【Holding】
[1] Whether an additional tax under tax laws may be imposed where the taxpayer has justifiable grounds for which the taxpayer cannot be blamed for neglecting various obligations such as filing returns and paying taxes (negative)
[2] In a case where A company, in receiving from B company services supplied abroad to which the zero rate applies under Article 22 of the Value-Added Tax Act, agreed to apply the general rate, paid B company an amount equivalent to value-added tax, and claimed an input tax deduction; when B company issued an amended tax invoice correcting the value-added tax on the services to the zero rate and filed a request for correction and obtained a refund of value-added tax, A company likewise filed an amended value-added tax return and paid the amount equivalent to value-added tax that it had deducted as input tax as well as additional taxes for underreporting and failure to pay; and A company filed a request for correction seeking to cancel the amended return but the head of the tax office refused it, the Court held that, with respect to the additional tax portion of the disposition, the lower court erred in its misapprehension of legal principles by holding that A company had no justifiable grounds for which it could not be blamed for neglecting its obligations so as to be exempt from additional taxes
【Summary of Decision】
[1] An additional tax under tax laws is an administrative sanction imposed in accordance with the law where the taxpayer, without justifiable reasons, violates various obligations prescribed by law, such as filing returns and paying taxes, in order to facilitate the exercise of taxing power and the realization of tax claims. Therefore, such sanction cannot be imposed where there are justifiable grounds for which the taxpayer cannot be blamed for neglecting the obligations, such as where there are circumstances in which the taxpayer's failure to know of the obligation can be regarded as justified because it was not unreasonable, going beyond mere ignorance or misunderstanding of the law, owing to conflicting views arising from doubts in the interpretation of tax laws, or where there are circumstances in which it would be unreasonable to expect the party to perform the obligation.
[2] In a case where A company, in receiving from B company services supplied abroad to which the zero rate applies under Article 22 of the Value-Added Tax Act, agreed to apply the general rate, paid B company an amount equivalent to value-added tax, and claimed an input tax deduction; when B company issued an amended tax invoice correcting the value-added tax on the services to the zero rate and filed a request for correction and obtained a refund of value-added tax, A company likewise filed an amended value-added tax return and paid the amount equivalent to value-added tax that it had deducted as input tax as well as additional taxes for underreporting and failure to pay; and A company filed a request for correction seeking to cancel the amended return but the head of the tax office refused it, the Court held as follows: ① with respect to the principal value-added tax portion of the disposition, since the services were supplied abroad and the zero rate applies thereto under Article 22 of the Value-Added Tax Act, B company's issuance of a tax invoice to A company applying the general rate (10%) falls under "where a tax invoice is issued by applying an incorrect tax rate" under Article 70(1)9 of the Enforcement Decree of the Value-Added Tax Act, and thus the lower court's judgment that B company's issuance of an amended tax invoice to correct the rate to the zero rate was lawful as being based on that provision was justified; however, ② with respect to the additional tax portion of the disposition, considering that, where a tax invoice is issued and value-added tax is paid by applying the general rate to a supply of goods or services to which the zero rate applies and there is no tax evasion, the recipient's deduction of the amount equivalent to value-added tax as input tax is based on the provisions of the Value-Added Tax Enforcement Standards, etc., and that B company, having received the amount equivalent to value-added tax from A company, initially paid value-added tax but later defaulted on it, and in light of the fact that A company continued to pay the amount equivalent to value-added tax even after B company's default began, there is a possibility that A company did not recognize or foresee that B company would default on value-added tax, the lower court, in determining whether there were justifiable grounds for exemption from additional taxes, should have further examined whether A company could have recognized or foreseen that B company would default on value-added tax, and then carefully determined whether A company could have been expected to choose on its own not to claim an input tax deduction even though it had paid B company the amount equivalent to value-added tax; nevertheless, the lower court erred in its misapprehension of legal principles by holding that A company had no justifiable grounds for which it could not be blamed for neglecting its obligations so as to be exempt from additional taxes, merely on the ground that A company's claiming an input tax deduction by applying the general rate rather than the zero rate to the services stemmed from mere ignorance or misunderstanding of the law, etc.
【Referenced Statutes】
[1] Articles 47 and 48(1)2 of the Framework Act on National Taxes; Article 60 of the Value-Added Tax Act [2] Articles 47 and 48(1)2 of the Framework Act on National Taxes; Articles 9(1), 22, 32(1) and (7), and 60 of the Value-Added Tax Act; Article 70(1)9 of the Enforcement Decree of the Value-Added Tax Act
【Referenced Precedents】
[1] Supreme Court Decision 2017Du41108, January 14, 2022 (Gong2022Sang, 365)
Supreme Court Decision 2024Du66181, June 12, 2025 (Gong2025Ha, 1254)
(Source: Supreme Court Decision 2026Du30500, August 12, 2026 | Judicial Information Disclosure Portal, Precedents)
2026. 10. 14. · By Attorney Dongwoo Shin
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