Seoul Administrative Court 2006Guhap26493 ( July 16, 2009)

Cho High Court Decision 2005No443 (206.05.02)

The principle of trust and good faith shall not apply to gold bullion business entities.

In light of the fact that it is sufficient to restrict the exporter's input tax deduction and refund at the final stage to maintain the basis of the pre-stage tax credit system, and further to deny the exporter's input tax deduction and refund from the intermediate taxable business operator's input tax deduction and refund may result in the State's unfair benefit. In light of the principle of good faith, the principle of good faith is applicable only to cases where input tax is deducted and refunded through the application of zero-rate tax rate for

Article 15 of the Framework Act on National Taxes

Article 17 of the Value-Added Tax Act

2011Nu2242 Revocation of Disposition of Imposition of Value-Added Tax, etc.

AAice Corporation

Head of the tax office;

Seoul Administrative Court Decision 2006Guhap26493 Decided July 16, 2009

February 8, 2012

March 21, 2012

1. Of the judgment of the court of first instance, the part against the defendant in excess of the money ordered to revoke is revoked, and the plaintiff's claim corresponding to the revoked part is dismissed. The part exceeding KRW 795,251.310 of the disposition of imposition of value-added tax for the first term of April 1, 2003 against the plaintiff on April 1, 2005 and exceeding KRW 230,502,360 of the disposition of imposition of value-added tax for the second term of year of 2003 and exceeding KRW 342,787,450 of the disposition of imposition of value-added tax for the first term of year of 204, and exceeding KRW 230,502,360 of the disposition of imposition of value-added tax for the second term of year of 203, and the part exceeding KRW

2. The defendant's remaining appeal is dismissed.

3. 10% of the total costs of litigation shall be borne by the Plaintiff, and the remainder by the Defendant.

1. Purport of claim

On April 1, 2005, the Defendant imposed value-added tax of 1.063, 794, 125 won on the Plaintiff in 2003, imposed value-added tax of 2003, imposed value-added tax of 237,290,034 won in 203, and imposed value-added tax of 171 minutes in 204, imposed value-added tax of 692,982,826 won in 2004. (The Plaintiff partially reduced the claim from this light source)

2. Purport of appeal

The judgment of the first instance is revoked, and the plaintiff's claim is dismissed.

1. Details of disposition;

A. From January 30, 2003 to May 20, 2005, the Plaintiff engaged in precious metal wholesale and retail business, and export and import business on the 0th floor of Jongno-gu Seoul Metropolitan Government OOdong 00-0 DD building.

B. From January 1, 2003 to December 31, 2004, the Plaintiff purchased gold bullion amounting to KRW 335,252,004,00 in total from 37 enterprises, such as a stock company (in the case of a stock company, excluding the name of the stock company) and received tax invoices (hereinafter referred to as the “tax invoices of this case”) from those enterprises, and sentenced to refund of value-added tax by deducting the input tax from the sales tax amount. The Defendant received notification from the Director of the Seoul Regional Tax Office that the tax invoices of this case are different from the facts by fraud or other unlawful methods, and issued a disposition of imposition of value-added tax in the order of 0.10 on April 1, 2008, including the non-proof of evidence, the Defendant issued a disposition of imposition of value-added tax to the Plaintiff on April 1, 2005 and the remaining amount of value-added tax (the first disposition of imposition of value-added tax on October 10, 2008, 2011).

(The following table omitted):

1,063,794,125 won = Principal tax of 908,105,604 + Additional tax of 90,810,560 won + Additional tax of 94,877,961 won + Additional tax of 64,87,961 won

The remaining tax amount of 237,290,034 won = the principal tax of 215,718,213 + the additional tax on negligent tax returns of 21,571,821 won (additional tax for unfaithful payment)

The remaining tax amount of 692,982,826 won = principal tax of 455,970,600 + additional tax of 45,597,060 + Additional tax of 45,597,060 + Additional tax of 191,415,166

[In the absence of dispute. Facts, Gap evidence Nos. 1 through 25, Eul evidence Nos. 1, 2, 26, 27, 29 (including virtual numbers; hereinafter the same shall apply), the purport of the whole pleadings]

2. Whether the disposition is lawful;

A. The parties' assertion

The plaintiff asserts that the disposition of this case refusing to deduct or refund the input tax amount based on the tax invoice of this case is unlawful because the tax invoice of this case is the same as the fact, while the defendant asserts that the defendant's seeking the deduction or refund of the input tax amount based on the tax invoice of this case is not allowed because it violates the principle of trust and good faith.

(b) Fact of recognition;

1) On July 10, 2002, the Plaintiff started the business at 837-9, Busan-dong, Busan-dong, but moved its main office to Seoul on January 30, 2003, and then discontinued the business registration on May 20, 2005.

2) The Plaintiff’s representative director, JH had worked in FF, the precious metal exporter of the Busan GG department store, and became the Plaintiff’s representative director, as the introduction to New II, the Plaintiff’s actual operator. Since 1986, PP II, the Plaintiff’s actual operator, was working in the precious metal industry, and JJ, KK, LLLLL, etc. and the prohibition of Korean land as an incorporated association, etc. was determined by the circumstances of the gold market, such as JJ, KK, and LLLLL, as the president of the Association. The Plaintiff had its principal office in a building, such as the LLLLLLLL, operated by new II.

3) A new II was found to have actively participated in the crime of evading value-added tax by 32 wide coal leaves, and was convicted of imprisonment for 9 years in the first instance trial (Seoul Central District Court Decision 2007Dahap855, Jun. 5, 2008) due to the criminal facts committed by 32 wide coal leaves, and was convicted of committing the crime of evading value-added tax by 9 years in the second instance (Seoul Central District Court Decision 2007Dahap855, Jun. 5, 2008). In the second instance, the first instance judgment was finalized in the final appeal (Seoul High Court Decision 2008No1587, Feb. 4, 2009). The second instance judgment became final and conclusive (Supreme Court Decision 2009Do1872, Nov. 25, 2010).

