[부가가치세부과처분취소][공2006.8.1.(255),1375]
[1] Criteria for determining whether a transaction is subject to the imposition of value-added tax
[2] The case holding that the place where a service provided to a domestic financial institution by SWIFT (the financial and communications organization between international banks) is provided to a domestic financial institution
[1] Article 10 (2) 1 of the Value-Added Tax Act provides that the place where the service is supplied shall be "the place where the service is provided or the goods, facilities, or rights are used", so whether the transaction is subject to the authority to impose taxes shall be determined based on the place where the service is provided.
[2] The case holding that the most important and essential part of the services provided by SWIFT to a domestic financial institution is the transmission of a message on foreign exchange transactions entered according to the message format standardized by SWIFT, and that the place where such SIFT connection and transmission of message is made is a domestic store of a domestic financial institution, the place where such services are provided is the domestic place, and it is not different even if the mechanical or technical work of the mechanical or technical work of the transmission and storage of message using the SIFT communications network was performed abroad.
[1] Article 10 (2) 1 of the Value-Added Tax Act / [2] Articles 10 (2) 1 and 34 (1) 1 of the Value-Added Tax Act
[1] Supreme Court Decision 95Nu1071 delivered on November 22, 1996 (Gong1997Sang, 122)
Korea Exchange Bank Co., Ltd. and 9 others (Law Firm Han & Han, Attorneys Yellow-tae et al., Counsel for the plaintiff-appellant)
2 others than the chief of the Nammun District Tax Office
Seoul High Court Decision 2003Nu9369, 9376 delivered on June 10, 2004
All appeals are dismissed. The costs of appeal are assessed against the plaintiffs.
Article 10(2)1 of the Value-Added Tax Act provides that the place where the service is supplied is “the place where the service is provided or the goods, facilities, or rights are used.” Thus, whether a transaction is subject to the authority to impose taxes should be determined based on the place where the service is provided.
In light of the above legal principles and the records, S.W.I.F.T (hereinafter “SWIT”)’s main contents of the instant services supplied to the Plaintiffs by S.W.I.F.T (SIFT) through the above communications network, even if it were to be sent from the terminal of the Plaintiffs’ stores installed with the software necessary for the use of the SIFT network, the main contents of the instant services were to be sent to the Plaintiffs according to the standardized message format by linking the SIFT network in Korea, and to the notice of remittance between financial institutions that the Plaintiffs entered according to the standardized message format by the SIFT network, such as notice of funding transfer, order of foreign currency transfer, establishment of foreign currency funds or loan and deposit contracts, and the notice of the opening of the L/C. The transmission of these transaction messages was not to be done by the Plaintiffs’ domestic telecommunications network, but to be used by the Defendant’s domestic telecommunications network, which is the most important part of the instant telecommunications network.
In the same purport, the court below is just to determine that the service provider of this case is liable to pay the value-added tax of this case on the premise that it is a domestic source, and there is no error of law such as misunderstanding of facts as to the contents of the service of this case, violation of the rules of evidence, or misunderstanding of legal principles as to the meaning and scope of application of the service provision place
Therefore, all appeals are dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.
Justices Kim Young-ran (Presiding Justice)