Seocho 2010west 1769 ( October 16, 2010)

It is difficult to conclude that the purchase transaction of gold bullion is a nominal transaction, and domestic taxation transactions do not violate the principle of good faith.

The mere fact that a transaction by a gold bullion coal supplier was opened or a substantial operator was found guilty of tax evasion is difficult to readily conclude that a part of the entire transaction is a nominal transaction. The purchase tax invoice issued in the domestic tax transaction, other than export, may not constitute a violation of the good faith principle, and thus, the disposition of imposition is unlawful.

2010Guhap46081 Revocation of Disposition of Imposition of Value-Added Tax

○○ Co., Ltd.

○ Head of tax office

o April 13, 201

May 20, 2011

1. Each disposition of the Defendant imposed value-added tax of KRW 1,443,580,620 on the Plaintiff on February 8, 2010, and KRW 5,091,080,480, and KRW 2,299,255,250 for the second period of value-added tax of KRW 2,206 for the year 2006 shall be revoked.

2. The costs of the lawsuit are assessed against the defendant.

The same shall apply to the order.

1. Details of the disposition;

The following facts may be acknowledged as either in dispute between the parties or in full view of the purport of the whole pleadings in each statement in Gap evidence 1-1-3, Gap evidence 2-2, and Eul evidence 2.

A. On January 10, 2005, the Plaintiff is a corporation established for the purpose of engaging in the sales business of gold bullion, gold bullion, and gold bullion. The Plaintiff received a tax invoice equivalent to KRW 59,698,05,000 (hereinafter “instant tax invoice”) regarding the purchase of gold bullion during the taxable period from the second to the second period from 2005 to the amount of value-added tax, as indicated in the details of receipt of the tax invoice in the attached list, and deducted the relevant input tax amount from the output tax amount.

B. The Seoul Regional Tax Office conducted a gold bullion data survey with the Plaintiff from July 21, 2009 to September 28, 2009, and around that time, notified the Defendant of the taxation data that the Plaintiff received the instant tax invoice equivalent to KRW 59,698,05,000 without a real transaction during the respective value-added tax period of the second and second taxable periods of the value-added tax in 2005, 2006.

C. On February 8, 2010, the Defendant deemed that the instant tax invoice was written differently from the facts, and on this ground, issued each disposition of imposition of value-added tax of KRW 1,443,580,620 for the second period of value-added tax of KRW 5,091,080,480,480, and KRW 2,206 for the second period of value-added tax of KRW 2,299,29,25,255,250 for the second period of value-added tax of KRW 2,250 for the year 206 (hereinafter collectively referred to as the “instant disposition of imposition”).

2. Whether the instant disposition is lawful

A. The parties' assertion

(1) The plaintiff's assertion

Despite the fact that the gold bullion transaction pursuant to the instant tax invoice is an actual transaction accompanied by the supply of goods, the instant disposition of taxation on the ground that the instant tax invoice constitutes a nominal transaction on the sole basis that the so-called so-called large coal supplier, a value-added embezzlement company, was involved in a series of gold bullion transactions opened by the Plaintiff, constitutes a tax invoice different from the instant tax invoice, on the ground that it constitutes a nominal transaction.

(2) The defendant's assertion

(A) the first argument

In relation to the instant tax invoice, both the so-called wide-scale coal company, the exporter company, and the Plaintiff were issued and received tax invoices for purchase and sales as if they were actually engaged in the real transaction for the purpose of receiving a refund of value-added tax by pretending the transaction of gold bullion from the beginning, and then obtaining illegal profits. The Plaintiff’s actual operator was convicted of the act of public offering with a wide-scale coal company. Accordingly, the transaction related to the instant tax invoice is a processed transaction conducted for the purpose of evading value-added tax from the beginning.

(b)the second argument

In light of the legal principle that unfair input tax deduction and refund claims violate the principle of good faith, if only the exporter of the final stage, it is impossible to prevent the national treasury loss caused by various wide carbon transactions; if the input tax deduction is permitted to the Do-based enterprise, there is a realistic need not allow the input tax deduction and refund by the Do-based enterprise in order to prevent active outflow of the national treasury or loss to the national treasury; and to maintain the foundation of the value-added tax system; the judgment of the European Court does not limit the non-deduction of the input tax; and only intentional and negligent transactions are considered as the requirements for non-deduction of the input tax amount. In light of the above, it is difficult for the Do-based enterprise, such as the Plaintiff, to claim the deduction of the input tax amount, against the principle of good faith as stipulated in Article 15 of the Framework Act on National Taxes.

