Cho High Court 2014 Jeon 3305 ( December 22, 2014)

Although the instant tax invoice constitutes a false tax invoice, it was not negligent in the Plaintiff’s failure to know such fact.

Although the tax invoice received by the plaintiff constitutes a tax invoice entered differently from the fact by the supplier, the disposition of this case is unlawful since the plaintiff was not negligent in not knowing the above fact.

Articles 16 and 17 of the Value-Added Tax Act

2015Guhap10081 Value-Added Tax and Disposition of Revocation of Imposition of Corporate Tax

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The Director of the National Tax Service

June 1, 2016

September 7, 2016

1. On March 25, 2014, the Defendant revoked each disposition of imposition of value-added tax for the second term of 2012 against the Plaintiff on March 25, 2014, KRW 00, value-added tax for the first term of 2013, and KRW 00,000, corporate tax for the business year 2012.

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

Cheong-gu Office

Paragraph (1) shall apply.

1. Details of the disposition;

A. The Plaintiff is a company that runs the business of refining and refining non-ferrous metals.

B. At the time when the Plaintiff reported and paid corporate tax for the second term portion in February 2012, 2013, and for the first term portion in January 2013, and for the business year 2012, the Plaintiff received three copies of the purchase tax invoice of KRW 00,000, total sum of the supply values for the second term in February 2012, 201, from Company A, 16 copies of the purchase tax invoice of KRW 00,000, total sum of the supply values for the second term in February 2012, 2012, and reported and paid the value-added tax and corporate tax by including the above supply value in deductible expenses.

C. The director of a regional tax office considers the purchase tax invoice delivered by the Plaintiff from the Plaintiff as a false tax invoice and notifies the Defendant on the ground that the Plaintiff constitutes so-called "a company (a company that discontinues its business without paying value-added tax for a short time due to explosion of sales without paying value-added tax) that the Plaintiff established under another person's name under the name of the closed-end sales business entity (a company that pretends to be supplied with goods normally as a false company that connects the actual sales place).

D. The defendant, upon the above notification, shall not deduct the relevant input tax amount as stated in the above Paragraph (b) from deductible expenses.

In addition, on March 25, 2014, the Plaintiff issued a notice of correction and notification of the value-added tax for the second term of 2012 ○○○○, the value-added tax for the first term of 2013, and the corporate tax for the business year 2012 (hereinafter collectively referred to as “instant disposition”).

E. The Plaintiff dissatisfied with the instant disposition and filed an appeal with the Director of the Tax Tribunal on June 23, 2014, but the said claim was dismissed on December 22, 2014.

[Ground of recognition] Evidence No. 1-1, 2, 3, Gap evidence No. 2, 4, Gap evidence No. 32-1 through 16, Gap evidence No. 46-1 through 9, Eul evidence No. 1-1, 2, and 3, and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

1) Since the Plaintiff purchased a normally closed Dong from the instant purchaser and received the purchase tax invoice, it does not constitute a false tax invoice under Article 17(2)2 of the former Value-Added Tax Act (amended by Act No. 11874, Jun. 7, 2013; hereinafter “former Value-Added Tax Act”).

2) Even if the Plaintiff’s supplier of the purchase tax invoice received from the instant purchaser is different from the fact, the Plaintiff was unaware of such fact, and the Plaintiff did not know of such fact, and the instant disposition was unlawful as it did not err by failing to know of such fact.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

1) Whether the purchase tax invoice received by the Plaintiff from the instant purchaser constitutes a false tax invoice

A) Relevant legal principles

Article 17(2)2 of the former Value-Added Tax Act provides that input tax amounts shall not be deducted from the output tax amount in cases where the entries of a tax invoice are different from the fact. In such cases, the meaning that it is different from the fact is stipulated that if the ownership of income, profit, calculation, act or transaction subject to taxation is nominal, and there is a separate person to whom such ownership belongs, the person to whom such ownership belongs shall be liable for tax payment and the other person shall be subject to tax payment. In light of the purport of Article 14(1) of the Framework Act on National Taxes that provides that the requisite entries of a tax invoice refer to cases where the necessary entries of a transaction contract between the parties to the goods or service do not coincide with the actual supplier, the price, and the timing of the transaction (see Supreme Court Decision 96Nu617, Dec. 10, 196). Thus, even if a transaction of supplying the goods actually exists, the supplier shall be deemed to fall under the "tax invoice that is different from the facts issued prior to the issuance of the tax invoice (see Supreme Court Decision 292Du52629, Apr. 26, 29, 20129.

