Seocho 209west 1839 (209.03)

No person may claim the excess of sales from the adjustment of increase due to the non-deduction of input tax amount.

If a taxpayer voluntarily reports such sales to him/her, it is reasonable to deem that such sales actually existed, and even if there was no domestic sales, the portion reported by a taxpayer as sales is finalized as it is, and thus, it cannot be asserted that the increase or decrease due to the non-deduction of input tax amount cannot be claimed.

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

1. All of the plaintiffs' claims are dismissed.

2. The costs of lawsuit are assessed against the plaintiffs.

The Defendants’ imposition of value-added tax as stated in the separate sheet against the Plaintiffs shall be revoked.

1. Details of the disposition;

A. The Plaintiffs are beneficiaries of value-added tax

(1) Plaintiff EA: BB Dong 48-3CC 90 (mutual name:CC tax)

(2) Plaintiff BD: BB Dong 48-22 EE 28, Jung-gu, Seoul (mutual name: F)

(b) Results of the Seoul Regional Tax Office’s criminal investigation;

(1) Inspection time: January 16, 2007 - April 19, 2007

(2) Details of detection

(A) The actual operators of the MM Tax Accounting Office (including the Plaintiff, and approximately 1,223 companies' tax declarations and bookkeepings) made cross-transactions by exchanging sales and purchase tax invoices under mutual agreement without real transactions in order to make the sales and purchase tax base, the input tax amount, and the amount of tax payable to the above 1,223 companies, while filing a value-added tax return on the above 1,223 companies.

(B) Issuance of tax invoices equivalent to KRW 219,849,00,000 in total of supply values by adjusting the sales tax base and input tax amount as above.

C. Plaintiffs’ VAT declaration

The Plaintiffs shall deduct the input tax amount on each purchase tax invoice (Plaintiff EA: 216,20,000,000 won in aggregate of the supply values, Plaintiff DD: 129,450,000 won in aggregate of the supply values; hereinafter each purchase tax invoice of this case) issued by bothGs from the output tax amount by taxable period, and file a value-added tax return

D. The defendant's corrective disposition (hereinafter in this case each disposition)

Value-added tax is corrected and notified as shown in the attached Form, by deducting each input tax amount on the grounds that each purchase tax invoice of this case is false;

Facts without dispute over the basis of recognition, Gap evidence 1-1 to Gap evidence 3, Gap evidence 5, Eul evidence 1-1 to Eul evidence 4, the purport of the whole pleadings

2. Whether each of the dispositions of this case is legitimate

A. The plaintiffs' assertion

(1) Violation of the underlying taxation principle

Article 21(1)3 of the former Value-Added Tax Act (amended by Act No. 8826, Dec. 31, 2007; hereinafter the same) provides that the tax authority shall determine or rectify the tax base, etc. of value-added tax by investigation in cases where the entries of the list of the list of the total tax invoice by buyer, etc. submitted in the final return of value-added tax are different from the facts when filing the final return of value-added tax. Article 21(2) of the Value-Added Tax Act provides that the tax authority shall determine or rectify the tax base, etc. of value-added tax when determining or correcting the tax base, amount of tax,

Although each of the tax invoices of this case was prepared falsely, the corresponding sales tax invoices were also prepared falsely by YangGG, a tax account agent, and this is a private opinion revealed as a result of the investigation conducted by the Seoul Regional Tax Office. Thus, the defendant should have confirmed a new tax base by either on-site investigation or at least on-site investigation without being up to the false sales tax invoices submitted by the plaintiff. Nevertheless, the defendant determined a tax base based on the sales tax invoice clearly false and issued each of the dispositions of this case accordingly, which is in violation of the principle of base taxation.

(2) Violation of the principle of equity in taxation;

The defendant imposed value-added tax on the merchants in South Seodaemun-gu who had filed a revised return among the merchants in the same location as the plaintiffs, but imposed value-added tax on the plaintiffs only for 11 taxable periods only on the ground that they did not file a revised return, which goes against the principle of equity in taxation.

B. Determination

(1) Whether the underlying taxation principle violates the principle of taxation

Article 17(2) of the Value-Added Tax Act provides that "in cases where the input tax invoice under Article 16 of the Value-Added Tax Act is not issued with respect to the input tax amount, or all or part of the entries required for the delivered tax invoice are not entered or entered differently from the fact, the input tax amount shall not be deducted from the output tax amount even if the taxpayer was actually supplied with the goods or services." However, as long as the taxpayer voluntarily filed a return on the output tax amount due to lack of such provision, it is reasonable to deem that such sales actually existed as long as the taxpayer actually declared the sales. Even if the taxpayer did not have the actual sales, the portion reported as the sales amount in the VAT, which is the tax return method, is finalized (if the sales tax amount is filed excessively, the taxpayer should take the procedure of claiming a reduction or correction, etc.). Therefore, the portion reported as the sales amount should not be deemed to have been deducted from the total sales amount under the principle of equity (see Supreme Court Decision 2004Du9197, Nov. 10, 20005).

Furthermore, according to the statement in Gap evidence No. 8, the employees of the MM Tax Accounting Office find merchants prior to reporting value-added tax on commercial merchants, and can recognize the fact that they issued or received false tax invoices in response to the fact that the purchase data or sales data are insufficient after receiving the actual sales data and the purchase data are insufficient. Therefore, it is difficult to view that the sales tax invoices, etc. submitted by the plaintiffs are all false. Therefore, the defendant cannot be deemed to have a duty to re-determine sales according to the estimation method stipulated in the Value-Added Tax Act. Thus, this part of the plaintiffs' assertion is without merit.

(2) Whether the principle of equity in taxation is violated

In full view of the purport of the argument in Gap evidence No. 4, the defendant sent a guide to the effect that in the case of non-compliance with the request for a revised tax return on the value-added tax for the first period from the first period of 2005 to the first period of 2006 issued by bothGs, the defendant may impose taxes on the whole of the relevant taxable period. In fact, the merchants who responded to the revised tax return in accordance with the above guide was issued the revised tax amount for the three taxable periods, and the plaintiffs also received the above guide, but did not make the revised tax return unlike other merchants. The defendant's above taxation disposition is very weak, while the manpower of the tax authorities were merely corrected three taxable periods for the merchants who filed the revised tax return in consideration of the lack of tax invoices related to bothGs, and it does not seem that the remaining taxable period has been waived.

In addition, although the merchants who reported the revised tax due to the above taxation disposition by the defendant were to receive the benefit of the deadline for the amount of the corrected tax for the remaining taxable periods, it is recognized that the opportunity to receive the benefit of the deadline for the amount of the corrected tax for the remaining taxable periods in response to the revised tax return was given to the plaintiffs, in light of the fact that the plaintiffs did not comply with the above revised tax return, and that the plaintiffs did not suffer disadvantages compared to other merchants, it is difficult to view the disposition of this case as contrary to the principle of

Therefore, this part of the plaintiffs' assertion is without merit.

3. Conclusion

Therefore, all of the plaintiffs' claims are dismissed. It is so decided as per Disposition.