Incheon District Court 2012Guhap3860 ( October 18, 2013)

The propriety of the disposition imposing tax on the portion of joint purchase by deeming the non-issuance of the sales tax invoice as the omission of sale

In accordance with an agreement with BB Construction, the Plaintiff did not issue a sales tax invoice equivalent to the amount of the instant amount, even though BB Construction received from BB Construction, and it is reasonable to deem that the Plaintiff omitted sales equivalent to the instant amount, as it did not issue a sales tax invoice for the amount equivalent to the instant amount.

Article 16 of the Value-Added Tax Act

Article 18 of the Enforcement Rule of the Value-Added Tax Act

2013Nu12609 Revocation of Disposition of Imposition of Value-Added Tax, etc.

AA Construction Corporation

The director of the North Incheon National Tax Office

Incheon District Court Decision 2012Guhap3860 Decided April 18, 2013

June 3, 2014

June 24, 2014

1. Revocation of a judgment of the first instance;

2. The plaintiff's claim is dismissed.

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

1. Purport of claim

On January 3, 2011, the Defendant’s imposition of the value-added tax on the Plaintiff on January 3, 2009 and the imposition of the KRW OO in excess of the KRW OOO of the imposition of the KRW OO in the year 2009 and the imposition of the KRW OO of the KRW OO in the year 209 are revoked.

2. Purport of appeal

The same shall apply to the order.

1. Details of the disposition;

(a) New library construction works by the plaintiff, etc.;

"The plaintiff was formed with four companies and joint contractors of BB Construction Co., Ltd. (hereinafter referred to as "B Construction"),CC Comprehensive Construction (hereinafter referred to as "CC Construction"), DD Construction Co., Ltd. (hereinafter referred to as "DD Construction") and EE Construction Co., Ltd. (hereinafter referred to as "EE Construction") on June 13, 2007, with the FN Information Center Co., Ltd. (hereinafter referred to as "F Knowledge Information Center"), and entered into a construction contract for the FF City Library Construction Co., Ltd. (hereinafter referred to as "the contract for the construction of this case") with the FF City Library Construction Co., Ltd. (hereinafter referred to as "Co., Ltd."), and the plaintiff and joint beneficiaries paid the total amount of the construction contract corresponding to their share of the FF Information Center on February 2, 2009."

(b) Investigation into suspicions of tax evasion by prosecutors' offices;

In the process of investigating the suspicions of tax evasion by the plaintiff, the representative director of the Incheon District Prosecutors' Office, and the KH, the vice president II of BB construction agreed to issue a tax invoice equivalent to 93% of the tax invoice for BB construction at the time of the plaintiff's settlement of expenses, such as the cost of the construction of this case, and then, during the construction of this case, the tax invoice was normally issued pursuant to the above agreement. However, on February 2, 2009, when the settlement of the completion amount was made on February 2, 2009, the plaintiff issued only the tax invoice equivalent to 90% on the part of the plaintiff, and deposited the OOOO equivalent to the remaining 3% into the accounts of main GG and the KH, etc. of the plaintiff's representative director, thereby depositing the said amount

On October 27, 2010, the Incheon District Prosecutors' Office notified the Defendant of the results of the investigation that the Plaintiff evaded corporate tax and value-added tax by fraud or other unlawful means by submitting a false tax invoice, purchase sales place, and a list of total tax invoices by purchase sales place, which states that the Plaintiff paid to the Defendant for expenses such as construction cost, personnel expenses, etc. paid to the subordinate companies in excess of the amount, and filed a false complaint with the Plaintiff.

C. The defendant's disposition

"The defendant conducted a tax investigation on the plaintiff from November 4, 2010 to August 8, 2010, determined that the plaintiff omitted sales of the above OOOO (hereinafter referred to as "the amount of this case") out of the above OOOO won deposited into the accounts of stateG, KH, etc. without issuing a tax invoice to BB Construction." " Accordingly, the defendant imposed the amount of the value-added tax on the plaintiff on January 3, 201, 209 (the value-added tax based on the amount of this case is the OO won. The value-added tax based on the amount of this case is the amount calculated by deducting the already paid OOOO won from the amount of the tax calculated by deducting the input tax from the output tax amount, and the amount calculated by adding the amount of the tax paid to the amount of the additional tax paid to OO and the amount of the corporate tax assessed to OO (the amount of the corporate tax under this case is the amount calculated by deducting the amount of the tax paid to each of the plaintiff.

