The burden of proving the joint purchase assertion of the same kind of business

With respect to a disposition of imposition for correction of the estimation for conversion into sales by omitting a report of purchase, the plaintiff's assertion that the omission of report was a joint purchase by the same kind of business, but it is not acceptable to accept the plaintiff's assertion

Article 21 of the Value-Added Tax Act / [Correction]

1. The plaintiff's claim is dismissed.

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

The Defendant’s imposition of value-added tax of KRW 48,04,690 on December 7, 2005 and global income tax of KRW 57,674,230 on December 7, 200 against the Plaintiff shall be revoked.

1. Details of the disposition;

A. The Plaintiff was engaged in the Kasio wholesale and retail business with the trade name called ○○○○○○○-dong 486-2 '○○○○ Audio’.

B. Around 2003, the director of the regional tax office of ○○○○○ Co., Ltd. (hereinafter “Nonindicted Co., Ltd.”) conducted a tax investigation with respect to Nonparty Co., Ltd. (hereinafter “Nonindicted Co., Ltd.”) and subsequently, the non-party Co., Ltd supplied the Plaintiff the goods of KRW 432,293680 during the second taxable period of 200, but the tax invoice issued KRW 249,225,881, and omitted sales of KRW 183,067,80, and notified the Defendant of the fact of detection.

C. In accordance with the above notification data, the Defendant: (a) deemed that the Plaintiff omitted the return of KRW 232,614,00, computed by applying the total profit ratio to the amount supplied as non-party-free materials from the non-party company; and (b) on December 7, 2005, imposed upon the Plaintiff a notice of imposition of KRW 48,04,690, and KRW 57,674,230, respectively, of the global income tax for the second term portion of value-added tax for the year 200 and KRW 57,674,230 (hereinafter “instant taxation”).

[Reasons for Recognition] Each entry of Gap 1, 2, Eul 1 through 5 (including each number), and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

In order to receive such discount benefits, the non-party company issued a joint purchase of goods from the non-party company under the name of the non-party company, i.e., ○○○○○○ and the non-party company (hereinafter referred to as “○○○○○○○○○○”) that operated the same kind of company with the trade name called “○○○○○○○○○” to receive such discount benefits, and jointly purchased goods from the non-party company under the name of the plaintiff. Of 183,067,800 won, which was recognized to have been supplied by the plaintiff as non-indicted 160,035,00 won, which was only jointly purchased under the name of the plaintiff, but actually purchased from the plaintiff ○○○ (106,842,00 won) and ○○○○○○○○○ (53,193,000 won). Thus, the part of the tax disposition in this case should be revoked on the premise that the plaintiff supplied goods from the non-party company.

(b) Related statutes;

It is as shown in the attached Table related statutes.

(c) Fact of recognition;

(1) As a result, the director of the regional tax office of 003 conducted a tax investigation on the non-party company around 2003, he discovered that the non-party company issued the processed tax invoice in excess of the actual transaction amount to ○○ and ○○○○○ in the second taxable period of 2000, and notified the defendant thereof.

(2) Accordingly, on April 2004, the Defendant imposed the value-added tax of KRW 19,076,630 by deducting the input tax amount of KRW 106,842,080 from the input tax amount of KRW 106,842,080. The Defendant imposed the value-added tax of KRW 10,029,360 by deducting the input tax amount of KRW 53,192,00 from the input tax amount.

(3) On July 7, 2004, ○○ filed an objection with the Defendant to the effect that the said disposition of value-added tax was not a processed transaction since it purchased goods normally from Kim○, a business employee of the non-party company. However, it was dismissed.

(4) On March 27, 2006, prior to the operation of ○○○○○○○○○○○, submitted a petition for grievance to the Defendant to the effect that the said disposition of imposing value-added tax was not a processed transaction since the purchase of actual goods and the payment was made in full by the Nonparty Company, but was dismissed on the ground that the period of application was expired.

[Grounds for recognition] Each entry of Eul 2, 10, 15 evidence (including each number), and the purport of the whole pleading is determined.

