Seoul High Court Decision 200Na14488 decided May 1, 2001

Head of the Geumcheon Tax Office and two others

June 12, 2015

1. The imposition of value-added tax on September 16, 201 by the head of the Geumcheon Tax Office, which was made between February 2, 2006 and January 1, 2008 by the Plaintiff Gwangju Round Co., Ltd. on September 16, 2013, is revoked.

2. As to the imposition of value-added tax on June 7, 2013 by the head of the Geumcheon District Tax Office against Plaintiff Pluter Co., Ltd., Ltd. on June 7, 2013, the imposition of value-added tax from February 2006 to February 2007 is invalidated.

3. All of the plaintiffs' claims against the defendant North Daegu Tax Office, the Hanyang Tax Office, and the plaintiffs' remaining claims against the defendant Geumcheon Tax Office are dismissed.

4. Of the costs of lawsuit, ① 4/5 of the portion arising between the Plaintiff, Dong-dong Mazers’s Day and Defendant Kucheon-gu’s Head of Kucheon-gu’s Tax Office shall be borne by the director of Kucheon-gu Tax Office, and the remainder 1/5 by the director of Kucheon-gu Tax Office, ② the part arising between the Plaintiff, Dong-gu Mazers and the director of Kucheon-gu Tax Office, ② the remainder 9/10 shall be borne by the Plaintiff, Mazers, and the remainder 1/10 shall be borne by the director of Kucheon-gu Tax Office. ③ The part arising between the Plaintiff Mazers and the director of Kucheon-gu Tax Office, and the part arising between the

The “Defendant” column of the Disposition No. 2 and [Attachment 1] List No. 2 and [Attachment 1] column, each of the Defendants listed on each date, “the date of imposition”, shall revoke all the respective dispositions of imposition as indicated in the Disposition No. 2 and the “tax amount” column, each of which was made to the Plaintiff, Dongdong-ropers, Inc., Ltd., flapers, and DK EXS.

1. Details of the disposition;

A. From February 2, 2006 to February 2, 2012, Plaintiff Dongdong Mazers Co., Ltd. and Plaintiff Mazper Co., Ltd.: (a) merged with Plaintiff Mazer Co., Ltd. (hereinafter “instant tax invoice”) and comprehensively succeeded to the rights and obligations of dixex Co., Ltd. (hereinafter “instant tax invoice”) on December 31, 2014 following the disposition of imposition at issue in the instant case; (b) omitted the “stock company” from the indication of the said three companies; and (c) through the Plaintiffs and dixex Co., Ltd., Ltd. (hereinafter “Plaintiffs, etc.”) deducted the purchase tax invoice (hereinafter “instant tax invoice”) from the output tax amount during the value-added tax period from February 2, 2009 to February 2, 2012.

본문내 포함된 표 상호 ○○○○○○○○○ △△△ □□□□ ◇◇◇◇◇◇◇ 성명 소외 2 소외 3 소외 4 소외 5 등록번호 (등록번호 1 생략) (등록번호 2 생략) (등록번호 3 생략) (등록번호 4 생략)

B. Nonparty 2, Nonparty 3, Nonparty 4, and Nonparty 5, the representative of the instant test company, are those who are in a relationship of relationship with Nonparty 1, the representative director of the Plaintiff Gwangju Man-Mazers, and Nonparty 1. The actual representative of the instant test company is Nonparty 1, and Nonparty 2, Nonparty 3, Nonparty 4, and Nonparty 5 are those who lent only the name of the representative to Nonparty 1 (hereinafter referred to as the “titler”).

C. The "trade name" column of the tax invoice of this case delivered by the plaintiffs, etc. from the patent firm of this case refers to the trade name of the patent firm of this case, and the "name" column refers to the name of the trademark holder of this case instead of the non-party 1, the actual representative, and the name of the trademark holder of this case.

