Supreme Court Decision 2008Du20680 ( October 12, 2009)

Seoul High Court 2008Nu6938 ( October 30, 2008)

Whether it is a nominal transaction for disguised carbon trade related to gold bullion trade

It is difficult to conclude that gold bullion transactions are nominal transactions for the purpose of disguised actual transactions of bombombing business solely on the grounds that there is a bombane company at an interim stage from the import to the export.

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

1. The part of the judgment of the first instance against the plaintiff falling under the subsequent part of the order of revocation shall be revoked.

The Defendant’s imposition of value-added tax against the Plaintiff on November 10, 2006 each disposition of KRW 256,880,000 for the first term of 203 and KRW 228,869,350 for the second term of 203 shall be revoked.

2. All costs of the lawsuit shall be borne by the defendant.

The decision of the first instance court is revoked. The defendant's imposition of value-added tax for the first term of 2003 to 256,880,000 won for the first term of 2003 to 228,869,350 won for the second term of 203 to 2003 and the imposition of corporate tax for the business year of 203 to 82,203,730 won for each of the above dispositions (However, since the judgment was made with respect to the portion of corporate tax in the above disposition of imposition, the scope of the trial after remand is limited to the portion of value-added tax which has not yet been determined among the above dispositions of imposition, as shown below).

1. Scope of adjudication of this court;

On November 10, 2006, the Plaintiff filed a lawsuit against the Defendant against the Defendant for the revocation of each disposition of imposition of KRW 1,56,880,00 for the first term portion of value-added tax 203 for the year 2003 and KRW 228,869,350 for the second term portion of year 203 for the revocation of each disposition of imposition of KRW 82,203,730 for the business year 203. On February 5, 2008, the first instance court appealed against the judgment of the first instance. The Plaintiff appealed against the judgment of the first instance. On November 10, 2006, the first instance court before remanded the Plaintiff. The Plaintiff’s appeal against the Plaintiff is dismissed, and it is clear that the Plaintiff and the Defendant’s appeal against the Plaintiff were remanded to the Seoul High Court prior to the judgment against the Plaintiff. The judgment against the Plaintiff is dismissed.

Therefore, this Court decides to decide only on the claim for revocation of each disposition of value-added tax imposed by the Defendant against the Plaintiff on November 10, 2006, including the first term portion of value-added tax 256,880,000, and the second term portion of tax 228,869,350 in 203.

2. Details of the disposition; and

A. On January 3, 2003, the Plaintiff is a company established for the purpose of manufacturing and selling precious metals, export and import business, etc. with its head office located in AAdong 944-26 BB building 502, Gangnam-gu, Seoul.

B. On March 18, 2003, the Plaintiff received 50km 69,350,000 from 30,000,000 won from 20,000,000 or less from 30,000,000,000 or less (hereinafter referred to as "1,000,000,000) and received from 30,00,000,000,000,000 or less (hereinafter referred to as "6,000,000,000,000,000,000,000,000,000,000,000 or less than 6,000,000,000 won (hereinafter referred to as "2,00,000,000,000,0000).

D. On Nov. 10, 2006, the Defendant recognized the instant tax invoice as a false tax invoice on Nov. 10, 2006, and notified the Plaintiff of value-added tax amounting to KRW 228,869,350 for the first term portion of 2003, and the second term portion of 2003, and KRW 82,203,730 for the business year of 203, by applying the penalty tax not received, and imposed corporate tax amounting to KRW 82,203,730 for the business year of 203 (hereinafter “instant tax disposition”).

E. On February 13, 2007, the Plaintiff was dissatisfied with the instant disposition and requested to the National Tax Tribunal for a trial on February 13, 2007, but the National Tax Tribunal dismissed the disposition on May 23, 2007.

[Ground of Recognition] Facts without dispute, Gap evidence 1 to 3, Gap evidence 2 through 4, Gap evidence 14-1 to 3, Gap evidence 26, Eul evidence 1-1 to 26, Eul evidence 1-2, Eul evidence 2, and the purport of the whole pleadings

3. Whether the instant disposition is lawful

A. The plaintiff's assertion

(1) Violation of value-added tax part

Since the Plaintiff actually purchased gold bullion from the business partner of this case and paid the price in full, the tax invoice of this case is normal transaction. The Plaintiff confirmed whether it is a normal business entity by visiting the business partner of this case before the transaction of this case and then purchased gold bullion from the business partner of this case and exported it to the company of Hong Kong through HH HH (hereinafter referred to as “HHHH”). The Plaintiff did not agree with the trader, duty-free supplier, supplier, or KK company to unlawfully refund value-added tax, and thus, the tax invoice of this case is false tax invoice of this case, or the Defendant’s disposition imposing value-added tax of this case on the premise that the Plaintiff knew or could have known it is unlawful.

(2) Violation of double tax investigation

The disposition of this case is unlawful in violation of the provisions of Article 81-4 of the Framework Act on National Taxes and Article 63-2 of the Enforcement Decree of the same Act, since it was conducted as a result of a duplicate tax investigation on the

(b) Related statutes;

It is as shown in the attached Form.