"4) 이 사건 세금계산서에 따른 긍지금 거래 중 수출거래와 영세융 매출에 따른 금지금 거래의 경우, 수입업체에 의하여 수업되어 면세금으로 유통되다가 과세금으로 전환되어 과세중간상과 원고와 같은 대형도매업체를 거쳐 홍콩에 있는 QQQ(이하 'QQQQ'QQQQ'라고 한다)를 통해 수출이 이루어졌고, QQQQ, QQQQ는 대표가 같은 사람이었으며, 그 거래 과정 중 RRRRR, SSSSS무역, TTT물산 등과 같은 악의적 사업자가 끼어 있었다. 국세청 소속 조사자가 원고의 수출처인 QQQQ에 대한 조사 과정에서 국내 신생엽체 명단을 제시하자, QQQQ 직원이 오랜 친구라고 말하는 등 그 진술에 일관성이 없었다.", 5) 원고는 금도매 시세와 상관없이 국내시세 및 국제시세보다 낮은 가격으로 금지금을 유통하였고, 매입 ・ 매출 거래에 있어서 수출이 먼저 이루어지고 그에 따른 수출 대금이 수출업체에 송금되면 그 이후에 원고 등 수출의뢰업체에 송금이 이루어지는 방식으로 대금이 결제되었다.

6) In the case of gold bullion exported by the Plaintiff through zero-rate tax rates, there was a transaction of re-importing the exported gold bullion, which re-imported and re-exports the exported gold bullion. The amount of gold exports made by the Plaintiff was 165t in 2003, 233t in 2004, and 6t sharply decreased in 2005.

[Ground of recognition. Private theory without dispute, Gap evidence 1, 29 to 40, 45 to 93, Eul evidence 3 to 27, 46, the purport of the whole pleadings]

C. Determination

1) Article 15 of the former Framework Act on National Taxes (amended by Act No. 9911, Jan. 1, 2010; hereinafter “Framework Act”). Article 15 of the same Act provides that “When a taxpayer performs his/her duty, he/she shall faithfully engage in his/her duty. This principle also applies to the legal relationship concerning value-added tax (Article 1 and Article 3(1) main text of the Framework Act on National Taxes). It is naturally applicable to a malicious business owner’s malicious intent to evade value-added tax from the initial stage of a series of transactions, and only if a malicious business owner fails to generate profit and avoid value-added tax, it is rather deemed to cause damage to the national treasury (hereinafter “illegal transaction”). In light of the principle of good faith and good faith, if an exporter is aware that there was an illegal transaction between the exporter and the purchaser, etc. at least 20 years of zero (hereinafter “export, etc.”), the exporter’s duty to deduct the difference between the exporter’s and the purchaser’s duty to deduct and the exporter’s duty to deduct the total amount of taxes from 15.

2) As to the export transaction and purchase of tax based on the zero-rate tax rate among the instant tax invoices. In light of the aforementioned transaction practices, distribution routes, period, volume and value of the Plaintiff’s transaction, Plaintiff’s representative director’s experience, details of establishment of the Plaintiff’s representative director, and the result of investigation by relevant transaction partners, etc., the Plaintiff is deemed to have known, or failed to have known, by gross negligence, the circumstance that there was a malicious business operator with intent to evade the output tax in the series of transaction at the time of the transaction through the export transaction and the purchase of zero-rate tax rate, and that there was a malicious business operator with intent to evade the output tax at the time of the transaction. The Plaintiff’s assertion for the deduction and refund of the input tax invoice based on the export transaction and zero-rate purchase confirmation is not permissible in violation of the principle of good faith as stipulated under Article 15 of the Framework Act

3) On this issue, the Defendant asserts that the Plaintiff’s input tax amount as a taxable business entity may not be deducted and refunded as long as it was conspired with the malicious business entity. However, the above assertion is insufficient to recognize that the evidence submitted by the Defendant does not comply with the aforementioned legal principles and alone was conspired with the malicious business entity. In addition, in the judgment of remand, the principle of trust and good faith shall not apply to the deduction and refund of input tax amount, which is related to domestic taxable transactions, as stated in the reasoning of the judgment of remand.

4) Comprehensively taking account of the purport of the whole arguments as to Gap evidence 29, the export details and purchase details made by the plaintiff as the export business operator, etc. for January 2003, 2003, and January 2004, are as follows: the export content column and the input tax amount column; the imposition disposition of value-added tax (including additional tax) which is calculated by denying the value-added tax stated in the purchase content column is as follows; and the calculation details are as follows:

(3) The following table:

5) On the other hand, the Plaintiff asserts that the portion exceeding the additional tax on negligent tax on negligent tax on negligent tax on the calculation of the remaining tax amount and the additional tax on negligent tax on negligent tax on negligent tax on negligent tax on negligent tax on the basis of the calculation details of the remaining tax amount after the deduction was made is unlawful. Since both the principal tax on the calculation details of the tax amount, the additional tax on negligent tax on negligent tax on negligent tax and the additional tax on negligent tax on negligent tax on negligent tax payment are within the scope of the calculation details of the remaining tax amount, the Plaintiff’s assertion on this part is without merit. Therefore, the subsequent tax on negligent tax amount (the same shall apply to the details

3. Conclusion

In the judgment of the first instance court, the part against the defendant ordering the cancellation of the tax amount corresponding to the above legitimate tax amount shall be revoked, and the plaintiff's claim corresponding to the revoked part shall be dismissed. The defendant's remaining