Appropriateness of the disposition of non-deduction of input tax invoices on data

It is reasonable to deem that the processed tax invoice was issued without a real transaction in light of the fact that it was accused of the so-called data issued by the investigation agency and was not present at the time of the tax investigation of the competent tax office, and the details of the sales did not have been reported

Article 17 (Payable Tax Amount)

1. The plaintiff's claim is dismissed.

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

On June 4, 2004, the Defendant revoked the imposition of value-added tax of KRW 11,476,810 for the first period of 1999 against the Plaintiff (the date of the written disposition seems to be a clerical error) and KRW 23,946,060 for global income tax for the year 199 as of July 10, 2004, respectively.

1. Details of the disposition;

A. The Plaintiff is an entrepreneur who engages in the manufacturing and wholesale business of resistant uniforms on the floor of ○○○○-dong ○○○-dong ○○○ building.

B. In filing a return on value-added tax for the first period of January 199, the Plaintiff received two tax invoices (hereinafter “instant tax invoices”) which amounting to 5,005,000 total supply value from ○○○ (trade name: ○○), and deducted the input tax amount. Moreover, when filing a final return on global income tax base for the year 1999, the Plaintiff reported and paid KRW 55,005,000 equivalent to the total supply value as necessary expenses.

C. ○○○○○○ Tax Office, a supplier of the instant tax invoice, conducted an investigation on the data, and reported to the Defendant on March 3, 2004 that ○○○ filed a return of value-added tax for the first period of January 1999, only sales amounting to KRW 502,328,350, and was investigated as having no transaction details between the Plaintiff and the Plaintiff, and subsequently filed a complaint with ○○○ on the data and filed a complaint with ○○ and that all the instant tax invoices were written without a real transaction.

D. Accordingly, the Defendant denied the Plaintiff’s deduction of the input tax amount of the value-added tax for the first period of January 1999, and denied the inclusion in the necessary expenses related to the global income tax for the year 1999, thereby correcting the tax base and tax amount. On June 4, 2004, the Defendant issued the instant disposition to the Plaintiff on July 10, 2004, imposing and notify the Plaintiff of the global income tax of KRW 23,946,06,060 for the first period of January 199 as well as the global income tax for the year 199.

[Ground of Recognition] Unsatisfy, Gap 1, Eul 3.

2. Whether the disposition is lawful;

A. The plaintiff's assertion

The instant disposition is unlawful for the following reasons.

(1) The instant tax invoice was actually purchased and issued by the Plaintiff from ○○○ (○○).

(2) The Plaintiff’s total sales amount of KRW 63,951,00 which was supplied to ○ Home Shopping in 199 and the purchase amount of the goods initially reported by the Plaintiff is KRW 57,126,00, including the supply amount under the instant tax invoice. In the event that the Defendant considers the portion of the supply value of the instant tax invoice as a processing transaction, the remaining purchase amount of the goods would be 3% of the cost composition amount, and thus, it is unreasonable for the Defendant to regard the remaining goods as a processing transaction, and thus, the portion of the supply value of the instant tax invoice in light of the sales amount should be deducted as necessary expenses based on the actual transaction. If the Plaintiff’s sales amount cannot be deducted as necessary expenses, the amount of the Plaintiff’s estimated sales should be determined by considering the lack

(b) Related statutes;

Article 27 (Calculation of Necessary Expenses)

(1) In calculating real estate rental income, business income, temporary property income, other income, or forest income, the necessary expenses to be included shall be the sum of the expenses corresponding to the total amount of income in the year concerned, which is generally accepted.

(2) The expenses corresponding to the total amount of incomes in the current year, which are not appropriated as the necessary expenses before the current year, shall be considered as the necessary expenses.

(3) Necessary matters for the calculation of necessary expenses shall be prescribed by Presidential Decree.

Article 80 (Determination and Correction)

(3) If the tax base and tax amount of the current year are determined or revised under paragraphs (1) and (2), the chief of the district tax office or the director of the regional tax office having jurisdiction over the place of tax payment shall make it based on the books and other documentary evidence: Provided, That if it is impossible to calculate the income amount by books and other documentary evidence for the reasons

Article 55 (Calculation of Necessary Expenses for Real Estate Rental Income, etc.)

