Incheon District Court 2010Guhap65 (2010.07.02)

Cho High Court Decision 2009J3006 ( October 08, 2009)

(1) Deduction of constructive purchase tax amount on recycled waste resources related to export of used cars

In fact, while exporting a new vehicle, it is merely an intermediate acquisitor as if it were exported a used vehicle, and thus, deducting the constructive purchase tax amount is contrary to the purpose of the special system on the deduction of the input tax amount for the waste resources, etc.

2010Nu25185 Revocation of Disposition Rejecting Value-Added Tax Refund

3.4

OO Head of the tax office

Incheon District Court Decision 2010Guhap65 Decided July 2, 2010

1. The plaintiff's appeal is dismissed.

2. The costs of appeal shall be borne by the Plaintiff.

The judgment of the first instance shall be revoked. The defendant's disposition that the defendant rejected the application for refund of value-added tax of 64,921,762 won for the second period of 208 against the plaintiff on April 14, 2009 shall be revoked.

1. Quotation of judgment of the first instance;

The reasons for this Court concerning this case are as follows: Article 8(2) of the Administrative Litigation Act and the main text of Article 420 of the Civil Procedure Act are as follows. The reasons for this Court's entry are as follows.

(a) Relevant statutes;

It is as shown in the attached Form.

B. Determination

1) The purpose of the system that deducts the constructive input tax amount for recycled waste resources, including recycled waste resources, from the output tax amount under Article 108 of the Restriction of Special Taxation Act (amended by Act No. 9921, Jan. 1, 2010; hereinafter “the Restriction of Special Taxation Act”) is to facilitate the collection of recyclable waste resources and used goods more smoothly, facilitate recycling, and promote environmental conservation by deducting a certain amount from the input tax amount in the case where an entrepreneur collects and sells recyclable waste resources and used goods from a simplified taxable person who is unable to issue a tax invoice or from the general public (see, e.g., Supreme Court Decisions 90Nu9797, Jul. 9, 191; 98Du15122, Feb. 23, 2001).

2) In addition, Article 2 subparagraph 5 of the former Automobile Management Act (amended by Act No. 5104 of Dec. 29, 1995) provides that "the term "motor vehicle" means a motor vehicle from a person who manufactured, assembled, or imported a motor vehicle to the time when it is practically impossible to maintain its performance from the time when it was acquired from a person who manufactured, assembled, or imported a motor vehicle in accordance with the provisions of the law, or from the time when it was actually impossible to maintain its performance." However, the amendment does not separately stipulate the meaning of "motor vehicle" at the time of the Plaintiff's declaration of value-added tax and the "motor vehicle under the current Automobile Management Act", the issue of whether it constitutes "high motor vehicle" as the object of deduction of the constructive purchase tax under the Restriction of Special Taxation Act shall be determined individually and strictly in consideration of the purport of the aforementioned system, and it shall not be deemed that it constitutes a "motor vehicle" subject to deduction of the immediate constructive purchase tax from

3) Meanwhile, examining the history of the relevant laws and regulations, regarding the scope of recycled waste resources and used goods subject to deduction of input tax amount related to value-added tax, the provisions of Article 58-2 (3) 8 of the Enforcement Decree of the Regulation of Tax Reduction and Exemption Act (amended by Presidential Decree No. 13804, Dec. 31, 1992) stipulate the same contents as the first used motor vehicle under the Automobile Management Act (amended by Presidential Decree No. 15976, Dec. 31, 1998) since January 1, 1999, the Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 15976, Dec. 31, 1995; Presidential Decree No. 2010, Dec. 29, 1995; Presidential Decree No. 2013 of the Motor Vehicle Management Act was amended by Presidential Decree No. 20, Dec. 17, 2000).

