Cho High Court Decision 2012 Deputy 1654 (Law No. 15, 2012)

Even if a de facto marital couple was a de facto marital couple at the time of construction, the return and payment of value-added tax shall be liable for payment according to actual attribution.

In a case where one party supplies goods or services in the name of the other party, it is difficult to deem that a person who actually supplies goods or services bears the duty to report and pay value-added tax pursuant to the substance over form principle. Therefore, depending on whether the nominal owner and the actual business owner are a couple in a de facto marital relationship or marital relationship, it is difficult to deem that

2012 disposition of revocation of imposition of value-added tax

KimA

Head of tax office

March 21, 2013

April 16, 2013

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 000 on September 6, 201 against the Plaintiff on September 6, 201 shall be revoked.

1. Details of the disposition;

The following facts may be recognized by taking into account the evidence No. 4, evidence No. 1, and evidence No. 2, and the overall purport of the arguments and arguments:

A. On November 18, 2008, the Plaintiff is a business operator registered with the trade name of "BB Construction" from 000 OB in Changwon-si, Changwon-si, OBB Construction, and is engaged in the construction business until September 14, 2010.

B. On September 6, 201, Nonparty 1 and 3 applied for a refund of input tax amount of the instant construction services to the Defendant on the purport that they were supplied with the instant construction services (supply cost of KRW 000) by Nonparty E, who is engaged in the construction business under the trade name of DD construction, while Nonparty 1 and 3 engaged in the instant construction business, and the Defendant: (a) determined that the person who actually provided the instant construction services is not EE; and (b) determined that the Plaintiff was the Plaintiff, not EE; and (c) on September 6, 2011, on the ground that the Plaintiff omitted sales equivalent to the supply value of the said construction services, the Plaintiff imposed and notified the Plaintiff of KRW 00,000 and additional tax KRW 00,000,000, total of value-added tax of KRW 1, 201 (hereinafter “instant disposition”).

C. On June 15, 2012, the Plaintiff filed an appeal with the Tax Tribunal, but the Tax Tribunal dismissed the Plaintiff’s appeal.

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

1) At the time of the instant construction project, the Plaintiff’s business registration was cancelled by the Defendant, and thus does not constitute a business operator. Therefore, the Plaintiff does not have any obligation to issue a tax invoice for the supply of construction services, and there is no obligation to pay value

2) The instant construction contract was concluded in the name of EE of DD construction, and part of the construction cost was received in the account of EE, and the Plaintiff was practically closed after business registration was cancelled, so the Plaintiff is a EE that operates the instant construction, and the Plaintiff is not the Plaintiff. Accordingly, the Plaintiff is not obligated to pay value-added tax on the provision of the said construction service.

3) Even if the Plaintiff actually supplied the construction services of the instant construction and reported and paid the value-added tax in the name of leEE, the Plaintiff and leEE is a de facto marital couple, and one of the couple having a de facto marital relationship is a de facto marital couple, and a de facto marital relationship is registered under the name of the other spouse and reported and paid the value-added tax in the name of the latter, it is legitimate to report and pay the value-added tax. Therefore, the return and payment of the value-added tax in the name

4) Therefore, the instant disposition, based on the premise that the Plaintiff is liable to pay value-added tax due to the supply of construction services, ought to be revoked as it is unlawful.

B. Determination

1) Whether the Plaintiff constitutes a business entity at the time of the instant construction work

The commencement, discontinuance, etc. of business under the Value-Added Tax Act, regardless of the registration and reporting under the Act, is determined by the actual substance of the relevant fact (see, e.g., Supreme Court Decision 96Nu16193, Jun. 27, 1997; Supreme Court Decision 97Nu20625, Sept. 18, 1998); furthermore, the tax authority’s ex officio cancellation of business registration under Article 5(6) of the Value-Added Tax Act, merely includes the fact of closure, and does not cause a change in its status as a business operator (see, e.g., Supreme Court Decision 2008Du2200, Jan. 27, 201), and the Plaintiff’s assertion that the Plaintiff’s business was under the name of the Plaintiff under the Act, on the ground that the Plaintiff was delinquent in paying taxes on September 14, 2010, and that the Plaintiff’s business was not under the name of the Plaintiff under the Act.

