Open Decision Ledger · Tax & international taxation
Fictitious tax invoices and the 10-year assessment period
Supreme Court, Dec. 30, 2021, 2021Du33371 (judgment)
No holding summary · checked against points at issue. The official text publishes no summary of the holding for this decision. The quotation and factors in this record are copied verbatim from the points at issue; the evidence for each axis is taken from the points at issue, the order and the reasons.
Case name: 부가가치세등부과처분취소
Official text on the National Law Information Center
Question
Does a taxpayer's receipt of a tax invoice issued without any real transaction, used to deduct or refund input VAT, fall within 'defrauding or otherwise improperly evading or obtaining a refund or deduction of national tax' under Article 26-2(1)(i) of the former Framework Act on National Taxes, so that the 10-year assessment and collection period applies, and when does the omission of corporate income from the books become such an improper act?
Holding
The 10-year period applies only where, beyond knowing that the invoice is false and that input VAT will be deducted or refunded, the taxpayer also knows that the issuer has escaped the VAT payment obligation on that invoice, so that the deduction ultimately reduces state tax revenue. On the corporate tax side, simply not filing or filing falsely is not an improper act, but where an omission or under-declaration is joined by active conduct showing an intent to conceal, such as deliberately keeping income or sales out of the books, the tax assessment and collection may be treated as made impossible or manifestly difficult. The Supreme Court held that keeping fictitious books to distribute collusion profits showed such an intent in this case, so the 10-year period covered the corporate tax assessments for business years 2009 to 2012.
Points at issue, verbatim
과세대상의 미신고나 과소신고와 아울러 수입이나 매출 등을 고의로 장부에 기재하지 않는 등 적극적 은닉의도가 나타나는 사정이 덧붙여진 경우, 조세의 부과와 징수를 불능 또는 현저히 곤란하게 만든 것인지 여부
Unofficial English translation
Whether, in addition to non-filing or under-filing of the object of taxation, where circumstances indicating an affirmative intent to conceal, such as intentionally failing to enter income or sales, etc. in the books, are added, the imposition and collection of taxes have been rendered impossible or markedly difficult
Disposition
Partly reversed and remanded Stated in the decision
원심판결의 피고 패소 부분 중 2009 사업연도 내지 2012 사업연도 각 법인세 부과처분 부분을 파기하고, 이 부분 사건을 부산고등법원에 환송한다. 피고의 나머지 상고와 원고의 상고를 모두 기각한다.
Unofficial English translation
The portions of the judgment of the court below against the defendant concerning the respective corporate tax assessments for business years 2009 through 2012 are reversed, and this part of the case is remanded to the Busan High Court. The remainder of the defendant's final appeal and the plaintiff's final appeal are dismissed.
Form of the test
Elements stated Stated in the decision
구 국세기본법 제26조의2 제1항 제1호의 ‘사기나 그 밖의 부정한 행위’란 조세의 부과와 징수를 불가능하게 하거나 현저히 곤란하게 하는 위계 기타 부정한 적극적인 행위를 말하고
Unofficial English translation
"Fraud or other wrongful act" as used in subparagraph 1 of paragraph (1) of Article 26-2 of the former Framework Act on National Taxes means deception or other wrongful affirmative act that renders the imposition and collection of taxes impossible or markedly difficult, and
Factors
- 납세자가 실물거래 없이 발행된 허위의 세금계산서를 교부받아 매입세액의 공제 또는 환급을 받은 행위가
- ‘사기 기타 부정한 행위로써 국세를 포탈하거나 환급·공제받은 경우’에 해당하여 10년의 부과제척기간을 적용하기 위한 요건
- 과세대상의 미신고나 과소신고와 아울러 수입이나 매출 등을 고의로 장부에 기재하지 않는 등 적극적 은닉의도가 나타나는 사정이 덧붙여진 경우
- 조세의 부과와 징수를 불능 또는 현저히 곤란하게 만든 것인지 여부
Unofficial English translation
• An act by a taxpayer who received a false tax invoice issued without any actual transaction and obtained a deduction or refund of input tax
• The requirements for applying the 10-year exclusion period for assessment on the ground that it falls under "a case where national taxes have been evaded or a refund or deduction has been obtained by fraud or other wrongful act"
• In addition to non-filing or under-filing of the object of taxation, where circumstances indicating an affirmative intent to conceal, such as intentionally failing to enter income or sales, etc. in the books, are added
• Whether the imposition and collection of taxes have been rendered impossible or markedly difficult
Relation to precedent
Follows earlier decisions Stated in the decision
대법원 2017. 1. 12. 선고 2016두52811 판결 등 참조
Unofficial English translation
See, e.g., Supreme Court Decision 2016Du52811 decided January 12, 2017
Decisions referred to
[1] 대법원 2017. 1. 12. 선고 2016두52811 판결 / [2] 대법원 2015. 9. 15. 선고 2014두2522 판결(공2015하, 1675)
Burden of proof
Not addressed Not in the decision
Open question and revisit condition
Where fictitious tax invoices were taken in only for some of the business years in issue, in which years does an inference of active intent to conceal reach, and how long does the ten-year period run from the date each tax may be assessed?