4) In light of the amendment process and contents of the relevant laws and regulations as above, it seems that the former Enforcement Decree of the Regulation of Tax Reduction and Exemption Act and the Enforcement Decree of the Restriction of Special Taxation Act allow the benefit of the special system on the deduction of the input tax amount on recycled waste resources, etc. as stipulated in Article 108 of the Restriction of Special Taxation Act to be considered as a used motor vehicle under the Automobile Management Act, because it violates the basic purpose of the aforementioned system by stipulating that the time when it is considered as a used motor vehicle under the Automobile Management Act is "when a person who manufactures, assembles, or imports a motor vehicle acquires a motor vehicle in accordance with legal acts or provisions of the Act", it would be deemed that the relevant laws and regulations have been amended in order to resolve the problems that would look at the benefit of the above system even in cases where the person directly purchases a motor vehicle purchased from the manufacturer of the motor vehicle with the intention of deducting the

5) Comprehensively taking account of the purport of each statement in Eul evidence Nos. 6, 7, 9, 10, 12, and 13 (including paper numbers), the plaintiff submitted as data that the plaintiff purchased used cars at the time of filing a value-added tax return from February 10, 2009 to February 2, 2008 at the time of the tax investigation on February 10, 2009, the automobile sales contract was voluntarily prepared for the purpose of value-added tax return. The plaintiff submitted a self-written confirmation that no contract was prepared for the automobile seller and the automobile sales contract; ② the purchase price of the automobile reported as used cars was directly transferred to the automobile sales agency or the sales employee; ③ The automobile was transferred to the plaintiff before the first registrant was delivered to the plaintiff, and was transferred to the plaintiff before the first registrant was newly registered; ④ The Plaintiff’s husband and the director of Dong trade was the husband of the new automobile, and the Plaintiff submitted a certificate of registration cancellation for export within 208 years from the date of filing an application for value-added tax deduction (6).

6) In light of the above facts, it is merely a mere fact that the Plaintiff actually exported a new car while carrying it in form, and thus, deducting the constructive purchase tax amount is contrary to the purport of the special taxation on the deduction of the input tax amount for the waste resources, etc. as seen above. Ultimately, it is reasonable to view that the instant automobiles purchased and exported by the Plaintiff do not constitute a used car under the Act on Special Cases concerning Taxation.

7) As to this, even after the amendment of the Automobile Management Act and the provision on the definition of used cars was deleted, the administrative agency has granted a refund of value-added tax by deducting the input tax amount in accordance with the previous definition provisions for more than 10 years. The confirmation source of such a practice was established on July 7, 2005, which is the same content as the provision on used cars defined in the above provision on used cars, and the above basic common provisions are valid until now. The defendant asserts that the administrative agency has a duty to deduct the input tax amount for used cars and to refund the value-added tax after deducting the input tax amount for the plaintiff who trusted the above practice and basic rules of the administrative agency.

On December 29, 1995, common rules of the Restriction of Special Taxation stipulate that "a used motor vehicle under the Automobile Management Act as prescribed by Article 110 (4) 8 of the Decree" means a motor vehicle from a person who manufactured, assembled, or imported a motor vehicle to the time when it is practically impossible to maintain its performance. However, the common rules of the above is presumed to be premised on the same provision concerning used motor vehicles under the Automobile Management Act. As seen earlier, the Automobile Management Act was amended by Act No. 5104 of Dec. 29, 1995, and the provision concerning used motor vehicles was deleted. The above common rules of the above stated as a used motor vehicle under Article 110 (4) 8 of the Enforcement Decree of the Automobile Management Act, or used the above phrase as a used motor vehicle under the Automobile Management Act, which was not a new one under the general rules of the Restriction of Special Taxation Act, even after it was amended by an administrative agency as of December 29, 200, the above basic rules of the Restriction of Special Taxation Act cannot be seen as a new use rule.

2. Consultations

The judgment of the court of first instance that held the instant disposition lawful is justifiable, and the Plaintiff’s appeal is dismissed as it is without merit. It is so decided as per Disposition.