Whether a specific transaction constitutes the supply of goods as prescribed by the Value-Added Tax Act among a series of transactions shall be determined individually and specifically by comprehensively taking into account various circumstances, such as the purpose, details, and mode of the transaction, the subject to whom profits accrue, and the payment relationship of the consideration, etc. of each transaction. The specific transaction is a nominal transaction without actual delivery or transfer of goods.

For reasons, the burden of proving that the tax invoice received in the course of the transaction constitutes “other tax invoice than the fact” under Article 17(2)2 of the former Value-Added Tax Act where the input tax deduction is denied is the principle that the tax authority bears the burden (see, e.g., Supreme Court Decision 2008Du13446, Jun. 23, 2009).

B) Whether the purchase tax invoice received from A is false

In full view of the following circumstances, the Plaintiff’s actual purchaser of the closure agreement on the purchase tax invoice delivered by A is not a third party, but a disguised trader who issued only the tax invoice to the Plaintiff under his/her own name. Therefore, the Plaintiff’s tax invoice received by A constitutes a false tax invoice on the ground that the Plaintiff’s entry of the supplier constitutes a false tax invoice, and thus, the Plaintiff’s assertion on this part constitutes a false tax invoice.

shall not be effective.

(1) A is a corporation established on November 1, 2003 with the objective of producing recyclable materials using waste vinyls. A. The representative director A.A. worked for a period of 30 years since C.C. and collected waste vinyls after retirement and established a corporation which manufactures recyclable plastic products, and there was no experience in waste trading.

(2) From November 7, 2012 to January 25, 2013, the director of a regional tax office conducted an investigation of value-added tax for A and secondary value-added tax assessment for A from April 23, 2014 to September 27, 2014. At the time of the investigation of the first value-added tax by the director of a regional tax office, AAB issued a corporate seal impression and a corporate name deposit passbook to BB, and managed BB the deposit details of the said deposit passbook. AA and A were not the actual transaction, and the transfer route was not known. BB filed an input tax return based on the purchase tax invoice and transaction list that BB brought about, and received from the seller, based on the purchase tax invoice and transaction list that BB received from the seller, the BB received the tax invoice from B0 to B, and the BB received the tax invoice from B, and the BB was arbitrarily issued to B, and the BB was issued to B, and received the tax invoice and sales fee from B.

(3) According to the account entry and withdrawal transaction under the name of the household used in the closed transaction, which was managed by BB, the closed deposit amount deposited in AA deposit account was transferred to the bank account in the name of the purchaser on the tax invoice immediately or following day after the deposit.

C) Whether the purchase tax invoice received from BB is false

In full view of the following circumstances, the Plaintiff’s actual purchase place of the closure agreement on the purchase tax invoice delivered by Ghana is a third party, not Ghana, and also a disguised transaction that issued only tax invoices to the Plaintiff in its own name. Therefore, the Plaintiff’s tax invoice received from Ghana constitutes a false tax invoice, and thus, the Plaintiff’s assertion on this part is without merit.

(1) From July 16, 2012 to March 28, 2013, CCC, which served as a representative director of BB, has only a personal history of engaging in publishing business and has no career of engaging in closed-end transactions.

(2) B) On July 16, 2012, B) was commenced on July 16, 2012, and closed on February 15, 2013, and during the said period, B)’s value-added tax return status is as listed below.

Table Omission of the Table

As such, Ghana closed its business after issuance of sales tax invoices and purchase tax invoices representing KRW 40 billion for the short period of approximately eight months.

(3) If B.B. deposits the closed dong purchase price into a deposit account in the name of the purchaser on the tax invoice, the purchaser immediately withdraws the purchase price in cash, and if the purchaser normally runs the business, it is difficult to readily understand that the entire amount of the revenue deposited into the transaction account is withdrawn in cash.

(4) As a result of the tax offense investigation conducted between May 2, 2013 and August 29, 2013 by the director of a regional tax office on Ghana, CCC did not actually participate in the closed Dong transaction, and it was found that DD and BB led to the issuance and receipt of tax invoices on closed Dong transaction between DD and BBB. The director of a regional tax office found, as a result of the aforementioned investigation, that the purchaser of BB constitutes the so-called large carbon industry that generates only sales without purchase, or the most intended entity that received tax invoices from BB, and confirmed that BB tax invoices received from BB were issued without real transaction.

