Whether the purchase tax invoice of gold bullion constitutes a false tax invoice

The disposition that deemed gold bullion purchase tax invoice as a false tax invoice is legitimate, because it was merely the appearance of the transaction for the purpose of refunding the value-added tax, but the additional tax that is not paid for the disguised purchase tax invoice is illegal since there is no legal basis.

Tax amount paid under Article 17 of the Value-Added Tax Act

Article 76 of the Corporate Tax Act

1. The part of the judgment of the court of first instance against the plaintiff that ordered revocation shall be revoked next.

2. The defendant revoked each disposition of imposition of corporate tax of KRW 39,040,670 for the business year 2003 against the plaintiff on October 1, 2005, corporate tax of KRW 76,326,790 for the business year 2004.

3. The plaintiff's remaining appeal is dismissed.

4. 8 minutes of the total costs of the lawsuit shall be borne by the Plaintiff, and the remainder shall be borne by the Defendant.

The decision of the first instance shall be revoked. The defendant shall revoke each disposition of imposition of the value-added tax of 2003 against the plaintiff on October 1, 2005 (to be deemed to be a clerical error on October 11, 2005, value-added tax of 244,663,950 won, value-added tax of 466,773,730 won, value-added tax of 1 year 2004, corporate tax of 39,040,670 won, corporate tax of 203, and corporate tax of 76,326,790 won for 204.

1. Details of taxation; and

A. On July 24, 2003, the Plaintiff is a company established with the location of its head office ○○-dong ○○○○-dong ○○○○-dong, ○○○-dong, ○○○-dong, and for the purpose of manufacturing, selling, exporting, and importing precious metals.

B. When filing a return of value-added tax on February 2, 2003 and January 2004, the Plaintiff deducted the input tax amount on Chapter 25 of the purchase tax invoice equivalent to 9,014,515,000 won (one thousand won or less) from the output tax amount, deducted the input tax amount on Chapter 25 of the total sales amount, 9,343,362,017 won from the output tax amount, 5,494,71, 497 won from the head of ○○, ○○○○, ○○○○○, ○○○○, ○○○○, ○○○, ○○○○, ○○○, ○○○, ○○○○, ○○○, ○○○, ○○○, ○○○, ○○○, ○○, ○○, ○○, ○○, ○○, ○○, ○○, ○○, and 363635.

C. After that, among the purchase tax invoices in Chapter 25 above, the defendant decided to deduct the input tax amount on the ground that the company issuing the tax invoice in this case is "the purchaser of this case", and the gold bullion which became the object of the tax invoice in this case is a false tax invoice not to be traded. On October 1, 2005, the defendant issued 24,663,950 won as value-added tax for the second period of 2003, and 466,73,730 won as value-added tax for the first period of 204, and 466,73,730 won as value-added tax for the first period of 204, and issued 39,040,670 won as additional tax for the business year of 203, 2040, 204, 7636, 790 won as additional tax for the corporate tax (hereinafter referred to as "tax assessment").

(unit: ,000 won)

No.

Purchase Agency

Details of purchase

Export Service

Jinay

Date of purchase

Quantity

(k)

Value of Supply

Amount of tax

Total

Classification

Export Amount

1

○ ○

September 30, 2003

20

273,060

27,306

300,366

○.M.L

Direct Export

292,648

2

○○ Dod

November 27, 2003

40

596,266

59,626

655,892

“”

“”

611,098

3

○ ○

December 18, 2003

26

391,733

39,173

430,906

(ju)○○ Rouritius;

Vicarious Execution

394,860

4

○ ○ Apt

December 24, 2003

40

610,120

61,012

671,132

○.K.L

Direct Export

629.35

5

○ ○

January 30, 2004

30

42,399

44,239

486,638

“”

“”

478,596

6

○ ○ Apt

24, 2004

50

765,350

76,535

841,885

“”

“”

802,917

7

○ ○ Apt

April 29, 2004

50

709,350

70,935

780,285

“”

“”

857,354

8

○○ Dod

April 29, 2004

10

141,600

14,160

155,760,70

9

○ ○ Apt

May 14, 2004

100

1,410,700

141,070

1,551,770

○

“”

1,428,101

Total

366

5,340,578

534,056

5,874,634

[Ground of recognition] Facts without dispute, Gap 1 through 3 evidence, Eul 1 and 2 evidence, each entry in 1 and 2, and the purport of the whole pleadings

2. Whether the taxation disposition is legitimate

A. The plaintiff's assertion

The Plaintiff: (a) purchased gold bullion normally and sold some gold bullion to domestic manufacturers; and (b) reported and paid the value-added tax under the Value-Added Tax Act after having exported some gold bullion overseas; (c) but recognized the Defendant as a normal trade with regard to the domestic tax for the same trade, and recognized the export portion as an abnormal trade, and thus, deemed the instant tax invoice as a tax invoice different from the facts.

