Early High Court Decision 2016J 0794 ( October 26, 2016)

Whether the instant tax invoice constitutes a false tax invoice

In light of the type of Aluminium transaction, the witness Kim 00 relayed the transaction with the purchaser of this case, and thus, it cannot be deemed that the transaction of this case was processed or put in. Thus, the tax invoice of this case does not constitute a false tax invoice.

Article 17 of the former Value-Added Tax Act

Suwon District Court 2016Guhap61830 (2019.04)

Consideration0000

00. Head of tax office

oly 2018.17

2018.09.04

1. On December 1, 2015, the Defendant’s imposition of KRW 000 of the value-added tax (including additional tax), KRW 000 of the value-added tax (including additional tax), KRW 000 of the value-added tax (including additional tax), KRW 000 of the value-added tax (including additional tax) on KRW 1, 2013, and KRW 000 of the value-added tax (including additional tax) on KRW 2, 2013 shall be revoked. 2. The litigation cost is assessed against the Defendant.

The same shall apply to the order of the Gu office.

1. Details of the disposition;

A. The Plaintiff is a company established for the purpose of the building structure safety diagnosis business and is engaged in the aluminium distribution business from around 2010.

B. The Plaintiff: (a) deducted the supply value of 6,03, 94, 92 from 200 Co., Ltd. (hereinafter referred to as “00”); (b) 300 won from 200; (c) 200 won from 200 won for each of the said tax periods; (d) 300 won from 200 won for five tax invoices; (e) 200 won for five tax invoices; (e) 30 years from 200 won for five tax invoices; (e) 200 won for five tax invoices; and (e) 300 won for five tax invoices; (f) the Defendant issued 200 won for five tax invoices; (f) each of the above tax invoices for five years from 200 won for five tax invoices; (f) 30 years from 200 won for five tax invoices; and (f) the Defendant issued each of the above input tax invoices for five years from 200 won for five tax invoices.

[Ground of recognition] Facts without dispute, Gap evidence 1 through 6, Eul evidence 1 to 4, 12 (including provisional number, hereinafter the same), the purport of the whole pleadings

2. The plaintiff's assertion

A. The Plaintiff acquired ownership by acquiring the goods from KRW 0,00,00,000 by means of possession, amendment, or transfer of the right to claim restitution of the goods, etc. Accordingly, each of the above transactions is not a real transaction and a disguised transaction or a disguised transaction, and thus, each of the tax invoices of this case cannot be deemed a false tax invoice.

B. Even if each of the tax invoices of this case constitutes a false tax invoice, the Plaintiff is a party to a transaction with good faith and negligence since the Plaintiff fulfilled its duty of care in the course of receiving Aluminium from 00s, etc.

C. Therefore, the instant disposition is unlawful.

3. Relevant statutes;

[Attachment 1] The entry is as follows.

4. Determination

(a) Relevant principles, etc.;

Article 17(2)2 of the former Value-Added Tax Act (wholly amended by Act No. 11873, Jun. 7, 2013; hereinafter the same) provides that an input tax amount shall not be deducted from the output tax amount in cases where the details of a tax invoice are different from the facts. In such cases, the meaning of different facts is that where the ownership of income, profit, calculation, or transaction subject to taxation belongs only to the nominal owner, and there is another person to whom such income, profit, act or transaction belongs, the person to whom such income, etc. belongs shall be liable for tax payment in light of the purport of Article 14(1) of the Framework Act on National Taxes, which provides that the necessary entry in a tax invoice shall be deemed as a case where the details of the tax invoice are not identical to those of the parties to the transaction regarding the goods or service, regardless of the formal entry in the relevant tax invoice made between the parties to the transaction, and thus, whether the entrepreneur was aware of such facts, such as the actual supply of the goods or service, and the burden of proof that the transaction constitutes an intermediate supply.

