XX Commemorative Hall

O Head of tax office

A. The Defendant’s rejection disposition against the Plaintiff on March 11, 2008 against the application for refund of value-added tax for the first term portion of value-added tax in 2007 is revoked only for the portion exceeding KRW 78,426,09.

B. The plaintiff's remaining claims are dismissed.

2. The total costs of the lawsuit shall be five minutes, and one of them shall be borne by the defendant, and the remainder by the plaintiff, respectively.

The Defendant’s disposition of imposing value-added tax on the Plaintiff on March 11, 2008 and the disposition of rejecting the application for the refund of value-added tax of 171, 2007, which was issued by the Plaintiff on March 11, 208 (the Plaintiff changed the purport of the claim in the trial).

2. Purport of appeal

A. The plaintiff

The part of the judgment of the court of first instance against the plaintiff shall be revoked. The defendant shall revoke all the disposition imposing value-added tax on the plaintiff on March 11, 2008 as stated in the attached Table 2 of the details of the tax disposition.

B. Defendant

The part of the judgment of the court of first instance against the defendant shall be revoked, and all the plaintiff's claims corresponding to the above revocation shall be dismissed.

A. The Plaintiff is a corporation established on August 20, 1986 pursuant to the ○○○○○ Act and engaged in the collection, preservation, management, and exhibition of materials of the Memorial, the investigation and research of materials of the Memorial Hall, the management and expansion of the facilities of the Memorial Hall, and the projects for securing financial resources for the operation of the Memorial Hall. The Plaintiff’s business revenue consists of revenue generated from taxable businesses, such as lease revenue, parking revenue, sales revenue, etc., and revenue generated from taxable businesses, such as admission to the Independence Hall of Korea, and revenue generated from tax-free projects, such as admission to the Independence Hall of Korea. The Plaintiff’s business revenue consists of revenue generated from such taxable businesses as revenue from lease revenue, parking revenue, and sales revenue, and revenue generated from tax-free projects as admission to the Independence Hall of Korea. The Minister of Patriots and Veterans Affairs and the Minister of Culture and Tourism, etc. receive national subsidies each year as part of the tax budget corresponding to the Plaintiff’

(The following table omitted):

B. Meanwhile, from the first to the first half of 2003, the classification of input tax amounts during the taxable period from the first half of 2007 is as follows:

(The following table omitted):

C. The Plaintiff filed a claim for correction against the Defendant on the grounds that the common input tax base and its tax amount were not deducted from the relevant output tax amount in 2004 when the Plaintiff filed a return on and paid the value-added tax without deducting the common input tax amount from the relevant output tax amount, and that the subsidies were not included in the tax-free supply amount and the total supply amount. Accordingly, in calculating the common input tax amount upon receiving the Plaintiff’s claim, the Defendant refunded the Plaintiff KRW 249,280,010 in total of the value-added tax paid in excess on the basis of the amount calculated without including the national subsidies in the tax-free supply amount and the total supply amount (hereinafter “instant correction disposition”). From 1, 2005, the Plaintiff filed a return on the tax base and tax amount of the value-added tax for the second period from 2007 to 1, 2007, by calculating the relevant input tax exemption amount from the relevant output tax amount without including the national subsidies in the tax-free supply amount and the total supply amount.

D. However, the defendant, from October 15, 2007 to October 19, 2007, conducted a tax investigation with respect to the plaintiff, during the taxable period from the first to the first period from 2003 to 2007, each of the above national subsidies (hereinafter referred to as the "national subsidies of this case") should be included in the amount of each tax-free supply and the total amount of supply in calculating the proportional distribution of the common purchase tax by each taxable period. In accordance with such calculation method, the defendant calculated the tax amount calculated as stated in the "main tax" column as stated in the "main tax" column as shown below for each taxable period, and imposed the value-added tax on the plaintiff on March 11, 2008 after calculating the tax amount in the "total" column as stated in the "additional tax on negligent return" and the "additional tax on negligent payment on negligent payment" column as stated below for each taxable period.

(The following table omitted):

E. On April 24, 2008, the Plaintiff filed an appeal with the Tax Tribunal on April 24, 2008. The Tax Tribunal cannot charge the Plaintiff’s negligence on the part of the imposition of the additional tax on negligent tax returns and the additional tax on negligent tax payment for the first term portion in September 30, 2009, and the first term portion in the imposition of the additional tax on September 30, 2009.

