early 2010 Heavy1028 ( October 25, 2010)

If the processing is purchased or sold, the exclusion period for imposition shall be five years.

Even if the input tax amount is processed, it shall be deemed that there was a tax evasion or tax refund deduction of value-added tax related to the processing transaction only for the portion exceeding the output tax amount of the processing. In the case of purchase and sale of the processing, the exclusion period for imposition of additional tax shall be five years since there is no actual tax evasion amount

2010Guhap15910 Revocation of Disposition of Imposition of Value-Added Tax

○○ Co., Ltd.

○ Head of tax office

January 20, 201

February 17, 201

1. The Defendant’s imposition of value-added tax of KRW 199,906,050 against the Plaintiff on December 4, 2009 shall be revoked.

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

The same shall apply to the order.

1. Details of disposition;

(a) Acceptance of purchase and sale tax invoices for processing;

1) The Plaintiff (previous AAz.) is a company that manufactures and sells information processing equipment from November 18, 1989.

2) The Plaintiff received purchase tax invoices of KRW 4,997,651,000 (hereinafter referred to as the “purchase tax invoices of this case”) from BBS Co., Ltd. (former ○○○○ Co., Ltd.) and △△△ C&C Co., Ltd. (hereinafter referred to as “the purchaser of this case”) without real transactions during the 2001 taxable period of the Second Value-Added Tax (hereinafter referred to as July 1, 2001) and filed a return on value-added tax accordingly. The Plaintiff issued and issued the purchase tax invoices of the same value (hereinafter referred to as “the sales tax invoices of this case”) to △ Communications Co., Ltd. (hereinafter referred to as “the seller of this case”).

B. Disposition of this case

On October 7, 2009, the Defendant conducted a tax investigation on the second-term value-added tax for the Plaintiff on October 30, 2001. On December 4, 2009, the Defendant corrected and notified the Plaintiff of KRW 19,906,050 of the value-added tax (hereinafter “instant disposition”).

C. Administrative appeal

On January 21, 2010, the Plaintiff filed an objection against the Defendant on January 21, 2010, but was dismissed on February 11, 2010, and filed an appeal with the Tax Tribunal on March 10, 2010, but was dismissed on August 25, 2010.

[Ground of Recognition] Unsatisfy, Gap evidence 1, 2 (including paper numbers), Eul evidence 1 and 2;

The purport of all pleadings

2. Whether the instant disposition is lawful

A. The parties' assertion

1) Plaintiff

Even if the Plaintiff entered the supply value on the purchase sales tax invoice of this case on the purchase sales invoice of this case by purchaser, there is no tax amount actually evaded value-added tax or unjustly deducted, which does not constitute “cases where a taxpayer evades national tax or obtains a refund or deduction by fraudulent or other unlawful means” under Article 26-2(1)1 of the Framework Act on National Taxes, which applies the exclusion period of imposition of national tax in 10 years, and thus, five years, which is the exclusion period of imposition of national tax under Article 26-2(1)3 of the Framework Act on National Taxes, should be applied to the penalty tax of this case. Accordingly, the disposition of this case is unlawful after the expiration of the exclusion period of imposition

2) Defendant

Inasmuch as the Plaintiff received the instant purchase tax invoice and issued the instant sales tax invoice to the Plaintiff, and received the purchase deduction using it, the Plaintiff should be deemed to have evaded value-added tax or illegally deducted the Plaintiff, and furthermore, the Plaintiff should be recognized as tax evasion in the event that there is a reason to avoid the tax payment even if it did not reach a tax refund or deduction. Accordingly, the exclusion period of imposition of the instant penalty tax is ten years.

B. Key statutes

It is as shown in the attached Form.

C. Determination

1) According to the statutory form, legislative purport, and strict interpretation of Article 26-2(1)1 of the Framework Act on National Taxes, even if a taxpayer who filed a tax base return within the statutory due date of return commits fraud or other unlawful acts, if the taxpayer evades national taxes or does not deduct national taxes due to such fraudulent or other unlawful acts, the exclusion period of imposition shall be five years, in principle, and even if the relevant taxpayer participated in the tax evasion, etc. of another taxpayer, it does not change unless there is any tax evasion. In addition, whether there was a tax evasion or illegal deduction for the relevant national tax in the method of filing a tax return shall be determined based on the main tax amount excluding additional tax. In addition, where a business operator who supplied goods or services files a return on the tax base of value-added tax or the amount of tax payable on the basis of the processing tax invoice along with the processing tax invoice, the value of supply under the processing tax invoice cannot be deemed as having not been supplied with the goods or services subject to value-added tax, and thus, an abstract tax liability exists on such portion that exceeds the output tax amount of the processing.

2) According to the facts found above, the supply price on the purchase tax invoice of this case and the supply price on the sales tax invoice of this case are identical, even if the Plaintiff filed a value-added tax return by entering each of the supply price on the purchase tax invoice of this case on the list of tax invoices by seller and seller on the list of tax invoices by seller, the Plaintiff’s tax evasion amount, etc. is deemed nonexistent. Therefore, the exclusion period for imposition of the penalty tax of this case shall be five years, and the disposition of this case is unlawful after five years from the expiration of the exclusion period from January 26, 2002 (the following day of January 25, 2002, which is the second-year return deadline for the return of value-added tax of 201).

3) Even if the sales office received a purchase deduction using the instant sales tax invoice, it cannot be deemed that the Plaintiff himself/herself evaded a tax, and, in light of the principle of strict interpretation of tax law, in the event there is only the circumstance of evading a tax refund or a mutual aid even if it did not reach a refund or mutual aid under the principle of strict interpretation, it cannot be extended to the extent that the tax evasion is recognized. Therefore, the Defendant’s assertion on a different premise

3. Conclusion

Thus, the plaintiff's claim of this case is justified and accepted.