2) The fact that the Plaintiff actually supplied the construction services of the instant construction project is recognized

The following facts may be recognized by the Parties, taking into account the following facts, whether there is no dispute between them, evidence 1, evidence 2, evidence 1, and 2, evidence 8, evidence 12, and evidence 2, and evidence 3 through 7, and the testimony and overall arguments of this witnessCC:

(1) Around October 2010, the Plaintiff, as the representative of the said CC and three other representatives of BB Construction that it operates, ordered the said PE to undertake the said construction project, and entered into a construction agreement with Nonparty CC on October 28, 2010 with respect to the removal part of the said construction project. The Plaintiff was entering into a construction agreement with Nonparty CC on October 28, 201 with respect to the construction project under the said construction contract, and entered the BB Construction’s business registration in the said ex officio, and entered the said ex officio cancellation as its representative on January 5, 201, and entered the business registration under the said construction agreement into a business registration agreement with Nonparty CC with Nonparty 3 as its representative, and thereafter, the Plaintiff entered the construction agreement with Nonparty 30 on October 14, 2010 to 200, and entered the supply value of the said construction project in the name of Nonparty 30 on March 13, 2010, respectively.

(2) On the other hand, the statements of the persons concerned who have supplied the construction services of the instant construction are as follows.

(A) The Plaintiff stated as follows: “At the time of undergoing a tax investigation from the Marina Tax Office, the investigator actually performed all of the construction works from the removal to the completion of the instant construction,” and “DD Construction’s Mad Construction’s Mad Construction’s Mad Construction’s Mad Construction’s Mad Construction’s own denial, but without any problem.

(B) The EE shall, when a tax investigation is conducted by Masan Tax Office, be conducted by the investigator.

‘Along with the fact that the construction project of this case was in charge of accounting-related affairs, such as detailed specifications, and there is no less person engaged in construction business,' and ‘A' on tax invoices issued in 000 won are known to be prepared by KimA and delivered to three parties, such as thisCC,' and ‘BB construction is closed ex officio, it is known that the construction contract of this case was changed to DD construction without any choice to be repreparationd.'

(C) At the time of the above tax investigation, thisCC entered into a construction contract with the EE of DD construction and reported that it received a tax invoice from DD construction, but it, in substance, has prepared a written confirmation that the FF Construction KimA was proceeding and completed the construction, and paid the construction cost to BBB construction and Kim Young-young, and this court has testified to the same content.

(3) The details of money deposited by thisCC in the Plaintiff-BB Construction account in connection with the instant construction project are as listed below.

(The following table omitted):

B)Judgment

According to the above facts, the plaintiff entered into the construction contract of this case with the aboveCC and three others, and actually completed the construction work of this case, so it is reasonable to see that the person who provided the construction work of this case is the plaintiff. Therefore, this part of the plaintiff's assertion is without merit.

3) Finally, we examine the argument that the return and payment of value-added tax in the name of EE, registered as the business entity, is legitimate because the Plaintiff and EE was a de facto marital couple at the time of the instant construction work.

First, as alleged by the Plaintiff, whether the Plaintiff and EE were de facto married or married at the time of the instant construction as alleged by the Plaintiff, it is not sufficient to recognize the Plaintiff’s health account, the entry of No. 3 evidence No. 14, and Gap evidence No. 13-1 and No. 2, which correspond to the Plaintiff’s assertion, and there is no other evidence to acknowledge otherwise. Even if the Plaintiff and EE were de facto married or married at the time of the instant construction, as alleged by the Plaintiff, under Article 14(1) and (2) of the Framework Act on National Taxes, if there is another person who is not the nominal owner of the income, income, and property subject to taxation, and transaction, and the tax law on the calculation of the tax base also provides that the person who actually belongs to the person liable to pay the tax should be applied according to the substance regardless of the name or form of income, income, and property, and the name of the act or transaction, and the actual relation between the Plaintiff and the person who actually supplied the goods or service is not the nominal owner.

4) Therefore, the Defendant’s disposition of this case based on the premise that the Plaintiff was determined as the person liable for the return and payment of value-added tax on the above construction services is lawful.

3. Conclusion

Then, the plaintiff's claim is dismissed as it is without merit, and it is so decided as per Disposition.