Each claim was revoked on the ground that there was a justifiable reason, but all remaining claims were dismissed.

F. Meanwhile, when the Plaintiff reported the value-added tax on the first term portion to the Defendant in 2007, the Plaintiff filed an application for refund of KRW 83,818,760 with the Defendant. On March 11, 2008, the Defendant calculated the amount of refund for the first term portion in 2007 as KRW 5,392,61 in accordance with the above calculation method, and upon recognizing that the Plaintiff did not refund the amount of refund for the first term portion in 2007, the Plaintiff was already paid KRW 86,257,710 with the value-added tax for the first term portion in 207, but received the said KRW 86,257,710 from the Plaintiff on March 31, 2008, and thereafter refunded the Plaintiff all of the above KRW 86,257,710 to the Plaintiff on December 3, 2010.

[Ground of recognition] Facts without dispute, Gap evidence 1, 2, Eul evidence 1, 2, 4, 6, 7 (including each number), the purport of the whole pleadings

2. Object of the political party deliberation;

A. In the first instance court on March 11, 2008, the Plaintiff sought revocation of the imposition disposition of value-added tax stated in the attached Table 1 of the details of the imposition of value-added tax. The court of the first instance, among them, sought revocation of the imposition disposition of value-added tax on the second period of 2004, the first period of 2005, the second period of 2006, the second period of 2006, the second period of 2006, the second period of 2006, the second period of 2006, the second period of 2007, and the second period of 171, the second period of 2007, and dismissed the remainder of the claim. The Plaintiff and the Defendant appealed all of these appeals. Since the Plaintiff changed the purport of the revocation disposition on each of the above imposition disposition of value-added tax which is the part against the Defendant in the first instance court, the Plaintiff was excluded from the subject of the

B. Meanwhile, the Defendant’s imposition of value-added tax for the first period of March 11, 2008 on the first period of 2007, without taking any specific measure on the Plaintiff’s application for refund of KRW 83,818,760, the Defendant imposed value-added tax of KRW 86,257,710 on the Plaintiff without taking any specific measure on the Plaintiff’s application for refund of KRW 83,818,760, and the said amount was paid by the Plaintiff again to the Plaintiff. Accordingly, the Plaintiff’s refusal disposition against the Plaintiff’s application for refund of KRW 83,818,760 remains in fact. Accordingly, the Plaintiff changed the purport of the claim

C. Therefore, the subject of the judgment of the court below is legitimate in the imposition of value-added tax as stated in the attached Table 2 of the tax disposition that the defendant made against the plaintiff on March 11, 2008 (hereinafter "the disposition of this case") and the disposition of refusal on the application for the refund of value-added tax for the first time of 2007 (hereinafter "the disposition of this case" and "the disposition of this case" in the disposition of this case and the disposition of this case are "the disposition of this case")

limited.

3. 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) Since the instant government subsidy is a subsidy received by the Plaintiff pursuant to relevant Acts and subordinate statutes, such as the Independence Hall of Korea Act, not the cost for the Plaintiff’s provision of goods and services, it cannot be included in the tax-free and total supply value in calculating the common purchase tax, the instant disposition that the Defendant calculated the input tax amount including the tax-free and total supply value of the instant government subsidy is unlawful. Even if it is not so, the Plaintiff’s government subsidy is expected to be used not only for the tax-free or non-taxable business, but also for the taxable business, and the State’s subsidy is also for the taxable business. Thus, it is unlawful to include it in the tax-free or non-taxable supply value for calculating the common purchase tax solely on the premise that the instant government subsidy is for the tax-free

2) The Defendant accepted the Plaintiff’s request for correction and rendered the instant correction disposition accordingly, and the Plaintiff calculated and paid value-added tax by calculating the common purchase tax without including the national subsidy in the tax-free supply price and the total supply price, with respect to value-added tax after the relevant taxable period. The Defendant’s previous position that changed the previous position was unlawful.

(b) Related statutes;

It is as shown in the attached Table related statutes.