Accordingly, the Plaintiff filed an appeal with the Tax Tribunal on February 24, 2011, but the Tax Tribunal dismissed the appeal on May 8, 2012.

[Ground of recognition] Facts without dispute, Gap evidence 2, 3, 5, Eul evidence 1 to 5, and Eul evidence 7 (including each number; hereinafter the same shall apply), the purport of the whole pleadings

2. The parties' assertion

The Plaintiff and BB Construction included the construction cost received from the FN Information Center as sales in connection with the instant construction project. However, for the smooth progress of the instant construction project, the instant amount corresponding to the portion to be borne by the said Company from BB Construction on the site expenses paid by the Plaintiff as trees, crops, livestock compensation, etc. around the construction site is nothing more than after the follow-up settlement of accounts. In other words, the cost settlement between the joint beneficiaries is not subject to the Value-Added Tax Act, but is not subject to the corporate tax because the construction cost and the revenue have already been already appropriated at the representative company, and it is not subject to the corporate tax because the cost settlement amount was deposited into the accounts of the StateG, etc.

Therefore, it is unlawful that the Defendant rendered each of the dispositions of this case against the Plaintiff by deeming the amount of this case as omitting sales.

B. Defendant’s assertion

The common expenses incurred by the Plaintiff, as a representative of the joint beneficiaries, in the construction process of the instant case, should be received from the subcontractor, etc., and the purchase cost should be allocated to each joint beneficiary through the issuance of the sales tax invoice, and the expenses additionally issued should also be distributed by issuing the sales tax invoice, but the Plaintiff received the instant money from BB Construction and did not issue a tax invoice corresponding thereto. This constitutes an omission of sales, and thus, the Defendant’s disposition of the instant case is legitimate.

3. Determination

(a) Relevant statutes;

It is as shown in the attached Form.

(b) Fact of recognition;

1) Allocation agreement between joint beneficiaries of the instant construction project

On June 2007, the joint beneficiaries, including the Plaintiff, provided the construction services by being jointly awarded a contract with the F Knowledge Information Center, and each of the members of the joint beneficiaries jointly agreed to allocate the construction and the construction cost according to the above ratio as the Plaintiff (27%) (23%) , BB construction (23%) , DD construction (20%) , DD construction (20%) , and EE construction (10%) . The joint beneficiaries agreed to allocate the construction and the construction cost according to the above ratio.

2) Claim for progress payment and distribution of expenses

The FNN Information Center, which is the ordering authority, has paid the construction cost, including the subcontracted portion, in several installments at the request of the joint beneficiaries, directly to each joint beneficiary, and the sum of the amounts claimed for the completion payment for each time shall be as follows:

- The total amount of flag up to the time of the conference OOO

-OOO for the first time progress portion (OOO for the original contract + OO for the subcontracted portion),

-OOOO for the second round portion of payment (OOO for gold + OO for subcontracted portion)

-OOOO for the third round portion of payment (OOO for gold + OO for subcontracted portion)

-OOOO for the 4-time progress portion (OOO for Won gold + OO for subcontracted portion),

-OOOO for the fifth performance portion (OOOO for the gold + OO for the subcontracted portion),

-OOOO for the sixth-time progress portion (OOOO for gold + OO for subcontracted portion),

-OOOO for the seventh installment payments (OOOO for gold + OO for subcontracted)

The Plaintiff and joint beneficiaries treat the construction cost (raw materials, service cost, etc.) required for the instant construction project as joint expenses, receive transaction documents related to joint expenses, such as tax invoices and receipts, in the name of the Plaintiff, and the Plaintiff, a representative company, allocated the said joint expenses to the joint beneficiaries according to their respective shares.

3) Receipt of tax invoices between the Plaintiff and BB Construction

BB Construction agreed to pay to the Plaintiff the amount equivalent to 93% of the construction cost received from the ordering authority, excluding the profit equivalent to 7% of the construction cost, and accordingly, the amount equivalent to 93% of the construction cost received from the ordering authority was paid according to the agreement between the Plaintiff and the BB Construction regardless of whether the Plaintiff actually spent the amount equivalent to 93% of the construction cost received from the ordering authority.

