Busan District Court-2014-Gu 20736 ( December 26, 2014)

Cho-2013-Divisions-4089 (Law No. 14.07. 2014)

It is necessary to recognize that in the event of underreporting the tax base by fraudulent means the reduction of tax revenue.

In case of underreporting the tax base by fraudulent means, it should be recognized that the taxpayer would be subject to deduction of the input tax amount by evading the liability for the payment of value-added tax on the tax invoice.

Article 16 of the Value-Added Tax Act, Additional Tax on Underreporting and Excess Refund Return under Article 47-3 of Framework Act on National Taxes

Busan High Court 2015Nu20244

ZZ Co., Ltd.

YThe director of the tax office

Busan District Court Decision 2014Guhap20736 Decided December 26, 2014

April 20, 2016

September 21, 2016

1. The plaintiff's appeal is dismissed.

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

The judgment of the first instance court is revoked. The disposition of imposition of value-added tax for the first term of July 15, 2012 rendered by the Defendant to the Plaintiff on July 15, 2013 is revoked in all the imposition of value-added tax for the first term of 2012, value-added tax for the second term of 2012, value-added tax for the employee and the second term

1. Details of the disposition;

A. The Plaintiff has its head office AA City BB-ro 42 and 3 XX, and runs steel and steel products wholesale and retail business, etc., and has a branch office inCCDD E-dong 9 XX-X (CC business).

B. From March 2012 to June 2012, the Plaintiff’s place of business received a tax invoice from FFF for the total supply price of 5,869,454, and for the first period of value-added tax in 2012, the Plaintiff’s place of business deducted the amount of input tax when filing a tax return for the first period of value-added tax. From July 2012 to December 2012, 2012, the Plaintiff deducted the total supply price from FFF from the total supply price of 115,703, the total supply price of 2,537,105, and the total supply price from GGGG (hereinafter the Plaintiff received each of the instant tax invoices from FFF and GGGGGGGGGG from March 2012 to December 2012, and deducted the amount of input tax for the second period of value-added tax.

C. Based on the Plaintiff’s investigation into the business place, the Director of the Regional Tax Office accused relevant persons, including HaH, who are the Plaintiff’s employees, for the alleged violation of the Punishment of Tax Evaders Act, on the ground that each of the tax invoices of this case is false tax invoices, and notified the Defendant of relevant taxation data.

D. On July 15, 2013, the Defendant corrected and notified the Plaintiff of value-added tax 1,000,389 for the first term portion of KRW 1,00,389 for the year 2012, value-added tax 437,501 for the second term of KRW 2012 and value-added tax for the year 2012 (hereinafter “each disposition of this case”).

E. The Plaintiff appealed and filed an appeal with the Tax Tribunal on September 13, 2013, but was dismissed on May 7, 2014.

[Reasons for Recognition] Facts without dispute, Gap evidence 1 to 4, evidence 13, Eul evidence 1, 2 and 15 (including various numbers), the purport of the whole pleadings

2. The assertion and judgment

A. The plaintiff's assertion

Each of the dispositions of this case is unlawful for the following reasons.

1) The assertion that the tax invoice is not false

As indicated in each of the instant tax invoices, the Plaintiff was supplied with scrap metal from the FFF and GGGG and accordingly received the tax invoice accordingly, and thus, each of the instant tax invoices does not constitute a false tax invoice.

2) The assertion that the trader is a trader of good faith and negligence

Even if the company that supplied the Plaintiff with scrap metal actually is not the FFF and GGGGGGG, the Plaintiff was unaware of the fact that the scrap metal was supplied from companies other than FFF and GGGGG, and the Plaintiff did not know of the fact that the scrap metal was supplied. The Plaintiff fulfilled its duty of care in the course of verifying the business registration certificate, etc. before the commencement of the transaction and receiving the scrap metal. Accordingly, the Plaintiff did not know of the fact that the input tax amount was deducted in accordance with each of the instant tax invoices.

3) The assertion that the right to tax collection is abused

The Plaintiff paid all the value-added tax pursuant to each of the instant tax invoices to FFF and GGGGG. Nevertheless, the Plaintiff’s payment of value-added tax without deducting the input tax pursuant to each of the instant tax invoices is merely an abuse of the right to tax collection, since the National Tax Service’s failure to collect value-added tax from FF and GGGGGGG is merely an abuse of the right to tax collection.

