Suwon District Court-2017-Gu Partnership-62021 ( October 17, 2017)

Cho Jae-2016-China-2592 ( November 28, 2016)

A claimant for a refund on taxes paid under the special system for payment by purchaser;

In accordance with the special case of payment by a purchaser, it is clearly stipulated that the amount paid erroneously or in excess of the amount of value-added tax paid by the person provided with copper scrap, etc. shall be refunded to the person provided with the purchase. Therefore, the claim for repayment of the amount of tax overpaid or erroneously paid by the purchaser is attributed to the

Article 106-9 of the Restriction of Special Taxation Act

2017-Nu-80327 Revocation of Disposition Rejecting Value-Added Tax Correction

AA

o Head of the tax office

oly 2018.14

8.07.05

1. Revocation of a judgment of the first instance;

2. Of the instant lawsuits, the part of the revocation claim against the rejection disposition regarding the amount of value-added tax for the second term in 2014 and the amount of value-added tax for the first term in 2015 shall be dismissed.

3. The plaintiff's remaining claims are dismissed.

4. All costs of the lawsuit shall be borne by the Plaintiff.

the Gu Office's place of service and place of service

1. Purport of claim

The Defendant’s value-added tax for the second term of May 31, 2016 and the first term portion of January 2015 for the Plaintiff on May 31, 2016

The rejection disposition regarding the value-added tax shall be revoked.

2. Purport of appeal

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

1. Details of the disposition;

A. From October 10, 2014 to 00:0 a.m. to 00 a.m., the Plaintiff is engaged in wholesale and retail business, such as scrap iron and steel scrap, with the trade name “0 metal resources”. In relation to the said place of business, the Plaintiff reported and paid value-added tax for two years in 2014 and value-added tax for one year in 2015, as follows:

B.** The commissioner of a regional tax office conducted a tax investigation on the Plaintiff’s workplace from April 2015, and confirmed that the Plaintiff issued false sales tax invoices without real transactions during the period of two years in 2014 and one year in 2015. On this ground, the Defendant issued a revised tax order to reduce the sum of KRW 17,768,209,620, out of the total value of supply for the first year in 2015, and to reduce the sum of KRW 17,768,209,620, out of the total value of supply for the second period in 2014, and the total amount of output for the second period in 2014, and the amount of value-added tax that reduces KRW 1,776,820,962 from the output tax amount for the first year in 2015

C. On March 23, 2016, the Plaintiff filed an application for rectification with the Defendant to seek refund of KRW 3,358,598,480 (hereinafter referred to as “instant application for rectification”) for value-added tax for the second term of 2014 (hereinafter referred to as “the instant special provisions”) and KRW 2,125,021,830 for the first term of 2015 (hereinafter referred to as “instant disposition”). However, the Defendant rejected the application on May 31, 2016 (hereinafter referred to as “instant disposition”).

D. On July 11, 2016, the Plaintiff filed an appeal with the Tax Tribunal. However, on November 30, 2016, the Tax Tribunal dismissed the Plaintiff’s appeal on the ground that the actual payer of value-added tax paid pursuant to the instant special provisions is not the Plaintiff but the Plaintiff’s seller (purchase).

[Reasons for Recognition] Facts without dispute, Gap evidence Nos. 1 through 4, Eul evidence Nos. 1 through 6 (including each number), the purport of the whole pleadings

2. The plaintiff's assertion

If the Plaintiff’s sales are denied due to the processing transaction, the value-added tax imposed by the purchaser pursuant to the special provisions of this case should be refunded to the Plaintiff as the seller. Therefore, the disposition of this case rejecting the claim for correction of this case on the ground that the actual payer is not the Plaintiff but the purchaser is legal.

3. Relevant statutes;

The court's explanation on this part is the same as the entry in the corresponding column of the judgment of the court of first instance. Thus, it is accepted in accordance with Article 8 (2) of the Administrative Litigation Act and Article 420 of the Civil Procedure Act.

4. Determination on the defense prior to the merits

A. Defenses before the merits

1) 1) Defenses

Since the actual payer of the tax amount at issue is not the Plaintiff but the purchaser, the Plaintiff cannot be deemed to be a person whose rights or interests have been infringed due to the instant disposition, and thus cannot seek revocation of the instant disposition. Therefore, the instant lawsuit is unlawful.

2) 2 Defenses

The instant claim for correction is nothing more than seeking refund of the value-added tax already reduced through the instant decision of correction. As such, the instant disposition rejecting refund cannot be deemed a disposition that specifically and directly affects the existence or scope of the claim for refund of value-added tax. Therefore, the instant lawsuit is unlawful on account of its lack of qualifications for appeal.

B. Determination as to No. 1 defense

The court's explanation on this part is the same as the statement of "4 pages of the judgment of the court of first instance", and therefore, this part is cited in accordance with Article 8 (2) of the Administrative Litigation Act and Article 420 of the Civil Procedure Act.

