2018년 부가가치세 및 관세 판례회고

Supreme Court rendered only four decisions concerning value-added tax (‘VAT’) in 2018. This review not only introduces but also analyzes all four cases since each case has significant implications. This review also introduces one important but not well known VAT decision rendered in December 2017. The five VAT related decisions are as follows：(1) KORAIL (Korea Railroad Corporation) provided several services for the public good such as offering a discount for the disabled, and providing rail service in the backwoods, and etc. and in return received subsidies from the Korean government. The Supreme Court ruled that the above-mentioned subsidies should not be included both (ⅰ) in the VAT taxable amount and (ⅱ) in a denominator when calculating deductible proportion for a taxable person which provides both VAT taxable and non-taxable goods or services by Supreme Court Decision 2017du55329 rendered on January 25, 2018. (2) On April 12, 2018, the Supreme Court Decision 2017du65524 ruled that the right to omit green-house gases should be considered as a ‘right’ which falls under ‘goods’ category thus being VAT taxable. This review introduces a discussion regarding the treatment of ‘service/goods vouchers’ as ‘a right’ or ‘merely a promise to provide services/goods’. (3) In Korean debt rehabilitation process, the court approved a rehabilitation schedule which included debt-equity swap and cancellation of all shares which were issued by the debt-equity swap. On June 28, 2018., the Supreme Court Decision 2017du68295 ruled that the supplier (creditor) is permitted to have a VAT credit for the debt-equity swap and cancellation of all shares conducted by the rehabilitation schedule. (4) There was an interesting case concerning the issue of the VAT treatment for franchise services. The Supreme Court emphasized the importance of the agreement which reflected each party’s free will when interpreting VAT treatment in Supreme Court Decision 2016du48362 rendered on April 26, 2018. (5) According to the precedents before the Supreme Court Decision 2017do 11628 rendered on December 28, 2017., a taxpayer was subject to aggravated criminal punishment if he/she issued/received fictitious VAT invoices of KRW 1.5 billion or more and filed the sum-table which reflect the same fictitious VAT invoices. The Supreme Court practically overturned its prior position in ruling that if the fictitious Vat invoices were issued/received electronically, the amount for the sum table was not punishable anymore. Accordingly, the tax payer is subject to punishment for the issuance/receipt of the fictitious VAT invoices only. There was no meaningful Supreme Court decision relating to the Customs Act rendered in 2018, but there was one rendered in January 2019. ASIA-PACIFIC TRADE AGREEMENT (‘APTA’) adopts Direct Consignment Rule but the documents required to be considered as ‘direct consignment’ is not specified by the APTA itself but by the Operational procedure for the Certification and Verification for the Origin of Goods under APTA (‘Operational procedure’) and the Korean domestic presidential decree reflecting the Operational procedure. One of the required documents is the through B/L. However it was almost impossible to receive the through B/L when importing goods from China since there was no carrier which can issue it. The Supreme Court Decision 2016du45813 ruled that the through B/L is not a mandatory document to be considered as ‘direct consignment’ and thus can be supplemented or replaced by other documents.