The plaintiff purchased goods jointly with O○○ and O○○○○ in the second taxable period of 2000. Among them, it was examined whether O○○ and O○○○○○○○○○ had purchased goods equivalent to KRW 160,035,000, and the testimony of O○○○ and O○○○○○○ and O○○○○’s testimony as follows: (a) the facts of recognition under the preceding paragraph are as follows; and (b) the overall purport of the arguments is added to the facts of recognition under the above paragraph (c); (c) in other words, O○ and O○○ only asserted that they traded with the non-party company’s business employees while raising an objection against the imposition of value-added tax on each amount of joint purchase with the plaintiff; (c) the plaintiff did not make any mention as to the fact that O○○ and O○○○○○ were jointly purchased during the second taxable period of 2000, since it is difficult to recognize that the amount of purchase by O○○ was 106,84200,000, respectively.

Therefore, the instant taxation disposition is lawful.

3. Conclusion

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

Relevant statutes

(1) The former Value-Added Tax Act (amended by Act No. 7007 of Dec. 30, 2003)

Article 21 (Rectification)

(1) The head of a district tax office having jurisdiction over the place of business, the Commissioner of the competent Regional Tax Office or the Commissioner of the National Tax Service shall correct the tax base or tax amount payable for the taxable period

1. Where the final tax return is not filed;

2. Where there are any mistakes or omissions in details of the final tax return;

3. Where the list of the total tax invoice by buyer or the total tax invoice by buyer is not submitted in the final tax return, or all or part of the submitted list of the total tax invoice by buyer is not entered or

(2) Where the tax base and amount of tax payable or refundable amount are determined or corrected for each taxable period pursuant to paragraph (1), the head of the competent district tax office having jurisdiction over the place of business, the Commissioner of the competent Regional Tax Office or the Commissioner of the National Tax Service shall determine or correct them on the basis of tax invoices, books and other evidence:

1. Where tax invoices, books, and other evidence necessary for calculating the tax base do not exist or important parts are incomplete;

2. Where the contents of tax invoices, account books, and other evidence are obviously false in light of the scale of facilities, the number of employees, and the market prices of raw materials, commodities, products, or various charges;

3. Where the contents of tax invoices, account books, and other documentary evidence are obviously false in light of the quantity of raw materials used, power used, and other operational conditions.

4. Where there is a possibility of evading the value-added tax due to the causes as determined by the Presidential Decree other than subparagraphs 1 through 3.

(1) The former Value-Added Tax Act (amended by Presidential Decree No. 18153, Dec. 30, 2003)

Article 69 (Method of Estimation and Revision)

(1) Estimated correction under the proviso of Article 21 (2) of the Act shall be governed by the following methods:

4. Calculation method by any of the following criteria determined by the Commissioner of the National Tax Service by type of business and by region:

(a) Input quantity per unit of won, which determines the relationship between the partial or whole quantity, from among the raw or secondary materials input for production, and the quantity of production;

(b) A cost-related ratio which determines the relationship between all or part of the personnel expenses, rent, material expenses, water, mineral heat, and other operating expenses and sales;

(c) A commodities turnover rate which determines the relationship between the average stored amount during a fixed period and the sales amount or the sales price;

(d) A sales profit rate which determines the ratio of the sales to the gross sales profit during a fixed period;

(e) The value-added rate determined by the sales amount and value-added amount during a fixed period.

(1) The former Income Tax Act (amended by Act No. 6292 of Dec. 29, 2000)

Article 80 (Settlement and Correction)

(1) If a person liable to make a final return on the tax base pursuant to Articles 70, 71 and 74 fails to make such report, the chief of the district tax office or the director of the regional tax office having jurisdiction over the place of tax payment shall determine the tax base

(2) If a person who is liable to make a final return on the tax base pursuant to Articles 70 through 72 or 74 fails to make such return, the superintendent of the district tax office or the director of the regional tax office having jurisdiction over the place of

1. Where an omission or error exists in the contents of return;

2. Where the whole or part of the total account statements by sale and by purchaser under Article 163 or the payment records under Article 164 are not submitted;

3. Where an entrepreneur designated as one eligible to join a credit card merchant pursuant to Article 162-2 of this Act and Article 32-2 of the Value-Added Tax Act fails to join a credit card merchant without any justifiable reason, and it is judged that the reported details are unfaithful considering the scale of facilities