Article 37 of the Enforcement Decree of the Value Added Tax Act

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

A. The Plaintiff is a non-profit foundation that is established on October 13, 1924, and conducts missionary work, youth training, and social sports business as intended business.

B. On October 31, 2002, the Plaintiff entered into an entrustment contract for the management and operation of the youth training center in Seoul Metropolitan Government (hereinafter referred to as the “instant entrustment contract”) located in Yeongdeungpo-gu Seoul Metropolitan Government (hereinafter referred to as the “instant training center”), and managed and operated the instant training center until the end of 2005.

C. The Defendant imposed on the Plaintiff, on January 17, 201, value-added tax No. 2003 (including additional taxes), and No. 1 value-added tax (including additional taxes) in March 7, 2004, and No. 2000 (including additional taxes) in 2004, and No. 1 value-added tax (including additional taxes) in 2004, and No. 1 value-added tax (including additional taxes) in 2004, and No. 1 value-added tax (including additional taxes) in 2005, and No. 1 value-added tax (including additional taxes) in 2005, and No. 1 value-added tax (including additional taxes) in 2005.

D. On April 7, 2011, the Plaintiff filed an objection, and on July 8, 2011, from the Seoul Regional Tax Office, “The Seoul Regional Tax Office conducted the instant training center independently under its responsibilities and calculations,” re-examines whether the amount received from the general public is the amount of reimbursement for actual expenses compared with the fees for the use of the same kind of sports facilities, and accordingly, notified the Seoul Regional Tax Office of the re-audit decision.”

E. Accordingly, the Defendant conducted an on-site investigation, and submitted it to the Council at the request of the Plaintiff. However, the advisory committee for determination of taxation facts notified the Defendant that “the matters already consulted are excluded from the deliberation,” and the Defendant notified the Plaintiff of its content on August 23, 201.

F. Accordingly, the Plaintiff filed an appeal on October 11, 201, and received a decision of dismissal from the Tax Tribunal on March 30, 2012.

[Reasons for Recognition] The whole purport of the arguments, as described in the facts without dispute, Gap 1, 4, 5, 6, 7, and 9

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

(1) The plaintiff operated the training center in this case under the responsibility and calculation of Seoul Special Metropolitan City, and the supplier under the substance over form principle should be considered to be Seoul Special Metropolitan City. Accordingly, the service provided to the general public constitutes "services provided by the State, local governments or local government associations" under Article 12 (1) 17 of the Value-Added Tax Act (amended by Act No. 8142 of Dec. 30, 2006) and is subject to value-added tax exemption.

(2) The plaintiff provided juvenile-related educational services to the general public for the purpose of using the training center in this case, and the services provided to the general public should also be deemed included in the juvenile-related educational services. Accordingly, the services provided to the general public constitute the educational services teaching knowledge, skills, etc. to the students, trainees, trainees, or trainees in the juvenile training facility under Article 12(1)5 of the Value-Added Tax Act and Article 30 of the Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 1930 of Feb. 9, 2006, hereinafter the same).

(3) The plaintiff allowed the general public to use the training center in this case for the purpose of appropriating the operating expenses of the training center in this case, set the facility level, and controlled the user fees by the Seoul Special Metropolitan City. Accordingly, the service provided to the general public constitutes Article 12(1)16 of the Value-Added Tax Act and Article 37 subparag. 1 of the Enforcement Decree of the Value-Added Tax Act, which constitutes "services temporarily supplied or provided for its own business purposes or provided for cost or free of charge by a nonprofit corporation."

(4) There was no value-added tax-free practice on the consignment operation of a youth training center, and the Plaintiff did not report value-added tax on the trust thereof. Accordingly, the instant disposition that took place five years after the termination of the instant consignment contract is contrary to the principle of trust protection.

(b) Related statutes;

It is as shown in the attached Table related statutes.

(c) Fact of recognition;

(1) The Plaintiff entered into the instant consignment contract with Seoul Special Metropolitan City on October 31, 2002, and December 2002.

30. It was approved by the Defendant as an organization deemed a corporation that does not engage in profit-making business.

(2) The main contents of the consignment contract are as follows.