(5) As a result of the above investigation on BBB and DD, the director of the regional tax office alleged that the above 20-year tax invoice had been issued and received a false tax invoice on July 23, 2014 (BB died on September 5, 2013 and was subject to a disposition of non-right of appeal). DDD 2 was a person who supplied the above 20-year tax invoice to the Plaintiff on August 22, 2014 and the above 20-year tax invoice was sentenced to imprisonment with prison labor for the above 10-year tax invoice and the above 20-year tax invoice for the 20-year tax invoice for the above 20-year tax invoice and the above 20-year tax invoice for the 20-year tax invoice and the above 20-year tax invoice for the 20-year tax invoice for the 20-year tax invoice and the 20-year tax invoice for the 20-year tax invoice for each of the above 20-year off tax invoice.

2) Whether the Plaintiff is a trading party with good faith and negligence

A) Relevant legal principles

"The actual supplier and the supplier under the tax invoice are different from the facts under the main sentence of Article 17 (2) 2 of the former Value-Added Tax Act." Unless there are special circumstances where there is no negligence on the part of the supplier, the input tax amount cannot be deducted or refunded, and the supplier under the tax invoice shall be proved by the person who asserts the deduction or refund of the input tax amount (see, e.g., Supreme Court Decision 97Nu4920, Jun. 27, 1997)." However, in full view of the following: (a) the process of issuing and delivering the tax invoice; (b) the price of the goods or services supplied; (c) the specific route and process of the supply of the goods or services; and (d) whether the recipient's place of business or business facilities are confirmed; (d) the actual supplier; and (e) the supplier under the tax invoice is merely the supplier under the name.

(B) transactions with virtual family;

In full view of the following circumstances, Gap evidence Nos. 4, 5, 6, 7, 9, 10, 21 through 33 (including each number), Eul evidence Nos. 2-2, and Eul evidence Nos. 2-2, and witness EE’s testimony, even if the plaintiff did not confirm the close-down operation of Eul’s business at the time of the supply of the closed-dong, the plaintiff did not know that the purchase tax invoice that the plaintiff received from A was different from the fact, i.e., the fact that the actual supplier of the closed-dong was not the actual supplier, and that there was no negligence in failing to know.

(1) Since the Plaintiff’s establishment in 2002, most of the Plaintiff’s sales revenue occurred from the business of purchasing, processing, and resale stuffs that can contain semiconductors (FOSB) and from the business of manufacturing chemical drugs. The Plaintiff was unable to engage in waste metal recycling business before 2012. After the establishment of a metal recycling business team in September 2012, 2012, the Plaintiff entered FF, with the experience of non-ferrous metal wholesale business, as a business director (FF, from January 201 to April 2012, 200, with the trade name of “FF,” and “FF,” with the trade name of “FF”, from January 20 to April 2012, 200. FF was permanently stationed in the Plaintiff’s business establishment, and FF was in charge of non-ferrous metal recycling and business operation, including closed steel wholesale business. At the time of the Plaintiff’s 200-B-B-B-B-B-2000.

(2) The Plaintiff agreed through BB on the transaction terms and conditions of AA or AB, and entered into a contract for closed Dong sales with A on September 13, 2012. From September 14, 2012, the Plaintiff began to engage in closed Dong sales transactions with AB and AA. At the time of receipt of the name of BB and AA (each of the above names was entered as ABA’s director, AAA’s representative director, and representative director), a copy of the business registration certificate entered in AAA(Evidence 24), the representative’s representative’s name entered in AA(Evidence 25), a copy of the bank deposit passbook in the name of AA(Evidence 26), a certificate of personal seal imprint (Evidence 29), a certificate of personal seal imprint (Evidence 29), and a certificate of tax payment issued to the head of the tax office on the place of business where the representative’s name was issued, and the Plaintiff received the certificate of tax payment under the name of 2015.

(3) The waste Dong entered in the purchase tax invoice that the Plaintiff received from A was transferred to the outside fraternity, or the Plaintiff’s sales office, private company (hereinafter “private company”). At the time of the said mooring, the measurement certificate is written by the vehicle number, the vehicle weight, the end weight, the weight of the vehicle end, the weight of the vehicle end, the time limit, and the relay company. The weight of the waste agreement entered in the purchase tax invoice issued by A to the Plaintiff is the same as the weight entered in the purchase tax invoice issued by A, but the purchase tax invoice was issued at a lower amount, if the weight of the waste, etc. was reduced by the weight of the waste, etc. after the guidance at a private company.

