Whether the input tax amount of the auction real estate is deducted

If the value-added tax on a building is not included in the successful bid price, there is no room to deduct the successful bidder as the input tax amount even if the successful bidder receives the tax invoice from the former owner.

Article 17 of the Value-Added Tax Act

1. The plaintiff's appeal is dismissed.

2. The costs of appeal shall be borne by the Plaintiff.

The judgment of the first instance is revoked. The defendant's disposition of non-deduction of input tax amounting to KRW 61,674,70 of value-added tax for 1 year 2005 and the disposition of imposition of KRW 6,149,000 of value-added tax for failure to file a return of value-added tax on September 7, 2005 is revoked.

1. Details of the disposition;

The following facts are not disputed between the parties, or may be acknowledged by taking into account the whole purport of the pleadings in each entry in Gap evidence 1, 2, Gap evidence 3-1, 2, Gap evidence 7, 8, Eul evidence 1-1 through 4, Eul evidence 2-1, and Eul evidence 2.

A. The Plaintiff, a real estate rental business operator, at ○○○ District Court 2004ta, around 18060, acquired ownership by winning a total of 90,110,000 won of the buildings (Nos. 202, 301, 302, 302, 401, 401, 501, 601, 701, and 801 on May 12, 2005, which were owned by the Plaintiff at ○○○○○○○○○○○○○○○○○○○○○○○○○○○○ Building, which was owned by the Plaintiff.

B. On July 25, 2005, the Plaintiff received the sales tax invoice stating that the Plaintiff supplied 613,747,000 won of the supply price, excluding the value of the site part of the instant building from ○○○○○, the former owner and the entrepreneur of the instant building, and received the said supply price. On July 25, 2005, the Plaintiff purchased 115,39 won of the sales amount at KRW 113,74,74,700 of the instant building to be used for the real estate rental business, and then filed an application for refund of the sales amount at KRW 61,363,161 (=61,374,700 - 11,539 won.

C. On September 13, 2005, the Defendant rejected the Plaintiff’s input tax return amounting to KRW 61,374,700 on the ground that the Plaintiff was awarded a successful bid of the instant building and did not paid the value-added tax, and that no value-added tax was separately paid to ○○○, the former owner of the instant building, and rendered a disposition to impose the Plaintiff’s input tax return amounting to KRW 61,374,700 on the supply value reported by the Plaintiff which was entered excessively differently from the facts in the list of total tax invoices submitted by the Plaintiff pursuant to Article 22(4) of the Value-Added Tax Act (hereinafter “instant disposition”).

2. Determination on the legality of the disposition

A. The plaintiff's assertion

(1) The plaintiff (1) received a tax invoice on the supply of the building of this case from ○○, the former owner and supplier of the building of this case, and the defendant collected the value-added tax from ○○○○. Thus, it is unlawful to recognize the plaintiff as not eligible for an input tax deduction equivalent to the relevant value-added tax. (2) Even if the plaintiff's return of input tax deduction was erroneous, the plaintiff was issued a tax invoice with the knowledge that it would be possible to obtain an input tax deduction, and thus, it cannot be deemed as an unfaithful return. At least, the part on imposition of additional tax among the disposition of this case is unlawful.

(b) Related statutes;

○ Articles 1 and 1 of the Value-Added Tax Act (amended by Act No. 7876 of March 24, 2006)

(1) Value-added taxes shall be imposed on the following transactions:

1. Supply of goods or services; and

2. Import of goods.

○ Taxpayers under Article 2 of the Value-Added Tax Act

(1) A person who independently supplies goods (referring to the goods prescribed in Article 1; hereinafter the same shall apply) or services (referring to the services prescribed in Article 1; hereinafter the same shall apply) on a business basis, regardless of whether it is for profit making or not (hereinafter referred to as "business operator") shall be liable to pay value-added taxes

○ Supply of goods Article 6 of the Value-Added Tax Act

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

○ Tax Invoice Article 16 of the Value-Added Tax Act

(1) Where an entrepreneur registered as a taxpayer supplies goods or services, he/she shall deliver an invoice stating the following matters (hereinafter referred to as "tax invoice") to the person who receives the supply as prescribed by Presidential Decree at the time prescribed in Article 9: Provided, That in cases prescribed by 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.

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

(1) The amount of value-added taxes payable by an entrepreneur (hereinafter referred to as "paid tax amount") shall be the amount computed by deducting the tax amount under the following subparagraphs (hereinafter referred to as "purchase tax amount") from the tax amount on the goods and services supplied by him/her (hereinafter referred to as "sales tax amount"): Provided, That where an input tax amount exceeds the output tax amount, it shall be a refundable tax amount (hereinafter referred to

1. The tax amount for the supply of goods or services used or to be used for his own business;

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

1. An input tax amount in case where the list of the total tax invoice by customer is not submitted under Article 20 (1) and (2), or the input tax amount on the portion not entered or entered differently from the fact, in case where the whole or part of the registration numbers or supply values by transaction parties in the submitted list of the total tax invoice by customer is not entered or entered differently from the fact, excluding the input tax amount in such

○ Submission of a list of total tax invoices under Article 20 of the Value-Added Tax Act