B. Facts of recognition

The following facts may be acknowledged in full view of the purport of the entire pleadings in each entry in Gap evidence 2 and Eul evidence 2, or there is no dispute between the parties or in full view of the purport of the whole pleadings:

(1) During the 1st taxable period of the value-added tax in 2006, ABT Co., Ltd. supplied gold bullion via BBT Co., Ltd., Ltd., Ltd., Ltd., Ltd., andCC, etc., to each Plaintiff during the 2nd taxable period of the 2006 second taxable period of the value-added tax. GG precious metal Co., Ltd. purchased gold bullion supplied through CBE, Inc., Ltd., a breadth company, during the 1st taxable period of the value-added tax in 2006, through the 2006 taxable period of the 2nd taxable period of the 2nd taxable period of the 2006 second taxable period, and supplied it to each Plaintiff for the 20th taxable period of the 206nd taxable period of the 20th taxable period of the 2nd taxable period of the 2006 second taxable period of the 2nd taxable period of the 200th taxable period of the 2nd taxable period of the 200th taxable period of the PE.

(2) However, the Plaintiff, a company with a large amount of value-added tax, is a state of escape and diving, both of which are in arrears and discontinuance of business.

(3) On August 24, 2007, the Plaintiff’s actual operator authorityA was sentenced to imprisonment with prison labor for 7 years and fines of 205 billion won for the crime of evading taxes in collusion with the operator of a heavy coal business in the Seoul Central District Court.

C. Relevant statutes

The entries in the attached statutes are as follows.

D. Determination

(1) Judgment on the Defendant’s first argument

(A) Article 1(1)1 of the Value-Added Tax Act provides that "the supply of goods as taxable subject to value-added tax" and Article 6(1) provides that "the supply of goods shall be a delivery or transfer of goods on all contractual or legal grounds." In light of the fact that value-added tax has characteristics as multi-stage transaction tax, "delivery or transfer" under Article 6(1) of the Value-Added Tax Act includes all acts of causing transfer of the right to use and consume goods, regardless of the existence of profits actually acquired. In this case, the issue of whether a specific transaction constitutes the supply of goods under the Value-Added Tax Act shall be determined individually and specifically by taking into account all the circumstances such as the purpose and process of the transaction by each transaction party, the manner and manner of the transaction, the person to whom profits accrue, and the payment relationship of consideration, and the burden of proving that a tax invoice received in the course of the transaction is denied on the grounds that the specific transaction is a nominal transaction without actual delivery or transfer of goods falls under Article 17(2)1-2 of the Value-Added Tax Act.

(B) In light of the aforementioned legal principles, it is difficult to readily conclude that the Plaintiff’s purchase and sale transaction, which is a part of the entire transaction, is not a nominal supply of goods subject to value-added tax, and there is no other evidence to find otherwise, solely on the ground that the Plaintiff was convicted of a criminal fact that the transaction by the so-called wide coal business was opened or the Plaintiff’s actual operator evaded tax, among the distribution process of goods related to the instant tax invoice. Accordingly, the Defendant’s first argument is without merit.

(2) Judgment on the Defendant’s second argument

On the other hand, it is against the principle of good faith to seek the deduction and refund of input tax by an exporter who knew or did not know by gross negligence that there is a malicious entrepreneur with the aim of evading the input tax amount in the course of a series of consecutive transactions and thereby causes different tax losses (see, e.g., Supreme Court en banc Decision 2009Du13474, Jan. 20, 201). However, the taxable entrepreneur between malicious entrepreneur and exporter is not only an essential factor in a series of variable gold bullion transactions, but also an intentional difference between the exporter and malicious entrepreneur, even if the deduction of input tax amount is recognized, the difference between the input tax amount and the input tax amount is paid to the National Treasury because it does not occur directly, and further, it is difficult for the Plaintiff to claim the deduction and refund of input tax amount from the final stage to maintain the foundation of the pre-stage tax credit system, and it is also unreasonable for the Plaintiff to seek the deduction and refund of input tax amount from the input tax amount to the Republic of Korea (see, e.g., Supreme Court Decision 201207Du14).

(3) Sub-decisions

Therefore, the Defendant’s disposition of this case, based on the premise that the instant tax invoice falls under a tax invoice different from the fact, or that the Do company’s seeking the deduction and refund of the input tax amount violates the principle of good faith, is unlawful.

3. Conclusion

Therefore, the plaintiff's claim of this case is justified and it is so decided as per Disposition.