

(C) Meanwhile, as a result of the investigation into the sales office of ○○○, confirmed the details of the separate investigation from the trading company, and Kim○○ issued an amount equivalent to KRW 9,198,253,00 from April 1, 1998 to August 30, 198, and filed an accusation against the ○○○○ Prosecutors’ Office on the ground that the receiving company issued the Plaintiff’s sales tax invoice 9,198,253,000 without real transactions, and subsequently, filed an accusation against the ○○○○○ Office on the ground that the receiving company would unfairly deduct the input tax amount of value-added tax. An additional taxation was issued to the ○○○○○○○○○○○○ Company upon processing transaction. Although ○○○ was investigated by the investigative agency, ○○○○○ Company was issued a false tax invoice on the ground that ○○○○ 2 was issued a new tax invoice for 6 months after having been issued to the said ○○○○○○○○.

(2) Determination

As shown in the above facts, ○○○ does not have a business operation at the place of business registration; ○○○ does not have abnormal transaction types that report purchase prices in comparison with its supply prices; 2) most of the transaction parties who received purchase tax invoices from ○○○○ and reported value-added tax by receiving only a processed tax invoice in the name of ○○○ without a real transaction; and 3) it is difficult to easily understand that ○○○○○ was holding a gold amounting to KRW 9 billion while operating a business without an employee for a short period of about five months (or it is difficult to believe ○○○○○○○’s statement from 9 billion won to the investigation agency that ○○○ was selling to the said transaction). 4) In light of the above circumstances, it is difficult to view that the Plaintiff and ○○○○○○○○’s actual transaction, without considering the circumstances leading up to the purchase of ○○○○○○’s statement and its actual suspicion that it was difficult to obtain from the Plaintiff and the Plaintiff’s actual representative ○○○○○.

In light of the evidence that the real transaction with ○○○ was conducted, the Plaintiff submitted the check of the number of units (No. 8 through 11 of the evidence No. 8) issued by the Plaintiff and endorsed by Kim○○○, and the Plaintiff’s statement of the current account (Evidence No. 9). However, the endorsement on the back of the above check of number of units was not submitted by the Plaintiff during the national tax trial process on June 20, 2006, the Plaintiff was submitted at the third preparation date of the court of the first instance, and the Plaintiff did not submit all objective data on the details of the use of the above check of number of units (this testimony that the witness Kim○ does not have objective data on the use of the above check of number of units). In light of the fact that the above evidence appears to be contrary to the fact that the transaction with the Plaintiff and ○○○ is processed transaction, it is difficult to believe that the above evidence is contrary to the fact that the transaction with ○○○ was conducted.

Therefore, the first disposition that did not recognize the input tax deduction, considering that the entries of the purchase tax invoice in the instant disposition are different from the facts, is lawful.

D. Determination as to the legitimacy of the second disposition

(1) As to the primary reason for disposition

With respect to whether the Plaintiff issued only the sales tax invoice of this case to ○○○○○ without actually supplying the sales tax invoice of this case, each of the statements in Gap’s Nos. 2-2, Eul’s Nos. 13, and 14 is insufficient to recognize that the transaction with the Plaintiff and ○○△△△ is a processing transaction. Rather, according to each of the statements in Gap’s Nos. 13, 17 internal organs 19, 29, and 31, the Plaintiff is recognized to have supplied ○○○○○○○○ as zero-rate tax rate during the period from April 21, 199 to June 30, 199, and actually delivered the sales tax invoice of this case to ○○○○○○○ as zero-rate tax rate.

Therefore, it is illegal to impose additional tax on the buyer's tax invoice on the grounds that the entries of the list of the buyer's tax invoice submitted by the plaintiff at the time of the return of value-added tax are different from the facts.

