Article 22 of the National Tax Collection Act

A. Of the instant lawsuit, the part concerning the revocation of the disposition imposing additional dues and aggravated additional dues is dismissed.

B. All remaining claims of the Plaintiff are dismissed.

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

The following facts are either disputed between the parties, or acknowledged by considering the whole purport of the arguments in each of the statements in Gap evidence 1-1, evidence 1-2, evidence 1-2, evidence 1-1, evidence 2, evidence 1-2, evidence 2-2, evidence 2-2, evidence 3-2, evidence 4-1 through 6, evidence 6, evidence 7-1, and evidence 7-2, and each of the statements in Gap evidence 3-1, 2, and evidence 4 through 9 is not interfered with the above recognition.

A. From July 1, 2005 to July 13, 2006, the Plaintiff operated the game room (hereinafter “instant game room”) with the trade name called “○○○○○○○-13, Ulsan-dong” (hereinafter “○○○○”).

B. The Plaintiff purchased gift certificates from the provider of gift certificates for free use and stored them in the game machine. The game machine user inputs certain cash in the game machine and operated in the form of receiving gift certificates when the requirements set forth in the game are met. The Plaintiff purchased gift certificates of 5,000 face value from ○○○○○, a general sales company in the Ulsannam region of Ulsannam region, and supplied them to the game machine users with gift certificates of 323,000 in the taxable period of the second value-added tax in 2005, and 384,400 in the first value-added tax in 2006.

C. The Plaintiff reported the value-added tax base to the Defendant for the second period of 2005 with respect to the instant game place, KRW 4,500,000 for the second period of 205, and KRW 5,000,000 for the first period of 206, and paid the value-added tax thereon.

D. The Defendant: (a) deemed the total amount of cash input by the instant game users to be the sales amount of the instant game site; (b) conducted on-site verification investigations; (c) however, there is no sales-related account books or electronic data that enable users to know the actual amount of money input in the game season; (d) pursuant to the Regulations on the Designation of Gift Certificates, the Plaintiff’s sales status data reported to the Korea Game Industry Development Institute, a foundation; (b) during the first taxable period of 2005 and 206, the Plaintiff calculated the total amount of the gift certificates purchased from 00,000 won per gift certificates by multiplying the total amount of KRW 5,000 per gift certificates by 60,000, the total amount of the purchase amount of KRW 160,000, KRW 200, KRW 205, KRW 2000, KRW 200, KRW 106, KRW 2005, and KRW 10,006.

E. On April 23, 2007, the Plaintiff filed a request for examination with the Commissioner of the National Tax Service regarding the instant disposition, but the Commissioner of the National Tax Service dismissed the said request on May 30, 2007.

2. Whether a lawsuit seeking revocation of a disposition imposing additional dues and aggravated additional dues is legitimate;

The additional dues and increased additional dues provided for in Articles 21 and 22 of the National Tax Collection Act are a kind of incidental dues imposed in the meaning of interest for arrears on unpaid portion if national taxes are not paid by the due date. If national taxes are not paid by the due date, the additional dues and increased additional dues are naturally generated if national taxes are not paid by the due date without the due date of payment by the due date of payment by the due date of payment by the due date of payment by the due date of the person who has the authority to impose taxes, and in order to commence the collection procedure, it is possible to urge the payment by the due date. Thus, if the payment demand is unlawful, it shall be possible to bring an objection against the disposition of cancellation by the due date, but the tax authority has notified the purport that the additional dues and increased additional dues will be collected by the due date of payment by the due date. If there is no demand for the payment after the due date of payment by the due date, the disposition of imposition of additional dues and increased additional dues shall be deemed unlawful (see, e.g., Supreme Court Decision 200Du2013).

In the case of this case, as seen earlier, only notified the purport that each additional dues and aggravated additional dues as stated in the purport of the claim should be collected if the defendant did not pay each amount of tax by the payment deadline, and there is no evidence to prove that the defendant commenced the collection procedure by demanding the payment of each additional dues and increased additional dues, or that the defendant made a certain disposition to confirm them. Thus, the part of the lawsuit of this case seeking revocation is unlawful on the premise that each additional dues and increased additional dues are imposed.

3. Whether the instant disposition is lawful

A. The plaintiff's assertion

The instant disposition is unlawful for the following reasons.

(1) Items exempt from value-added tax

Value-added tax is imposed on the added value created by the transaction in which an entrepreneur supplies goods or services to his/her counterpart. In the case of the game of this case, the game of this case is not a place where added value is created, and it is not an object of value-added tax.