B. Relevant statutes

It is as shown in the attached Form.

C. Facts of recognition

(1) A general behavior of an irregular gold bullion transaction for the purpose of evading taxes in the transaction of gold bullion;

(A) According to Article 11(1)1 of the Value-Added Tax Act, in cases where gold bullion is purchased from another wholesaler on the basis of a purchase approval certificate (purchase certificate) upon presenting export-related documents to a foreign exchange bank, the zero tax rate is applied to the input tax amount. On the other hand, Article 106-3 of the former Restriction of Special Taxation Act (amended by Act No. 6852 of Dec. 30, 2002 and enforced from July 1, 2003; hereinafter the same shall apply) and Article 106-3 of the Enforcement Decree of the same Act (amended by Presidential Decree No. 17892 of Dec. 30, 2002) delegated by the authority to supply goods for export, and where gold bullion and gold bullion are supplied to the gold bullion importer's tax-free gold bullion and gold bullion importer's tax-free gold bullion's tax-free gold bullion's tax-free gold bullion's tax exemption from 995/1,000 or more of gold bullion's.

(B) As above, in the case of importing gold bullion as raw materials for export under the Value-Added Tax Act or the former Restriction of Special Taxation Act, zero tax rate is applied to the value-added tax, and from July 1, 2003 to June 30, 2005, the case of importing gold bullion for the purpose of unjustly refunding the value-added tax by abusing the fact that the value-added tax is exempted, and then selling or exporting gold bullion for the purpose of unfairly refunding the value-added tax, or receiving the value-added tax after disguisedly selling or exporting it among the precious metal manufacturers of ○○○-gu Seoul Metropolitan City.

(C) Specifically considering the process of the transaction, the transaction amount shall be distributed in order from the exporting company to the importing company in the reverse direction, through the stages of 1.2 secondary enterprises (e.g., hereinafter referred to as 'cubic enterprises'), 1. Floor wholesalers ? Export enterprises ? Foreign enterprises ? The transaction amount shall be paid in sequence from the exporting company to the importing company.

A gas supply business entity has already been distributed at zero tax rate (before June 30, 2003) or tax-free (after July 1, 2003), and has purchased and sold to a gas supply business entity with 10% value added to the supply price lower than the purchase price (the aggregate value of the value-added tax on the supply price is higher than the purchase price). By withdrawing profits in cash within a short period, it is impossible for the State to collect the value-added tax by withdrawing profits in cash, and the amount equivalent to the value-added tax that the gas supply business entity received from the gas supply business entity is successively transferred to each of the immediately preceding stages by means of deducting the input tax by using the tax invoice that the supplier received from the immediately preceding stage, and ultimately, the exporter is entitled to receive the input tax from the State according to zero tax rate after exporting the gold bullion. Ultimately, the portion corresponding to the value-added tax amount refunded by the gas supply business entity is the ultimate source of profits from the gas supply business.

The above profit is distributed in the form of marin, or the amount calculated by the certain ratio from among the profits (the remaining amount after the purchase price is deducted from the sales price) of an enterprise engaged in the marin business is distributed to the domestic company involved in the margin business in the form of so-called marin that it is separately paid to the involved company, and the export price is also distributed to the foreign company involved in the margin business in the form of the difference between the export price and the import price (the export price is lower than the import price if based on the domestic company)

(2) Type of transaction by the Plaintiff

(A) The instant gold bullion was all imported from a foreign country and distributed as a tax-free gold by an importing company, and was converted from an importing company to a total of 6-8 stages from the importing company to the Plaintiff. The transaction flow after the bombing company is as follows. The transaction flow after all stages of the gold bullion is as follows:

The plaintiff exported all the gold bullion of this case on the date of purchase, and the export price was lower than the price imported by the importing company, and was considerably low compared with international market taxes and domestic market taxes.

No.

