in the case of an individual among farmers, only the person who has registered agricultural or fishery business information;

The plaintiff's business partner is not registered with the information on agriculture and fisheries, so it cannot be viewed as a transaction subject to zero-rate tax under the Restriction of Special Taxation Act.

Article 105 of the Restriction of Special Taxation Act

Cheongju District Court 2015Guhap12064 Revocation of Disposition of Imposing Value-Added Tax

O Co., Ltd.

O Head of tax office

2016.03.24

obs 2016.12

1. Details of the disposition;

A. The Plaintiff is a corporation established on March 25, 2004, which runs the manufacturing and sales business of feed.

B. The Plaintiff supplied AA (mutual: BB) (a) an individual entrepreneur during the 2nd or 2013 second or 2013 taxable period with an aggregate of the total supply values to OOO members and CCC (trade name: D farm) and each supply transaction was made on the premise that each of the above supply transactions was subject to zero-rate tax under Article 105(1)5 (e) of the former Restriction of Special Taxation Act (amended by Act No. 11133, Dec. 31, 2011; 1) or 2013 with respect to the second or second or second transaction in 2013, the Plaintiff issued a tax invoice on the premise that the transaction is subject to zero-rate tax rate under Article 105(1)5 (e) of the former Restriction of Special Taxation Act; hereinafter collectively referred to as “former Restriction of Special Taxation Act”).

C. Meanwhile, the Defendant, on May 9, 2014, deemed that each mixed feed supply transaction for the above AA and CCC did not constitute zero-rate tax under Article 105(1)5(e) of the former Restriction of Special Taxation Act because it was not a person who has registered agricultural and fishery business information pursuant to Article 4(1) of the Act on Fostering and Supporting Agricultural and Fisheries Enterprises (hereinafter “Agricultural and Fisheries Enterprises Act”), and thus, on May 9, 2014, imposed upon the Plaintiff the imposition of value-added tax OO(including additional tax), for the second year of 2011, for the first year of 2012, for the first year of 201, for the second year of 2012, for the value-added tax OO(including additional tax), for the second year of 2012, for the first year of 2013, for the first year of 2013, for the second year of 2013.

D. On November 21, 2014, the Plaintiff filed an appeal with the Director of the Tax Tribunal on November 21, 2014. On August 24, 2015, the Director of the Tax Tribunal dismissed the Plaintiff’s appeal regarding the transaction between the Plaintiff and AA (hereinafter “instant transaction”). On the other hand, the Plaintiff made a decision to accept the Plaintiff’s appeal regarding the transaction with the Plaintiff and the Plaintiff.

E. Accordingly, on September 8, 2015, the Defendant revoked ex officio the imposition of value-added tax for the first year of 2013 related to the transaction with CCC, and for the second year of 2013, the imposition of value-added tax for the second period of 2013 (hereinafter “each of the instant dispositions”) (i.e., each of the imposition of value-added tax for the second period from May 9, 201 to 2012 and each of the imposition of value-added tax for the second period from May 9, 2014).

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1, 3 through 7, the purport of the whole pleadings

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

A. The plaintiff's assertion

1) If a transaction was conducted with an individual who is a farmer engaging in the livestock industry even without filing for registration of business information on agriculture and fisheries under the Agricultural and Fisheries Business Entities Act, such transaction shall be deemed a transaction subject to zero-rate tax under Article 105(1)5(e) of the former Restriction of Special Taxation Act. Thus, since AA continues to engage in the two-way business since it commenced on September 16, 2002, and the transaction between the Plaintiff and the Plaintiff constitutes zero-rate tax transaction.

2) Even if the instant transaction is not a transaction subject to zero-rate tax rate, the value-added tax (including additional tax) related to the instant transaction shall be collected from AA, other than the Plaintiff, pursuant to Article 105(2) of the former Restriction of Special Taxation Act (hereinafter “instant additional collection provision”).

3) Of each of the dispositions in this case, the imposition of additional tax against the Plaintiff is unlawful on the grounds that the Plaintiff could reasonably present it in the issuance of the tax invoice on the premise that the instant transaction is subject to zero tax rate, or that there is a justifiable ground not attributable to it.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

1) Whether the instant transaction constitutes zero tax rate transaction

A) Article 105(1)5 (e) of the former Restriction of Special Taxation Act provides that the zero tax rate shall apply to the value-added tax for the transaction of supplying feed to farmers prescribed by Presidential Decree in accordance with the Control of Livestock and Fish Feed Act, and Article 2(1) of the former Special Cases Concerning the Application of zero-rate Tax and Tax Exemption, etc. (amended by Presidential Decree No. 25202, Feb. 21, 2014; hereinafter referred to as the "Special Cases Concerning the Amendment") of the Value-Added Tax Act for machinery, equipment, and petroleum for agriculture, livestock farming, forestry, and fishing under the Korean Standard Industrial Classification publicly notified by the Commissioner of the Statistics Korea pursuant to Article 22 of the Statistics Act refers to a person engaged in crop cultivation, livestock farming, crop cultivation, and livestock complex farming among agriculture under the Korean Standard Industrial Classification publicly notified by the Commissioner of the Statistics Korea, and Article 2(1) of the former Special Cases Concerning Agricultural and Fishery Business Entities among farmers under Article 4(1)1 of the former Special Cases Concerning Agricultural and Fishery Business Entities:

On the other hand, Article 2 (1) 1 of the Special Cases Concerning the Application of Value-Added Tax Rates and Tax Exemptions for Machinery, Equipment, and Petroleum for Agriculture, Livestock, Forestry, and Fishing (amended by Presidential Decree No. 22575, Dec. 30, 2010; hereinafter referred to as the "former Special Cases") does not have any provision that limits the scope of individual persons corresponding to farmers as those who have registered business information on agriculture and fisheries pursuant to Article 4 (1) of the Agricultural and Fisheries Business Entities Act, unlike the relevant special provisions, however, Article 2 (1) 1 of the former Special Cases Concerning the Application of Value-Added Tax Rates and Tax Exemptions for Petroleum Products and Petroleum (amended by Presidential Decree No. 22575, Dec. 30, 2010; hereinafter referred to as the "former Special Cases") has not any provision that limits the scope of individual farmers to those who have registered business information on agriculture and fisheries under Article 4 (1) of the Agricultural and Fisheries Enterprises Act.