(2) The legality of the estimated determination

In operating the game of this case, the Plaintiff purchased gift certificates from the U.S. branch of U.S. P. ○○○○○ (representative: Kim○) in the second half-year taxable period of 2005, 109,300, and 89,800 during the first half-year taxable period of 2006, which recorded the details of the Plaintiff’s purchase of gift certificates. This fact is confirmed by the gift purchase ledger, transaction statement, details of passbook, and the document of confirmation prepared by the ○○○○ P. P. ○○ P. S. S. S. Doz., the Plaintiff, a supplier of the gift certificates, and accordingly, purchased gift certificates from the U.S. branch of U.S. (representative: Kim○)

(3) Deduction of par value of gift certificates when calculating the tax base

The game user of the game of this case uses the game of this case for the purpose of acquiring merchandise coupons rather than using cash in the game machine for the purpose of entertainment. As such, cash inputs can be divided into the use fee of the game machine and the purchase cost for the acquisition of merchandise coupons using an average winning rate. Among them, the purchase cost for the acquisition of merchandise coupons is paid for the acquisition of goods such as merchandise coupons and the amount of purchase cost must be deducted from the tax base when considering that merchandise coupons are exempted from value-added tax. If the total amount inputs in the game machine as tax base without exception, if it is the total amount inputs in the game machine, it would result in paying more amount than the total amount of revenue of the game of this case as value-added tax.

(4) Violation of non-taxable practices

Only the remaining amount of income of the game operators operating the game of this case, such as the game of this case, calculated by deducting the gift certificates value for several years, as the tax base of the output tax amount, and the tax authorities including the defendant accepted the above return and payment without any measure. The plaintiff, who believed such tax practice, was liable to pay taxes because he was subject to the instant disposition of this case while operating the game of this case without obtaining an opportunity to collect value-added tax from the users of the game of this case. In light of these circumstances, the instant disposition of this case is contrary to established non-taxable practices or against the good faith principle.

(b) Related statutes;

Article 16 (Ground Taxation for Framework Act on National Taxes)

Article 18 (Standards for Tax-Related Acts Interpretation and Prohibition of Retroactive Taxation)

Article 1 (Taxable Objects)

Article 7 (Supply of Value-Added Tax Act)

Article 13 (Tax Base of Value-Added Tax Act)

Article 48 (Calculation of Tax Base of Value-Added Tax Act)

Article 69 (Method of Estimation and Revision)

C. Determination

(1) Whether the value-added tax is exempt

Casino business revenues can be classified into gambling revenues, excluding money received by customers, in order for customers to gamble with gambling, from admission fees received from customers in return for admission to casino facilities. Gambling revenues, excluding admission fees, do not constitute value added tax, and such revenues do not constitute value added tax (see Supreme Court Decision 2004Du13288, Oct. 27, 2006).

However, even if the service provided in the game of this case has a certain degree of character as a speculative act, ① the game of this case is primarily used to provide customers with entertainment for the game of this case, and gift certificates are provided for interest-generating in accordance with the standards for free dealing in the game software establishment publicly notified by the Minister of Culture and Tourism, and the realization of such gift certificates is strictly limited in accordance with the former standards for free dealing in the game software establishment (amended by the Ministry of Culture and Tourism No. 2006-24, Nov. 1, 2006). In light of this, in the game of this case, it cannot be viewed as identical to the act of customers making money for gambling in cash directly paid for the game of this case, ② the game of this case is provided to customers with merchandise coupons while using the game machine, so it cannot be viewed as being added to the game of this case, and thus, it cannot be viewed as being provided with value-added tax in the process of creating value-added tax.

(2) Whether the decision of estimation is lawful

Where the tax base and amount of tax payable or the amount of tax refundable for each taxable period of value-added tax are determined or corrected, the account books kept and recorded, such as tax invoices or account books, pursuant to Article 16 of the Framework Act on National Taxes or the main sentence of Article 21 (2) of the Value-Adde

In light of the overall purport of pleadings at issue 1, 2, 4, 5 and 9 of the Plaintiff’s 1, 200 won for each of the above 20-year 200 won for each of the 30-year 20-year 1, 2000 won for each of the above 20-year 20-year 2000 won for each of the 30-year 200-year 600 books for each of the 20-year 1, 2000 won for each of the above 30-year 20-6 items for each of the 60-year 1, 300-6 items for each of the 60-year 1, 200-6 items for each of the 60-year 1, 300-6 items for each of the 60-year 1, 200-6 items for each of the 60-year 205 items for each of the 30-year 205 items for each of merchandise.