Purchase Agency

Date of purchase

Raban Enterprise

The following trade flows of an bombing entity:

1

○ ○

September 30, 2003

○ ○ Trade

○○○ - ○○B & F- ○○

2

○○ Dod

November 27, 2003

○○ Luxembourg

○○ - ○○○ - ○○ aggregate

3

○ ○

December 18, 2003

○○ Dod

○ ○○ - ○

4

○ ○ Apt

December 24, 2003

○ ○ Water Products

○○ Dod-○○ Apt

5

○ ○

January 30, 2004

○ ○ Happa

○ ○○ - ○

6

○ ○ Apt

24, 2004

○ ○

○○ Dod-○○ Apt

7

○ ○ Apt

April 29, 2004

○ ○ Trade

○○ Doice-○○○t

8

○○ Dod

April 29, 2004

○ ○ Trade

○○ Doice-○○○○

9

○ ○ Apt

May 14, 2004

○○ Doice

○○ Dod-○○ Apt

(B) The Plaintiff purchased the instant gold bullion on credit and exported it to Hong Kong located company where no particular human and material facilities are installed. The price was paid by the Plaintiff around the next day of export and was made by means of credit transaction and remitting the gold bullion to the instant purchasing agency, and there was no particular credit guarantee in relation thereto.

(C) On the other hand, all of the above companies converting the gold bullion of this case into the taxable gold in the circulation, sold the gold bullion purchased by them at a price lower than the purchase price (However, the amount added to the value-added tax, i.e., the price for supply, higher than the purchase price), and closed the gold bullion without paying the value-added tax, or the representative was temporarily allowed to do so.

(D) From 195 after graduating from a university, ○○○○○, the representative director of the Plaintiff, was on commission of ○○ Futures, ○○ Futures, ○ Futures (from 1999 to July 2002), ○ Futures (from July 2002 to July 2003). Around July 25, 2003, ○○○○○○○ established the Plaintiff by taking into account the experience of engaging in overseas gold futures trading from ○ Futures, and mainly, ○○○○○, ○○○, ○○○○, ○○○○, ○○○○, ○○○○, ○○○, ○○○, ○○○, ○○○, ○○○, ○○○, ○○○, ○○○, ○○○○, and ○○○○○○, etc., which had been actually operated by ○○○○○, and was directly purchased and exported to ○○○○, etc.

(3) Other.

(A) The representative director of ○○○○○, one of the purchasing places of this case, was convicted of having been involved in the act of evading value-added tax due to the transaction of gold bullion, such as ○○ Trade, ○○ Water Industry, ○○○○ Gac, ○○ ○○ Gac, and ○○ ○○ ○○ Doc, which is one of the purchase places of this case, by using the said companies as the floor wholesaler (see, e.g., Supreme Court Decisions 2007Do3690, Apr. 26, 2007; 2006Da1073, 1096, 1141, etc.).

(B) After establishing and operating a large number of gold bullion importers and a large-scale carbon company, etc., the criminal judgment was found guilty of evading value-added tax on the ○○○ et al. through gold bullion transactions. The criminal judgment on the fact that ○○ et al. actually operated ○○ trade, ○○, ○○, ○○, ○○○, and ○○ trade, a company with a large amount of carbon, and the amount of ○○, ○○, ○○, and ○○, ○○, and ○○○, as an intermediary company, evaded value-added tax by using ○○ as an exporter company (Seoul Central District Court Decision 2006Da713, 790, 956, 1219, Jan. 12, 2007).

(C) On the criminal judgment against Hong ○, ○○○, which is an importing company, is a tax-free gold bullion wholesale business entity; ○○○, which is a tax-free gold bullion wholesaler; and ○○○, ○○○, ○○○○, ○○○, ○○○○, ○○○, ○○○○, ○○○○, ○○○○, and ○○○○○○○, etc., which are exporters and importers, have evaded value-added tax through gold bullion transactions (Seoul High Court Decisions 2006No63, 2007No334, Sept. 13, 2007; 2006Da1142, Jan. 12, 2004).

(D) The ○○○ gold, one of the instant purchasing agencies, is 580 billion won in annual sales in 2003 and 10% in the domestic entire gold bullion market. Large wholesalers, such as the company, sell gold bullion purchased through taxation, and sell gold bullion purchased through zero-rate or tax exemption, at a high price for gold bullion subject to zero-rate or tax exemption, and supply gold bullion with low-rate or tax exemption at a low price, at a low price, at a low price for gold bullion transaction (e.g., purchase tax exemption at 16,068 won per g, and sell gold bullion at 16,230 won in the domestic gold bullion market; on the other hand, gold bullion was not taxed at 14,730 won in value-added tax excluding value-added tax; on the other hand, gold bullion was purchased at 14,730 won in value-added tax; and on the other hand, no tax exemption rate at 162 won in value-added tax exemption at 14,294 won in sales from gold bullion.

