Cho High Court Decision 2008Da3219 ( November 28, 2008)

Whether a processed tax invoice related to the purchase of scrap metal has been received;

A disposition imposing value-added tax, etc. is legitimate because the claimant fails to present objective and apparent evidence that can confirm the fact of transaction, even though the person suspected of being the other party to the transaction was subject to a disposition without suspicion from the prosecution.

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

1. The plaintiff's claim is dismissed.

2. The plaintiff shall bear the litigation costs.

With respect to the Plaintiff, the head of Defendant ○○ Tax Office’s imposition of value-added tax of KRW 106,193,480 for the first term of July 3, 2008 on July 3, 2008, and the head of Defendant △△ Tax Office’s imposition of global income tax of KRW 68,358,780 for the year 2007 shall be revoked.

1. Circumstances of dispositions;

가. 원고는 2006. 1. 25.부터 2007. 9. 30.까지 □□ □□구 □□2동 1321에서 '♤♤♤라'라는 상호로 고철 수집 및 판매업을 영위하였는데, ♡♡비철이라는 상호로 비철・ 고철 등 도소매업을 영위하는 친구 김AA로부터 공급가액 984,647,000원 상당의 세금 계산서를 받아 2007년 1기 부가가치세 확정신고시 매입세액으로 공제하였다.

B. As a result of confirming the payment relationship of KRW 984,647,00 of the supply value stated in the above tax invoice after conducting an investigation of tracking the distribution process of waste resources, such as scrap metal, against the plaintiff and KimA (hereinafter "tax investigation of this case"), the head of △ Regional Tax Office determined that the tax invoice for the above amount was a processed transaction without a real transaction and notified the defendants.

C. Accordingly, the Plaintiff: (a) the head of the Defendant ○○○ Tax Office did not deduct the input tax amount for KRW 583,915,045; and (b) corrected and notified KRW 101,913,140 as the value-added tax for the first period of 2007; and (c) the head of the Defendant △△△ Tax Office corrected and notified the global income tax amount of KRW 68,358,780 as the global income tax for the year 2007 as the global income tax for the reason that the said value of supply was not

D. On September 4, 2008, the Plaintiff was dissatisfied with each of the instant dispositions and requested to the Tax Tribunal for an inquiry on each of the instant dispositions, but the Tax Tribunal dismissed the Plaintiff’s request on November 28, 2008.

[Ground of recognition] Facts without dispute, Gap evidence 1-2, Eul evidence 1-4, Eul evidence 5-1 and Eul evidence 5-2, the purport of the whole pleadings

2. Whether each of the dispositions of this case is legitimate

A. The plaintiff's assertion

From April 13, 2007 to September 30, 207, the Plaintiff is supplied with scrap metal equivalent to KRW 1,59,425,100 ( KRW 984,647,00 for January 1, 2007 + KRW 614,778,100 for February 2, 2007) on a 11-time basis, and accordingly received tax invoices. In fact, the Plaintiff actually transferred 1,091,100,000 out of the scrap metal to the account of KimA, and the remaining amount of KRW 690,40,000 for the Plaintiff’s export of scrap metal to the Chinese trading company and then transferred the advance payment to the account of Kim Jong, and thus, the Plaintiff was not subject to the disposition of imposition of KRW 1,781,50,000 for the total amount of KRW 1,500,00 for the Plaintiff and the Chinese trading company’s actual payment of KRW 1,609,000.

(b) Related statutes;

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

(c) Fact of recognition;

(i)the details of transactions and transfers between the plaintiff and the KimA;

가) 김AA는 ◇◇시 ◇◇동 115-5번지 지상에 컨테이너박스를 설치한 후 2007. 4. 3. '♡♡비철'이라는 상호로 사업자등록을 하여 본격적으로 비철・고철 수집 및 도소매업을 영위하기 시작하였다.

