Plaintiff (Law Firm Ba, Attorney Lee Tae-soo et al., Counsel for plaintiff-appellant)

Head of the High Tax Office

January 27, 2010

Suwon District Court Decision 2007Guhap5238 Decided December 2, 2008

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 imposition of value-added tax of KRW 27,268,580 on December 7, 2006 against the plaintiff on December 7, 2006 and KRW 271,793,10 on February 2, 2003 and KRW 24,837,970 on February 2, 2004 shall be revoked.

1. The reasoning presented by the court in this decision is the same as that of the judgment of the court of first instance except for the following additional parts, and thus, it is in accordance with Article 8(2) of the Administrative Litigation Act and Article 420 of the Civil Procedure Act.

A. The Plaintiff asserts that the Defendant’s disposition of this case without deducting input tax amount on the ground that Nonparty 1 (Supreme Court Decision) was not an independent entrepreneur, and thus, deeming that the Plaintiff’s tax invoice of KRW 887,390,000 directly received from Nonparty 1 as a false tax invoice is unlawful.

On the other hand, the defendant did not recognize non-party 1 as an independent business operator and did not deduct the input tax amount of the above 887,390,000 won. However, the plaintiff filed a request for a national tax trial after the National Tax Tribunal recognized non-party 1 as an independent business operator and decided to correct the tax base and tax amount by deducting the input tax amount of the above 887,390,000 won. Accordingly, the defendant revoked the imposition disposition of value-added tax for the second period of 2004 and corrected the amount of value-added tax for the second period of 2003. As seen above, the plaintiff's assertion that the disposition of this case did not exist, and thus, the plaintiff's assertion is rejected.

B. In addition, the Plaintiff asserts that the Defendant’s disposition of this case without deducting the input tax amount on the portion of KRW 850,000,000, out of the tax invoices lawfully received by the Plaintiff regarding the Plaintiff’s revised value-added tax return on July 30, 204, is unlawful.

According to the overall purport of the statements and arguments by Gap evidence Nos. 2 and Eul evidence Nos. 7, the plaintiff filed a return of value-added tax and comprehensive income tax for the second period of 2003 following the sale of the commercial building of this case. On July 30, 2004, when the return of value-added tax was filed on July 30, 200, the sales agency fee of KRW 3,691,000 was paid to non-party 2,3, and 1, and the tax invoice was deducted. However, when the return of global income tax was filed, the amount of tax calculated on the premise that the sales agency fee of KRW 2,841,00,000 was paid, and the difference between the sales agency fee of KRW 850,00,000 was reported and the defendant submitted to the plaintiff during the re-audit process with respect to the payment of the sales agency fee of KRW 850,00,000,000 for the commercial building of this case.

In an administrative litigation seeking revocation on the grounds of illegality of taxation, the tax authority bears the burden of proof as to the existence of the fact that constitutes the taxation requirement, such as the taxable cause and tax base (see Supreme Court Decision 85Nu393, Jul. 7, 1987, etc.). However, as in this case, if the Plaintiff, as a taxpayer, discovers that the Plaintiff reported differently the sales agency fee, which serves as the basis of the calculation of the amount of value-added tax and the global income tax, to the Defendant, who is the tax authority, at the time of filing the return of the same taxable period, to the Defendant, as the tax authority, the Plaintiff should prove that the Plaintiff, as taxpayer, has actually paid the sales agency fee of the amount equivalent to the difference, and there is no evidence to prove that the Plaintiff actually paid the sales agency fee of the above 850 million won

C. The Plaintiff also asserts that the instant disposition, which was not included in the necessary expenses, was unlawful, that the Plaintiff paid KRW 100 million to Nonparty 3 as a sales agency fee.

On the other hand, since the issue of whether the sales agency fee of the plaintiff's assertion is to be included in the necessary expenses is related to the calculation of the value-added tax base and the amount of tax, the plaintiff's assertion itself is not reasonable (it is without merit since the defendant did not deduct the input tax amount as to the tax invoice of 100 million won as to the sales agency fee of the plaintiff, even if the disposition of this case is deemed to be unlawful since the purport of the plaintiff's above assertion is that the tax invoice of 100 million won was not deducted, it is not evidence to acknowledge the payment of the tax amount as mentioned above, and according to the evidence Nos. 7 and No. 8-1 and No. 2, the above claim is recognized

2. Thus, the part of the claim for revocation of the imposition of value-added tax for the amount exceeding KRW 207,021,129 among the lawsuit in this case and the part of the claim for revocation of the imposition of value-added tax for the second period in 2003 and the part of the claim for revocation of the imposition of value-added tax for the second period in 2004 shall be dismissed, and the plaintiff's remaining claims shall be dismissed. The judgment of the

Judges Cho Jae-hoon (Presiding Judge)