The remand judgment of the Busan High Court on the corporate tax for business years 2009 to 2012 will show how the intent-to-conceal requirement is assessed on this record. Any amendment to Article 26-2 of the Framework Act on National Taxes or to Article 12-2 of its Enforcement Decree would also require this entry to be read again.
Cross-family AI independent reading & axis check
7 of 8 axes matched GPT-6 Astra (OpenAI, codex CLI) · 2026-10-26
A reader from another model family (GPT-6 Astra), given the official text but not the primary reading, agreed on 7 of the 8 axes; the readings differed on axis 8 (open question and revisit condition).
Axis 8 (Open question and revisit condition): Primary “Where fictitious tax invoices were taken in only for some of the business years in issue, in which years does an inference of active intent to conceal reach, and how long does the ten-year period run from the date each tax may be assessed?” vs Independent “What evidence would establish the recipient's awareness of a loss of national tax revenue if an invoice issuer later sought a refund of the output tax?”
They differ because the primary asks about the yearly reach and calculation of the period while the independent asks about evidence of awareness when the issuer later claims a refund.
과세대상의 미신고나 과소신고와 아울러 수입이나 매출 등을 고의로 장부에 기재하지 않는 등 적극적 은닉의도가 나타나는 사정이 덧붙여진 경우, 조세의 부과와 징수를 불능 또는 현저히 곤란하게 만든 것인지 여부Raw responses and comparison record: Protocol · Blind readings (JSONL) · Axis comparison (JSONL) · SHA-256 (JSON)
Lower-court contrast & scope of application
Lower-court reading vs. Supreme Court holding
Lower-court context: The Busan High Court, in its judgment of 13 January 2021 (2020Nu22008), held that the dealing was a sham formed so that the plaintiff and the trading companies could give each other collusion benefits under the appearance of ordinary trade. For the VAT assessments it found that the trading companies had declared and paid the output VAT on the invoices issued to the plaintiff and had neither filed for correction nor sought a refund, so it found it difficult to conclude that the plaintiff knew its deductions would reduce state tax revenue; the five-year period had expired and the assessments were unlawful. For the corporate tax it held, relying on the fact that the money calculated on the margin rate had actually been exchanged and accounted for, that the plaintiff's conduct was not 'defrauding or otherwise improper act', so the five-year period applied and the assessments for business years 2009 to 2012 were unlawful.
Supreme Court standard: The Supreme Court found no error in that reading as to the VAT assessments, so it dismissed the defendant's appeal points 2 and 3; the corporate tax assessment for business year 2013 stood within the five-year period and the plaintiff's appeal against it was dismissed as well. On the corporate tax, however, it held that actual exchange of the margin money and the accounting for it showed in truth that the plaintiff had kept fictitious books to distribute collusion profits, which supports an inference of active intent to conceal corporate income; together with the purpose and structure of the dealing, its duration and the size of the tax assessed, this was 'defrauding or otherwise improper act'. The ten-year period therefore applied, the 2009 to 2012 assessments were made in time, and that part was reversed and remanded.
