Seocho 2010west0385 (20 August 20, 2010)

There is no evidence to acknowledge gold bullion transactions as nominal transactions, and the plaintiff is not an exporter, and thus is not in violation of the good faith principle.

There is no evidence to acknowledge the transaction of gold bullion as a nominal transaction, and the violation of the good faith principle applies only to the exporter, but the Plaintiff paid the difference between the output tax amount and the input tax amount as a taxable wholesaler, not the exporter.

2010Guhap43044 Disposition to revoke the imposition of value-added tax

Doeng Co., Ltd

O Head of tax office

1. On October 1, 2009, the Defendant imposed value-added tax of KRW 102,743,160 for the first term of 2004 against the Plaintiff, imposed value-added tax of KRW 46,535,340 for the second term of 2004, and imposed value-added tax of KRW 11:532,270 for the first term of 205, respectively.

2. The litigation costs shall be borne by the defendant.

The same shall apply to the order.

1. Details of the disposition;

A. The Plaintiff is a corporation established on May 6, 2003 for the purpose of wholesale, retail, and export and import of precious metals and gold bullion (referring to gold with at least 995/1,000 in the state of raw materials, such as metal, metal dub, and dud bar) and is deemed dissolved under Article 520-2(1) of the Commercial Act on December 1, 2009.

B. The Plaintiff issued a tax invoice of an amount equivalent to 12,104,026,00 won in total for the first half-year value-added tax period (from January 1, 2004 to June 30 of the same year) in 2004, and received a tax invoice of an amount equivalent to 12,086,527,000 won in total, and reported and paid KRW 1,13,000 in value-added tax for the first half-year value-added tax in 2004 (from July 1, 2004 to December 31 of the same year), and issued a tax invoice of an amount equivalent to 3,496,192,00 won in total for the second half-year value-added tax period (from June 30, 2004 to KRW 3,490,226,000 in value-added tax for the second half-year value-added tax period, and filed a return and payment for the same period from 2005,206,005.

(c) The defendant was notified of the taxation data that the plaintiff issued and issued a false tax invoice from Seoul Regional Tax Office and North 2000 won + 250 won (hereinafter referred to as the "tax investigation of this case") and found that the tax investigation of the plaintiff was conducted from April 27, 200 to August 10, 209, the plaintiff was 7,47,027,270 won (the total value-added tax amount shall be 15,18,79,79,300 won + 22,258, 207, 207, 300 won (the above tax base of value-added tax) calculated for 205, 207, 300 won (the value-added tax amount shall be deducted from the total value-added tax amount of value-added tax for 205, 300 won (the value-added tax shall be deducted from the total value-added tax amount of value-added tax for 204, 2603 won).

D. On January 18, 2010, the Plaintiff filed an appeal on the instant disposition with the Tax Tribunal, but was dismissed on August 20 of the same year.

[Ground for Recognition: there is no dispute, Gap evidence 1-3, Gap evidence 2, Eul evidence 1-1-3, the purport of whole pleadings]

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The Plaintiff’s disposition of this case, as stated in the attached Form 2, shall be revoked since the Defendant’s disposition of this case, which reported otherwise, was unlawful since it was not only purchased gold bullion from each purchaser, but also sold gold bullion in each seller, and received the payment of the transaction price.

(b) Related statutes;

It is as shown in the attached Table related statutes.

(c) Fact of recognition;

(1) A general form, etc. of an irregular gold bullion transaction for the purpose of evading tax;

From around 202 to 2004, gold bullion is imported by abusing the value-added tax or zero-rate tax exemption system among precious metal companies located in Jongno-gu Seoul Metropolitan Government, and then distributed it through various stages wholesalers, through which it is distributed as zero-rate or zero-rate tax exemption system. The so-called "large Carbon Business" is converted to taxation amount, and the "large Carbon Business" is exported by converting it into the so-called "large Carbon Business" (or "large Carbon Business" that discontinues its business with no economic ability, but only discontinues its business with the intention of tax evasion) and then distributing it into taxation through various stages of wholesalers, and the "large Carbon Business" is limited to the so-called "large Carbon Business" in which the exporter evades the transaction collected value-added tax, and the exporter is entitled to receive the unpaid value-added tax. The specific type of business is as follows:

A) In appearance, gold bullion is distributed through the stages of “foreign companies ? importer ? Tax-free wholesale companies ? Tax-free wholesale companies ? Tax-free wholesale companies ? ? Tax-free wholesale companies ? ? Tax-free wholesale companies ? ? Foreign companies ? The transaction amount is paid in sequence from the export company to the import company in the reverse direction, but in particular, the taxable wholesale companies only issue tax invoices at the order of specific persons or specific companies, and do not actually trade or transport gold bullion.

B) After purchasing gold bullion as a tax-free gold and selling it as a tax-free gold, it is evaded the value-added tax by way of withdrawing, concealing, and closing the profit within a short period of time. "Plastist" sells gold bullion with the value of supply below the purchase price. However, due to the fact that the value-added tax added to the value-added tax is higher than the purchase price and the value-added tax collected is not paid, the difference between the value-added tax and the purchase price is expected to be obtained. Meanwhile, the value-added tax collected by the "Plastist Enterprise" is successively transferred by the method of deducting the input tax by using the tax invoice received from the immediately preceding stage enterprise. In the end, it is the ultimate source for the value-added tax paid by the "Plastist Enterprise" in the form of "bombing business", which is the difference between the export price and the domestic sales price paid by each domestic enterprise in the form of "bombba" and the "bomba" in the form of "bomba".

2) The Plaintiff’s type of transaction

A) If the Plaintiff, a gold bullion exporter and importer, asked the gold bullion supplier to purchase the gold bullion, he/she verified whether there was a transactional intent by using the gold bullion sales source, and paid the gold bullion purchase price in advance to the purchaser of gold bullion by account transfer, etc. without any security offered from the purchaser, and then delivered the gold bullion to the purchaser. Upon receipt of gold bullion from the purchaser, the Plaintiff used transportation company or the Plaintiff’s representative director, who transferred the gold bullion to the purchaser.

B) The gold bullion purchased by the Plaintiff from the buyer is the gold bullion imported from a foreign country, such as Hong Kong. The importer and the taxation chain exist between the Plaintiff and the Plaintiff, and the EEE, Inc., the Plaintiff’s seller, exported most of the gold bullion purchased from the Plaintiff to a foreign country, including Hong Kong.

3) Judgment of innocence, etc.

A) The EEEE, FFF, BB, Inc., the Plaintiff’s seller, was accused by the tax authorities on suspicion of receiving the processed tax invoice.

(B) NewlyD and the Plaintiff, the representative director of the Plaintiff, around October 15, 2004 and around December 12, 2004, entered the gold bullion supplied by BBB Co., Ltd. and CCC Co., Ltd., with the supply price of the gold bullion amounting to KRW 1,81,121,620, and submitted a false entry in the list of total supply prices in the list of total tax invoices on January 25, 2005, and submitted it to BB Co., Ltd., GGG, HGGG, HH, JJ, HaKK, and most of the supply prices of the gold bullion supplied to them for each of the above 1,815,561,370, which were issued by the Seoul High Court for sale and purchase order of the gold bullion Co., Ltd., Ltd., which was issued by the Plaintiff to the above 13rd of the total purchase price of the gold bullion.