(4) Ordinary closed-end transactions do not directly collect them at each place of business and do not load and unload them at one’s own place of business, and there are many cases where intermediate wholesalers directly close-end stores in the relevant place of sale for the reduction of transportation costs and convenience of transactions. According to Article 7 of the sales contract (Evidence A23) entered into by the Plaintiff and A, the Plaintiff bears the duty to remove household goods (waste) and transport them to the designated place of business by the Plaintiff. The closed-end shop after the guidance was transported to the Plaintiff’s place of business or transported to the Plaintiff’s place of business.

(5) The FF did not visit a household’s workplace in order to check the condition of the household’s consent of closure, but if the household transmits a mobile phone of the household’s moving-in photographs at the end of the household, it was confirmed whether the goods were supplied directly to the company, which is the next seller, to the company.

(6) The Plaintiff did not appear to have deposited the closed loan transaction in the Nong Bank account under the name of A, and there is no circumstance that the Plaintiff paid all or part of the deposited amount to the Plaintiff at an abnormal withdrawal and returned it to the Plaintiff.

(7) On June 30, 2014, the Plaintiff’s representative director GGG and director FF received a non-prosecution disposition on charges of violation of the Punishment of Tax Evaders Act, violation of the Act on the Aggravated Punishment, etc. of Specific Crimes (issuance of False Tax Invoice), and violation of the Act on the Aggravated Punishment, etc. of Specific Crimes (issuance of False Tax Invoice) that “GG and FF received 16 copies of purchase tax invoices from A to submit them to the competent tax office, although there was no fact that they were supplied with the closed operation from A at the time of filing the final return of value-added tax for the second term portion on July 25, 2012, as if they received 16 copies of purchase tax invoices from A and submitted them by false entry.”

(c) transactions with Ghana;

In full view of the following circumstances, considering Gap evidence Nos. 4, 5, 6, 35, and 48 (including each number), and evidence Nos. 4, 5, 6, 35, and 48, and the purport of the entire argument in witness EE testimony, it is reasonable to view that the Plaintiff was unaware of the fact that the purchase tax invoice received from Eul was different from the fact, i.e., the actual supplier of the closed consent, and that there was no negligence.

(1) On November 2012, the Plaintiff was making a transaction with A while making a transaction with BB, and the Plaintiff was leaving BB to BB due to a defect in the transaction with BB. However, even after receiving a proposal, the Plaintiff started the transaction with BB.

(2) The Plaintiff agreed on the terms and conditions of the closed transaction with Nabna’s representative director or CCC. On November 20, 2012, the Plaintiff received the name card (Evidence 35-1) and a copy of the identification card (Evidence 35-2 of the A) from CCC. On November 21, 2012, the Plaintiff received a written statement of performance (Evidence 37-1 of the A) accompanied by the certificate of seal impression (Evidence 37-2 of the A) or the certificate of corporate seal impression (Evidence 37-2 of the A). The above written statement of performance is that “I” or “I will pay taxes to the Plaintiff in good faith and assume all responsibilities if there is a tax accident.” The Plaintiff received from Nabna’s representative director or HH’s representative director’s certificate (Evidence 39-1 of the CCC), 40 or value-added tax, 210 or 214 of the CCC’s name, 210 or 214 of the Plaintiff’s name and 2121.

(3) On November 28, 2012, the Plaintiff started a closed-end transaction with BB, and prepared a sales contract (Evidence A38) and goods sales contract (Evidence A) with B on December 1, 2012. The Plaintiff deposited the closed-end transaction price into the Nonghyup Bank, the Bank in the name of BB, the Bank of Korea, and the Company Bank’s deposit account. It does not seem to be the circumstance that the Plaintiff deposited all or part of the deposited amount into the said account in an abnormal manner and returned to the Plaintiff.

(4) The end-dong entered in the purchase tax invoice issued by the Plaintiff’s Na was in place of the outside fraternity, or the Plaintiff’s place of business after the Plaintiff’s place of business was established around December 2012. The measurement certificate drafted at the time of the said mooring is indicated by the vehicle number, the vehicle weight and the end-of-life vehicle weight, and the weight, the end-time time, and the part-time company. The weight of the end-of-life agreement entered in the purchase tax invoice issued by the Plaintiff is the same as that indicated in the purchase tax invoice issued by the Plaintiff, but the purchase tax invoice was issued at a lower amount if the weight of the end-of-life, etc. was reduced by the company’s place of business.

(5) According to Article 6 of the Contracts for the Sale of Goods concluded between the Plaintiff and B, the Plaintiff is obligated to remove B-B goods and transport B-B goods to the place designated by the Plaintiff. In addition, the closure of B-B after mooring at a public measuring station located near the place of business was transported to the Plaintiff’s place of business, or transported to the Plaintiff’s private place of business, which is the Plaintiff’s place of sale. The Plaintiff paid transportation expenses to the transport engineer.