Until the claim for the 6th completion payment, the Plaintiff issued and delivered a tax invoice amounting to 93% of the construction cost received by BB Construction from the ordering authority, but around February 2009, upon the claim for the 7th completion payment, the Plaintiff requested that the amount equivalent to 3% of the total contract amount corresponding to the shares of BB Construction be paid without issuing a tax invoice. Accordingly, BB Construction deposited the total amount of OO total including the instant amount with the personal account, such as the stateG and the KH requested by the Plaintiff, and the Plaintiff did not receive a tax invoice for this portion.

4) A criminal judgment rendered against the plaintiff's representative director, etc.

The part of the embezzlement was charged by the Incheon District Court 2010 U.O.O. and the judgment of conviction was affirmed, as it is, for the following reasons: (a) the construction contract was concluded by making up the construction cost paid to the subcontractor in a direct payment manner in cash or by receiving return from the account or borrowed account; and (b) the company funds was created by taking advantage of personal use, such as the cost of living, management, repayment of personal debt, loan, etc. of the StateG, and embezzlement for illegal purposes; (c) the part of the embezzlement was charged by the State GG and the KH H H H agency; and (d) the above conviction was finalized after the conviction was finalized (the amount of the instant embezzlement also included in the amount of the embezzlement for which the conviction was finalized).

[Ground of recognition] Facts without dispute, Gap evidence Nos. 3, 5, 6, Eul evidence Nos. 4 through 7, 11, witness Nos. 1 and the purport of the whole pleadings

C. Determination

Article 16(1) of the former Value-Added Tax Act (amended by Act No. 9915, Jan. 1, 2010) provides that where an entrepreneur supplies goods or services, a tax invoice stating the value of supply, value-added tax, etc. at the time of supply for such goods or services shall be issued to the person who receives the supply. Article 18 of the former Enforcement Rule of the Value-Added Tax Act (amended by Ordinance of the Ministry of Strategy and Finance No. 140, Mar. 31, 2010; hereinafter the same shall apply) provides that where an electricity supplier under the Electric Utility Act differs from one another in the supply of electricity, the nominal owner and the person who actually consumes electricity shall be deemed to be the nominal owner and the nominal owner shall be deemed to have issued a tax invoice within the scope of supply value stated in the said tax invoice, and that the said person who actually consumes electricity shall not be deemed to have issued a tax invoice within the scope of supply value indicated in the relevant tax invoice, unless it is found that there is a lack of evidence in a criminal case where the said partner or similar organization supplies services.

(4) In light of the above legal principles, if the representative of the joint supply and demand organization was to supply goods or services required for the construction project under BB’s responsibility and accounting, the portion of the tax invoice received by the representative of the joint supply and demand organization under Article 18 of the former Enforcement Rule of the Value-Added Tax Act can be supplied to the joint supply and demand organization by the same method. ② The Plaintiff’s purchase tax invoice or receipt was to be collected from the joint supply and demand organization for the remaining amount of the construction project that the Plaintiff would have received from the joint supply and demand entity’s share of the construction cost, and the Plaintiff would have received from the joint supply and demand entity’s share of the construction cost for the goods or services that the Plaintiff would have received from the joint supply and demand entity for the above 3G construction cost, and the amount of the construction cost that the Plaintiff would have received from the joint supply and demand entity’s private supply and demand for the remaining amount of the construction cost that the Plaintiff would have received for the goods and services, such as the purchase of the raw materials and labor cost.

In full view of the above circumstances, it is reasonable to view that the Plaintiff omitted sales equivalent to the amount of the instant case by failing to issue sales tax invoices for the amount equivalent to 93% of the amount received by BB construction from the ordering party, even though the Plaintiff received payment from BB construction, according to the agreement with BB construction.

Therefore, the prior plaintiff's assertion on a different premise is without merit.

4. Conclusion

Therefore, the plaintiff's claim is dismissed, and the judgment of the court of first instance is unfair with different conclusions, so the judgment of the court of first instance is revoked, and it is so decided as per Disposition.