(E) On January 2, 2008, ○○○○○ was sentenced to imprisonment with labor for five years and a fine of 150 billion won for the criminal facts that he/she evaded value-added tax in collusion with the actual operators of ○○ trade, ○○○○, ○○○○○, ○○○○, 792, etc., a violation of the Act on the Aggravated Punishment, etc. of Specific Crimes (tax), etc., of the Act on the Aggravated Punishment, etc., of Specific Crimes (tax) on which ○○○○○ was actually operating ○○○○○○○, which was sentenced to a penalty of KRW 1,083 from the taxable period of value-added tax on February 1, 205 and July 4, 2005, 2000 to one of the purchase tax invoices received from a customer to one of the taxable periods of the year 2004, but the Defendant filed an administrative litigation against ○○○○, 2006.

[Ground for recognition] A without dispute, Gap evidence 7, 18, Eul evidence 21-5, Gap evidence 22-14 through 16, Gap evidence 23-1, 23-2, Eul evidence 3 through 10, 13, 14, 20, 22 through 24, Eul evidence 11-1 through 9, Eul evidence 12, 16-18, 2, Eul evidence 15, 19, 21-1 through 3, and the purport of the whole pleadings

D. Determination

(1) As to the value-added tax

(A) Criteria for determination

Articles 6(1), 7(1) and 16(1) of the Value-Added Tax Act provide that a tax invoice shall be issued to an entrepreneur who supplies or receives goods or services, such as a person who delivers or provides services on contractual grounds, and a person liable to pay value-added tax shall also be the entrepreneur who actually supplies the goods or services to an entrepreneur who does not have a nominal legal relationship with the entrepreneur who actually provides or receives the goods or services, and a supplier on a tax invoice differs from that on a tax invoice under Article 17(2)1-2 of the Value-Added Tax Act (see, e.g., Supreme Court Decisions 96Da48930, 48947, Mar. 28, 1997; 2002Do4520, Jan. 10, 2003).

(B) Whether the instant tax invoice constitutes “illegal tax invoice”

The following circumstances revealed in the facts of recognition: (a) the gold bullion was distributed within a very short period of time from the import to the export; (b) there was no added value in the process; (c) the export price was lower than the import price; and (d) the ultimate source of profits earned by each transaction party was not paid by the exporter; and (e) the export price of the gold bullion was considerably low compared with the international market price and domestic market price. The Plaintiff’s transaction parties, including the Plaintiff, were able to obtain much more profits from the transfer of the gold bullion to the Plaintiff, but were merely involved in the purchase of the gold bullion in the instant transaction without any involvement of the Plaintiff’s purchase-price supplier in the purchase-price transaction; and (c) the Plaintiff’s purchase-price was merely subject to exchange of the gold bullion in the instant transaction without any involvement of the Plaintiff’s transfer-price in the purchase-price transaction.

(C) Whether the Plaintiff acted in good faith and without fault

The following circumstances acknowledged by the above facts, namely, ① ○○○, the representative director of the Plaintiff, established the Plaintiff by taking into account the Plaintiff’s experience in engaging in the futures trading from a futures company for a considerable period of time prior to the establishment of the Plaintiff, and mainly purchased and exported the gold bullion export agency. According to the relevant criminal judgment, etc., it is revealed that a large number of the importing companies entrusted the export of the gold bullion export to the Plaintiff as part of the sales business. ② Large wholesalers, one of the purchasing companies of this case, such as ○○ gold, etc., are different from the trading price of gold bullion in the gold bullion transaction from the trading of this case. The Plaintiff appears to have easily known that the exported gold bullion was traded at a low price as the trading price of gold bullion. ③ The supplier was exported on the date of the purchase of the gold bullion from the importing company to the Plaintiff, and the Plaintiff was not aware of the fact that the Plaintiff did not have any particular knowledge of the fact that the gold bullion transaction was conducted without any specific credit guarantee and domestic sales price of this case.

(D) Sub-determination

Therefore, the Defendant’s portion of value-added tax in the instant taxation is lawful, and the Plaintiff’s assertion against this is not acceptable.

(2) Additional tax due to lack of evidence

In applying Article 76(5) of the Corporate Tax Act (amended by Act No. 8141, Dec. 30, 2006; hereinafter “Corporate Tax Act”) on the ground that the instant tax invoice is a tax invoice different from the actual one, the Defendant imposes penalty tax equivalent to 2/100 of the total amount of supply due to transactions in each business year.