Therefore, as seen earlier, the Plaintiff did not keep evidence such as books or electronic data that can identify the amount of money invested in the game machine by the game users. However, in the instant case, unless there are circumstances to deem that the part against the Plaintiff among the current status of sales of merchandise coupons by the game room reported by the Korea Game Industry Development Institute, a foundation, is not particularly reliable, it is legitimate for the Defendant to estimate and calculate the value-added tax base pursuant to the proviso of Article 21(2) of the Value-Added Tax Act and Article 69 of the Enforcement Decree of the same Act based on the contents reported by

(3) Whether the face value of gift certificates is deducted when calculating the tax base

Article 1 (1) 1 of the former Value-Added Tax Act (amended by Act No. 8142 of Dec. 30, 2006; hereinafter referred to as the "Act") provides that "the supply of goods or services" shall be subject to value-added tax, and Article 1 (3) of the former Value-Added Tax Act provides that "any services and other acts having property value other than goods" shall be "all services and other acts having property value other than goods", and Article 13 (1) of the Act provides that "the tax base of value-added tax on the supply of goods or services shall be the total value falling under any of the following subparagraphs," while Article 1 (3) provides that "if the price is paid in money, the price shall not be deducted from the tax base after the goods or services are supplied."

Considering the contents and purport of each of the above provisions, and the fact that Korean value-added tax, which adopts the pre-stage tax credit system, takes into account the form of transaction tax imposed on the external appearance of transaction, not substantial income, unlike income tax and corporate tax, there is no concept of deduction of expenses. It is imposed regardless of the profit or loss of the game operator. It is only the use of the game machine to provide merchandise coupons to the game users. It is reasonable to view that a merchandise coupon is an incidental gift provided by each game user after the use of the game machine, and there is room to view that there is a characteristic of incentive under Article 13(3) of the Act. As seen above, the former standard of handling merchandise in the game software establishment is strictly limited to the degree that the merchandise coupon can not be presented in cash even if it is substantially guaranteed, and that a game business operator is not entitled to deduction of the input tax amount as a result of purchasing the merchandise coupon without value-added tax, in calculating the value-added tax base of the merchandise coupon in the game providing it as free gift, it cannot be viewed that it goes against the principle of no taxation without law.

(4) Whether the non-taxable practice has been violated

In order to establish non-taxable practice under Article 18(3) of the Framework Act on National Taxes, there is an objective fact that there was no tax exemption on certain matters over a long period of time, and the tax authority has an intention not to impose tax on such matters with the knowledge that it is possible to impose tax, and such intent has been externally expressed explicitly or implicitly. Game enterprisers have reported the game user's game input amount less the face value or acquisition value of gift certificates provided to the game user as gift gift, and the tax authority including the defendant has reported the amount as value-added tax base. Even if the tax authority did not raise any objection, the receipt of value-added tax by the taxpayer's report is merely a factual act, and it cannot be viewed as a confirm disposition. The tax authority did not explicitly express opinion as to the calculation of the value-added tax base of the game site which provides gift certificates as gift gift certificates, and it cannot be viewed that the amount of value-added tax after deducting the value of the gift certificates provided from the game user's game input amount as gift gift certificates, such as the plaintiff's game input amount as value-added tax base.

(5) Therefore, the plaintiff's above arguments are without merit.

4. Conclusion

Therefore, the part of the claim for revocation of the disposition imposing additional dues and aggravated additional dues among the lawsuits in this case is unlawful and dismissed, and the remaining claims of the plaintiff are dismissed as it is without merit. The judgment of the court of first instance is partially unfair, and the judgment of the court of first instance is modified as above. It is so decided as per Disposition.

Ulsan District Court 2007Guhap2108 (2008.02)

2. The litigation costs shall be borne by the plaintiff.

A. From July 1, 2005 to July 13, 2006, the Plaintiff operated the game room (hereinafter “instant game room”) with the trade name called ○○○○○○○○○○○○ 286-13 to ○○○○○○○○○.

B. On February 14, 2007, the Defendant considered the total amount of cash inputs to the game of this case by the users of the game of this case as sales in the game of this case, and calculated the Plaintiff’s tax base of value-added tax of KRW 1,700,000 in 205 and KRW 1,922,00,000 in 206, respectively, and issued a disposition imposing value-added tax of KRW 64,46,50 in 2005 and KRW 69,62,680 in 206 (hereinafter “instant disposition”).

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1 and 2, Gap evidence No. 1, 2, Eul evidence No. 1-1 and 2, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The plaintiff asserts that the disposition of this case is unlawful for the following reasons.

(1) Value-added tax is imposed on the added value created by the transaction. The money input by the game machine users in the game machine is for speculative entertainment, such as casino, and it is not for creating added value. Therefore, it cannot be viewed as a taxable object of value-added tax.

(2) The gift certificates that the Plaintiff pays to the game-based users are not subject to value-added tax for the transaction of such currency-based securities with monetary-based securities. Therefore, a taxable transaction that is subject to value-added tax among the goods that the Plaintiff provides to the game-based users and the services that use the game machine is limited to the provision of services that use the game machine.

Therefore, since the part corresponding to the face value of merchandise coupons paid to the game user from the money input in the game machine is not a taxable transaction, the value of merchandise coupons supplied to the game user in calculating the value of supply in relation to the disposition of this case should be deducted.

