Whether an actual business operator of the Corporation is obligated to pay value-added tax

The corporation is obligated to pay the value-added tax, and even if the licensee has paid the value-added tax in his own name after receiving the amount equivalent to the value-added tax from the actual entrepreneur, it cannot be said that the obligation to pay the value-added tax is exempted.

Article 14 of the Framework Act on National Taxes

Article 21 of the Value-Added Tax Act

1. The plaintiff's claim is dismissed.

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

Cheong-gu Office

The Defendant’s imposition of KRW 170,036,790 of value-added tax for the second period of 2002 on July 1, 2006 against the Plaintiff, KRW 25,845,60 of value-added tax for the second period of 2003, KRW 78,708,00 of value-added tax for the second period of 2004, KRW 48,559,70 of value-added tax for the second period of 2004, KRW 7,56,040 of global income tax for the year 201, KRW 43,43,890 of global income tax for the year 2002, KRW 62,79,070 of global income tax for the year 204, KRW 59,179,000 of value-added tax for the second period of 201 on July 4, 2006, respectively, shall be revoked.

1. Details of the imposition;

A. The Plaintiff received a tax evasion report to the Defendant that the Plaintiff issued a tax invoice under the name of the Plaintiff, such as ○○-○, Seoul, ○○○-dong ○○-Ground ○○○ building construction project (hereinafter “the instant construction project”); ○○-○, and ○○-○, Gangwonnam-do ○○○, both above ground (hereinafter “instant construction project”); ○○-○, and ○○-○, and ○○-○-○, and ○-○-○, and a new construction project for a neighborhood life and multi-household (hereinafter “instant three projects”); ○○, Seoul, ○○-dong 1,000, and 1,00-○-○, and a new construction project for a neighborhood life and a single house on both ground (hereinafter “instant four projects”).

B. After investigating the Plaintiff on May 2006, the Defendant: (a) assessed the Plaintiff on the aggregate of KRW 310,00,000 on the revenue amount of the instant 1 corporation; (b) KRW 1,104,787,00 on the revenue amount of the instant 2 corporation; and (c) KRW 792,90,00 on the revenue amount of the instant 3 corporation; and (d) KRW 963,50,00 on the revenue amount of the instant 4 corporation; and (b) imposed the global income tax for the amount of KRW 963,50,00 on the global income amount of KRW 170,036,790 on the second 202 global income for the global income for the year 2003, KRW 25,845,60 on the global income for the year 204; and (c) imposed the global income tax for the year 2007, KRW 364,209 on the Plaintiff.

C. The plaintiff filed an appeal against the instant disposition on September 25, 2006, but the National Tax Tribunal dismissed the said appeal on December 26, 2006.

[Ground of recognition] Facts without any dispute, Gap 1 to 3, 17 to 19, Eul 1 to 9, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

(1) Value-added tax;

(A) The Corporation of this case

With respect to the instant construction project, the Plaintiff entered into a construction contract by separately stipulating the supply value of KRW 310,00,000 and value-added tax. At that time, ○○ entered into a contract without value-added tax agreement by deeming that the contract was defective solely with the actual construction cost without value-added tax, and accordingly, was not subject to value-added tax from ○○○. Accordingly, the imposition of value-added tax on the instant construction project is unlawful.

(B) The instant 2 Corporation

The Plaintiff borrowed a construction business license from ○○ Construction Co., Ltd. (hereinafter “○○ Construction”) for the instant two projects. However, since the purchase data and value-added tax arising from the construction have already been reported through ○○ Construction, it was unlawful to impose double taxation on the Plaintiff for the instant two projects.

(C) The 3.4 Corporation of this case

The Plaintiff did not lend a license to the instant 3 and 4 construction work from the ○○ Public Service, but entered into a contract with the owner of the building, and the Plaintiff entered into a subcontract with the ○○ Public Service and entered into a construction work, and paid all the purchase data and value-added tax, etc. incurred from the construction work through the ○ Public Service, thereby imposing double taxation on the Plaintiff is illegal.

