Seocho 209west 1973 (Law No. 207. 20)

If reported sales are asserted as processed sales, deduction of income amount shall be made.

As long as there was no actual domestic sales as reported by the sale, it shall be deemed that it is confirmed as it is, unless the procedures for request for reduction or correction are followed.

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

1. The plaintiff's claim is dismissed.

2. Litigation costs shall be borne by the plaintiff.

The Defendant’s disposition of imposing global income tax of KRW 100,160,750 for the year 2007 against the Plaintiff on January 1, 2009 shall be revoked.

1. Circumstances of the imposition disposition;

A. From November 28, 2005, the Plaintiff reported a comprehensive income tax for the year 2007 while engaging in the sales business of home appliances in the name of ○○○○○○-gu ○○○○○ ○○ 2, △△△ 106, the Plaintiff reported a comprehensive income tax for the year 2007. The Defendant discovered the Plaintiff’s omission of KRW 209.921.258 out of the amount of sales reported during the first taxable period in the year 2007, and notified the Plaintiff of a correction and notification of KRW 100,160,750 of the global income tax for the year 207 (hereinafter “instant disposition”).

B. Accordingly, the Plaintiff filed an appeal with the Tax Tribunal on April 22, 2009 on the instant disposition on February 3, 2009, but was dismissed on July 20 of the same year.

[Recognition] Facts without any dispute, Gap No. 1, 2, and 3

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

1) The Plaintiff was found to have omitted returns of KRW 209,921,258, but 155,939,018, out of the sales on the first sale tax invoice issued by the Plaintiff, was falsely appropriated at the request of the customer in 2007. Thus, it is unreasonable that this part should be excluded from the amount of income belonging to the year 2007.

2) Although the Plaintiff submitted to the Defendant all available transaction data, such as a tax invoice and deposit passbook for KRW 155,939,018 relating to the processed sales, the Defendant did not recognize it and demanded the Plaintiff to verify the customer involved in the transaction with the Plaintiff. This disposition of imposing taxes is unfair because the Plaintiff bears the burden of proof, despite the existence of the office imposing the burden of proof.

B. Relevant statutes

Attached Form is as shown in the attached Form.

C. Determination

1) As to the assertion of deduction from the issue of false sales tax invoice

According to the provisions of Article 17 of the Value-Added Tax Act, where the tax invoice under Article 16 is not delivered, or where the whole or part of the requisite entry items are not entered or entered differently from the fact in the delivered tax invoice, the input tax amount should not be deducted from the output tax amount even if the taxpayer was actually supplied goods or services. However, in the case of a sales declaration, it is reasonable to deem that the taxpayer was actually engaged in such sales as long as the taxpayer voluntarily declared the sales. Even if there was no domestic sales, in the value-added tax, which is the tax method by which a tax return was filed, the portion reported by the taxpayer as the sales is finalized (if the sales tax amount is reported excessively, the taxpayer should take the procedure of a request for reduction or correction, etc.). Therefore, the portion reported as the sales should not be deducted from the total sales amount under the principle of equity (see Supreme Court Decision 2004Du

As to the instant case, the Plaintiff asserted that the remaining amount after deducting the amount actually deposited from the sales credit accrued during the period of January 2007 from the actual passbook should be deducted from income. However, in light of the above legal principles, even if the Plaintiff did not report the above amount by itself as long as there was no domestic sales, it shall be deemed that the Plaintiff became final and conclusive as long as the Plaintiff did not take the procedure of request for correction of reduction. Therefore, it shall not be deducted from the processing sales.

Furthermore, the following circumstances acknowledged by comprehensively taking account of the overall purport of evidence Nos. 4-1 through 5, evidence Nos. 5-4 through 6, evidence Nos. 7-1 through 4, evidence Nos. 8-1 through 4, and the overall purport of argument Nos. 8-1 through 4, and the Plaintiff’s counter-party to the transaction, namely, the Plaintiff’s deduction of the input tax amount based on the tax invoice received from the Plaintiff and uses it as necessary evidence of global income tax or corporate tax (if the Plaintiff’s assertion is true, the transaction partner should bear additional value-added tax and global income tax). The Plaintiff submitted a confirmation that he/she was aware of the processing transaction from the transaction partner, and it is difficult to view it as a genuine document without signing the same form. The above transaction partner did not prepare and conclude the document Nos. 5-2 to the Defendant, and it is difficult to view that there was an actual transaction. Meanwhile, the Plaintiff’s assertion that the remaining amount of income collected from the sales claim No. 1 in 20007, which the Plaintiff did not claim.

Therefore, the plaintiff's above assertion does not appear to have any mother or reason.

(ii)as to the burden of proof of the tax imposition disposition:

In general, the burden of proving the facts of taxation requirement in a lawsuit seeking revocation of disposition imposing tax shall be borne by the imposing authority. However, if it is revealed that the facts of taxation requirement have been presumed in light of the empirical rule in the course of a specific lawsuit, it cannot be readily concluded that the other party is an unlawful disposition that fails to meet the taxation requirement, unless the other party proves that the facts in question were not eligible for application of the empirical rule (see Supreme Court Decision 2002Du6392, Nov. 13, 2002).

With respect to this case, the Plaintiff issued and delivered a tax invoice on the premise of actual transactions, entered the account book in the account book of the Plaintiff, and confirmed the return of value-added tax and global income tax. The Plaintiff asserted that the business owner of the customer alleged to be a processed sales had actual transactions. As seen earlier, the Plaintiff, as a person subject to double-entry bookkeeping, was responsible for double-entry bookkeeping, by recording the sales and purchase through double-entry bookkeeping, and issuing a tax invoice for sales based on this account book and filing a report of value-added tax and global income tax. In light of the fact that the requirements for imposing global income tax in this case are presumed to be in light of the empirical rule, and since the Plaintiff did not give any specific counter-proof to this, the Plaintiff’s assertion that the Defendant, who was the tax authority, has

3.In conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and it is so decided as per Disposition.