(Major Contents Omitted)

(3) The instant training center has the following facilities:

(Omission of Installation Details)

(4) In the instant training center, the Plaintiff engaged in educational and cultural activities in the name of the Plaintiff, sports-for-all activities (youth’s physical activities and citizen sports activities), facility counter-facilities (free swimmings, small theaters, etc.), and self-marketing operations, etc., and the details of revenues by each business are as follows.

(Omission of Import Details)

(5) The Plaintiff appropriated the instant training center’s operating expenses from the revenue of each business, the business expenses received from Seoul Special Metropolitan City, etc., and accounted for the instant training center’s operating expenses separately from other businesses. Upon the completion of the instant entrustment contract, the Plaintiff returned the remaining balance KRW 00,000 after appropriating the expenses to the Seoul Special Metropolitan City on April 15, 2006.

(6) In addition to the Plaintiff’s articles of incorporation, the Plaintiff enacted and operated the instant training center’s articles of incorporation, and its main contents are as follows.

(A) Articles of incorporation

(Major Contents Omitted)

(B) Articles of incorporation of the instant training center

(Major Contents Omitted)

[Reasons for Recognition] The facts without dispute, Gap 2, 7, and 10 (including household numbers), and Eul 2 through 6, and the purport of the whole pleadings

D. Determination

(1) As to the first argument

(A) Article 2 (1) of the Value-Added Tax Act provides that "any person who supplies goods or services independently on a business basis, regardless of whether they are for profit or not, shall be liable to pay value-added tax under this Act", and "in this context, "in the case of carrying on a business under his responsibility and account", even if he carries on the entrusted business, the trustee is liable to pay value-added tax if he carries on a business under his responsibility and account. Meanwhile, Article 10 (1) of the Ordinance on Juvenile Facilities provides that "the Seoul Special Metropolitan City head may delegate or entrust his authority on the operation, etc. of juvenile facilities to any autonomous head of the Gu as prescribed by the Rules, or to any juvenile organization", and Article 2 (1) of the Ordinance on Entrustment of Administrative Affairs to the Private Sector (hereinafter referred to as the "Ordinance on Administrative Affairs") provides that "in the case of entrusting the operation of juvenile facilities to any juvenile organization, the head of the Seoul Special Metropolitan City Mayor and Article 2 (1) of the Ordinance on Administrative Affairs, and the head of the Seoul Special Metropolitan City provides that person shall be responsible under his name or entrusted."

(B) On the other hand, the instant case was managed by the Plaintiff’s account, and the Plaintiff concluded the instant commission contract pursuant to Article 10 of the Seoul Special Metropolitan City Ordinance on Juvenile Facilities, and the Plaintiff is entitled to operate the instant training center under his name and responsibility. ② According to the instant consignment contract, Seoul Special Metropolitan City is entitled to control and supervise the instant training center operation or the execution of project costs, etc. (Articles 8 and 9), and the Plaintiff is obligated to directly operate the instant training center (Articles 2, 4, 6, and 13) and the Plaintiff is responsible for the instant training center operation (Articles 2, 6, and 13). ③ The Plaintiff included the details of the revenue and expenditure of the instant training center in the subsidy income received from the Seoul Special Metropolitan City during the consignment period, and returned the balance of the project cost remaining after the entrustment period to Seoul Special Metropolitan City.

(2) As to the second argument

(A) Article 12 (1) 5 of the Value-Added Tax Act provides that "the provision of educational services as prescribed by the Presidential Decree shall be exempted from value-added tax," and Article 30 of the Enforcement Decree provides that "the provision of educational services under Article 12 (1) 5 of the Act shall be provided to schools, private teaching institutes, teaching institutes, training institutes, training institutes, teaching schools, and other non-profit organizations, and youth training facilities under Article 10 (1) 1 of the Juvenile Activity Promotion Act that provide students, trainees, trainees, or trainees with knowledge and skills." On the other hand, Article 1 of the Framework Act on Juveniles provides that "the purpose of this Act is to provide for the rights and responsibilities of juveniles, family, society, state and local governments for youth, and basic matters concerning youth fostering policies, and Article 3 subparagraph 1 of the Enforcement Decree provides that "the youth hostel is defined as "persons aged between 9 and below 24", and Article 10 (1) 2 through 6 provides that "the youth hostel shall be defined as juvenile training facilities, and the youth training facilities shall be defined as 17".

