Plaintiff (Attorney Kim Jae-hun, Counsel for the plaintiff-appellant)

Head of Suwon Tax Office

May 30, 2007

Suwon District Court Decision 2005Guhap8031 Decided September 27, 2006

1. Revocation of a judgment of the first instance;

2. Each disposition of imposition of value-added tax of KRW 50,016,180 for the first year of 1999, value-added tax of KRW 30,063,760 for the second year of 1999, value-added tax of KRW 33,981,240 for the second year of 200, value-added tax of KRW 54,847,80 for the second year of 200, value-added tax of KRW 52,69,650 for the business year of 200 shall be revoked.

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

The same shall apply to the order.

1. Details of the disposition;

A. From 1999 to 2000, the Plaintiff received tax invoices equivalent to KRW 1,085,815,037 from Nonparty 2, a shipping agent, and included them in the input tax amount and deductible expenses, and paid the value-added tax and corporate tax accordingly.

B. Regarding this, the Defendant calculated the value-added tax by deducting the input tax amount from the non-party 2 Co., Ltd. on the ground that the Defendant received transportation services from the borrower of the personal vehicle located in the non-party 2 Co., Ltd., on the ground that the value of supply in the above tax invoice is 867,922,221 won (hereinafter “the instant tax invoice”) and different from the fact that it received transportation services from the non-party 2 Co., Ltd., and calculated the corporate tax by applying the non-party 2’s additional tax (10% of the amount of documentary evidence collected). On January 19, 2004, the Defendant notified the Plaintiff of the correction of the corporate tax for each business year (hereinafter “the instant disposition”).

【Ground for Recognition: Facts without dispute; Gap evidence 2 and 3; Gap evidence 1 to 12; Gap evidence 4-1 to 4; Gap evidence 5; the purport of the whole pleadings

2. Determination on the legitimacy of the instant disposition

A. The plaintiff's assertion

(1) The plaintiff received transportation services from the non-party 1 corporation and provided transportation services using the vehicle belonging to the non-party 2 corporation, and the non-party 1 corporation issued sales tax invoices in the name of the plaintiff and traded them in normal terms by issuing them to the non-party 2 corporation. The tax invoice of this case issued in the name of the non-party 2 corporation cannot be deemed a false tax invoice. Thus, the disposition of this case on a different premise is unlawful.

(2) The value-added tax amount reported and paid by Non-Party 2 Company is unlawful as the double taxation where the instant disposition was made by deducting the input tax amount from the input tax amount.

(b) Related statutes;

It is as shown in the attached Form.

(c) Fact of recognition;

(1) On June 1, 1998, the plaintiff transported the products of the non-party 1 corporation between the non-party 1 corporation and the non-party 1 corporation entered into a transportation contract with the purport that the plaintiff will pay transportation charges to the plaintiff according to the transportation fare table by section, and the contract has been renewed by changing transportation charges each year.

(2) Vehicles offered for goods transport services corresponding to the instant tax invoice were entered into the non-party 2 corporation and registered in the name of the non-party 2 corporation. However, the non-party 3, including the non-party 3, who had been affiliated with the non-party 5 corporation (the non-party 2 corporation was defaulted on February 1998).

(3) A private borrower, including Nonparty 3, etc. (hereinafter “Nonindicted 3, etc.”) entered into an individual transport contract with the Plaintiff as a land owner affiliated with Nonparty 2 Co., Ltd., and established an allocation plan for the quantities received from the Plaintiff, and provided transportation services.

(4) Of the transportation charges that the Plaintiff received from Nonparty 1 Co., Ltd., the Plaintiff paid to Nonparty 3, etc. a part of them under the name of management expenses, insurance premiums, oil bags, etc., and distributed the remainder.

In particular, the Plaintiff transferred 10% value-added tax on transport charges received from Nonparty 1 corporation to Nonparty 3, etc. quarterly, and Nonparty 3, etc. paid it to Nonparty 2 corporation. Nonparty 2 reported value-added tax en bloc and issued and issued the instant tax invoice to the Plaintiff.

[Ground for Recognition: Facts without dispute; Gap evidence 7, Gap evidence 8, Gap evidence 9-1 through 20, Gap evidence 10-1 through 3, Gap evidence 12 through 16, Eul evidence 12 through 16, Eul evidence 13, Eul evidence 13, non-party 3, 6, and 7 of the court below's witness, fact-finding results to the head of Yeongdeungpo-gu Office in the trial, and the purport of the whole pleadings]

(d) Markets:

(1) Articles 16 and 17 of the Value-Added Tax Act provide that when the service is supplied, the entrepreneur’s registration number, name or title, registration number, value-added tax, and value-added tax amount shall be issued, and where the whole or part of the above entries are not entered or entered differently from the fact, the input tax amount shall not be deducted from the output tax amount.

(2) According to the agreement between the owner of the trucking transport business and the owner of the trucking transport business in substance, an automobile is registered in the name of the owner of the trucking business and reverted to the owner of the trucking business, and the borrower conducts a business on his/her own management and account, and the owner of the trucking transport business pays the purchase fee to the owner of the trucking transport business, even if the owner of the land directly operated and managed the vehicle in his/her own name and entered into a cargo transport contract in the name of the sub-owner, the legal effect of the act of the sub-owner acting for the sub-owner as an agent for the operation and management of the vehicle by delegation by the sub-owner, which is the owner of the vehicle. This does not change in terms of the burden of value-added tax under the trucking contract.

As to this case, according to the facts of recognition as seen earlier, the non-party 2 corporation and the non-party 3 et al. register an automobile under the name of the non-party 2 corporation and the external legal effect of the transportation contract and other legal acts belong to the non-party 2 corporation. In the inside of the country, the non-party 3 et al. conducted business on their own management and account, and concluded a land entry contract with the non-party 2 corporation with the form of payment of management expenses, insurance premium, etc. as the land entry fee, and provided the plaintiff with the cargo transport service. The legal effect of the cargo transport contract, which serves as the basis for the provision of the transportation service, under the above land entry contract, is between the plaintiff and the non-party 2 corporation, and even if the actual performance of the transportation service or the conclusion of the transportation contract was made by the non-party 2 corporation, the provider of the transportation service under the transportation contract, which is the non-party 2 corporation, shall not be deemed the false tax invoice received by the plaintiff from the non-party 2 corporation.

Therefore, the instant disposition, which did not deduct the input tax amount pursuant to the instant tax invoice issued by Nonparty 2, is unlawful.

3. Conclusion

Therefore, the plaintiff's claim seeking the cancellation of the disposition of this case is justified, and the judgment of the court of first instance is unfair with different conclusions, so it is so accepted by the plaintiff's appeal and the judgment of the court of first instance is revoked and it is so decided as per Disposition.

Judges Cho Yong-ho (Presiding Judge)