Cho-2019-Gu-1557 ( September 19, 2019)

Since a disposition was made after the exclusion period of imposition, it shall be null and void.

Although the decision of refund to the head office upon the decision of the head office and applying the unit taxation system of the place of business, the branch business operator who was not the claimant can not apply the special exclusion period to the branch business operator, and the exclusion period has already expired at the time of the disposition, the disposition is null and void.

The exclusion period for national tax assessment under Article 26-2 of the Framework Act on National Taxes

Daegu District Court 2019Guhap22615

○○○○○ (main)

○ Head of tax office

October 16, 2019

October 30, 2019

1. The Defendant’s imposition of value-added tax of KRW 353,949,400 (including additional tax) on the Plaintiff on December 4, 2018 is invalid.

2. The costs of the lawsuit are assessed against the defendant.

Cheong-gu Office

The same shall apply to the order.

1. Details of the disposition;

A. The Plaintiff is a corporation that is engaged in the manufacture, sale, etc. of taxes, paints, scambling agents, etc. and operates six business places, such as the head office and port offices.

B. The director of the Seoul Regional Tax Office: (a) conducted an integrated investigation of corporate tax against the Plaintiff from June 2016 to November 201 of the same year; (b) determined that the sales transaction of chemical products between the Plaintiff, ○ Group, ○○○○○, etc. (hereinafter “instant transaction”) and between the Plaintiff, ○○ Group, and ○○○, etc. constituted a processed transaction without supply of goods.

C. Accordingly, on December 5, 2016, the tax authorities, including the head office of the Gu, imposed the Plaintiff a disposition imposing value-added tax of KRW 650,307,440 on the part of the instant transaction at the main office (hereinafter “related disposition”), and ② refund of KRW 353,949,40 on the part of the instant transaction at the port and port in the instant case.

D. On February 28, 2017, the Plaintiff dissatisfied with the relevant disposition and filed an appeal with the Tax Tribunal on February 28, 2017. In this regard, on November 20, 2018, the Tax Tribunal rendered a decision to the effect that the part of the instant transaction constitutes a normal transaction, not a processing transaction, and that the tax base and tax amount of the relevant disposition are corrected (hereinafter referred to as “the instant decision”).

E. According to the instant decision, the head of the Gu Tax Office revoked the relevant disposition, and subsequently refunded the Plaintiff the value-added tax of KRW 671,654,570 (including additional dues of KRW 21,347,430) related to the transaction of the head office in 2011. Meanwhile, on December 4, 2018, the Defendant issued a disposition again imposing value-added tax of KRW 353,949,400, which was refunded to the Plaintiff in relation to the transaction of the head office (hereinafter “instant disposition”).

Facts that there is no dispute with recognition, each entry of Gap 1 through 3 (including paper numbers), and the purport of the whole pleadings.

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The Value-Added Tax Act, in principle, treats each workplace as one taxpayer from the standpoint of the principle of taxation per workplace unit, so many workplaces operated by one entrepreneur are separate taxpayers.

However, the Plaintiff only filed an appeal with the Tax Tribunal on the pertinent disposition imposed at the head office, and did not object to the first value-added tax for the year 201, which was refunded to the Plaintiff’s Posing Port, and the first value-added tax for the year 201 at the Plaintiff’s Posing Port was not subject to the lawsuit. Therefore, the first value-added tax for the year 201 imposed at the Plaintiff’s Posing Port does not constitute a case where a decision is made upon a request for a trial. Thus, the provision that the period of exclusion under Article 26-2(2)1 of the Framework Act on National Taxes (amended by Act No. 10621, May 2, 201; hereinafter the same) can not be applied to the provision that the period of exclusion under Article 26-2(1)3 of the Framework Act on National Taxes can be decided within one year from the date the decision following the request for a request for a trial becomes final (hereinafter “the provision for exclusion period of this case”).

Ultimately, the instant disposition is null and void since the lapse of the exclusion period for imposition of five years from July 26, 201, following the filing deadline for the first value-added tax in 201.

B. Relevant statutes

The entries in the attached Table-related statutes are as follows.

