Supreme Court-2014-Du-11892 (Law No. 23, 20169)

It is difficult to see that there is a legitimate reason to exempt the purchaser from the penalty tax in bad faith on the grounds that the purchaser is a large enterprise affiliated company.

It is difficult to see that there is a legitimate reason to exempt the purchaser from the penalty tax in bad faith on the grounds that the purchaser is a large enterprise affiliated company.

Article 22 of the former Value-Added Tax Act

2016Nu850 Revocation of Disposition of Imposing Value-Added Tax

OOOO Co.

O Head of tax office

November 29, 2016

December 20, 2016

1. Revocation of the part against the defendant in the judgment of the court of first instance, and the plaintiff's claim corresponding to the revocation part;

The dismissal is dismissed.

2. The plaintiff's appeal is dismissed.

3. All costs of the lawsuit shall be borne by the Plaintiff.

1. Purport of claim

The Defendant’s imposition of value-added tax of KRW 100 for the first period of 2008 against the Plaintiff on September 1, 201, KRW 000 for the first period of 2010, and KRW 00 for the second period of 2010 shall be revoked.

2. Purport of appeal

A. The plaintiff

The part of the judgment of the court of first instance against the plaintiff shall be revoked. The defendant's imposition of value-added tax of KRW 000 on September 1, 201 against the plaintiff on September 1, 201 shall be revoked.

B. Defendant

The same shall apply to the order.

1. Quotation of judgment of the first instance;

The reasoning for the court's explanation on this case is as stated in the reasoning of the judgment of the court of first instance, except for the dismissal of the judgment of the court of first instance as follows. Thus, it shall be quoted in accordance with Article 8 (2) of the Administrative Litigation Act and Article 420 of the Civil Procedure

○ From 4th of the first instance judgment to 6th of the second to 12th of the second instance judgment.

(1) The △△△△△ is a company that is a distributor, and actually operates the JJ, AAA, and SS Distribution Co., Ltd. (hereinafter collectively referred to as “J3 company”), and the small and medium enterprise distribution center (hereinafter referred to as “small and Medium Enterprise Distribution Center”) is a company that is incorporated by the Small and Medium Business Corporation with 100% investment in order to develop markets for products and promote business management. J3 concluded an entrustment contract with the Small and Medium Enterprise Distribution Center and the Small and Medium Enterprise Distribution Center for the purchase and delivery of products, etc. since 2005, and performed its business on behalf of the Corporation.

(2) When the △△△△ was liable for a large amount of liability due to investment loss, it used by J3 personnel J3 who operated the △△△△ to be entrusted with the purchase and sales business by the Small and Medium Enterprise Distribution Distribution Center, thereby processing circular transactions as if the distribution flow of the goods were back to the third party from J3 companies, J3 companies, or the Small and Medium Enterprise Distribution Center via J3 companies, thereby re-processing circular transactions as if the distribution flow of the goods was back to the third party, and using them as its debt repayment, etc. after receiving the payment first from GGG accounting, etc.

(3) On February 208, 2008, the LLL of the △△△△ and the staff of the △△△△ Party, who received a request for diversification of the sales place from the Small and Medium Enterprise Distribution Distribution Center or the GG hall, proposed that KK in charge of the Plaintiff’s work as a broker for the transaction between the GGGrite and the JJ. Accordingly, the Plaintiff entered into a contract for the purchase of goods and the sale of goods from the GGrite to the JJ from the date of the above circular trading process. Furthermore, on the grounds that 2010, the Plaintiff purchased goods from the Small and Medium Enterprise Distribution Center from the Small and Medium Enterprise Distribution Center and sold them to the JJ and AA (hereinafter collectively referred to as the “each of the instant contracts”). Accordingly, the instant tax invoice was received from these companies.

(4) According to a contract entered into with the Plaintiff, the Plaintiff, the buyer, or the small and medium enterprise distribution center, only allows the Plaintiff to supply the goods at the place determined by the Plaintiff, and there is no provision on the Plaintiff’s duty of inspection. According to a contract entered into with the JJ or AAA, the Plaintiff, the buyer, is the logistics center designated by the said company, and the said company, the buyer, is required to verify whether there is any defect in the goods. The Plaintiff and the purchaser and the seller companies traded the goods to supply the goods to the purchaser immediately without going through the Plaintiff. The goods price was treated by the method that the Plaintiff, after receiving the goods from the buyer first, pays the remainder to the purchaser by removing the cost of the goods. The goods subject to the transaction pursuant to each of the instant contract were multi-types and small products used for daily life, such as cleaning and processed food, and the fee rate that the Plaintiff received by the Plaintiff was at least 1.5% in 208 and 31% in 2010.

○ From Nos. 7 to 8 of the first instance court ruling is as follows.

Article 22 (3) of the former Value-Added Tax Act (Amended by Act No. 9915, Jan. 1, 2010)

Where an entrepreneur has issued a tax invoice without supplying goods or services (subparagraph 2) or goods

If a tax invoice has been issued without being supplied with or being supplied with a service (as referred to in subparagraph 2-2), the supply price

An amount equivalent to 2/100 of the amount shall be imposed as an additional tax (2013.

1. 1. Article 22(3)2 and 3 of the former Value-Added Tax Act before the amendment by Act No. 11608

this is the same purport. This is to ensure that the tax invoice system is exposed to the transaction between the parties.

Considering the function of mutual verification between taxpayers that facilitate the dissemination of source of income tax and corporate tax as well as value tax, an entrepreneur liable to pay value-added tax for the proper exercise of the taxation right and the easy realization of taxation claims imposes an obligation not to issue or receive a tax invoice without supply of goods or services, and the entrepreneur’s justifiable reason

If a tax invoice is received without the supply of goods or services in violation of this, it would be required to impose an administrative sanction on the tax invoice in bad faith. Therefore, the tax invoice is not bona fide.

In a case where there is a justifiable reason to exempt additional tax, determination as to whether a taxpayer’s failure to know his/her duty is unreasonable or not is unreasonable to expect the taxpayer to fulfill his/her duty, and thus, constitutes a case where there is a justifiable reason not to mislead the taxpayer by neglecting his/her duty. Only the mere fact that the taxpayer was unaware of the fact that he/she was a tax invoice received without supplying goods or services should not be readily concluded that a justifiable reason exists (see, e.g., Supreme Court Decision 2014Du11892, Sept. 23, 2016).

See Decision 20

The Plaintiff entered into each of the instant contracts under the pretext of mediating transactions between △△△, etc. and J3 companies on the basis of the Plaintiff’s proposal, i.e., the fact that the Plaintiff was aware of the fact and the record as seen earlier. However, the Plaintiff did not receive, or take, an order from the purchaser of the instant goods, as it did not actually take part in the delivery or inspection of the goods. As such, the Plaintiff did not receive, the Plaintiff did not know of the fact that it did not receive, nor did it receive, from the purchaser or the seller of the instant goods, the Plaintiff did not receive, nor did it receive, from the purchaser or the seller of the instant goods for a long time, the Plaintiff did not appear to have received, nor did the Plaintiff receive, from the purchaser or the seller of the instant goods, the sales of the instant goods without any justifiable reason. (iii) The Plaintiff did not receive, from the purchaser or the seller of the instant goods, the Plaintiff did not appear to have received, nor did it appear to have received, a total sales amount exceeding 6G sales volume of the instant goods.

2. Conclusion

Therefore, the plaintiff's claim of this case shall be dismissed as it is without merit, and since the part against the defendant in the judgment of the court of first instance against the defendant is unfair with its conclusion different, it shall be revoked, and the plaintiff's claim of this case shall