D. The Defendants: (a) deemed that the actual operator of the instant test company is Plaintiff Dongdong Mazers and Nonparty 1, the representative director of Mazers, and thus, the instant tax invoice constitutes “a tax invoice that differs from the facts entered by the supplier,” and thus, deducted the input tax amount related to the instant tax invoice; and (b) imposed value-added tax and corporate tax on the Plaintiffs and DKE (attached Form 1 and 2) by applying the documentary evidence non-taxation tax under the Corporate Tax Act (hereinafter “instant disposition”).

[Ground of recognition] Facts without dispute, Gap evidence 1, 2, 3, Eul evidence 3 through 6 (including branch numbers), the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiffs' assertion

1) The allegation that the instant tax invoice does not constitute “unlawful tax invoice”

Article 16(1)1 of the former Value-Added Tax Act (amended by Act No. 11608, Jan. 1, 2013; hereinafter “former Value-Added Tax Act”). Article 16(1)1 of the former Value-Added Tax Act (hereinafter “instant legal provision”) provides for an “business operator’s registration number and name or title to be supplied” as a requisite entry of a tax invoice. In the case of an individual entrepreneur, it accords with the principle of strict interpretation to interpret that one of the matters to be entered in the above “name” or any of the matters to be entered in the “title” column meets the requisite entry requirements if it is true. Furthermore, if there is no problem in the function of the tax invoice calculating the amount of tax payable and the external and external verification function of the relevant tax invoice, it must be excluded from the amount of tax payable. The instant tax invoice does not necessarily cause any obstacle to calculating the amount of the value-added tax payable, and as the business operator’s business operator’s registration number is stated true, there is no problem in the instant tax invoice.

(ii) argument regarding the exclusion period

Since the Plaintiffs, etc. were not evading value-added tax by fraud or other unlawful means, five years of exclusion period shall apply to such tax disposition. Among the instant disposition, the imposition of value-added tax and the imposition of the list (attached Form 2) from February 2, 2006 to January 2008 on the Plaintiff Magman Pitius among the instant disposition was made after the lapse of five years of exclusion period for imposition.

B. Relevant statutes

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

C. Determination

1) As to the allegation in the above 1)

In light of the following points, it is reasonable to view that the instant tax invoice, on which Nonparty 1, who is the actual representative, entered the name of the nominal holder of the instant case instead of Nonparty 1, constitutes “unlawful tax invoice” and does not deduct the relevant input tax amount.

① Article 17(2)2 of the former Value-Added Tax Act provides that an input tax amount in a case where the entries of a tax invoice are different from the facts, shall not be deducted from the output tax amount. In this case, the meaning that it is different from the facts is stipulated that if the ownership of the income, profit, calculation, act or transaction which is the object of taxation is nominal, and there is a separate person to whom such income, profit, or transaction belongs, the person to whom such income, profit, or transaction belongs shall be liable for tax payment and the other person to whom such tax is applied in accordance with the purport of Article 14(1) of the Framework Act on National Taxes, which provides that the necessary entries of a tax invoice are inconsistent with those of the person to whom the goods or service is actually supplied or supplied, regardless of the formal descriptions of the transaction contract, etc. prepared between the parties to the transaction concerning the goods

② The instant legal provision provides for the “business operator’s registration number and name or title to be supplied” as the requisite entry of the tax invoice. In the case of an individual entrepreneur, if the name of a third party, other than the actual supplier, is indicated in the name column, it may be deemed that the necessary entry of the tax invoice is different from the fact. However, the instant tax invoice is written by the transaction agent who supplied interior services to the Plaintiffs, not Nonparty 1, as the instant nominal lender.

③ The Plaintiffs asserted that the instant tax invoice corresponding to the business registration did not constitute a false tax invoice, since the instant patent firm’s business registration was made in the name of the instant patent firm from the beginning of the beginning. However, in light of the fact that the so-called “data tax invoice” was also a tax invoice corresponding to the business registration, the Plaintiffs’ assertion that the said tax invoice does not constitute a false tax invoice is equivalent to the business registration is not acceptable.