4) The allegation that the portion of unfair under-reported penalty tax is illegal

The Plaintiff did not know that each of the instant tax invoices was false, and did not have any awareness that the Plaintiff would receive an input tax deduction or refund under a false tax invoice, as well as that there was no awareness that the Plaintiff would result in the reduction of national tax revenues, as a consequence, by evading the liability for the payment of value-added tax on the relevant tax invoice, by a person who issued a false tax invoice. Therefore, the portion imposed as an unfair under-reported additional tax on each of the instant dispositions is unlawful.

B. Relevant statutes

The entries in the attached Table-related statutes are as follows.

C. Determination

1) As to the assertion that tax invoices are not false

Article 17(2)2 of the former Value-Added Tax Act, which denies the deduction of input tax on a tax invoice received in the course of transaction, refers to a case where the necessary entries in the tax invoice do not coincide with the actual subject, price, and time of the supply of the goods or services, notwithstanding the formal descriptions of the transaction contract, etc. prepared between the parties to the transaction with respect to the goods or services (see, e.g., Supreme Court Decision 96Nu617, Dec. 10, 1996). Thus, even if the transaction of supplying the goods, etc. actually exists, the supplier shall be deemed to fall under the “tax invoice different from the fact that the tax invoice is issued by the issuer.”

First of all, with respect to the tax invoice issued by FF from each of the tax invoices in this case, it is recognized that the name of business operator of the above company was Kim II, but the actual operator was J and HaK, while L supplied the Plaintiff with scrap metal, issued the tax invoice under the name of FFFF under the approval of J and HaK. Therefore, inasmuch as L was to issue the tax invoice to the Plaintiff in the name of FFF under the name of FFF, the tax invoice constitutes “tax invoice that is different from the fact by the third party” under Article 17(2)2 of the former Value-Added Tax Act (in relation to this part, the tax invoice constitutes “tax invoice” under Article 17(1)5 of the former Value-Added Tax Act, and the "CC High Court (2015No10, Jun. 25, 2015)" under the name of HF 20 times the final tax invoice was supplied to the Plaintiff, and the person who actually supplied the goods under the name of H FF 100 times or more under the name of HF.1.

Next, in full view of the purport of each of the above arguments, with respect to the tax invoices issued by GGGGs, the actual purport of this case’s tax invoices is as follows: (a) LL operating the above company and operating its business registration; (b) LL actually supplied the Plaintiff with the volume and amount equal to that stated in the tax invoice; and (c) therefore, in the relevant criminal case, theCC High Court issued the tax invoice on June 25, 2015, on the ground that the LL cannot be deemed to have issued the tax invoice or a false list of the tax invoices concerning its supply; (d) this case’s employee cannot be deemed to have received the tax invoice in a false manner, on the ground that this case’s tax invoice was issued in the name of the supplier, not the Plaintiff’s 3GG supplier, and thus, the aforementioned judgment became final and conclusive because the Plaintiff did not appeal against the violation of Article 10(3)1 of the Punishment of Tax Evaders Act. However, the above judgment issued the GL under the name of the supplier, not its own 30.3G supplier.1.

2) As to the assertion that he/she is a trader of good faith and negligence

An actual supplier and a supplier on a tax invoice may not deduct or refund an input tax amount unless there is any special circumstance that the supplier was unaware of the fact that the supplier was unaware of the name of the tax invoice, and that the supplier was not negligent in not knowing the fact that the supplier was unaware of the name of the tax invoice, the person who asserts the deduction or refund of the input tax amount must prove that the supplier was not negligent (see, e.g., Supreme Court Decision 2009Du1808, Jun. 11, 2009

However, the evidence submitted by the Plaintiff alone is insufficient to acknowledge the difference between the supplier and the actual supplier as to whether the Plaintiff was negligent in not knowing that the difference between the supplier and the actual supplier as stated in each of the instant tax invoices, and there is no other evidence to acknowledge the difference.