(3) In order to calculate the tax base of value-added tax, the amount invested in the actual game machine should be reasonably estimated based on the gift certificates purchase ledger, daily quantity of gift certificates, daily amount of refund, winning rate, and daily account settlement statement, etc. However, since the defendant decided the tax base of value-added tax with only the purchase object of gift certificates and the plaintiff's statement, it goes against

B. Relevant statutes

The entries in the attached Table-related statutes shall be as follows.

(c) Fact of recognition;

(1) A game user using the game of this case puts certain cash into the game machine and puts a game. As such, a game continuing to play a game by crediting the winning points in the game process, the game can continue to be conducted without relation to time or frequency until the winning points are extinguished.

(2) If a game user completes a game, he/she is provided free gifts according to the accumulated points. The Plaintiff provided gift certificates purchased from a merchandise coupon supplier as free gifts.

(3) The ratio of the amount of gift certificates to the amount invested by the game user in the instant game room is 95% in the second period in 2005 and 100% in the first period in 2006.

(4) The Plaintiff purchased gift certificates of KRW 5,000 in face value from merchandise coupon suppliers during the second taxable period of value added tax in 2005 and supplied them to the game machine users with gift certificates of KRW 323,00 during the first taxable period of value added tax in 2006.

(5) The Plaintiff does not keep relevant evidentiary data, such as account books or electronic data on the amount, etc. input by the game users of the instant game room.

(6) The Defendant calculated the instant value-added tax base by multiplying the amount of payment of the gift certificates of this case by the amount of KRW 5,000 per gift certificate per gift certificate per gift certificate, and by dividing that amount into dividend rates and calculating the value of supply.

[Ground of recognition] Evidence Nos. 2-2, Evidence Nos. 3-1, 2, and Evidence Nos. 4-8, Evidence Nos. 2-1, 2, Eul evidence No. 3, Evidence Nos. 4-1 through 6, Eul evidence No. 6, and the purport of the whole pleadings

D. Determination

(1) As to the first argument of the Plaintiff

The following circumstances revealed by the above-mentioned facts, namely, the plaintiffs registered a game room business in accordance with the procedures prescribed in the former Sound Records, Video Products and Game Software Act, and legally operated the game room business in this case. The game machine installed in the above game room also was designed for entertainment by using computer programs and mechanical devices. Thus, users' use of the game machine in the above game room cannot be deemed as gambling or speculative acts, and the amount invested in the game machine by users of the game machine in the game machine belongs to the total business owner; < Amended by Presidential Decree No. 20690, Dec. 2, 200>

The cash is not returned to all users, and the game machine users are paid merchandise coupons only when they meet certain game conditions established by the computer program. As such, the above amount can be seen as being paid in advance for the use of entertainment for a certain period of time, not for deposit. In full view of the fact that the plaintiff's game room business in this case does not create any other added value different from the provision of other services, it is obvious that the money input by the game machine users is subject to value-added tax in return for the supply of goods or services. Therefore, this part of the plaintiff's assertion is without merit.

(2) On the second argument of the Plaintiff

The following circumstances revealed by the above recognition: (a) the money which the game users pay to the Plaintiff is not separately paid for each part of the provision of the service called game machine use and merchandise coupons, which is the whole price for the goods called merchandise coupons; and (b) the Plaintiff is not separately paid for each part of the merchandise coupons; (c) merchandise coupons are securities representing delivery claims with bills of lading, bill of lading, warehouse receipts, etc.; (d) money payment claims are different in nature from those representing money payment claims; (e) money payment cannot be viewed as the same as cash until they are exchanged; and (e) merchandise coupons are not subject to deduction of the value-added tax on the merchandise coupons, which are no more than the value-added tax base of the merchandise coupons, because the value-added tax can be imposed on the merchandise coupons, which are no more than the value-added tax base of the merchandise coupons, because the value-added tax can be imposed on the merchandise coupons, which are no more than the value-added tax base of the merchandise coupons, which are no more than the value-added tax base of the merchandise coupons.

(3) As to the third argument by the Plaintiff

Where the tax base and amount of tax payable or refundable amount for each taxable period are determined or corrected, such tax invoice, account book, etc. pursuant to Article 16 of the Framework Act on National Taxes or the main sentence of Article 21 (2) of the Value-Added Tax Act shall be kept. The account book kept and related

However, as seen earlier, the Plaintiff did not keep all relevant documentary evidence, such as account books and electronic data on the amount input in the game room. If there is no such evidence or material part is incomplete, there is no way to impose the value-added tax on the game room of this case by the evidence of tax invoice, account books, etc. as alleged by the Plaintiff, and the value-added tax shall not be imposed according to the estimation method according to the proviso of Article 21(2) of the Value-Added Tax Act and Article 69 of the Enforcement Decree of the same Act. Thus, the Plaintiff’s assertion on this part

3. Conclusion

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