1) Part of the tax invoice related to Nos. 17 through 25 in [Attachment 2]

A) Even though it is not bound by the facts established in a judgment on other civil cases, etc. in a civil trial, the facts established in the already established relevant civil case cannot be rejected without reasonable grounds (see, e.g., Supreme Court Decision 97Da49053, Feb. 24, 1998). This legal doctrine should be equally applied to administrative litigation to which the Civil Procedure Act applies in accordance with Article 8(2) of the Administrative Litigation Act. (b) In full view of the descriptions in subparagraphs 5 and 13 of Article 8 of the Administrative Litigation Act, the following facts are recognized in this court, as well as the overall purport of the arguments.

① With respect to the tax invoices listed in [Attachment 2] Nos. 17 through 25, the director of the tax office having jurisdiction over the tax invoices set forth in the [Attachment 2] considered all the purchase tax invoices and sales tax invoices issued to the Plaintiff, including each of the above tax invoices, that have been processed in relation to the tax invoices set forth in this Section, and that the head of the tax office having jurisdiction over the tax invoices set forth in the 000 tax invoices, and issued to the Plaintiff

② On June 23, 2016, 000, 000 Dong-dong filed a lawsuit seeking revocation of the above disposition. The above court rendered a judgment dismissing all the Plaintiff’s claims on the following grounds: (a) the Plaintiff was the Plaintiff who actually received Aluminium in the instant transaction; (b) the Plaintiff borrowed funds necessary for the purchase of Aluminium from 0 Dong-dong and paid approximately 2% interest to 0 Dong-dong; (c) the method of purchasing the pertinent Aluminium from 00 Dong-dong and adding approximately 2% interest to the purchase amount; and (d) the Plaintiff was supplied as if it was supplied to the Plaintiff and as if it was supplied to the Plaintiff; and (e) the Plaintiff was engaged in a transaction by inserting the name.

③ The Plaintiff appealed as Seoul High Court 2010Nu000, but was dismissed on June 16, 2017. The Plaintiff appealed as Supreme Court 2010Du0000, but the said judgment became final and conclusive on September 28, 2017.

C) In light of the testimony of the witness Kim 00, Kim00, and Cho 00, the plaintiff argued that the contents of his written answer at the time of the tax investigation were not reliable, and thus, the facts acknowledged in the above related case should be rejected in this case. However, even if considering that the contents of each written answer are partly different from the contents of each witness's testimony, it is difficult to conclude that there is any special circumstance to reverse the fact-finding of the above final judgment solely on the ground that there is such circumstance (the main part pointing out that the plaintiff is different from the contents of the above written answer, the main part pointing out that Kim 00, Kim 00, which points out that the contents of the above written answer are 00 or more companies (hereinafter referred to as "0") and the plaintiff could not be directly supplied with Aluminum to the plaintiff. Accordingly, it is difficult to view that the above contents are inconsistent with or inconsistent with the facts recognized in the above related case. Therefore, the plaintiff's assertion that the transaction corresponding to this part of the tax invoice constitutes a tax invoice under the name of the person who actually supplied.

2) The remainder of the tax invoice: Provided, That the remainder of the tax invoice except for the tax invoice Nos. 17 through 25 listed in the separate tax invoice of this case (attached Form 2) shall not be deemed to constitute a false tax invoice in light of the following circumstances acknowledged by comprehensively considering the overall purport of the pleadings as follows: each of the evidence mentioned above, Gap evidence Nos. 7, 8, 10 through 13, 15, 16, Eul evidence No. 6 through 10, and evidence Nos. 14 through 18.

① In light of the characteristics of Aluminium (defluence to easily move because the volume and quality of Aluminium are so heavy) transactions are conducted by a type of cargo guarantee (L/G, Leader) and there are many cases where Aluminium is traded through an intermediate distributor due to changes in the trading unit cost, such as warehouse cost, and cash direct trade practices.

2. As to the transaction related to this part of the tax invoice, Aluminium was delivered using the certificate of goods, certificate of prior cargo guarantee (L/G), etc., and the actual payment was also made between the parties to the transaction.

