Whether cash automatic payment lending and management services are subject to value-added tax;

Cash automatic payment lending and management services themselves are not subject to value-added tax exemption, and they are not subject to value-added tax exemption because they do not correspond to incidental services provided incidental to the main business.

Article 12 of the Value-Added Tax Act

Article 33 of the Enforcement Decree of the Tax Act: Scope of Finance and Insurance Services

1. The plaintiff's claim is dismissed.

2. The plaintiff shall bear the litigation costs.

The defendant's rejection of correction of KRW 519,774,275, which is the sum of the value-added tax as shown in the "attached Form" list for the plaintiff on December 26, 2005.

1. Details of the disposition;

The following facts do not conflict between the parties, or may be acknowledged by considering the whole purport of the pleadings in the descriptions of Gap evidence No. 1-1-3, Gap evidence No. 4-1-6, Gap evidence No. 5-1-2, and Gap evidence No. 6.

A. On December 6, 2003, the Plaintiff was established for the purpose of selling and leasing computers, oil, radio communication equipment and ancillary equipment, cash services and credit card agency business, deposit withdrawal and various credit card agency business, sales, management, agency, maintenance and repair, etc. on the part of the Plaintiff, and entered into a contract with ○○ Bank Co., Ltd. (hereinafter “○○ Bank”) around 2004, an automatic payment machine owned by the Plaintiff was installed at the convenience store to allow the customers of the national bank to use the services such as cash withdrawal (hereinafter “instant contract”) and receive a certain amount of fees according to the number of times of use in return for the instant service.

B. During the period from May 11, 2004 to August 8, 2005, the Plaintiff reported the service of this case to the Defendant as the service subject to the value added. The Plaintiff reported and paid value-added tax from May 1, 2004 to August 1, 2005 with respect to the service fees received from the service of this case, such as the entry in the “the first tax amount” list of “the details of the Plaintiff’s request for correction.”

C. On October 26, 2005, the Plaintiff filed a claim for correction of value-added tax with the content that the supply of this case to the Defendant constitutes an exemption of value-added tax pursuant to Article 12 and Article 12(1)10 of the Value-Added Tax Act, and Article 3(1) and (2) of the Enforcement Decree of the same Act, and that the Plaintiff’s request for correction of the Plaintiff’s claim under Article 45-2 of the Framework Act on National Taxes and Article 25-3 of the Enforcement Decree of the same Act, “the details of the Plaintiff’s request for correction” remains after deducting the Plaintiff’s legitimate amount of value-added tax from the original return and paid value-added tax, i.e., the amount of value-added tax from the first half of the year to the first half of the year from 2004, 2005, 274,275 won, and the Defendant did not notify the Plaintiff of the above request for correction within 20 months from the date of notification under Article 45-2(3) of the Framework Act.

D. The plaintiff filed an appeal with the National Tax Tribunal on January 26, 2006. On August 31, 2006, the National Tax Tribunal dismissed the plaintiff's appeal on the ground that the service of this case does not fall under financial and insurance services under Article 12 (1) 10 of the Value-Added Tax Act, and that the service of this case is not financial and insurance businessmen but constitutes the plaintiff's main business.

2. Whether the rejection disposition of this case is legitimate

A. The plaintiff's assertion

According to Article 27 of the Banking Act, Article 18 of the Enforcement Decree of the Banking Act, and Article 18 of the Act on the Law of Incidental Business among the banking business (the "Financial and Economic Department Notice No. 2003-13," hereinafter), where a customer of ○○ Bank intends to deposit money or account transfer, the service of this case is one of the banking business prescribed by the above-mentioned Acts and subordinate statutes, and is subject to the collection and payment agency service, which is one of the banking business prescribed by the Banking Act, and Article 12 (1) 10 of the Value-Added Tax Act, and Article 3 (1) 1 of the Enforcement Decree of the Value-Added Tax Act, and Article 33 (1) 1 of the Enforcement Decree of the Value-Added Tax Act are banking business, insurance business, value-added tax exemption, or the main service similar to the financing business under Article 33 (1) 1 of the Enforcement Decree of the Value-Added Tax Act.

The disposition of this case, which is judged differently, is illegal.

(b) Related statutes;

Attachment 'Related Acts and subordinate statutes' shall be as shown.