오히려, 앞서 든 증거들과 을 제3 내지 8호증의 각 기재에 변론 전체의 취지를 더하여 알 수 있는 다음과 같은 사정들, 즉 ① 원고의 CC사업소 영업과장 이HH은 이LL이 NNNN을 운영할 당시부터 이LL과 고철거래를 해오다 NNNN이 세금체납으로 2009년경 폐업된 이후에도 이LL과 고철 거래를 계속하였고, 그 과정에서 실제로는 이LL으로부터 고철을 공급받으면서도 6개 업체(OOOO, PPPP, QQQQ, RRRR, FFFFF, GGGGG) 명의의 세금계산서를 발급받은 점, ② 위 6개 업체는 같은 자리나 그 인근에서 고철판매업을 하였고, 6개월에서 1년 정도의 단기간 영업을 한 후 세금체납으로 폐업된 점, ③ 고철업계의 공급 구조가 복잡하고 무자료 거래가 빈번하다는 사실이 사회문제화 되어 있으므로, 통상적인 고철업 운영자라면 고철 공급업체가 실제 공급자인지 여부에 대하여 특히 주의를 기울일 필요가 있고, 특히 원고는 2009년경부터 고철 도・소매업을 운영하여 왔고, 원고의 직원인 이HH도 그 무렵 이전부터 고철업계에 종사하였으므로 국내 고철업계에서 널리 존재하는 자료상 거래의 실태 등을 잘 알고 있었을 것으로 보이는 점 등을 종합하면, 원고는 이 사건 각 세금계산서를 교부받을 당시 FFFFF이나 GGGGG가 실제로 고철을 공급하는 자가 아니라는 사실을 알았다고 봄이 상당하다. 원고의 이 부분 주장도 이유 없다.

3) As to the assertion that the right to tax collection is abused

As seen earlier, each of the instant tax invoices constitutes a tax invoice entered differently from the fact by the supplier, and as long as the Plaintiff seems to have known that the supplier stated in the tax invoice was different from the fact at the time of receipt of the tax invoice, the part on which the input tax on each of the instant dispositions did not deduct the input tax amount under the relevant statutes is lawful and lawful, and the Plaintiff’s assertion that the Plaintiff had already paid value-added tax to the FFF or GGGG, etc. does not constitute an abuse of the right to tax collection. The Plaintiff’s assertion on this part

4) As to the assertion that the portion of unfair underreporting was illegal

In light of the language, structure, etc. of relevant provisions under Article 47-3(2)2 of the former Framework Act on National Taxes (amended by Act No. 11604, Jan. 1, 2013), even if a taxpayer received false certification and underreporting the tax base, if the taxpayer did not know that there was false certification, it cannot be deemed that it constitutes a case of underreporting the tax amount due to an unlawful act, and the taxpayer did not know that there was a false representation by gross negligence. Furthermore, in order for the taxpayer to fall under “an unlawful act under Article 47-3(2)2 of the former Framework Act on National Taxes,” where the taxpayer received a different tax invoice from the supplier and the actual supplier, and thereby underreporting the input tax base, such an act should be deemed to fall under “an act of underreporting the tax base due to an unlawful act under Article 47-3(2)2 of the former Framework Act on National Taxes.” In addition, not only the fact that a taxpayer who issued a tax invoice should receive the input tax amount by either filing the tax payment amount or filing the tax invoice, or filing the tax invoice, thereby under 15.

In light of the following circumstances, the Plaintiff’s employees, including the Plaintiff’s tax invoice No. 17, discussed the Plaintiff’s tax invoice and the amount of scrap metal and quantity. At all times, the Plaintiff’s tax invoice was issued under the name of another company. ② The Plaintiff’s tax invoice was issued under the name of another company established in the same place or in the vicinity when the company that issued the tax invoice closes its business within a short time. ③ The National Tax Service, upon the Plaintiff’s failure to pay taxes, conducted a verification investigation on the SSS and TPPT, issued the sales tax invoice to the effect that the Plaintiff would have been aware of the fact that the Plaintiff’s employees and the Plaintiff’s employees were the employees of TPP, and that the Plaintiff would have been aware of the fact that the Plaintiff would not have been aware of the fact that the Plaintiff would have been in charge of tax evasion, including the amount of taxes imposed on the Plaintiff’s employees and the Plaintiff’s total amount of taxes imposed on the Plaintiff’s firm, and ④ the Plaintiff’s sales structure that would have been directly issued for the Plaintiff’s sales structure and supply of scrap.

3. Conclusion

Therefore, the plaintiff's claim is dismissed as it is without merit, and the judgment of the court of first instance is just in conclusion, and the plaintiff's appeal is dismissed as it is without merit.