Review Division 2009-0122 ( November 11, 2009)

If the processed purchase sales have occurred simultaneously, the period for exclusion from national tax shall be imposed.

Whether the tax has been evaded due to fraud or other unlawful acts shall be determined on the basis of the principal tax except for the penalty tax, and as long as there is no evaded tax due to the same processing sales and processing purchases, the exclusion period for imposition of national tax shall be five years

The contents of the decision shall be the same as attached.

1. The disposition that the Defendant imposed value-added tax of KRW 61,347,240 on the Plaintiff on June 9, 2009 shall be revoked.

2. The litigation costs shall be borne by the defendant.

The decision is as follows (the plaintiff stated in the complaint that the date of disposition was June 12, 2009, but it seems to be a clerical error).

1. Circumstances of dispositions;

(a) Receipt and delivery of processed purchase and sale tax invoices;

(I) The Plaintiff is a company that runs the business of developing, manufacturing, and distributing computer software with ○○○○○○○-dong 182-4 head office in ○○○○-dong 182-4 head office and ○○○ 508.

(2) On November 22, 2001, the Plaintiff received a tax invoice of KRW 1,533,681,000 (hereinafter “the purchase tax invoice of this case”) from △△△△△ Group without real real transaction during the taxable period of value 271 value-added tax (from July 1, 2001 to December 31, 2007), and issued a supply price of KRW 1,53,681,00 to △△△ Group on November 26, 2001, and filed a value-added tax return accordingly.

(b) Disposition of this case;

On June 9, 2009, the Defendant imposed value-added tax (hereinafter “instant disposition”) on the Plaintiff on the ground that the entries of the list of the total tax invoices by customer and purchaser were entered differently from the facts during the said taxable period of value-added tax, which is subject to the imposition of KRW 61,347,240 (hereinafter “instant penalty tax”).

Facts that there is no dispute over the basis of recognition, entry of evidence A1 and 2, the purport of the whole pleadings

2. Whether the disposition of this case is legitimate

A. The parties' assertion

(1) The Plaintiff: (a) even if the Plaintiff entered the supply value on the purchase sales tax invoice of the Plaintiff processed on the list of purchase sales tax invoices by purchaser, there is no amount of tax actually evaded value-added tax or unjustly deducted from refund; and (b) it does not constitute “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 for the imposition of national tax in 10 years; and (c) the additional tax of this case shall be subject to five years, which is the exclusion period for the imposition of national tax in accordance with Article 26-2(1)3 of the Framework Act on National Taxes. Accordingly, the disposition

(2) Defendant: (a) the Plaintiff received the instant purchase tax invoice and used it only for the instant processing tax invoice and for the instant tax return; (b) the Plaintiff issued the instant sales tax invoice to △△ Group, and received the purchase deduction using it; and (c) the Plaintiff should be deemed to have evaded value-added tax or illegally deducted from the refund thereof. Therefore, the exclusion period for imposition of the instant penalty tax is ten years.

(b) Related statutes;

It is as shown in the attached Table related statutes.

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 taxpayer participated in the tax evasion, etc. of another taxpayer, it does not change unless there is any tax evasion or unlawful tax refund. Furthermore, the determination of whether there was a tax evasion or unlawful tax refund in the national tax return method should be 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 tax refund based on the processing tax invoice along with the processing tax invoice, it cannot be deemed that there was no supply of goods or services subject to value-added tax as to the supply value under the processing tax invoice, and thus, an abstract tax liability exists for such portion, even if the input tax amount deducted, it should be deemed that exceeds the output tax amount (see Supreme Court Decision 2007Du7Du.

(2) According to the above facts, even if 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, the Plaintiff filed a value-added tax return on each of the supply price on the purchase tax invoice of this case on the sales tax invoice of this case, it shall be deemed that there is no actual tax evasion tax amount of the Plaintiff. Therefore, the exclusion period for imposition of the additional tax of this case shall be five years. The disposition of this case is made five years after the date following January 26, 2002 (the date following the second-year return period for the second-year return of value-added tax of 2001) where the value-added tax may be imposed on the Plaintiff.

(3) As to the Defendant’s assertion, even if △△ Group received a purchase deduction using the instant sales revenue account statement, it cannot be deemed that the Plaintiff himself/herself evaded tax, and thus, the Defendant’s assertion on a different premise cannot be accepted.

3. Conclusion

Therefore, the plaintiff's claim of this case is reasonable, and it is decided as per Disposition by the assent of all participating Justices.