(2) Whether the grounds for disposition are permitted to change

(A) Since the legitimate tax amount exists in a lawsuit seeking revocation of taxation, the tax authority may submit new data, which can support the legitimacy of the tax base and tax amount recognized in the relevant disposition, or exchange and change the grounds for disposition, even though during the lawsuit, until the closing of pleadings at the fact-finding court. It is not always possible to determine the legitimacy of the disposition by only the data at the time of the disposition, or to claim only the reasons for the disposition, or the exchange and alteration of the grounds for disposition are allowed to the extent that the consistency of the disposition is maintained (see, e.g., Supreme Court Decision 97Nu2429, Oct. 24, 1997).

Moreover, inasmuch as additional tax is a kind of administrative sanction imposed on a taxpayer who violates an obligation under the tax law without justifiable reason in order to facilitate the exercise of the right to impose taxes and the realization of a tax claim, it is merely a collection of the principal tax calculated under the relevant tax law by adding it to the amount of the principal tax calculated under the relevant tax law for the convenience of collection procedure. Since the national tax established under the tax law and its nature are in essence different from that of the principal tax, the imposition of additional tax is separate from the imposition of the principal tax (see, e.g., Supreme Court Decisions 200Du7520, Oct. 26, 2001; 2004Du2356, Sept. 30, 2005).

(B) On the other hand, while the original reason for the disposition of the second disposition was the "additional Tax", it cannot be deemed that the Defendant's preliminary reason for the disposition during the lawsuit of the instant case was the "additional Tax." In addition, the Defendant's reason for the imposition of additional tax (non-statements by buyer due to processing transaction) and the reason for the imposition of value-added tax (excluding the application of zero tax) cannot be seen as the identical disposition. In light of the above, it is reasonable to deem that the Defendant's change in the reason for disposition of the Defendant is not permitted because it goes beyond the identity of the disposition.

(3) Sub-determination

Therefore, the second disposition is illegal without examining the legitimacy of the second disposition.

3. Conclusion

Therefore, the part seeking the revocation of the first disposition among the plaintiff's claims in this case is dismissed as it is without merit, and the part seeking the revocation of the second disposition is accepted as it is with merit. Since the part concerning the second disposition in the judgment of the court of first instance concerning the second disposition is unfair with different conclusions, it is revoked and the second disposition is revoked, and the remaining appeal (the part concerning the first disposition) of the plaintiff is dismissed as it is without merit

Details of the survey

Name of the purchaser;

Amount (,000 won)

Details of confirmation

○ ○○

10,497

Revised Declaration and Written Confirmation of Certificate (the time of processing and purchase)

○ ○○

4,450,510

Punishment for the violation of the Punishment of Tax Evaders Act (data)

1,082,020

I explained that he is a normal transaction share, but presumed to be a processing transaction which is deferred under the circumstances.

(m)○○ scopon;

2,515,700

On September 30, 1998, the disposal of deficits of KRW 2,425,00,000 due to the closure of business, arrears, 2,425,000, not confirmed due to the death of representative ○○

(m)○○ water acid

15,000

Written Confirmation (the date of processing or purchase)

(state)○ trade;

971,640

On July 1, 1998, the disposition of deficits of KRW 125,000,000 due to closure, delinquency, and the representative's place of resident registration shall not be contacted with the representative's place of resident registration without permission.

○

7,000

The dispatch of a supporting statement, but not replies;

(m)○○ person;

11,000

On May 20, 1998, the disposal of deficits of 9,000,000 won due to closure of business, arrears, 9,000 won due to the representative's place of residence without permission, and the contact price due to the

○

85,850

Written Confirmation (the date of processing or purchase)

(m)○○ commercial

25,664

Processing Purchasing is the time limit, but refuses to submit a written confirmation;

(m)○○

8,296

In spite of the submission of explanatory materials, documents proving actual transactions are not sufficient, and Kim ○-○ was not known.

○ Doz.

15,076

The principal is presumed to be a processing transaction, such as there is no evidence of payment, even though he has proved for normal transaction.

Total

9,198,253