Article 64 of the former Enforcement Decree of the Value-Added Tax Act

2. The costs of lawsuit shall be borne by the Plaintiff.

A. On January 30, 2001, the Plaintiff, a corporation operating a construction business, etc., entered into an agreement with the Seoul Special Metropolitan City and the Plaintiff to newly construct a parking lot and related facilities on the 00 m2, Seoul Special Metropolitan City, ○○○-dong, 95- 1,531m2, which is owned by the Plaintiff, to contribute them to Seoul Special Metropolitan City and use them for 17 years. Accordingly, the Plaintiff newly constructed a parking lot and related facilities of the 1st, 4th, 3,79m2, 3,779m2 on the above land (hereinafter “instant parking lot facilities”). On February 20, 2002, the Plaintiff donated the amount equivalent to KRW 2,972,00,000 of the instant parking lot facilities to the Seoul Special Metropolitan City on the 00-dong, Seoul Special Metropolitan City and the tax authorities did not report the value-added tax thereon, and did not issue the

B. On June 7, 2007, the Defendant issued the instant disposition imposing the Plaintiff KRW 89,100,000 for the aggregate of the additional tax on the value-added tax for the first period of 2002, including the zero-rate tax base return KRW 29,70,000 and the non-issuance of the tax invoice KRW 59,40,000.

[Ground of recognition] Evidence Nos. 1, 2-2, 4, Eul evidence Nos. 1 and 2 (including paper numbers), the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

(1) Under Article 22(6) of the former Value-Added Tax Act, the amount of penalty tax for incomplete return of the zero-rate tax base should be relating to the transaction to which the zero-rate tax base is applied under the Value-Added Tax Act. The supply of the instant parking facility is not a transaction to which the zero-rate tax is applied under the Value-Added Tax Act, but rather a transaction to which the zero-rate tax is applied under Article 105(1)3-2 of the former Restriction of Special Taxation Act. Thus, the penalty tax for incomplete return of the tax base

(2) Additional tax for non-delivery of the tax invoice

In the event of the supply of a building, such as the instant parking lot facilities, the tax authorities legally secure a room to grasp and manage the transaction data received from the registration office or the inspection office under the Registration of Real Estate Act or the Act on Special Measures for the Registration of Real Estate. Therefore, compelling the issuance of a tax invoice and imposing a sanction on the non-performance of the tax invoice may not be allowed as it violates the principle of excessive prohibition.

(b) Related statutes;

Article 22 of the former Value-Added Tax Act

Article 64 of the former Enforcement Decree of the Value-Added Tax Act

Article 105 of the former Restriction of Special Taxation Act

C. Determination

(1) As to the incomplete return of the zero tax base

Article 22 (6) of the former Value-Added Tax Act (amended by Act No. 8142 of Dec. 30, 2006) provides that "tax base to which the zero-rate tax is applied as an object of penalty tax due to failure to report the zero-rate tax base" shall be limited to the case of failure to report the "tax base to which the zero-rate tax is applied", and does not limit to the case of failure to report the "tax base to which the zero-rate tax is applied under the Value-Added Tax Act". In full view of the fact that the supply of the instant parking facility is a transaction to which the zero-rate tax is applied under Article 105 (1) 3-2 of the former Restriction of Special Taxation Act (amended by Act No. 7845 of Jan. 2, 2006), the failure of the Plaintiff to report the supply of the instant parking facility constitutes a case of failure to report the zero-rate tax base under Article 22 (6)

The Supreme Court Decision 2003Du9718 cited by the plaintiff as the ground for the plaintiff's argument is that the tax base applied to zero-rate tax under Articles 64 (9) and 65 (4) of the former Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 16661 of Dec. 31, 199) shall be deemed not to have been reported, and to be subject to the imposition of penalty tax due to failure to report the zero-rate tax base under Article 22 (6) of the former Enforcement Decree of the Value-Added Tax Act, in light of the language and text of Articles 64 (9) and 65 (4) of the former Enforcement Decree of the Value-Added Tax Act, the tax base for the report shall be the transaction subject to zero-rate tax under Article 11 (1) of the Value-Adde

(2) As to the portion of the penalty tax not issued

Article 22 (2) 1 of the former Value-Added Tax Act (amended by Act No. 7007 of Dec. 30, 2003) which provides that an entrepreneur who supplies goods or services and fails to issue a tax invoice shall add an amount equivalent to 2/100 of the value of the supply to the payable tax amount or deduct the amount from the refundable tax amount (hereinafter referred to as "the above provision of additional tax") shall realize the function of input tax deduction and taxation data, which serve as the basis of operation, under our VAT system in accordance with the former Value-Added Tax Credit Act (hereinafter referred to as "the above provision of additional tax"). The legislative purpose is to establish the normalization of transactions and the training of the tax base through this, and the disadvantage suffered by the imposition of additional tax is significantly higher than the public interest compared to the sanction on the non-delivery of the tax invoice, or may not be deemed to violate the principle of excessive prohibition or the principle of minimum infringement (see, e.g., Supreme Court Decision 2008Du37906, Jul. 37, 2006).

The Supreme Court Decision 2003Du12820 cited by the Plaintiff as the ground for the argument is related to the issue of imposing additional taxes such as non-delivery of invoice under the Corporate Tax Act because a corporation fails to issue an invoice, etc. under the Corporate Tax Act while supplying real estate, such as land and buildings, or fails to submit an invoice, etc. under the Corporate Tax Act. As such, additional taxes such as non-issuance of invoice, etc. under the Corporate Tax Act, unlike the purpose of legislation

3. Conclusion

Therefore, the plaintiff's claim is dismissed as it is without merit. It is so decided as per Disposition.