B) According to the contents of KimA’s 2007 and 2nd value-added tax return, KimA reported the above amount to the Plaintiff as sales tax amount, during the first 2007 taxable period (from April 3, 2007 to June 30, 2007), KimA reported the total of KRW 1,047,417,00 purchased from UNCC and 39, as sales tax amount. From April 18, 2007 to June 27, 2007, the said scrap metal amount was sold to the Plaintiff at KRW 984,647,00,00 and reported the above amount to the Plaintiff as sales tax amount; from 207 taxable period (from 207 July 1, 2007 to 30, 207 to 207, the Plaintiff reported the input tax amount to KRW 1,047,571 to 207,57,57,271 to 27,57,264,27,25,27,27,27

C) According to the Plaintiff’s inquiry table, the Plaintiff’s statement of value-added tax return and the list of total tax invoices for 1, 207 and 2 years from January 1, 2007 to June 30, 207 (1, 2007) the amount of supply value of 1,264,308,619 won that the Plaintiff reported as the input tax amount during the trading period of 1,207 to June 30, 207 falls under KRW 78% of the total input tax amount (984,647,00 won / 1,264, 308, 619 won x100, 1000 won / 1000, 207, 308, 107, 378, 478, 207, 478, 197, 197, 207, 197, hereinafter the same).

D) Examining the national bank account under the Plaintiff’s name, City bank account, national bank account under the name of KimA, Industrial Bank, Industrial Bank of Korea, and agricultural cooperative account, the Plaintiff transferred KRW 77,000,000 from the national bank account under the Plaintiff’s name to KimA bank account on July 11, 2007, from that time to August 16, 2007, total of KRW 1,117,061,060 to KimA.

마) 원고는 중국 소재 ◆◆◆U 등 고철수집 업체에 고철을 수출하기로 하고 이를 □□세관에 신고하였는데 원고 신고의 수출실적명세서에 의하면, 고철 수출은 2007. 6. 9.부터 2007. 7. 27.까지 결제방법은 단순송금방식으로, 결제통화는 미국 달러로 하여 이루어졌다고 되어 있다. 한편 김AA 명의의 국민은행, 중소기업은행 계좌를 보면, '주JJ', 'KKZ' 등 원고가 아닌 제3자 명의로 2007. 6. 12. 60,400,000원이, 2007. 9. 14.부터 2007. 9. 17.까지 합계 630,000,000원(2007. 9. 14. 103,000,000원 + 2009. 9. 15. 277,700,000원 + 2009. 9. 16. 162,940,011원 + 2009. 9. 17. 86,360,000원)이 김AA에게 송금되어 총 690,400,000원(60,400,000원 + 630,000,000원)이 제3자 명의로 김AA에게 지급되었는데, 원고는 이 법정에서 위와 같이 제3자 명의로 김AA에게 송금된 금원은 원고가 김AA에 대한 고철대금 지급의무를 이행하기 위하여 원래 원고가 위 중국 거래업체에 고철을 수출하고 받을 수출 선급금을 위 중국 거래업체로 하여금 제3자의 명의를 이용하여 바로 김AA 계화로 송금하도록 한 것으로서 위 690,400,000원도 원고가 김AA에 지급한 고철대금이라고 진술하였다.

2) Results of the instant tax investigation by the Director of △△ Regional Tax Office

A) Transaction amount between the Plaintiff and KimA by reference table of the Purchase Transaction Agency

1,759, 367,610 won [1,59, 425,100 won + value-added 158,942,510 won (1,59,425,100 won x 10% of value-added 1,58,942,510 won)] excluding KRW 1,117,061,060 (1,759,367,610 won - 1,117,061,060 won - 1,117,060 won - 1,06,50 won (value-added 583,915,045 won + value-added 58,391,504 won) that the Plaintiff paid to KimA in his/her name - did not actually make a transfer to a third party transaction under the actual name of the Plaintiff.

B) As a result of the verification of the UCC and 39 other than the UCC, whose name was designated as a high iron purchaser in the report of value added tax on January 2007, 2007, KimA stated that five persons, including the deceased or the resident registration cancellation, were not contacted, and five persons, including AlE, KimF, Park GG, Cho HH, and Lee LL, were denied the transaction with the Kim Young-young and made a statement that their names were stolen. The remaining 18 persons, including Kim Young-young, were traded with the Plaintiff, other than Kim Young-young.