C. Determination

1) Determination on the first argument

(A)the method for calculating the common input tax amount;

(1) Article 17(1) and (2) of the Value-Added Tax Act provides that an input tax amount for goods or services used or to be used for a taxable business shall be deducted from the output tax amount, but an input tax amount for goods or services used or to be used for a taxable business shall not be deducted from the output tax amount. Therefore, where a uniform entrepreneur concurrently operates a taxable business and a tax-free business, only the input tax amount for goods or services used or to be used for a taxable business shall be deducted from the output tax amount for a taxable

(2) Meanwhile, Article 61(1) of the Enforcement Decree of the Value-Added Tax Act provides for the method of calculating the input tax amount related to the taxable business, among the input tax amount related to the taxable business and the tax-free business, which is commonly used for the taxable business and the tax-free business, and for which the tax amount, which can be deducted from the output tax amount of the taxable business, is an input tax amount related to the tax-free business, and which cannot be deducted from the said output tax amount (in addition, the input tax amount related to the tax-free business x the common input tax amount x the tax-free supply amount / the total supply amount). However, in light of the fact that the input tax amount for the goods or services used or to be used for the value-added tax-free business cannot be deducted from the output tax amount of the taxable business, it is reasonable to view that the said provision also applies to cases where the same business operator concurrently operates the taxable business and the tax-free business

B. Determination of a common purchase tax amount with the national subsidy

(1) The Plaintiff is a corporation that performs the duty of collecting, preserving, managing, and exhibiting materials of the Memorial, surveying and researching materials of the Memorial, managing and expanding the facilities of the Memorial, and raising funds for the operation of the Memorial. The Plaintiff’s revenue consists of taxable businesses (lease, parking, selling souvenirs, etc.) and tax-free businesses (admission fees) and revenues and national subsidies.

(2) If so, it is reasonable to view that the Plaintiff’s common input tax amount is not only a taxable business and a tax-free business, but also a tax-free business that is also used for the collection, preservation, management, and exhibition of materials in the Memorial, and for the investigation, research, etc. of materials in the Memorial. In this case, the input tax amount related to the non-taxable area (the Plaintiff’s original business) cannot be deducted from the output tax amount due to the taxable business, as well as the input tax amount related to the tax-free business. Thus, the Plaintiff’s common input tax amount can be reasonably distributed by applying Article 61(1) of the Value-Added Tax Act mutatis mutandis to the method of calculating the ratio of the value of supply for the taxable business to the sum of the values of supply for each taxable business, tax-free business, and non-taxable business (the Plaintiff’s original business of the Plaintiff

(3) However, the issue is that the non-taxable territory (Plaintiff’s original business) is an area where the price for the supply of the service is not given, and thus, it cannot be calculated by means of appraisal, etc. by its nature. However, in calculating the Plaintiff’s common input tax as alleged by the Plaintiff, the Plaintiff’s common input tax amount is calculated by the ratio of the non-taxable territory to the sum of the supply price for the taxable business and the taxable business to the sum of the supply price for the taxable business and the tax-free business, and, on the basis of this, if the Plaintiff’s common input tax amount is calculated by calculating the calculation of the portion relating to the taxable business, the amount of the Plaintiff’s common input tax amount is calculated differently from the actual taxable supply price/total supply price (tax supply price +the total supply price for the taxable business + the tax-free supply price) and thus, the Plaintiff’s improper increase in the input tax amount that the Plaintiff may be deducted from the output tax amount. This is obviously in violation of the purport of Article 17 of the Value-Added Tax Act, thereby adoption of such calculation method is impossible.

(4) Meanwhile, as pointed out by the Plaintiff, it is clear that the national subsidy is not itself the cost that the Plaintiff received for the Plaintiff’s provision of goods or services. However, the national subsidy is the amount that the Plaintiff received for the expenses incurred in performing the Plaintiff’s duties (Article 13(1) of the Independent Memorial Organization Act). The State subsidy is the amount that the State pays to be used for performing its original duties necessary for achieving the Plaintiff’s purpose of its establishment. ② The Plaintiff is paid the national subsidy every year as part of the revenue budget corresponding to the Plaintiff’s expenditure budget, such as personnel expenses, general management expenses, facility maintenance expenses, project expenses, management innovation expenses, reserve funds, etc. (Article 13(1) of the Independent Memorial Office Act). ③ The national subsidy is executed by dividing it into ordinary management expenses and business expenses, including personnel expenses, consumption expenses, service expenses, public charges, various facilities maintenance expenses, replacement expenses, etc., and all kinds of project expenses, etc., it seems that there is no need for the Plaintiff to ultimately calculate the original amount of the Plaintiff’s national subsidy as its original and reasonable legislative alternative method to resolve the Plaintiff’s tax amount of non-taxation.