(2) Global income tax

The Plaintiff did not receive the construction cost from the building owner and did not generate income from each of the instant construction works due to such reasons as a significant increase in the construction cost, but the Defendant imposed the global income tax on each of the instant construction works without an accurate factual investigation as to the amount of income, expenses, etc., and thus, the disposition imposing the global income tax is unlawful.

(b) Related statutes;

It is as shown in the attached Form.

C. Determination

(1) Value-added tax;

(A) The Corporation of this case

As long as the Plaintiff actually performed the instant construction project, even if he did not receive value-added tax from the owner ○○, this part of the Plaintiff’s assertion cannot be accepted.

(B) The instant 2 Corporation

As long as the Plaintiff actually performed the instant 2 construction, the Plaintiff is obligated to pay value-added tax pursuant to the instant 2 construction. Even if ○○ Construction, which is a license leasing business entity of the instant 2 construction, received an amount equivalent to value-added tax from the Plaintiff and paid value-added tax on the instant 2 construction in its own name, this cannot be deemed as exempt from the Plaintiff’s liability to pay value-added tax on ○○ Construction. Therefore, the Plaintiff’s assertion on this part cannot be accepted.

(C) The 3.4 Corporation of this case

First, as to whether the Plaintiff was awarded a subcontract for the instant 3 and 4 construction works from the ○○ public office, each of the descriptions in health room, evidence Nos. 9-1 through 10-4 is insufficient to acknowledge the above assertion. Rather, there is no other evidence to acknowledge it. Rather, if the Plaintiff added the purport of the entire argument in each of the statements Nos. 6-1 and No. 7-1, the Plaintiff may recognize the fact that the instant 3 construction corporation received a contract directly from the ○○○○○, and the instant 4 construction corporation directly from the ○○○○○○○. (In light of the foregoing, each of the statements Nos. 9, 10-1 and 10-1 and 3 items of evidence Nos. 9 and 10-10-2 are presumed to be the subcontract for the construction business loan agreement, and the Plaintiff itself recognized the fact that the instant 3 and 4 construction works were directly granted from the ○○ public office, and thus, the Plaintiff’s assertion in this part is unacceptable.

Next, if the Plaintiff, as alleged by the Plaintiff, had the Plaintiff paid value-added tax to ○○ public, it would affect the Plaintiff’s obligation to pay the value-added tax, and as long as the Plaintiff actually performed the instant 3 and 4 construction works, the Plaintiff is obligated to pay value-added tax for the instant 3 and 4 construction works. Even if ○○ public entity, which is the instant 3 and 4 licensing lending business entity, received the amount equivalent to the value-added tax from the Plaintiff and paid the value-added tax for the instant 3 and 4 construction in its own name, it cannot be deemed that the Plaintiff’s obligation to pay value-added tax is exempted. Accordingly, this part of the Plaintiff’s assertion cannot be accepted.

(2) Global income tax

According to Article 80(3) of the Income Tax Act and Article 143(1)1 of the Enforcement Decree of the Income Tax Act, in calculating the tax base, the amount of income may be estimated or determined if there is no necessary account books and documentary evidence or important parts are incomplete or false.

However, the Plaintiff asserted that each of the instant construction works did not generate income, but failed to submit data to verify the actual income. Thus, the Defendant determined the Plaintiff’s income amount on each of the instant construction works as the estimation pursuant to Article 80(3) of the Income Tax Act and Article 143(1)1 of the Enforcement Decree of the Income Tax Act and imposed the instant comprehensive income tax.

Therefore, this part of the plaintiff's assertion cannot be accepted.

3. Conclusion

Therefore, the disposition of this case is legitimate, and the plaintiff's claim seeking its revocation is dismissed as it is without merit. It is so decided as per Disposition.