C) On the grounds that the Plaintiff and KimA were issued a tax invoice through the processing transaction by the Plaintiff and KimA, the director of the △ Regional Tax Office accused the Plaintiff and KimA for the suspected violation of the Punishment of Tax Evaders Act. However, the prosecutorial office accepted the same claim as described in paragraph (1)(e) against the Plaintiff and KimA, that there was an actual transaction equivalent to KRW 1,17,061,060 between the Plaintiff and KimA, and that there was a third party’s transfer of money to KimA.

(iii)a statement in this Court of Justice of the Glaver;

가) 김AA는 이 법정에 증인으로 출석하여,① 실제로 원고에게 2007. 4.경 부터 2007. 7.경까지 1,759,367,610원 상당의 고철을 공급하면서 11장의 세금계산서를 발행하여 주었고,② 자신의 계좌에서 제3자 명의로 송금 받은 금원은 원고가 고철을 수출한 중국 업체로 하여금 원고가 지급받을 수출 선급금을 제3자 명의를 이용하여 직접 자신에게 송금하도록 하여 지급받은 것이며, ③2007. 4.경 ♡♡비철을 개업할 당시 총 자본금은 20,000,000원 정도이고, 그 중 김AA 본인의 자본금은 5,000,000원이었는데, 유CC 외 39명에게 1,047,417,000원 상당의 고철을 구입하면서 위 금액을 즉시 현금으로 지급하였고, 유CC 외 39명에게 지급한 금원은 매출대금과 원고로부터 받은 수출 선급금으로 지급한 것이며, 보통 영세업자로부터 고철을 구입하면서 바로 현금을 지급하였고,④ 자신은 주로 영세업자들과 거래를 하여 세금계산서를 받지 못하는 경우가 많았는데, 2008. 1. 초순경 ♡♡비철의 사무실로 쓰던 컨테이너박스에 화재가 발생하여 위 컨테이너박스에 있던 고철매입자료가 전부 소실되어 버렸는데, 매출관련서류는 다행히 가방 속에 있어서 화재로 소설되지 않았다고 진술하였다.

나) 그러나, 김AA는 ♡♡비철 자체의 자본금이 부족한 상태에서 바로 현금으로 지급하여야 할 10억 원 이상의 고철매입대금을 어떻게 조달하였는지에 대하여 정확한 답변을 하지 못하였고, 고철 매입처인 유CC 외 39명과의 관계에 대하여도 이들을 잘 알고 있다고 답하면서도 그들의 주민등록번호, 핸드폰 전화번호 등의 사항을 알게 된 계기에 대하여 명확하게 답을 하지 못하였다.

[Reasons for Recognition] Each of the evidence set forth above, Gap evidence Nos. 2 and 3-1, 2, 5, Gap evidence Nos. 6-1, 2, 7, Gap evidence Nos. 8 and 9-1 through 4, Gap evidence Nos. 10-2, Gap evidence Nos. 11-1 through 8, Eul evidence Nos. 11-6, Eul evidence Nos. 9-1 through 5, Eul evidence Nos. 10-1 through 10-5, Eul evidence Nos. 11-2, 3, Eul evidence Nos. 12-1, 12-15, part of witness Kim A's testimony, the purport of the whole pleadings

D. Determination

1) In a lawsuit seeking revocation on the grounds of illegality of taxation, the tax authority bears the burden of proving the legality of disposition and the existence of the taxation requirement. Therefore, in principle, the tax authority bears the burden of proving the legality of disposition and the existence of the taxation requirement. However, in a case where a tax invoice on a part of the expenses reported by a taxpayer has been falsely prepared without a real transaction, it is considerably proven by the tax authority to the extent that it is reasonable for the tax authority to dispute whether it is an actual cost, and the taxpayer’s assertion and the other party to the payment have proved to the extent that it is false, it is necessary to prove that it is easy for the taxpayer to produce data, such as books and evidence, regarding the fact that such expenses have been actually paid (see, e.g., Supreme Court Decision 20

2) In full view of the above facts and the following circumstances revealed therefrom, it is reasonable to deem that the tax invoice for KRW 583,915,045 of the supply value in the scrap metal transaction between the Plaintiff and KimA was prepared and issued without a real transaction and the transaction equivalent to the above amount was processed transaction. The witness KimA’s testimony is not trustable, and the Plaintiff was subject to a disposition of non-guilty suspicion by the prosecution against the suspected violation of the Punishment of Tax Evaders Act due to the issuance of a false tax invoice does not interfere with the above recognition.

