early 209west2437 ( August 28, 2009)

The legitimacy of the assertion that the processed sale equivalent to the processed purchase amount should be deducted as it occurred.

In the case of a report on sales, it is reasonable to deem that such sales was actually made as long as the person liable for duty payment voluntarily filed a report on such sales, and even if there was no domestic sales, the portion reported by the person liable for duty payment by the method of tax payment is finalized as it is (where the amount of sales tax, etc. is reported excessively, the person liable

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

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 against the plaintiff on March 16, 2009 is revoked in all of the first term portion of 2004, the second term portion of 5,367,950 won in 204, the second term portion of 6,257,260 won in 205, the second term portion of 2005, the second term portion of 3,673,000 won in 2005, and the first term portion of 4,973,990 won in 206.

1. Circumstances of the disposition;

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(b) Results of the Seoul Regional Tax Office’s criminal investigation

(1) The investigation period: January 16, 2007 - April 19, 2007

(2) Details of detection

(A) The actual operator of the U.S. Tax Accounting Office (including the Plaintiff, and the 1,223 business entities’ tax declarations and entry agent) performed cross-transactions by exchanging sales and purchase tax invoices under mutual agreement without real transactions in order to make the sales and purchase tax base, input tax amount, and tax amount payable to the above 1,223 business entities.

(B) As can be seen, tax invoices amounting to KRW 219,849,00,000 were issued by way of adjusting the sales tax base and input tax amount.

(c) Plaintiff’s value-added tax return (the first term portion in 2004 - the first term portion in 2006)

The input tax amount on the purchase tax invoice of KRW 148,039,000 (hereinafter referred to as the "purchase tax invoice of this case") issued by both the two countries was deducted from the output tax amount for each taxable period, and the value-added tax was filed.

D. The defendant's corrective disposition (the disposition in this case on March 16, 2009; hereinafter referred to as "the disposition in this case").

The reason that the purchase tax invoice of this case is false tax invoices, each input tax amount was not deducted, and the VAT was corrected and notified as stated in the purport of the claim.

[Ground of recognition] Facts without dispute, Gap 1 to 5 evidence, Eul 1 to 3 evidence (including each number), the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

(1) Purchase transactions on the instant purchase tax invoice are those on the sales tax invoice and cross-market transactions in each of the pertinent taxable periods. Accordingly, the supply price of the sales corresponding to the instant purchase tax invoice shall also be deducted from the tax base.

(2) The tax base and the amount of tax payable for each taxable period shall be determined by means of an estimate investigation pursuant to Article 21(2)1 of the Value-Added Tax Act, on the grounds that the tax invoice, account book, or other evidence necessary for calculating the tax base is either nonexistent or incomplete.

(3) The Defendant’s disposition based on the premise that the value-added tax base initially reported by the Plaintiff was unlawful.

B. Determination

(1) According to the provisions of Article 17 of the Value-Added Tax Act, where a tax invoice under Article 16 is not issued, or all or part of the entries required for the delivered tax invoice are not entered, or where the input tax amount is entered differently from the fact is not deducted from the output tax amount even if the goods or services were actually supplied, it is reasonable to deem that, in the case of a sales declaration, such sales was actually made so long as the taxpayer voluntarily filed a tax return. Even though there was no domestic sales, the part declared by the taxpayer as the sales amount in the value-added tax, which is the tax method by which a tax return was filed, is finalized (if the sales tax amount is declared excessively, the taxpayer should take the procedure of claiming for correction of the amount of reduction, etc.), and the portion reported as the sales amount should not be deducted from the total sales amount under the principle of equity (see Supreme Court Decision 2004Du9917, Nov. 1

(2) Even if the sales tax invoice issued under the name of the Plaintiff as alleged by the Plaintiff includes those issued by the tax agent for the processing and purchase of another company without permission, the total amount of sales initially reported by the Plaintiff is insufficient to deem it false, and there is no other evidence to acknowledge it, and thus, it cannot be deemed that there is no tax invoice, account book, or other supporting document necessary for the calculation of the tax base, or

(3) As a matter of course, the tax base and tax amount determined by the declaration cannot be contested in a lawsuit claiming a disposition of increase or decrease. As such, inasmuch as the Plaintiff already reported sales from the first to the first half of the year 2004 and became final and conclusive legally, even if the Plaintiff asserts that the sales declaration transaction should be deducted from the tax base as the processing transaction should be delayed, this cannot be accepted. Accordingly, the assertion that the sales should be re-determined by the method of estimated investigation is without merit.

(4) Therefore, the Defendant’s disposition of the instant case is lawful.

3. Conclusion

The plaintiff's claim is dismissed because there is no ground for appeal.