(c) Fact of recognition;

(1) A general form of variable transaction for the purpose of tax evasion in the transaction of gold bullion

(A) When the "tax-free gold bullion system" was implemented from July 1, 2003 to Article 106-3 of the Restriction of Special Taxation Act, among gold bullion distributors, the so-called "tax-free gold bullion distribution company" was put into the distribution middle in the distribution phase until the export is made through several distribution companies. When a gas supplier sells the gold bullion distributed as tax-free gold up to the whole phase of the gas company, it was sold as an additional tax amount equivalent to 10% of the value-added tax. After withdrawing the profit in cash within the short period and then closing the business without paying the value-added tax, a distributor after the gas supply is made impossible to collect the value-added tax. The exporter, who received the tax invoice at each stage, exported the gold bullion to the zero-rate tax rate, and eventually received the value-added tax refund from the State, and eventually, the so-called "large-scale business operator in which foreign gold bullion exporters and importers divided the profits of the gold bullion by dividing it with the foreign gold bullion distributors."

(B) In order to maximize its profit, a wide amount of gold bullion is distributed as much as possible within a normal and short period, and in order to prevent disputes between involved companies, which may arise therefrom, or accidents such as loss of prices, ① most of the same former owners (this refers to those who prepare for the first gold bullion import and settlement from the outside of the wide carbon business network; c) operate both the exporting company and the importing company at the same time; ② the former owners are placed in direct transactions with the large-scale coal company; ③ the former owners determine the volume of the transaction, unit price, and the margin of the transaction at each stage of transaction; ④ the series of transactions from the importing company to the exporting company are conducted at a very short time, and ⑤ the actual transactions of gold bullion are carried out at the same time as soon as they are transported to the exporting company immediately.

(2) Type, etc. of the instant transaction

(A) The details of transactions from six transactions to the export of the instant transaction are as follows.

(B) Other trade as a trade company. One trade was involved in MF trade, NNtra, 4, and 5 each stock company (hereinafter “PPPPPPPP Korea”) and the trade structure is as follows and is similar to the six trade.

(C) The date of import and export of the instant transaction and the export price and the domestic market price are as follows.

(D) Even if the Plaintiff is an exporter, the Plaintiff did not receive a certificate of subdivision for the refund of customs duties or refund customs duties for the export of the gold bullion of this case.

[Ground of Recognition] A without dispute, Gap evidence 26, Eul evidence 3, Eul evidence 4-1 through 7, Eul evidence 5-2, Eul evidence 8-1 through 3, Eul evidence 9-1 through 13, Eul evidence 14-1, 2, Eul evidence 15-1 through 4, Eul evidence 16, Eul evidence 17-1 through 22, the purport of the whole pleadings

D. Determination

Article 1(1)1 of the Value-Added Tax Act provides that "the supply of goods as taxable subject to value-added tax" and Article 6(1) provides that "the supply of goods shall be a delivery or transfer of goods on all contractual or legal grounds." In light of the characteristics of value-added tax as multi-stage transaction tax, "delivery or transfer" under Article 6(1) of the Value-Added Tax Act includes all acts of causing the transfer of authority to use and consume goods, regardless of the existence of actual profits (see, e.g., Supreme Court Decisions 85Nu286, Sept. 24, 1985; 9Du9247, Mar. 13, 201; 9Du9247, Mar. 16, 201). In such a case, the issue of whether a specific transaction among a series of transactions constitutes the supply of goods as provided for in the Value-Added Tax Act shall be determined by comprehensively considering the purpose and circumstances of each transaction party, the allocation of profits, and the denial of such profits.

In light of the above legal principles, the Plaintiff purchased gold bullion 280 km from March 18, 2003 to September 22, 2003, respectively, from six business entities, including CCC trading, and received the gold bullion on the date of purchase, and paid the price, and received each tax invoice under the instant transaction from the supplier of this case. The Plaintiff exported the gold bullion to Hong Kong on the date of purchase, and the Plaintiff accrued profits in the process. However, in light of the facts that the gold bullion was actually transferred to the exporter and exported from the exporter to the exporter, it is difficult to conclude that the gold bullion was actually supplied or received under the instant transaction, even if it was difficult to receive any other tax invoice on the sole basis of the fact that the gold bullion was supplied or received under the instant transaction.

In regard to this, the defendant shall be deemed to have received tax invoices different from the fact by falsely indicating the transaction amount that the plaintiff had only the value of supply and is not included in the value-added tax as if the value-added tax was included in the original transaction. Since the plaintiff's gold bullion transaction is a series of illegal acts committed by the so-called wide carbon business for the purpose of unlawfully refunding the value-added tax evaded, it shall be deemed that the plaintiff may refuse to apply for refund by denying the deduction of the input tax amount in order to prevent damages to the country caused by the tort. Further, the plaintiff's taking the gold bullion out of the country is merely a formal disguised export for the purpose of unlawfully acquiring the national tax revenue through converting the tax-free gold bullion through the method of converting the tax-free gold bullion into the tax-free gold bullion by abusing the zero rate system recognized for exporters rather than normal goods export and the input tax deduction. However, as seen earlier, since it is difficult to view that the tax invoice in this case falls under a "tax invoice different from the fact", there is no ground to deny the deduction of the input tax amount, and the evidence submitted by the defendant alone.

Therefore, the disposition of this case based on the premise that the tax invoice of this case constitutes "unlawful tax invoice" is unlawful without any need to further examine the remainder of the plaintiff's assertion.

4. Conclusion

Therefore, the plaintiff's claim shall be accepted on the grounds of its reasoning, and the judgment of the court of first instance is unfair on the grounds of its conclusion, so it is so decided as per Disposition by the court of first instance that the defendant's disposition of imposition of value-added tax amounting to KRW 256,880,00 for the first term of November 10, 2006 and KRW 228,869,350 for the second term of 203 against the plaintiff.