Distinguishing conditions
- A case in which the issuer of the tax invoice declared and paid the output VAT on it in full and never filed for correction or refund, so that the taxpayer cannot be found to have known of a loss of state tax revenue.
- A taxpayer who merely failed to file or filed falsely, with no further conduct such as deliberately keeping income or sales out of the books that shows an active intent to conceal.
- An assessment governed by the version of the Act in force after the amendment by Act No. 12848 of 23 December 2014, where current Article 26-2(2)(ii) rather than former Article 26-2(1)(i) applies.
Record verification notes
Establish first whether the dealing is a sham within the plaintiff's own appeal, which the Supreme Court left undisturbed, and keep the VAT part separate from the corporate tax part, since the two were decided differently. For the VAT, gather what the invoice issuer declared and paid and whether any correction or refund was sought; for the corporate tax, look for the books and entries showing fictitious dealings rather than real exchange. Confirm which version of Article 26-2 was in force for each assessment date.
From the official text
Points at issue
[1] 납세자가 실물거래 없이 발행된 허위의 세금계산서를 교부받아 매입세액의 공제 또는 환급을 받은 행위가 구 국세기본법 제26조의2 제1항 제1호가 규정한 ‘사기 기타 부정한 행위로써 국세를 포탈하거나 환급·공제받은 경우’에 해당하여 10년의 부과제척기간을 적용하기 위한 요건 [2] 구 국세기본법 제26조의2 제1항 제1호의 ‘사기나 그 밖의 부정한 행위’의 의미 및 과세대상의 미신고나 과소신고와 아울러 수입이나 매출 등을 고의로 장부에 기재하지 않는 등 적극적 은닉의도가 나타나는 사정이 덧붙여진 경우, 조세의 부과와 징수를 불능 또는 현저히 곤란하게 만든 것인지 여부(적극)
Unofficial English translation
[1] The requirements for applying the 10-year exclusion period for assessment where an act by a taxpayer who received a false tax invoice issued without any actual transaction and obtained a deduction or refund of input tax falls under "a case where national taxes have been evaded or a refund or deduction has been obtained by fraud or other wrongful act" as provided in subparagraph 1 of paragraph (1) of Article 26-2 of the former Framework Act on National Taxes [2] The meaning of "fraud or other wrongful act" in subparagraph 1 of paragraph (1) of Article 26-2 of the former Framework Act on National Taxes, and whether, in addition to non-filing or under-filing of the object of taxation, where circumstances indicating an affirmative intent to conceal, such as intentionally failing to enter income or sales, etc. in the books, are added, the imposition and collection of taxes have been rendered impossible or markedly difficult (affirmative)
Summary of the holding
The official text publishes no summary of the holding for this decision. The quotation and factors in this record are copied verbatim from the points at issue; the evidence for each axis is taken from the points at issue, the order and the reasons.
Order
원심판결의 피고 패소 부분 중 2009 사업연도 내지 2012 사업연도 각 법인세 부과처분 부분을 파기하고, 이 부분 사건을 부산고등법원에 환송한다. 피고의 나머지 상고와 원고의 상고를 모두 기각한다.
Unofficial English translation
The portions of the judgment of the court below against the defendant concerning the respective corporate tax assessments for business years 2009 through 2012 are reversed, and this part of the case is remanded to the Busan High Court. The remainder of the defendant's final appeal and the plaintiff's final appeal are dismissed.
Provisions referred to
[1] 구 국세기본법(2014. 12. 23. 법률 제12848호로 개정되기 전의 것) 제26조의2 제1항 제1호(현행 제26조의2 제2항 제2호 참조) [2] 구 국세기본법(2014. 12. 23. 법률 제12848호로 개정되기 전의 것) 제26조의2 제1항 제1호(현행 제26조의2 제2항 제2호 참조)
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