Article 61 of the Enforcement Decree of the Value-Added Tax Act

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

A. The Plaintiff is a non-profit corporation established pursuant to the Act on the Establishment, Operation and Fostering of Government-Funded Science and Technology Research Institutes, Etc. around June 1983.

B. (1) The Plaintiff received operating contributions of KRW 000 from the Minister of Construction and Transportation during the second period of 2004, and when filing a return of the second period of value-added tax in 2004, the Plaintiff did not include operating contributions in calculating the input tax amount related to the tax-free business in accordance with Article 61 of the Enforcement Decree of the Value-Added Tax Act.

(2) On December 4, 2009, the Defendant conducted a tax investigation on value-added tax against the Plaintiff, deeming that the operating contribution constitutes the tax-free and total supply amount under Article 61 of the Enforcement Decree of the Value-Added Tax Act, and accordingly, calculated the input tax amount related to the tax-free business again and notified the Plaintiff of the correction and notification of KRW 000 of the value-added tax for 204 (including additional tax).

C. (1) The Plaintiff received 000 won operating contributions and 7,000 won research contributions from the Minister of Construction and Transportation during the first period of 2005, and did not include operating contributions and research contributions in calculating the input tax amount related to the tax-free business among the amount of common input tax pursuant to Article 61 of the Enforcement Decree of the Value-Added Tax Act at the time of the return of the LOM in 2005.

(2) From April 19, 2010 to May 14, 2010, the director of the Central Regional Tax Office of China reported the Defendant of the taxation data that the operating contributions and research contributions constitute the tax-free and total supply amount. Accordingly, in calculating the input tax amount related to the tax-free business under Article 61 of the Enforcement Decree of the Value-Added Tax Act, the Defendant deemed that the operating contributions and the research contributions constituted the tax-free supply amount and the total supply amount. On June 1, 2010, the Defendant corrected and notified the Plaintiff of KRW 000 (including the additional tax) of the value-added tax of KRW 1, 2005.

(3) As a result of the Plaintiff’s appeal, the Plaintiff’s assertion was partially accepted, and the value-added tax for the first time in 2005 was reduced to KRW 000.

D. (1) In calculating the input tax amount related to the exempted business in accordance with Article 61 of the Enforcement Decree of the Value-Added Tax Act, the Plaintiff was paid 00 won operating contributions and 000 won research contributions from the Ministers of the Sea and South Korea in 2005 through 2009 (Provided, That this shall not apply to the second period in 2006, the second period in 2005, the first period in 2006, and the second period in 2007, and the second period in 2009, when filing a value-added tax return on the value-added tax, the Plaintiff did not include the operating contributions and research contributions in calculating the input tax amount related to the exempted business.

(2) From April 19, 2010 to May 14, 2010, the director of the Central Regional Tax Office issued a periodic tax investigation with the Plaintiff, and notified the Defendant of the taxation data that the operating contributions and research contributions constitute the tax-free supply amount and the total supply amount under Article 61 of the Enforcement Decree of the Value-Added Tax Act. Accordingly, the Defendant again calculated the input tax amount related to the tax-free business among the common purchases, and notified the Plaintiff on July 1, 2010, on January 2, 2005, and on July 1, 2006, the Plaintiff issued a revised and notified the correction of the total value-added tax amount of KRW 00 (including the additional tax) for the first period of the first period of the year of 2007 to the second period of the value-added tax in 2009 (hereinafter above 204 to the first period of the year of 2006 and the second period of the year of 207 to 1209).

[Reasons for Recognition] The non-satis, Gap 4, 5, 7, and 8 (including household numbers), and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

(1) Operation contributions, research contributions, and specific project contributions (hereinafter “each of the contributions of this case”) are not funds received in return for the provision of services, and Article 61(1) of the Enforcement Decree of the Value-Added Tax Act, which provides that the amount of common input tax under the Value-Added Tax Act shall be calculated in proportion to the cost of supply for tax-free business and taxable business, shall not be applied by analogy.