① 이 사건 세무조사결과 김AA가 2007년 1기 부가가치세 신고에서 고철 매입처로 지목한 사람들이 허무인이거나 일부는 명의도용을 주장하면서 고철 판매 사실을 부인하고 있으며, 김AA는 그들과 잘 아는 사이라고 주장하면서도 그들의 인적사항에 대하여 구체적으로 밝히지 못하고 있는 점, 고철매입대금에 대하여 김AA는 원고로부터 선급금을 받아 고철을 구입하였다고 주장하나, 원고로부터 김AA에게 실제로 대금이 송금된 시기는 2007. 7. 11.경인데 김AA가 고철을 공급하기 시작한 시기는 2007. 4. 경이어서 김AA의 위 진술과 상이하고, 김AA가 ♡♡비철을 개업한 시기인 2007. 4. 3.로부터 3개월간 어떻게 고철구업대금을 마련하였는지 여부에 대하여도 김AA가 제대로 답변을 하지 못하고 있는 점 등에 비추어 볼 때 김AA가 실제로 매입처로 지목된 사람들로부터 고철을 구입하여 이를 원고에게 공급하였는지 자체도 의심이 간다.

② In the return of value-added tax in February 2007, KimA filed a return on the input tax amount of KRW 4,521,510 with the input tax amount of KRW 4,521,510 and did not submit any supporting material to prove the purchase of the horses. On the other hand, the reported output tax amount of KRW 2,962,427,635 exceeds the input tax amount of KRW 2,962,427,635. In addition, on January 1, 2008, KimA had the supporting material of KRW 4,521,510 as a result of a fire in a container stuff, and the sales related documents were insufficient in light of the above assertion. Accordingly, it is general that the general business operator’s use of a new material to keep the input tax amount of KRW 4,521,510 with the input tax amount of KRW 4,521,510, and it is difficult to find it easy in general.

③ In light of the fact that the output tax amount of KimA was generated solely from the transaction with the Plaintiff, and that the transaction amount between the Plaintiff and KimA constitutes 78% of the total transaction amount of the Plaintiff’s high steel purchase, it is difficult to view that there was a normal transaction between the Plaintiff and KimA. Meanwhile, in light of the fact that the KimA testified that from this law to 2007, the Plaintiff introduced some of the persons who were designated as the purchaser of the scrap metal from the return of value-added tax in 2007 to the purchaser of the scrap metal, it would be possible to see that the Plaintiff would not in fact allow the purchaser of the scrap metal in the actual transaction to deliver through KimA for more deduction of the input tax amount.

④ The KimA asserts that the money that he received in his name was transferred to himself by a Chinese trader to himself under the name of a third party by using the Plaintiff’s advance payment for export of scrap metal. The time when the Plaintiff shipped the scrap metal to be exported to a Chinese trader on June 9, 2007 and the last date of shipment is July 27, 2007, and the time when the money was transferred to a third party to the bank account in the name of KimA was June 12, 2007, and thereafter, the money transferred in the name of a third party on September 14, 2007 cannot be deemed as an advance payment for export. In addition, if the Plaintiff’s settlement currency was US US dollars, which was transferred to the Plaintiff’s bank account in the name of KimA, it is difficult to believe that the money was transferred to a third party in the name of a Chinese trader in accordance with the empirical rule, a local currency in Korea.

3) Ultimately, taking into account the aforementioned various circumstances, there may be room to view that the entire scrap metal transaction between the Plaintiff and KimA constitutes a processing transaction rather than a real transaction. However, in conducting the instant tax investigation, the head of Pacific Regional Tax Office recognized that the transaction amounting to KRW 1,17,061,060, which the Plaintiff transferred to KimA from July 11, 2007 to August 16, 2007, was a real transaction and determined as a processing transaction only for KRW 1,759,367,610, the difference between the Plaintiff and KimA company and KRW 583,915,045, which is the difference between the said amount and KRW 583,915,045. Accordingly, each of the dispositions of this case, which was not included in necessary expenses, is legitimate.

3.In conclusion

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