(6) On June 30, 2014, the Plaintiff’s representative director GGG, and director FF received from the public prosecutor of the public prosecutor’s office on June 30, 2014, “GGG, and FF,” and “FF received from BB at the time of filing the final return of value-added tax on July 25, 2012, and from March 25, 2013, the Plaintiff received from BB at the time of filing the final return of value-added tax on March 25, 2013, and submitted the purchase tax invoice 6 and three copies at the time of filing the final return of value-added tax on March 25, 2013, and submitted the false list of tax invoices to the competent tax office having jurisdiction over the violation of the Punishment of Tax Evaders Act, the Act on the Aggravated Punishment, etc. of Specific Crimes (issuance of False Tax Invoice).”

3) Whether the instant disposition is lawful

A) Whether each disposition of this case is legitimate

The Plaintiff’s assertion that the purchase tax invoice received from Ghana is not a false tax invoice, but the Plaintiff did not know that the purchase tax invoice constitutes a false tax invoice. The Plaintiff’s assertion that the Plaintiff did not know that the purchase tax invoice constitutes a false tax invoice is with merit. Accordingly, the Plaintiff’s assertion that there was no negligence on the part of the Plaintiff.

Each disposition of value-added tax in the instant case must be revoked in an unlawful manner.

B) Whether a disposition imposing corporate tax is legitimate among the instant disposition

(1) Article 76(5) of the former Corporate Tax Act (amended by Act No. 11873, Jun. 7, 2013; hereinafter referred to as the "former Corporate Tax Act") provides that where a corporation receives false evidentiary documents from a business operator prescribed by Presidential Decree on the supply of goods or services, it shall collect an amount calculated by adding an amount equivalent to 2/100 of the amount received differently from the fact as corporate tax. Articles 120(3) and 158(1) of the former Enforcement Decree of Corporate Tax Act (amended by Presidential Decree No. 24357, Feb. 15, 2013; hereinafter referred to as the "former Enforcement Decree of Corporate Tax Act") provide that "business operator prescribed by Presidential Decree" under Article 76(5) of the former Corporate Tax Act, excluding a non-profit corporation, "business operator under Article 2 of the Value-Added Tax Act" and "business operator, etc. under Article 28 of the Income Tax Act.

In addition, if it is proved that the facts presumed to have been subject to taxation in light of the empirical rule in the specific litigation process, unless it proves that the taxpayer is inappropriate to apply the empirical rule or that there are special circumstances to exclude the application of the empirical rule in the case, it cannot be readily concluded that the taxation disposition is an illegal disposition that does not meet the taxation requirement (see Supreme Court Decision 2015Du60341, Jun. 10, 2016).

In full view of the number and scale of transactions in which the Plaintiff was actually supplied by the actual closed-end supplier, and the transaction period, etc., based on the empirical rule, it is presumed that the Plaintiff supplied goods and services to the Plaintiff with an intention to continuously and repeatedly create added value. Therefore, the Plaintiff constitutes “the case where the Plaintiff received evidentiary documents different from the fact that the Plaintiff was supplied goods or services from the business operator prescribed by Presidential Decree” under Article 76(1) of the former Corporate Tax Act.

(2) However, in order to facilitate the exercise of taxation rights and the realization of tax claims, additional tax under tax law is an administrative sanction imposed in accordance with the provisions of the tax law in cases where a taxpayer violates a return and tax liability under the tax law without justifiable grounds, and the taxpayer’s intention and negligence is not considered. However, such a sanction is not reasonable in cases where a taxpayer cannot be deemed to have known his/her duty, or where it is unreasonable for the taxpayer to expect the fulfillment of his/her duty, unless there are justifiable reasons to believe that it is unreasonable for the taxpayer to do so (see, e.g., Supreme Court Decision 2010Du1622, Apr. 28, 201). Meanwhile, in light of the function of the tax invoice and the purport of the additional tax, it is unreasonable to view that the Plaintiff was not aware of the fact that the Plaintiff did not receive additional tax under Article 76(5) of the former Corporate Tax Act, as well as the tax receipt, and thus, the Plaintiff was not aware of the fact that it did not receive the tax invoice from the Plaintiff.

3. Conclusion

Thus, the plaintiff's claim of this case shall be accepted on the grounds of its reasoning, and it is so ordered as per Disposition.

partnership.