However, Article 76(5) of the Corporate Tax Act provides that a corporation supplied with goods or services shall bear additional taxes in cases where it fails to receive regular documents, such as tax invoices, to enhance transparency in the expenditure of a corporation and induce other business operators to cultivate the tax base of the transaction partner. Thus, it is difficult to achieve such legislative purpose merely because the purpose of Article 76(5) of the Corporate Tax Act is legitimate and imposes a duty of faithful reporting on the transaction partner that is subject to tax base training. Thus, a sanction is imposed to require the corporation supplied goods or services to receive regular documents and to additionally pay an amount equivalent to a certain amount of the amount that has not been received for the breach of such duty (see Constitutional Court Order 2004Hun-Ba7, Nov. 24, 2005; Supreme Court Order 2006Hun-Ba88, May 31, 2007). The additional taxes imposed on the Plaintiff under the above provision shall be applied in cases where it fails to receive documentary evidence, such as this case, which is different from the actual transaction (see Supreme Court Decision 2008Du589, May 29, 2089, etc.).

3. Conclusion

Therefore, the part of the plaintiff's claim for the revocation of the disposition imposing corporate tax among the claims of this case is justified, and it is dismissed as there is no ground for seeking the revocation of the disposition imposing corporate tax. Since the part of the disposition imposing corporate tax in the judgment of the court of first instance is unfair with different conclusions, it is reasonable to accept the plaintiff's claim, and the remaining part of the judgment of the court of first instance is just in conclusion, and it is so dismissed as per Disposition.

Related Acts and subordinate statutes

○ Value-Added Tax Act (amended by Act No. 8826 of Dec. 31, 2007)

Article 6 (Supply of Goods)

(1) The supply of goods shall be a delivery or transfer of goods pursuant to all contractual and legal grounds.

Article 7 (Supply of Services)

(1) The supply of services shall be either the supply of services or having others use the goods, facilities or rights, pursuant to all contractual and legal grounds.

Article 16 (Tax Invoice)

(1) Where an entrepreneur registered as a taxpayer supplies goods or services, he shall deliver an invoice stating the following matters (hereinafter referred to as “tax invoice”) to the person who receives the supply as prescribed by the Presidential Decree at the time prescribed in Article 9: Provided, That in the case prescribed by the Presidential Decree, the delivery time may vary:

1. Registration number, name or denomination of the businessman who provides;

2. Registration number of the person who receives;

3. Supply value and value-added tax;

4. Date of preparation.

5. Matters as prescribed by the Presidential Decree other than those under subparagraphs 1 through 4.

(3) The head of a customs office shall deliver a tax invoice for imported goods to the importer under the conditions as prescribed by the Presidential Decree.

Article 17 (Payable Tax Amount)

(2) The input tax amount under the following subparagraphs shall not be deducted from the output tax amount:

1-2. An input tax amount, in case where the tax invoice as provided in Article 16 (1) and (3) is not delivered, or the whole or part of the matters to be entered under Article 16 (1) 1 through 4 (hereinafter referred to as a “necessary entry item”) is not entered or entered differently from the fact on the delivered tax invoice: Provided, That the input tax amount in such case as prescribed by the Presidential Decree shall be

○ Corporate Tax Act (amended by Act No. 8141 of Dec. 30, 2006)

Article 76 (Additional Tax)

(5) Where a corporation (excluding such corporation as prescribed by the Presidential Decree) is supplied with goods or services from a businessman as prescribed by the Presidential Decree in connection with its business and fails to receive the evidential documents falling under any of subparagraphs of Article 116 (2), the chief of the district tax office having jurisdiction over the place of tax payment shall collect as corporate tax the amount calculated by adding an amount equivalent to 2/100 of the unpaid amount, except for the case where the provisions of the proviso of the same paragraph are applied. In this case, the additional tax shall be collected even

§ 116. Receipt and safekeeping of documentary evidence of expenditure

(2) In cases of paragraph (1), where any corporation receives goods or services from a business operator prescribed by Presidential Decree and pays the price therefor, it shall receive and keep the evidential documents falling under any of the following subparagraphs: Provided, That the same shall not apply to cases prescribed by Presidential Decree

1. Credit card sales slip under the Specialized Credit Financial Business Act (in case of transactions using things similar to a credit card as prescribed by the Presidential Decree, it shall include the documentary evidence);

2. Tax invoice under Article 16 of the Value-Added Tax Act;

3. Completion of statements under Article 121 of this Act and Article 163 of the Income Tax Act.