(5) Therefore, according to such calculation method, the Plaintiff calculated the ratio of the supply value of taxable businesses to the aggregate value of each taxable business and tax-free business for each taxable period, and all national subsidies, based on this, the portion of the common input tax, among the input tax amount, should be calculated, and only the input tax amount should be deducted from the output tax amount

C) The legality of the instant disposition

According to the above calculation method as seen earlier, the Defendant calculated the portion relating to taxable businesses among the common input tax amounts for each taxable period, deducted it from the output tax amount for each taxable period, and imposed the value-added tax. Thus, the instant disposition is lawful. However, the Defendant did not refund the amount of KRW 5,392,61 for the first period of 2007 calculated according to the above calculation method, but did not do so. Thus, the instant disposition of refusal is unlawful only for the portion exceeding KRW 78,426,09 (i.e., KRW 83,818,760 - KRW 5,392,61) of the Plaintiff’s application amount for refund.

D) Determination on the conjunctive assertion

As to this, the Plaintiff’s national subsidy is not only a tax-free or non-taxable business but also a taxable business.

Inasmuch as the government subsidy is expected to be used for the taxable business, and the state already approved that it will be for the taxable business, the government subsidy of this case is unlawful to include it in the tax-free or non-taxable supply value for the purpose of calculating the common purchase tax amount under the premise that it is for the non-taxable business. Thus, we fully accept the plaintiff's above assertion, as well as the plaintiff's above, and since the government subsidy is not the economic output of the non-taxable area (the plaintiff's original business non-taxable area) and it is difficult to regard it as the value of supply. However, the plaintiff's common purchase tax amount cannot be considered in the calculation method of the common purchase tax (the plaintiff's original business), as long as the plaintiff's common purchase tax amount is used for the non-taxable area (the plaintiff's original business), there is no way to calculate the value of supply in the non-taxable area (the plaintiff's original business of the non-taxable area). Thus, we cannot accept the plaintiff's claim that the government subsidy of this case is the most common and reasonable method of calculating the plaintiff's tax amount.

E) Sub-decision

Therefore, the first argument of the plaintiff is partially justified only for the refusal disposition of this case.

2) Determination on the second argument

A) Generally, the requirements for applying the principle of trust and good faith and the principle of protection of trust to the acts of tax authorities in tax and law relations should be the first tax authorities to express public opinion that is the subject of trust to taxpayers. Second, the taxpayer should not be responsible for the reliance on the legitimacy of the expression of opinion by the tax authorities. Third, the taxpayer must act in trust and what is the subject of the statement of opinion. Fourth, the tax authorities' disposition against the above statement of opinion should result in infringing the taxpayer's interest by making the disposition against the above statement of opinion (see, e.g., Supreme Court Decision 87Nu156, Mar. 8, 198).

B) In light of the above legal principles, the fact that the defendant accepted the plaintiff's request for correction and conducted the correction disposition of this case after undergoing a tax investigation is as seen earlier, but the tax authority may correct or rectify the original disposition based on the tax laws and regulations at the time when the tax liability was established, or make a new disposition after cancelling the initial disposition, upon finding any error in the disposition. Therefore, it is difficult to view that the defendant accepted the plaintiff's request for correction and expressed a public opinion that the defendant would not take the disposition of this case against the plaintiff. The second argument of the plaintiff is without merit without examining the remaining part.

4. Conclusion

Therefore, the plaintiff's claim for revocation of the rejection disposition of this case among the plaintiff's claim of this case is justified within the scope of the above recognition, and the remaining claim for revocation of the rejection disposition of this case and the claim for revocation of the disposition of this case are dismissed as it is without merit. It is so decided as per Disposition