Seoul High Court 2010Nu4445 (Law No. 19, 2011)

Early High Court Decision 2009Du3738 ( December 22, 2009)

A non-ferrous metal wholesaler who has been issued a false tax invoice by the supplier;

Since it cannot be said that there was no negligence on the part of the person who was unaware of the fact that the tax invoice for the purchase of old interest was a false tax invoice, the imposition of the non-deductible input tax is legitimate, but the imposition of non-deductible input tax is illegal.

Article 17 (2) of the Value-Added Tax Act

2011Du23443 Disposition of revocation of imposition of value-added tax, etc.

XX non-ferrous Metal Co., Ltd.

Head of Si Tax Office

Seoul High Court Decision 2010Nu4445 Decided August 19, 2011

January 26, 2011

All appeals are dismissed.

Costs of appeal shall be borne by each party.

We examine the grounds of appeal.

1. A. According to the reasoning of the judgment below, the Plaintiff, who is an entrepreneur engaged in the non-ferrous metal wholesale business, received one copy of the purchase tax invoice of KRW 173,673,900 (hereinafter “the purchase price of this case”) from the ○○○ Co., Ltd. (hereinafter “○○ Co., Ltd.”) during the 2nd taxable period of the value-added tax for the second taxable year of 2008, and filed a value-added tax return by deducting the purchase price of this case from the amount related to the purchase price of this case, and filed a corporate tax return by including the purchase price of this case in deductible expenses. Upon the notice of the taxation data of the tax office of the B/C issued without real transaction, the Defendant did not deduct the purchase price of this case and did not include the amount related to the purchase price of this case in deductible expenses, and thus, the Plaintiff revoked the disposition of imposition of the value-added tax for the second taxable year of 2008 (hereinafter “the disposition of imposition of the value-added tax of this case”).

B. As to this, the lower court first determined as follows regarding the disposition imposing the value-added tax of this case.

(1) In principle, the burden of proving that a tax invoice received in the course of a specific transaction constitutes a "tax invoice different from the fact provided in Article 17 (2) 1-2 of the former Value-Added Tax Act (amended by Act No. 9268 of Dec. 26, 2008) where the deduction of an input tax amount is denied on the ground that the specific transaction is a nominal transaction without actual delivery or transfer of goods is a transaction (see Supreme Court Decision 2008Du9737, Dec. 11, 2008). The actual supplier and the supplier of a tax invoice are not entitled to deduct or refund an input tax amount unless there is any special circumstance that the supplier was unaware of the fact that the person who received the tax invoice was not aware of the fact that the person who received the tax invoice was not aware of the fact that it was a nominal transaction, and the person who asserts the deduction or refund of the input tax amount must prove the burden of proving the deduction or refund of the input tax amount (see Supreme Court Decision 2009Du1888, Jun. 111, 2009).

(2) However, according to the facts established by the court below after compiling the adopted evidence, ○○co-learning is a material that issues only tax invoices without real transactions. In light of the fact that the plaintiff did not receive from ○co-learning at the time of issuance of the tax invoice of this case, but it appears that the plaintiff purchased old interest, which is an object to be supplied, the tax invoice of this case constitutes a false tax invoice prepared as if ○co-learning supplied it. Meanwhile, considering the circumstances stated in its holding, the tax invoice of this case is legitimate. Meanwhile, in full view of the circumstances stated in its holding, the plaintiff could have known that ○○co-learning was not the actual supplier of the old interest, which is the object to be traded of this case, and that the tax invoice of this case was a false tax invoice prepared differently from the actual transaction. Therefore, it cannot be said that the plaintiff was not negligent in not knowing the fact of the nominal name of the tax invoice of this case. Therefore, the disposition of the value-added tax against the plaintiff of this case is legitimate.

C. Next, the lower court determined as follows with regard to the imposition of corporate tax of this case.

(1) Although the tax invoice of this case was prepared differently from the actual transaction, the following circumstances revealed from the fact of recognition as to the judgment, namely, ① the Plaintiff is an actual entrepreneur operating the non-ferrous metal wholesale business; ② the Plaintiff transferred the amount of KRW 191,041,290 (the supply price of KRW 173,673,90 + the tax amount of KRW 17,367,390) to the account of ○○○coon on September 4, 2008. Since the Defendant did not reveal whether the amount transferred was returned again to the Plaintiff, the said amount of transfer was only used to purchase copper, which is the transaction object of this case, ③ through a confirmation document and testimony at the first instance trial, it appears that the Plaintiff was in the actual possession of the goods of this case, which is the goods of this case, under the name of the Plaintiff’s ○○○ 2,000, which is the goods of this case, and the Plaintiff had been in the custody of the previous ○○ 3,000.

(2) Therefore, the purchase amount of the instant transaction goods paid by the Plaintiff should be treated as losses, which is normally disbursed in connection with the Plaintiff’s business. The disposition imposing corporate tax of this case, which is not included in deductible expenses, is unlawful.

2. Examining the reasoning of the lower judgment in light of the relevant laws, relevant legal principles, and records, the lower court’s aforementioned determination is just and acceptable. In so doing, the lower court did not err by misapprehending the burden of proof of good faith and negligence on the part of the taxpayer, or by exceeding the bounds of the principle of free evaluation of evidence against logical and empirical rules regarding the burden of proof of loss under the Corporate Tax Act, business relevance, and commerce.

3. Therefore, all appeals are dismissed, and the costs of appeal are assessed against each party. It is so decided as per Disposition by the assent of all participating Justices on the bench.