④ If the contents of the tax invoice to be entered are not true, it is difficult to function as an invoice for calculating the amount of tax payable under the Value-Added Tax Act, and as a result, the basis of the value-added tax system is considerably shaking. Moreover, it is difficult to expect that the accurate assessment of the tax invoice, such as corporate tax and local tax, would be difficult and that the entire taxation on the final consumer would be conducted smoothly and appropriately without securing the accuracy and accuracy of the tax invoice, which serves as the basis of the operation of the value-added tax system, and ultimately, it is highly likely that the VAT system will cause the poor operation of the entire taxation system as well as the entire taxation system (see Constitutional Court Decision 200Hun-Ba51, 202Hun-Ba56, Aug. 29, 200). In particular, our VAT system that has selected the pre-stage tax credit system, considering that there is a high possibility that the discovery of the tax transaction would be difficult if the name of the supplier is differently entered in the purchase tax invoice, thereby hindering the tax administration.

Therefore, the plaintiffs' assertion that the tax invoice of this case does not constitute "unlawful tax invoice" is without merit.

2) As to the allegation as to the above 2)

In a case where a taxpayer received an input tax amount deduction or refund from a supplier and an actual supplier on the relevant tax invoice, and received a different tax invoice, such an act constitutes “a case where a taxpayer evades national taxes, obtains a refund or deduction by fraudulent or other unlawful means,” and thus subject to the exclusion period of imposition for ten years under Article 26-2(1)1 of the Framework Act on National Taxes, there should be awareness that, in addition to the perception that a taxpayer is entitled to receive a deduction or refund of an input tax amount under a false tax invoice, the taxpayer would be entitled to receive a return or payment of the tax base and amount of value-added tax except for the output tax on the relevant tax invoice, or a refund upon filing a request for correction after filing a return or payment of the entire amount of output tax on the relevant tax invoice (see Supreme Court Decision 2014Du42001, Feb. 26, 2015).

The following circumstances, which are acknowledged by adding the purport of the argument to each entry in the evidence Nos. 2 through 5, i.e., ① in this case, Nonparty 1, who actually issued the tax invoice of this case, did not evade the obligation to pay value-added tax on the tax invoice of this case; ② Plaintiffs et al., were exempted from the liability to pay value-added tax on the tax invoice of this case; ③ Nonparty 1 evaded the comprehensive income tax from 2006 to 2011, which should be considered in calculating the exclusion period for imposition of global income tax, but this is not a circumstance that should be considered in calculating the exclusion period for imposition of value-added tax, and thus, the Plaintiffs’ deduction of the input tax amount pursuant to the tax invoice of this case would result in a decrease in revenues on the tax invoice of the State

Ultimately, the imposition of value-added tax (attached Form 2) and the list of the pertinent imposition of value-added tax shall be imposed from February 2, 2006 to January 2008, 2008 among the dispositions in this case, the imposition of 10 years shall not be applicable, and the imposition period of 5 years shall be applicable. Accordingly, the Plaintiffs’ claim for revocation of the imposition of value-added tax is also allowed since the date on which the pertinent value-added tax may be imposed [the day immediately following the 25th day from the end of the taxable period (the first day from June 30 every year in the case of the first period, and December 31 every year in the case of the second period)] was made after the lapse of 25 years from the end of the taxable period, and the imposition period of 206 to the second day of 2008 from the date on which the said Plaintiffs’ claim for revocation is made. Thus, the Plaintiffs’ claim for revocation of the imposition of value-added tax against the Plaintiff, the Plaintiff’s Dor.

3. Conclusion

Therefore, the plaintiffs' claims against the defendant of the Geumcheon Tax Office are justified within the scope of the above recognition, and they are accepted. The plaintiffs' claims against the defendant of the defendant North Daegu Tax Office, the Jungyang Tax Office and the others' remaining claims against the defendant of the Geumcheon Tax Office are dismissed. It is so decided as per Disposition.

[Attachment]

Judges and decorations (Presiding Judge) Lee Jong-hee-gu

1) Article 26-2(5) of the Framework Act on National Taxes; Article 12-3(1)1 of the Enforcement Decree of the same Act; Articles 3(1) and 19(1) of the former Value-Added Tax Act