Related Acts and subordinate statutes

[Framework Act on National Taxes]

Article 14 (Real Taxation) (1) If the ownership of the income, profit, property, act or transaction subject to taxation is merely nominal, and there is another person to whom it actually belongs, the person to whom it actually belongs shall be a taxpayer and tax-related Acts shall apply.

(2) The provisions concerning the calculation of tax base in tax-related Acts shall apply according to the substance, notwithstanding the name or form of income, profit, property, act or transaction.

[Valued Tax]

Article 21 (Settlement and Correction)

(1) The head of a district tax office having jurisdiction over a place of business, the Commissioner of the competent Regional Tax Office or the Commissioner of the National Tax Service shall determine or correct the tax base of value-added tax or tax amount

1. Where the final tax return is not filed;

2. Where there are any mistakes or omissions in details of the final tax return;

[Income Tax]

Article 80 (Settlement and Correction)

(2) If a person who has made a final return on the tax base pursuant to Articles 70, 71 and 74 (including a person who has failed to make a final return on tax base pursuant to Article 73, in cases falling under subparagraph 1-2), falls under any of the following subparagraphs, the head of the district tax office having jurisdiction over the place of tax payment

1. Where an omission or error exists in the contents of return;

(3) Where the head of a regional tax office or the head of a regional tax office having jurisdiction over the place of tax payment determines or revises the tax base and amount of tax in the current year under paragraphs (1) and (2), he shall make it based on the books and other documentary evidence: Provided, That if it is impossible to calculate the amount of income by books and other documentary evidence for

[Enforcement Decree of the Income Tax]

Article 142 (Determination and Revision of Assessment Standard and Tax Amount)

(1) The determination or correction of tax base and amount of tax under Article 80 of the Act shall be based on the final return on tax base and the attached documents or on-site investigations.

(2) The decision pursuant to Article 80 (1) of the Act shall be completed within one year from the date on which the final return on tax base is made: Provided, That this shall not apply in cases where the Commissioner of the National Tax Service separately determines the investigation period

Article 143 (Determination and Revision through Estimation)

(1) The term "reasons prescribed by Presidential Decree" in the proviso to Article 80 (3) of the Act means the cases falling under any of the following subparagraphs:

1. Where necessary account books and documentary evidence are missing or important parts are incomplete or false in the calculation of the tax base;

2. Where the contents of the entry are obviously false in light of the scale of facilities, number of employees, raw materials, market prices, various charges, etc. of goods or products.

3. Where the contents of the bookkeeping are obviously false considering the quantity of raw materials used, electric power used and other operational conditions.

(2) Where the tax base is estimated, determined and revised under the proviso to Article 80 (3) of the Act, the amount of tax base shall be calculated by making personal deduction and special deduction under Articles 50 through 52 of the Act from the income amount assessed under paragraph (3).

(3) Where the income amount is estimated, determined or revised under the proviso of Article 80 (3) of the Act, the method falling under each of the following subparagraphs shall be applied: Provided, That the provisions of subparagraph 1-2 shall apply only to persons subject to the application

1. The method of determining or revising, as the relevant income amount (hereafter referred to as "standard income amount" in this Article), the amount obtained by deducting the amount under the following items from the income amount. In such cases, if the amount to be deducted exceeds the income amount, the amount in excess shall be deemed non-existent: Provided, That where the standard income amount is in excess of the amount calculated by multiplying the income amount under subparagraph 1-2 by the ratio stipulated by the Commissioner of the National Tax Service, the amount calculated by multiplying such ratio may be determined as the income amount until December 31,

(a) Purchase costs (excluding those for fixed assets for business: hereafter the same shall apply in this Article) and rent expenses on the fixed assets for business which are paid or payable by the documentary evidences;

(b) The amount paid or payable by the relevant documentary evidence as wages and retirement benefits for employees;

(c) The amount obtained by multiplying income by standard expense rate;