B) Since there is no dispute between the parties to the instant case and AA’s health and agriculture business information under Article 4(1) of the Act on Agriculture and Fisheries, it is clear that the instant transaction that supplied mixed feed to A cannot be deemed a transaction subject to zero-rate tax under Article 105(1)5 (e) of the former Restriction of Special Taxation Act, barring any special circumstance, the interpretation of tax laws and regulations is prohibited in accordance with the statutory provisions, and it is not possible to extend or analogically interpret the relevant special provisions without any reasonable reason, and it is also consistent with the principle of fair taxation (see, e.g., Supreme Court Decision 2008Du11372, Aug. 20, 209). Moreover, considering the aforementioned legal principles and the purport of Article 106 of the former Restriction of Special Taxation Act, the amendment of the aforementioned special provisions on agricultural and fishery business regulations cannot be deemed to be applicable to those who are not subject to zero-rate tax treatment, and thus, the Plaintiff’s interpretation of the aforementioned special provisions on agricultural and fishery business regulations cannot be applied.

C) Therefore, the Plaintiff’s assertion on this part is without merit.

2) Whether value-added tax (including additional tax) should be collected from AA

A) Article 105(1)5 of the Restriction of Special Taxation Act provides that “Where a person who does not fall under a farmer under the part other than the items of Article 105(1)5 of the former Restriction of Special Taxation is supplied by applying the tax rate of value-added tax unjustly on the machinery, equipment, and feed for livestock industry under items (d) and (e) of the same Article, the head of the competent tax office shall additionally collect an amount equivalent to 10/100 of the value of supply of the machinery, equipment, etc. for livestock industry from a person who is supplied with the livestock industry, etc.,

B) Since Article 105(1)5 of the former Restriction of Special Taxation Act provides that a person who is not a farmer under Article 105(1)5 of the same Act shall immediately impose the value-added tax on the person who is supplied with the zero-rate tax, thereby preventing the omission of the value-added tax by imposing the value-added tax, “the case of being supplied with the zero-rate tax” shall be interpreted to mean that a person who is supplied with the zero-rate tax is subject to reduction of national tax revenues by evading liability for the payment of the value-added tax, in addition to the awareness that the person who is supplied with the zero-rate tax is not entitled to the zero-rate tax though he/she is unable to be supplied with the zero-rate tax, and that a person who is not a farmer under Article 105(1)5 of the same Act shall be construed as being subject to the zero-rate tax rate through active acts, such as creating false facts (see, e.g., Supreme Court Decisions 2013Du19516, Feb. 27, 2014>

C) Therefore, the Plaintiff’s assertion that differs from this premise is without merit.

3) Whether the imposition of additional tax against nonperformance of a tax invoice is lawful

A) In order to facilitate the exercise of taxation rights and the realization of tax claims, additional tax under the tax law is an administrative sanction imposed as prescribed by the individual tax law in cases where a taxpayer violates various obligations, such as a tax return under the Act without justifiable grounds, and it is unreasonable for the taxpayer to be unaware of such obligations, and thus, it is unreasonable for the taxpayer to be aware of such obligations or to expect the performance of such obligations to the party concerned, etc. (see, e.g., Supreme Court Decisions 2003Du4089, Apr. 15, 2005). However, the taxpayer’s intentional negligence is not considered, but does not constitute a justifiable ground for not infringing on the duty of taxation (see, e.g., Supreme Court Decisions 2005Du10545, Apr. 26, 2007; 2007Du31077, Apr. 23, 2009).

B) As seen earlier, inasmuch as the instant transaction cannot be deemed as a transaction subject to zero-rate tax rate under Article 105(1)5 (e) of the former Restriction of Special Taxation Act, the tax invoice issued by the Plaintiff on the premise that the zero-rate tax rate is applied to the instant transaction is clearly relevant to the transaction in Articles 22(2)2 and 22(2)5 of the former Value-Added Tax Act in relation to the second transaction in 2011 through 2013, the tax invoice issued by the Plaintiff on the premise that the zero-rate tax rate is applied to the transaction in this case constitutes “where all or part of the requisite entries in the tax invoice under Article 60(2)5 of the Value-Added Tax Act are written differently from the fact.” The above provision imposing penalty tax in cases where all or part of the requisite entry in the tax invoice is written differently from the principle of substantial taxation is prepared to secure the accuracy and accuracy of the tax invoice that serves as the basis of the operation of the value-added tax system, and thus, the portion imposed on the Plaintiff’s intent or negligence cannot be justified.

C) Therefore, the Plaintiff’s assertion on this part is without merit (On the other hand, the Plaintiff’s imposition of additional tax, other than the additional tax for insincereful payment of the tax invoice, through the reference document as of May 2, 2016 after the closing of argument, is unlawful on the ground that there is a justifiable ground that the Plaintiff could not charge the Plaintiff’s breach of duty. However, the Plaintiff’s intentional, negligent, and statutory sites do not constitute justifiable grounds, and there is no evidence to acknowledge that the Plaintiff has a justifiable reason otherwise. Therefore, the imposition portion of additional tax other than the additional tax

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit. It is so decided as per Disposition.