(2) Even if the method of calculating common input tax in the same manner as the instant disposition is calculated, there is justifiable reason that the Plaintiff reported each of the instant contributions to be excluded from the tax-free supply price when the common input tax amount is distributed in proportion to the common input tax amount under the Value-Added Tax Act, and there is no express provision regarding the handling of the contributions in proportion to the common input tax amount. Therefore, at least the penalty tax portion

B. Relevant statutes

Attached Acts and subordinate statutes shall be as temporary materials.

C. Determination

(1) Whether each of the instant contributions constitutes money received in return for the provision of services

(A) Operational contributions

In full view of the following circumstances, which are considered to be comprehensively taken into account the entire arguments, and ① the Plaintiff’s research institutes established under the Act on the Establishment, Operation and Fostering of Government-Funded Science and Technology Research Institutions, etc., (Article 5 of the same Act), and ② the Plaintiff reported the compilation of its budget to the Industrial Technology Research Council every year in accordance with the above Act and the Plaintiff’s articles of incorporation and approved its operation contributions, and ③ the operating contributions are composed of institution operation expenses (including personnel expenses, ordinary operating expenses, and general operating expenses, and equipment expenses), and the operating contributions are not considered to be paid as compensation for research services provided by the Plaintiff.

(B) The research contribution portion

In other words, Article 11 of the Framework Act on Science and Technology provides that the heads of relevant central administrative agencies shall establish and implement national research and development projects and support measures therefor in the fields of science and technology, and the equal management, etc. of national research and development projects under the above Act are defined as "the contributions means research expenses paid to research-related institutions in budget or funds without consideration by the State, etc. to achieve the objectives of national research and development projects" (Article 2 subparagraph 10 of the above provision), and (2) The Plaintiff signed a strike agreement with the Minister of Environment, etc. and conducted national research and development projects pursuant to the above Act and the above provisions. (3) In full view of the regulations on the operation of environmental technology development projects (Article 94 of the Ministry of Environment Directive), the contributions are prescribed as payment without consideration, and the contributions cannot be deemed as payment for research services provided by the Plaintiff.

(C) Specific project contributions

In full view of the overall purport of the arguments in evidence Nos. 14 and 15 (including natural disaster), there is no evidence to prove that the plaintiff entered into a contract on government-invested research projects with the Ministry of Land, Transport and Maritime Affairs, etc. and received a specific project contribution, and that the above contribution was paid for the research service provided by the plaintiff, unlike the operation contribution and research contribution as seen earlier (the defendant seems to have conducted the disposition in this case without properly grasping the scope and contents of the individual contract on which the payment of the specific project contribution was based). Accordingly, the defendant's assertion that the specific project contribution was paid as the consideration for the research service is without merit.

(D) Sub-committee

Therefore, since the portion of each of the instant research services rendered by the Plaintiff constitutes the provision of free services, it shall be deemed that the Plaintiff constitutes a non-taxable object of value-added tax under Article 7(3) of the former Value-Added Tax Act (amended by Act No. 11129, Dec. 31, 201).

(2) Method of calculating the common input tax amount;

In light of the contents and purport of Article 61(1) and (4) of the Enforcement Decree of the Value-Added Tax Act and the fact that input tax amount related to the non-taxable business cannot be deducted from the output tax amount of the taxable business, as well as the input tax amount related to the non-taxable business, it is reasonable to view that each provision on the calculation of the input tax amount is applied by analogy even in cases where the Plaintiff runs a taxable business and a non-taxable business concurrently like the Plaintiff (see, e.g., Supreme Court Decision 2009Du16268, Sept. 8, 2011). However, in the instant disposition, the Defendant calculated the common input tax amount by analogical application of Article 61(1) of the Enforcement Decree of the Value-Added Tax Act, but the Plaintiff’s provision of research services by each of the instant contributions constitutes a non-taxable business, and thus, it constitutes a case where there is no supply amount of the non-taxable business, and thus, it should have been found that the entire calculation method of the common input tax amount is not applied by analogy.

3. Conclusion

Then, the claim of this case by the plaintiff is justified and it is decided as per Disposition.