Cho-2014-China-4799 (Law No. 15, 30 January 30, 2015)

It is not equipped with the facilities, etc. necessary for the ownership of goods and the operation of a business, and thus constitutes a brokerage business.

Further, the Plaintiff’s type of transaction can be deemed as a brokerage business, in addition to the fact that the Plaintiff’s ownership of excavated machine belongs to the Plaintiff or the Plaintiff was equipped with essential facilities, such as a garage, which appears necessary for running the construction machine sales business such as the excavated machine.

Disposition Imposing Value-Added Tax

○○

○○ Head of tax office

December 17, 2015

2016.01.28

1. The Defendant’s imposition of value-added tax of KRW 13,041,740 against the Plaintiff on May 1, 2014 shall be revoked.

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

Cheong-gu Office

The same shall apply to the order.

1. Details of the disposition;

(a) ParkB is a person who has engaged in the export business of the excavated machine in the trade name of “CCC personal”;

B. From January 1, 2007 to June 31, 2007, ParkB deposited a total of KRW 65,190,000 in a bank account under the Plaintiff’s name.

C. On May 1, 2014, the Defendant: (a) determined and notified that the Plaintiff sold a heavy weight of 63,880,000 won (part of the money deposited from ParkB to the bank account in the name of the Plaintiff as described in the foregoing paragraph) to ParkB during the first taxable period of 2007, and did not report and pay the value-added tax thereon; (b) the Plaintiff registered the Plaintiff as a middle and construction machinery wholesaler at its own discretion on May 1, 2014; and (c) the Plaintiff registered the Plaintiff as the first value-added tax of 13,041,740 won (= principal tax of 6,388,000 won + the non-reported additional tax of 638,800 won + the non-reported additional tax of 1,277,600 won + the additional tax of 4,737,340 won (hereinafter “instant disposition”).

[Reasons for Recognition] Unsatisfy, Gap evidence 1, 3, 8, Eul evidence 1, the whole pleadings

Stop paper

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The plaintiff introduced a person who intends to dispose of a second-class excavated machine to ParkB to arrange the transaction between ParkB and the owner of a second-class excavated machine, and received fees from ParkB in return, and did not sell a second-class excavated machine to ParkB. Thus, the first-class measure of this case is unlawful on a different premise.

B. Determination

1) Whether the Plaintiff can be deemed to operate a wholesale business

According to Article 4 (1) of the Enforcement Decree of the Value-Added Tax Act, the classification of the business of supplying goods and services shall be in accordance with the Korean Standard Industrial Classification publicly announced by the Commissioner of the Statistics Korea, and the "market business" under the Korean Standard Industrial Classification prepared and publicly announced by the Commissioner of the Statistics Korea based on Article 22 (1) of the Statistics Act is sold to retailers with the ownership of the sold goods, and the "goods brokerage business" does not have the ownership of the goods, but means intermediating goods

In the case of this case, the fact that the plaintiff engaged in the wholesale business of secondhand construction machinery meets the taxation requirements and the defendant, who is the customs authority, bears the burden of proof, but it is not sufficient to recognize only the documents of subparagraphs B and B Nos. 2 and 3, and there is no other evidence to prove otherwise.

Rather, according to the overall purport of evidence Nos. 2, 3, 6, 7, and 8 as well as the entire pleadings, it is confirmed that ParkB transferred a certain amount to the Plaintiff’s account under the name of ParkBD, the Plaintiff, on the day or following day, transferred the remainder after excluding a part of the money, to the seller, and that the Plaintiff may be called a mark of wholesale business under the above Korean Standard Industrial Classification, i.e., the circumstances where the excavated machine’s ownership belongs to the Plaintiff or the Plaintiff was equipped with essential facilities, such as a garage, which appears necessary for the Plaintiff to engage in the construction machine sales business such as the excavated machine, can only be seen that the Plaintiff’s form of transaction constitutes a brokerage business.

Therefore, the instant disposition based on the premise that the Plaintiff engaged in the intermediate construction machinery wholesale business is unlawful.

2) Scope of revocation

The Plaintiff recognized that KRW 6,950,000, out of KRW 65,190,000 that he/she paid to himself/herself, was the money that he/she received as a commission (see the Plaintiff’s preparatory document dated December 4, 2015). However, as to whether the amount of the above entrance should be viewed as the Plaintiff’s share, it appears that the tax authorities’ confirmation work and its subsequent determination should be prior to the Plaintiff’s determination, and thus, the entire disposition of this case should be revoked.

3. Conclusion

Therefore, the plaintiff's claim of this case is reasonable, and it is decided as per Disposition by the assent of all participating Justices.