(B) It is reasonable to view that the instant case is limited to teaching knowledge, skills, etc. to juveniles (see Supreme Court Decision 2008Du716, Apr. 11, 2008). (2) Even if educational services are provided to the general public in order to raise the financial resources while providing juvenile education services, it cannot be deemed that it is provided as part of juvenile education services. (3) The term "other non-profit organizations" under Article 30 of the Enforcement Decree of the Value-Added Tax Act means all non-profit organizations established with the permission or authorization of the Government, and it does not mean the Elementary and Secondary Education Act, the Higher Education Act, the Early Childhood Education Act, the Act on the Establishment and Operation of Private Teaching Institutes, and the Installation and Utilization of Sports Facilities Act, and the Act on the Establishment and Utilization of Sports Facilities, and the Act on the Establishment and Utilization of Private Teaching Institutes, the Plaintiff’s assertion that it does not constitute the provision of education services to the general public under Article 30(1)5 of the Value-Added Tax Act.

(3) As to the third argument

(A) Article 12 (1) 16 of the Value-Added Tax Act provides that "The supply of goods or services supplied by religious self-governing, scientific, relief, or other organizations for public interest as determined by the Presidential Decree" shall be exempted from value-added tax, and Article 37 of the Enforcement Decree of the Value-Added Tax Act provides that "the term "those as determined by the Presidential Decree under Article 12 (1) 16 of the Act" shall mean:

The term “goods and services that are temporarily supplied or supplied for its proper business purposes or that are supplied at cost or free of charge by a private organization that carries out a business as prescribed in any of the subparagraphs of Article 12 of the Enforcement Decree of the Inheritance and Gift Tax Act.” The reason why the value-added tax is exempted on the basis of the incidental services provided while carrying on a business for the proper business is that the incidental services are provided in relation to a business for the proper business purposes and the frequency or amount of such services cannot be seen as being carried out as part of the proper business purposes. Therefore, if the incidental services cannot be seen as being provided “related to the proper business purposes”, it cannot be seen as being subject to value-added tax exemption even if they are supplied at cost or free of charge.

(B) On the other hand, the instant case is health. ① According to Articles 3 and 4 of the Plaintiff’s Articles of Incorporation, and Articles 3 and 4 of the instant Training Center’s Articles of Incorporation, the Plaintiff, and all these profit-making businesses are included in the subject of value-added tax exemption. ② According to the instant consignment contract or the Juvenile Facility Ordinance, it is possible to collect user fees for the use of the instant training center from the general public, but it is also possible to reflect the purpose of the establishment of the instant training center in the case where it is included in the subject of value-added tax exemption, and it is possible to avoid the provision of value-added tax exemption (the revenue received from the general public is above 15% compared with the total revenue, and it is above 00 won annually). ③ Since the instant consignment contract is widely limited to juvenile welfare and training activities conducted for the above youth, it is not reasonable to interpret that it is not related to the provision of tax exemption or exemption or exemption or provision of tax exemption or provision of tax exemption or provision of tax exemption or provision to the general public.

(4) As to the fourth argument

(A) In general, in tax law relations, in order to apply the principle of trust protection to the tax authority's acts, the tax authority must name the public opinion of the taxpayer who is the subject of trust, and the taxpayer should not be responsible to the taxpayer when the taxpayer trusted that the tax authority's statement of opinion is justifiable, and the taxpayer must either trust the name of the opinion and perform an act in which the tax authority made the taxpayer trust, and make a disposition contrary to the opinion list, thereby infringing the taxpayer's interest (see, e.g., Supreme Court Decisions 99Du10131, Nov. 27, 2001; 98Du2713, Aug. 18, 2000).

(B) It is insufficient to recognize that the taxing authority expressed a public view that the instant case would not impose any tax on the service provided to the general public only with the statement of No. 11 and the statement of No. 11, and there is no other evidence to acknowledge this (the taxing authority seems to impose value-added tax on the service provided to the general public). Accordingly, the Plaintiff’s assertion on the premise that there is a public opinion expression is without merit.

3. Conclusion

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