"The plaintiff prepared and delivered a confirmation document that he received a processed tax invoice without real transaction (hereinafter "the confirmation document of this case") to the defendant in the course of the tax investigation of this case on July 23, 2009, as shown in the first and second sales in the year 2004, and the attached processing transaction in the purchase transaction, and the above processing transaction details include the details of transaction which was rendered by the judgment of innocence of this case", "No dispute exists, and evidence Nos. 2, 3, 5, 6, evidence No. 4-1 through 6, evidence No. 4-2 through No. 4, and the purport of the whole pleadings and arguments No. 2 through No. 4]

D. Determination

(1) Article 1(1)1 of the Value-Added Tax Act provides that “supply of goods as taxable subject to value-added tax” and Article 6(1) provides that “The supply of goods shall be delivery or transfer by all contractual or legal grounds.” In light of the characteristics of value-added tax as multi-stage transaction, delivery or transfer of goods include all acts of causing the transfer of authority to use and consume goods, regardless of the actual profits gained (see, e.g., Supreme Court Decisions 85Nu286, Sept. 24, 1985; 9Du9247, Mar. 13, 2001; 2008Du9247, supra, the Plaintiff’s transaction of gold bullion purchased goods on the grounds that no specific transaction constitutes the supply of goods under the Value-Added Tax Act, including the purpose and attitude of each transaction, ownership of profits, and payment relationship between the Plaintiff’s purchase and sale of gold bullion, which were recorded on the basis of the following facts:

2) Judgment on the defendant's assertion

A) Defendant’s assertion

Since there is a so-called malicious coal company, which is a malicious business operator who makes illegal transactions at all stages of the plaintiff with regard to the transaction of gold bullion stated in the attached Form processing transaction, and the plaintiff knew or was unaware of the decrease in other tax revenues due to the deduction and refund of the input tax amount for himself/herself, the claim for deduction and refund of the input tax amount for the purchase transaction stated in the attached Form processing transaction cannot be allowed in violation of the principle of good faith as stipulated under Article

B) Determination

(1) In a series of consecutive transactions, where a malicious business operator in bad faith does not pay the value-added tax collected by him/her by attempting to make an abnormal transaction that is rather likely to cause losses (hereinafter “illegal transaction”) only by having the intent to evade value-added tax from the beginning and attempting to evade value-added tax from the time of the transaction, the exporter engaged in the transaction with the knowledge of the illegal transaction at the pre-stage stage to promote his/her own interest without any string, and his/her transaction profit is ultimately connected to the aforementioned illegal transaction. Furthermore, if his/her participation in the transaction becomes a critical factor that makes it possible to make the illegal transaction ultimately by taking advantage of the deduction and refund system of input tax, which is the premise thereof, it shall be deemed an act of pursuing unfair benefits by abusing the input tax amount deduction and refund system. Accordingly, the deduction and refund of input tax amount with other tax revenue from the illegal transaction would guarantee profits to the National Treasury, and it cannot be said that it goes against the principle of good faith and good faith (see, e.g., Supreme Court en banc Decision 2010Du14.

However, the principle of trust and good faith is applicable only to cases where input tax is deducted or refunded by applying zero-rate tax rates on exports, and it does not apply to cases where input tax is deducted or refunded in the domestic tax transaction (see, e.g., Supreme Court Decision 2009Du22317, Feb. 24, 2011). The principle of trust and good faith is applicable only to cases where input tax is deducted or refunded by applying zero-rate tax rates on exports, and only to cases where input tax is deducted or refunded in the domestic tax transaction (see, e.g., Supreme Court Decision 2009Du22317, Feb. 24, 201).

(2) In this case, as seen earlier, the Plaintiff paid the difference between the output tax amount and the input tax amount as a taxable wholesaler, not the exporter of the gold bullion transaction as stated in the attached processing transaction details. As such, the Defendant’s assertion that the disposition in this case is lawful on the ground of the violation of the principle of trust and good faith is not permissible on the ground that it is an addition to the grounds for disposition that is not identical to the previous reason for the disposition. However, the principle of trust and good faith, when applying the provisions of individual tax law as it is, may result in an unreasonable result that would result in the general sense of justice and ethics, thereby leading to the sound legal order, and instead, it may be limited or excluded from the application of individual provisions ex officio without the court’s assertion. Thus, the Plaintiff’s assertion is without merit.

3) Therefore, the Plaintiff’s above assertion is therefore justified.

3. Conclusion

Therefore, the plaintiff's claim of this case shall be accepted for all reasons, and it is so decided as per Disposition.