C. Determination

1) To arrange the contents and issues of the relevant provisions;

A) According to Article 26-2(1)3 and (5) of the Framework Act on National Taxes and Article 12-3(1)1 of the Enforcement Decree of the Framework Act on National Taxes (amended by Presidential Decree No. 29534, Feb. 12, 2019), national taxes on which the tax base and tax amount are reported may not be imposed after five years have elapsed from the date following the due date for filing a return or the due date for filing a return on the tax base and tax amount of the relevant national tax, unless a taxpayer evades national taxes, is refunded or deducted by fraudulent or other unlawful means, or a taxpayer fails to file a return by the due date for filing a return by the due date for filing a return. According to Article 26-2(2)1 of the Framework Act on National Taxes (the special exclusion period in this case), where a decision or ruling was made on other request for examination or a lawsuit under the Administrative Litigation Act, the tax base and tax amount to be reported to the head of a tax office within one year prior to the date of determination or judgment.

B) In light of the above relevant provisions, the exclusion period for imposition of the first half-year value-added tax (from January 1, 201 to June 30, 201) for the Plaintiff’s first half-year 201 (from January 1, 2011 to June 30, 201) was five years from July 26, 201, which was the day after the due date for filing the report, and the Defendant issued the instant disposition on December 4, 2018, which was apparent from July 26, 201 to December 4, 2018. Accordingly, the instant disposition was made after the lapse of the exclusion period for imposition of five years under Article 26(1)3 of the Framework Act on National Taxes, in principle. Accordingly, the Defendant asserted that the instant disposition was made by applying the exclusion period for the instant special exception, and thereafter, it should be examined as to whether the instant disposition satisfies the requirements for application of the exclusion period.

2) Whether the special exclusion period provision of this case is applicable

A) Relevant legal principles

The legislative intent of the special exclusion period provision of this case was to prevent unreasonable circumstances that make it impossible for the tax authority to make a decision or make a disposition in accordance with the decision, in the event that the procedure of the administrative appeal or administrative litigation, etc. on the disposition was over a long time, and the decision or judgment becomes final after the expiration of the exclusion period. Furthermore, the interpretation of tax laws and regulations is interpreted as the legal text, barring any special circumstance, and the exceptional provision or special provision requires more strict interpretation. Thus, even if the final decision or the scope of res judicata effect of the judgment is limited to the taxable unit that was the object of the lawsuit, and it cannot be said that the judgment has res judicata effect even if it was made in excess of it, it cannot be said that the judgment has res judicata effect (see Supreme Court Decision 2012Du636, Oct. 11, 2012).

B) Determination

(1) According to the Value-Added Tax Act, in principle, an entrepreneur shall register with the head office having jurisdiction over the place of business within 20 days from the date of commencing the business (the main sentence of Article 5(1)), and the value-added tax shall be reported and paid at each place of business (Article 4(1)). However, an entrepreneur having two or more places of business may register with the head office or the head office having jurisdiction over the head office (Article 5(2)), and an entrepreneur who is registered with the business unit (hereinafter referred to as an “business unit entrepreneur”) may report and pay en bloc at the head office or principal office of the entrepreneur. In this case, the head office or principal office of the entrepreneur shall be deemed each place of business in applying this Act (Article 4(3))

(2) As can be seen, value-added tax is paid for each workplace in accordance with the principle of taxation at each workplace, each workplace becomes a place of tax payment, and each workplace becomes an independent place for taxation purposes, and is a substantial tax unit (see, e.g., Supreme Court Decisions 2010Du23170, May 9, 2012; 2007Du4896, May 14, 2009). In the case of a business operator operating two or more places of business, if the place of business related to taxation is different, the tax unit is different.

(3) Comprehensively taking account of the evidence and the purport of the entire arguments as seen earlier in the instant case, the pertinent disposition subject to the instant decision was related to the value-added tax for the first time in 2011 to 2015 of the Plaintiff’s headquarters. On the other hand, the instant disposition is related to the value-added tax for the first time in 2011 at the Plaintiff’s Port Branch, which is a different business place from the said head office, and thus, the pertinent disposition and the instant disposition are different from the pertinent disposition, and thus, the scope of validity of the instant decision is limited to the pertinent disposition, and even if the relevant disposition was determined in the instant decision or there was a substantial correlation with the instant disposition, it shall not be deemed as different.

(4) Ultimately, the instant decision cannot be deemed as falling under the “decision” under the provision of the special exception exclusion period, which serves as the basis for the instant disposition.

3) Sub-determination

Therefore, the defendant cannot apply the provision of the special exception period to the disposition of this case, and the disposition of this case was made after the lapse of the exclusion period of five years (see, e.g., Supreme Court Decisions 9Du3140, Jun. 22, 1999; 2003Du1752, May 28, 2009).

3. Conclusion

Therefore, the plaintiff's claim is reasonable, and it is so decided as per Disposition.