C. Judgment on the second defense

The provisions of Articles 51(1) and 52 of the Framework Act on National Taxes merely stipulate the procedures for refund of the tax authority as an internal process of handling the national tax refund and additional dues for which the claim for repayment has become final and conclusive, and as such, the claim for refund is not finalized only by the determination of the national tax refund (including additional dues). Thus, the determination of the refund of a national tax refund decision or the refusal of refund of a request for the determination is not a disposition that specifically and directly affects the existence or scope of the tax payer’s claim for refund, and it cannot be deemed as a disposition subject to appeal (see, e.g., Supreme Court Decision 2001Du87

In light of the above legal principles, the disposition on the part already reduced due to the decision of refusal of refund among the disposition of this case is merely a notification of refusal to refund the plaintiff's claim, and it cannot be deemed that the plaintiff's right to claim refund of value-added tax has a specific and direct effect on the existence or scope of the plaintiff's right to claim refund of value-added tax. Therefore, the part on the claim for cancellation as to this part among the lawsuit of this case is unlawful

5. Determination on the legitimacy of the remaining dispositions

Examining the history, systematic interpretation, and relevant provisions of the special provisions of this case, in case where the value-added tax deposited by the person provided with copper scrap, etc. falls under the amount of erroneous payment and the grounds for refund arise, it is reasonable to deem that the claim for repayment thereof belongs to the purchaser rather than the Plaintiff, the seller, and thus, the Plaintiff’s assertion is groundless.

A value-added tax is imposed on the value-added tax generated at each stage of production and distribution. A person liable to pay value-added tax under the Value-Added Tax Act is an entrepreneur who supplies goods or services (Article 3 subparag. 1 and subparag. 3 of the Value-Added Tax Act); an entrepreneur must collect value-added tax from the supplier of goods or services (Article 31 of the Value-Added Tax Act); and in this case, the amount of tax payable by an entrepreneur is calculated by deducting the input tax amount, etc. from the output tax amount (Article 37 of the Value-Added Tax Act and the Pre-stage Tax Credit Act), and ultimately, the burden of value-added tax is ultimately transferred to a final consumer. However, in the case of special goods such as copper scrap, etc., a single person who discontinues the business without paying the value-added tax collected by the transaction, and the special tax treatment Act was amended by Act No. 11759 on May 10, 2013, the aforementioned special provisions were newly enacted to prevent the evasion of the output tax.

According to Articles 2 and 3, etc. of the Special Cases of this case, an operator of copper scrap, etc. is exempt from the duty to collect transaction because he/she fails to collect value-added tax from a person being supplied with the copper scrap, etc., notwithstanding Article 31 of the Value-Added Tax Act, and when an operator of copper scrap, etc., such as copper scrap, etc., is supplied with another operator of copper scrap, etc., the value of copper scrap, etc. shall be deposited with the supplier through a transaction account

In light of the background of introducing the special provisions of this case and the nature of the value-added tax as seen earlier, and the method of taxation, the special provisions of this case are interpreted as an exception that the supplier (seller) shall collect the value-added tax from the purchaser instead of paying the value-added tax, in order to prevent tax evasion and achieve the purpose of convenient tax collection.

The special provisions of this case stipulate that the supplier of copper scrap, etc. shall pay the value-added tax directly by the purchaser of the goods, instead of allowing the supplier to pay the value-added tax through the transaction collection. Thus, unlike the case of the general value-added tax payment, the Plaintiff, a supplier, is merely a formal taxpayer and does not have the obligation to collect the value-added tax from the purchaser. However, the Plaintiff, a supplier, does not have the obligation to pay it to the Defendant. However, when the value-added tax is paid between the Defendant and the purchaser, only the indirect tax law relationship is formed in the way that the Plaintiff’s tax liability (liability for the sales

On the other hand, the purchaser bears the substantial obligation to pay the value-added tax directly to the Defendant through the management of the bank pursuant to Article 3 (3) 2 and (10) of the Special Cases of this case. If the purchaser fails to comply with it, the value-added tax due to the relevant transaction shall not be deducted as the input tax amount pursuant to Article 5 of the Special Cases of this case, and the amount calculated by multiplying the period from the date following the date of receipt of the copper scrap, etc. to the date of deposit by the interest rate prescribed by Presidential Decree pursuant to Article 7 of the Special Cases of this case by the amount to be deposited, and it is reasonable to deem that the purchaser pays the value-added tax is performing his/her duty in accordance with the tax law relationship formed between the purchaser

Therefore, the purchaser who has paid the value-added tax pursuant to the special provisions of this case can be deemed as the taxpayer under Article 2 subparagraph 9 of the Framework Act on National Taxes, rather than the mere taxpayer on the value-added tax. In this case, the "tax liability" is established pursuant to the special provisions of this case, and it can be deemed as the "tax liability in the sense that the Plaintiff bears the obligation to pay the value-added tax corresponding to the payment obligation on the output tax amount in the general case that the Plaintiff

Article 106-9(11) of the Restriction of Special Taxation Act amended by Act No. 1527, Dec. 19, 2017 provides that "the amount paid erroneously or in excess of the value-added tax paid by the purchaser pursuant to Article 106-9(3) shall be refunded to the purchaser, notwithstanding Article 51(1) of the Framework Act on National Taxes." Article 32(2) of the Addenda provides that "the amended provisions of Article 106-9(11) shall also apply to the amount paid erroneously or in excess before this Act enters into force." The purport of the new provision is that the amount of the value-added tax paid by the purchaser of copper scrap, etc. shall be refunded to the purchaser, which is clearly provided that the amount paid erroneously or in excess of the amount of the value-added tax paid by the purchaser pursuant to the special provision on the payment by the purchaser is attributed to the purchaser.

6. Conclusion

Therefore, the part of the claim for revocation against the rejection of the claim for correction as to the value-added tax for the second term of February 2014 and the value-added tax for the first term of January 2015 is unlawful and dismissed, and the remainder of the plaintiff's claim shall be dismissed as it is without merit. Since the judgment of the court of first instance is unfair with different conclusions, the judgment of the court of first instance is revoked, and the part of the claim for revocation as to the refusal of correction as to the value-added tax for the second term of February 2014 and the value-added tax for the first term of January 2015 is dismissed, and the remainder of the plaintiff's claim is dismissed.