③ All transactions between the Plaintiff and 00 appears to have been made through the brokerage of Kim hundred. A mere brokerage of the supply of the product was made between the supplier and the user, and it cannot be readily concluded that such transaction was the most unfair transaction because the supplier and the user merely took the form of transaction that collects a certain fee on the basis of the intermediary (the Defendant may obtain a much more profit when the Plaintiff directly supplies alinium to the Plaintiff, but the transaction between the Plaintiff and 00 was made through the intermediate company such as 00s goes against common sense. However, the transaction between the Plaintiff and 00 was made by the intermediary, and the actual Kim0 appears to have been a majority of the transaction between the Plaintiff and the company other than the loan and the Plaintiff, and in such circumstances, it does not seem particularly to have been done without having gone through Kim0).

④ The Defendant asserts to the effect that the transaction constitutes a disguised transaction or breaking in exchange for the transfer of goods at a price of less than 00 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0. However, the Defendant’s 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 200 .

6. On the other hand, the Defendant did not assert or prove any particular assertion as to whether the transaction was a disguised transaction or a transaction in which the pertinent transaction was made by being supplied with Aluminum by an enterprise other than a loan (related to 3 to 7, 14) among the transactions described in attached Form 2. A.

7. The 00th and the 00th representatives were sentenced to the verdict of innocence in the case of violation of the Punishment of Tax Evaders Act regarding the tax invoices, etc. issued to the Plaintiff (Seoul 000, 2010 order000), and the judgment became final and conclusive as is (in accordance with the list of crimes in the evidence No. 9, the judgment of innocence was pronounced in relation to the No. 1 through 6).

8) In addition, the head of the tax office having jurisdiction over the purchase tax invoice (attached Form 2) received from the loan by 000 head of the tax office (attached Form 15, 16, 26 related) and the head of the tax office having jurisdiction over the sales tax invoice issued by 000 head of the tax office (attached Form 2 related to Nos. 4 through 6). In the course of the tax investigation, it seems that the purchase tax invoice, etc. received by the Plaintiff from 0 won and 000 head of the tax office is judged to be normal transaction.

① On December 19, 2016, the prosecutor of the Seoul Central District Prosecutor’s Office rendered a decision not to prosecute the violation of the Punishment of Tax Evaders Act in relation to the receipt of each of the tax invoices in this case against the Plaintiff and the Plaintiff’s representative, and Kim 00, a business director, on the ground that the violation of the Punishment of Tax Evaders Act was not proven.

(10) Part 0 did not proceed with the procedure of protesting for revocation of the disposition, even though the tax authorities received a correction or notification of value-added tax, etc. on the ground that the Plaintiff received false tax invoices. However, this court testified to the effect that this court did not respond to the situation where the representative director, etc. of the loan was under investigation due to the suspicion of fraudulent loan, etc., and the actual representative director, etc. of the loan appears to be subject to criminal punishment for such criminal facts. It seems difficult to readily conclude that the loan was all satisfied the above disposition on the sole basis of the above circumstances. Furthermore, as seen earlier, as long as it is deemed that the Plaintiff was negligent in acting in good faith and without fault on the part where the Plaintiff received purchase tax invoices different from the fact, it is difficult to deem that the Plaintiff was a bona fide and without fault.

D. We examine the scope of revocation among the instant disposition.

The issue of whether a disposition is lawful is determined depending on whether it exceeds a legitimate tax amount. The parties concerned may submit objective tax bases and materials supporting the tax amount until the closing of argument in the fact-finding court. When the legitimate tax amount to be imposed lawfully is calculated based on such materials, only the portion exceeding the legitimate tax amount should be revoked. However, unless otherwise, the entire tax assessment should be revoked, and in such a case, the court does not have the duty to calculate the legitimate tax amount to be imposed actively by its authority (see, e.g., Supreme Court Decision 94Nu13527, Apr. 28, 1995). In this case, the remaining tax invoice related to the tax invoice other than the tax invoice related to Nos. 17 or 25 stated in [Attachment Form 2] of the disposition in this case must be revoked illegally. The legitimate tax amount of value-added tax cannot be calculated on the basis of the materials submitted in relation to each of the two years 1, 2012, and 2013 and 22 years 2013.

5. Conclusion

If so, the plaintiff's claim shall be accepted for the reasons and it is so decided as per Disposition.