(1) Where an entrepreneur has delivered or received tax invoices under Article 16 (1) and (3), he/she shall submit a list of total tax invoices by customer and that by buyer stating the following matters (hereinafter referred to as "sales and total tax invoices by customer") along with the relevant preliminary or final return: Provided, That in cases where the provisions of the main sentence of Article 18 (2) are applied, he/she shall submit it along with the final

1. Registration number and name or denomination of the entrepreneur who supplies or is supplied;

2. Period of transaction;

3. Date of preparation;

4. The total amount of supply values and the total amount of tax during the transaction period;

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

○ Article 22 of the Value-Added Tax Act

(4) Where an entrepreneur falls under any of the following subparagraphs, an amount equivalent to 1/100 of the supply value corresponding to the input tax amount deducted under a tax invoice, not by the list of total tax invoices by customer, or the supply value declared excessively differently from the facts entered in the list of total tax invoices by customer submitted, shall be added to the payable tax amount or deducted from the refundable tax amount: Provided, That this shall not apply to the supply value of the portion, the transaction of which is verified

2. Where the list of the total tax invoice by customer under Article 20 (1) and (2) is not submitted, or the registration numbers or supply values by transaction parties in the submitted list of the total tax invoice by customer are not entered or entered differently from the fact, except in such cases as prescribed by the Presidential Decree.

3. Where the supply value in the entry of the list of the total tax invoice by customer submitted under Article 20 (1) and (2), which is entered excessively differently from the fact, is returned.

○ Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 1930 of Feb. 9, 2006)

Article 14 Scope of Supply of Goods

(1) The supply of goods under Article 6 (1) of the Act shall be as follows:

4. Delivery or transfer of goods through public auction, auction, expropriation, investment in kind, or other contractual or legal grounds;

C. Determination

(1) In the real estate auction procedure conducted by the court of execution, where the value-added tax on the auction price of the real estate is not included in the auction price, there is no input tax amount to be collected by the successful bidder, so even if the successful bidder received a tax invoice from the owner of the auction real estate under the premise that the auction price includes the value-added tax, it cannot be deducted as the input tax amount under the principle of value-added tax even if the successful bidder received the tax invoice from the owner of the auction real estate. Such a legal principle does not change on the ground that where the former owner of the auction real estate is a business operator under the Value-Added Tax Act (see Supreme Court Decision 2002Du1328, May

(2) Comprehensively taking account of the overall purport of the arguments in the evidence Nos. 4 through 7, No. 8-1, 2, and No. 9, in the real estate auction case of the building of this case, the appraiser at the executing court appraised the building of this case in 2.3 billion won only based on the objective property value without mentioning the value-added tax. Based on the above appraisal, the executing court set the minimum auction price for the building of this case at 2.3 billion won, but at the end that lowers the minimum auction price according to the certain ratio, the plaintiff was at the time when the plaintiff was bid at the time of the above auction, and at the above auction, the executing court permitted the sale of the building of this case at 901,110,000 won which is the highest price in the above auction procedure, and it can be acknowledged that the total auction price received from the plaintiff was distributed to the creditor of ○○○,000,000 won. Accordingly, there is no room for the plaintiff to assert that the purchase price of this case was paid by the plaintiff.

Even if the Plaintiff received a tax invoice from ○○○○, that the said tax invoice itself is different from the fact, and thus, the Plaintiff cannot be the basis for claiming the deduction of the input tax amount. In addition, Article 2(1) of the Value-Added Tax Act does not lead to the existence of liability for value-added tax by examining whether a business operator actually collects the amount of value-added tax from a person who receives supply, or whether a business operator is responsible for not collecting the amount of value-added tax, and the possibility of collection thereof. Therefore, in the auction of real estate, the court, as the auction of real estate, did not collect the value-added tax from the successful bidder, cannot be said to hold the owner liable for value-added tax (see Supreme Court Decision 2003Da49153, Feb. 13, 2004). Even if the Defendant intended to collect value-added tax from ○○○, the Plaintiff’s input tax deduction is not related.

(3) In addition, Article 22(4) of the Value-Added Tax Act provides that an amount equivalent to 1/100 of the value of supply declared shall be added to the payable tax in cases where the price of supply is entered differently from the fact in the list of the list of the total tax invoice by customer submitted by the Plaintiff. As such, in the case of a transaction for which no value-added tax has been collected by the Plaintiff, the Plaintiff entered the list of the total tax invoice by customer as a legitimate purchase transaction and filed a return of the input tax deduction, the Defendant may impose an additional tax equivalent to 1/100

The proviso of Article 22(4) of the Value-Added Tax Act provides that an additional tax shall be exempted for the supply value of the portion for which the actual transaction is confirmed, in cases where the entry of the list of total tax invoices by customer is entered by mistake. However, insofar as the Plaintiff was seeking a refund of the value-added tax that is not actually paid, there is no legal ground for exemption from additional tax as the Plaintiff’s above entry of the input tax amount cannot be deemed as a mistake or complying with the actual transaction, and there is no

(4) Therefore, the instant disposition that the Defendant did not report the Plaintiff’s input tax deduction and imposed additional tax is lawful.

3. Conclusion

Therefore, the plaintiff's claim is dismissed as it is without merit, and the judgment of the court of first instance is just in conclusion, and the plaintiff's appeal is dismissed.