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

Cheong-gu Office

The Defendant’s imposition of value-added tax of KRW 000 for the first term of February 2, 2015 against the Plaintiff on February 2, 2015 is revoked.

A. On February 4, 2008, the Plaintiff registered the business of housing construction and sales business with its business location as ○○-dong 291-2 (hereinafter “instant land”) and its trade name as ○○-dong 291-2 (hereinafter “instant land”). On March 31 of the same year, the Plaintiff started to establish three-story housing exceeding national housing size (hereinafter “instant housing”) on the instant land, and completed the approval for its use on March 19, 2010.

B. On April 15, 2010, the Plaintiff entered into a sales contract withCC to sell the instant land and the instant land and its appurtenant roads. On April 16, 2010,CC registered the real estate rental business with the instant land and the trade name asCC real estate. On April 16, 2010, the Plaintiff received the instant land and the instant land from the Plaintiff on April 30, 201, and the Plaintiff reported the closure of business with respect to B on May 4, 2010.

C. On February 2, 2015, the Defendant: (a) deemed the Plaintiff’s act of selling the instant house to be the supply of goods subject to value-added tax; and (b) rendered a disposition imposing value-added tax of KRW 000 on the Plaintiff for the first period of January 2010 (hereinafter “instant disposition”).

D. On May 4, 2015, the Plaintiff filed an appeal with the Tax Tribunal on the instant disposition, but was dismissed by the Tax Tribunal on July 2, 2015.

[Reasons for Recognition] There is no dispute, each entry of Gap evidence Nos. 1 through 3 and the purport of the whole pleadings.

2. Whether the disposition is lawful;

A. The plaintiff's assertion

The instant disposition is unlawful for the following reasons.

1) The transfer of the instant house constitutes a transfer of business not deemed a supply of goods under Article 6(6) of the former Value-Added Tax Act (amended by Act No. 10409, Dec. 27, 2010; hereinafter the same).

2) On or before February 8, 2006, the Value-Added Tax Act was amended on the 9th of the same month and the Enforcement Decree of the Value-Added Tax Act no longer requires the same type of business as that of the transferor and the transferee. Although the National Tax Service explicitly confirmed the same through the explanatory report published in 2006, it demanded the identity of the transferor and the transferee at the time of business transfer through a new interpretation in 2010. Ultimately, the instant disposition was taken on the ground that the type of business of the Plaintiff andCC at the time of the instant housing transfer is not the same. This is contrary to the good faith and the principle of prohibition of retroactive taxation.

B. Relevant statutes

Attached Form is as shown in the attached Form.

C. Determination

1) A business subject to transfer under the former Value-Added Tax Act and the Enforcement Decree thereof (amended by Presidential Decree No. 22395, Sept. 20, 2010) should be an organic combination of human and physical facilities so that the business can be separated from the main body of management and can be recognized as having social independence. The burden of proof is borne by the person liable to pay the burden (see Supreme Court Decision 97Nu12778, Jul. 10, 1998).

However, the evidence submitted by the Plaintiff alone is insufficient to recognize that the transfer of the instant house constitutes the transfer of a business that can be recognized as a social independence as an organic combination of human resources and physical facilities. There is no other evidence to acknowledge it. Rather, in light of the above facts and the overall purport of the statement and arguments as stated in Gap evidence No. 6, the Plaintiff andCC only prepared a real estate sales contract in lieu of preparing a contract for business transfer and acquisition, and there is no indication to deem that there was an appraisal of the assets, liabilities, goodwill, human resources, etc. related to the housing construction and sale business operated by the Plaintiff at the time of the contract. The Plaintiff registered a business for the construction of the instant house, transferred the instant house toCC, and closed its business only four days after the transfer of the instant house to the Plaintiff, andCC also concluded a sales contract for the instant house, and in view of the fact that "building division value-added tax is transferred and acquired between the Plaintiff andCC," the Plaintiff cannot be seen as a mere comprehensive transfer of the housing construction and sale business for the purpose of the sale of the instant house.

2) As seen earlier, so long as the transfer of the instant house cannot be seen as a transfer of business regardless of the difference between the Plaintiff andCC’s business type, the instant disposition cannot be deemed to violate the good faith principle or the principle of prohibition of retroactive taxation.

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and it is so decided as per Disposition.