(1) The necessary expenses corresponding to the total amount of real estate rental income and business income in each year shall be as follows:

1. Purchase price (excluding a purchase reduction or a purchase discount) of the raw materials for the commodities or products sold and the incidental expenses thereto. In this case, the original purchase price and incidental expenses thereto shall be applicable, if the relevant business operator has consumed such ones for a business use, as have been purchased for other purposes;

Article 143 (Estimated Decision and Revision)

(1) The term "reasons prescribed by Presidential Decree" in the proviso to Article 80 (3) of the Act means cases falling under any of the following subparagraphs:

1. Where necessary account books and documentary evidence are missing or important parts are incomplete or false in the calculation of the tax base;

2. Where the contents of the entry are obviously false in light of the scale of facilities, number of employees, raw materials, market prices, various charges, etc. of commodities or products.

3. Where the contents of the bookkeeping are obviously false considering the quantity of raw materials used, electric power used and other operational conditions.

Article 17 (Payable Tax Amount)

(1) The amount of value-added taxes payable by an entrepreneur (hereinafter referred to as "amount of tax payable") 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 the entrepreneur (hereinafter referred to as "sales tax amount"): Provided, That where an input tax amount exceeds the output tax amount, it shall be the refundable tax amount (hereinafter referred to as "amount of

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

2. The tax amount for the import of goods used or to be used for his own business; and

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

1-2. The input tax amount, in case where the tax invoice under the provisions of 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 “necessary entry items”) is not entered or entered differently from the fact on the delivered tax invoice: Provided, That the input tax amount in such cases as prescribed by the Presidential Decree shall be excluded;

(c) Fact of recognition;

"(1) On 1 April 1, 1999, ○○○ filed a charge of violating the Punishment of Tax Evaders Act by issuing KRW 4,797,645,00 in total of the supply value of the false purchase tax invoice, and allowing the transaction partner to deduct the unfair purchase tax amount from the total supply value of the false purchase tax invoice without any actual transaction from June 30, 200." (2) U.○○ did not appear at the time of the tax investigation, and according to the details of the return of value-added tax for the first period of January 1, 1999 by ○○○○, the instant tax invoice against the Plaintiff was not included in the sales details.

(2) The Plaintiff, as a person obligated to adopt double entry system, filed a global income tax return for 122,90,000 won with the amount of income of KRW 138,863,00,000, following the external adjustment of the tax agent.

[Evidence] Gap 3, Eul 9-12, the purport of the whole argument

D. Determination

(1) Whether it is a false tax invoice

The burden of proving that the tax invoice is false, in principle, to the defendant who is the tax authority, the defendant must prove that the tax invoice is not accompanied by real transactions, on the basis of direct evidence or all the circumstances. If the defendant has proved to the extent that he reasonably acceptable, it is necessary to prove that the tax invoice is not false and that it is easy for the plaintiff who is the taxpayer to dispute the illegality of the defendant's disposition to present relevant evidence and materials (see, e.g., Supreme Court Decision 96Nu8192, Sept. 26, 1997).

However, as shown in the above facts, it is reasonable to deem that the tax invoice of this case was issued without a real transaction in light of the fact that ○○ issued a processed purchase tax invoice without a real transaction, and filed a complaint with the investigation agency on the so-called data that issued the processed sales tax invoice, and did not appear at the time of the tax investigation by the competent tax office, and that the tax invoice of this case was not reported even on the sales content of ○○○○, and that the tax invoice of this case was not issued without a real transaction. The testimony of ○○○○ was merely a real transaction, and it is difficult to deem that the tax invoice of this case was actually used for the real transaction, and there is no other evidence to acknowledge this.

(2) Whether the method of estimated survey should be followed

The tax base of corporate tax or income tax is to be determined by the actual amount revealed by the method of the on-site investigation, and in order to determine it by the method of the on-site investigation, it is exceptionally permitted only when there is no taxpayer’s account books or documentary evidence or any other material part is incomplete or false and there is no other way for the tax authorities to disclose the actual amount of income. Furthermore, the conclusion cannot be different on the ground that the disposition of taxation by the on-site investigation is more unfavorable to taxpayers than the disposition of estimated taxation (see Supreme Court Decision 94Nu3407, Jul. 14, 1995).

According to the above facts, in addition to the non-deductible of purchase cost equivalent to the supply value of the tax invoice of this case, the plaintiff's assertion that the tax base and tax amount should be determined by the estimation method is groundless, since there is no account book or documentary evidence in the calculation of the plaintiff's income or important parts are incomplete or false.

(3) Therefore, the Defendant’s instant disposition against the Plaintiff is lawful.

3. Conclusion

Thus, the plaintiff's claim shall be dismissed as it is without merit.