(c) Fact of recognition;

In full view of the evidence mentioned above, Gap evidence No. 11 may transfer the following facts to the court.

(1)The plaintiff has entered into with ○ Bank; the terms of this case are as follows:

S. Schd service use contract

Article 1 (Purpose) The purpose of this Agreement is to provide for matters necessary for the customer of a national bank to obtain financial services, such as deposit and withdrawal, through an automatic cash payment machine other than those established by the Plaintiff.

SECTION 3.(The Law of Services)The law for the affairs specified in this Agreement shall be determined by the agreement between the ○ Bank and the plaintiff, as well as the circulation, the account transfer, the balance, and the extension of the scope of services and the terms and conditions of tax use.

Article 6 (Settlement of Fees)

① Of the automatic cash payment services, the Plaintiff’s customer is entitled to receive the fee for each case as stipulated in the separate agreement on deposit withdrawal through the Plaintiff’s automatic cash payment machines and on account transfer service.

② If the customer of ○○ Bank uses the Plaintiff’s automatic cash payment service, the ○ Bank shall collect a withdrawal fee from the customer’s account on behalf of the Plaintiff and keep it, and deposit it into the fee account designated by ○○ Bank 20 days prior to the 20th day of each month upon the Plaintiff’s request for payment (excluding omission)

Article 7 (Management of Original Funds)

① ○ Bank shall provide the customers of ○ Bank with funds required for the use of an automatic cash payment service, and the Plaintiff shall take all measures, such as filling cash, by demanding the customers of ○ Bank on the business day (D-1 day) prior to the day required for operating funds, so as not to cause inconvenience to the users of ○ Bank in using the automatic cash payment service (excluding omission).

③ The Plaintiff shall manage the operating funds received from ○ bank with due care as a good manager, and when ○ bank or ○ bank has inflicted damage on its customers due to loss, theft, or any other cause attributable to the Plaintiff, the Plaintiff shall immediately compensate for the corresponding damage.

Article 8 (Security of Operating Funds) In order to secure operating funds under Article 7, the Plaintiff shall submit to the ○ Bank a guarantee letter of payment in an amount equivalent to 100% of the operating funds provided by the ○ Bank (other than the ○ Bank) prior to the payment of operating funds.

Article 11 (Establishment, Operation and Management of Automatic Cash Payment Instruments)

(1) The installation and management of an automatic payment machine shall be based on the responsibility of the plaintiff, and shall immediately notify ○ bank of the installation, closure, change, or transfer of the automatic payment machine.

(2) In principle, the Plaintiff shall operate an automatic cash payment machine 24 hours a day, but the place of installation may be adjusted according to the service environment, and it shall endeavor to maintain and manage the automatic cash payment machine to ensure that customers of ○○ Bank do not have inconvenience in using it.

(3) All other expenses incurred in the installation, operation, maintenance, and repair of an automatic cash payer shall be borne by the plaintiff.

(2)In addition to the instant contract, the Plaintiff agreed to pay to the ○○ Bank 1,100 won per case in case of operating hours, 1,300 won per case in case of deposit withdrawal transactions, 1,300 won per case in case of outside business hours, 1,500 won per case in case of deposit withdrawal transactions, and 1,500 won per case in case of outside business hours during the account transfer, and 500 won per case in case of account transfer in accordance with the bank’s joint network fee system in case of cash withdrawal. The Plaintiff agreed to pay to the ○○ Bank 50% per case in case of deposit withdrawal fees collected from the customers of ○○ Bank.

D. Determination

(1) Article 12(1)10 of the Value-Added Tax Act provides that value-added tax shall be exempted for financial and insurance services prescribed by Presidential Decree. Article 33(1)1 of the Enforcement Decree of the same Act provides that "banking business under the Banking Act" shall be one of the financial and insurance services provided by Article 12(1)10 of the Value-Added Tax Act, and Article 12(2) of the same Act provides services identical or similar to the financial and insurance services incidental to the main business by a person operating a business other than a business under any subparagraph of paragraph (1) of the same Article.

On the other hand, Article 2 (1) 1 of the Banking Act provides that "banking business is a business of lending funds raised by bearing debts from many and unspecified persons through the receipt of deposits and issuance of securities and other bonds." Article 18-2 of the Enforcement Decree of the Banking Act under Article 27 (2) of the Banking Act and the guidelines on the scope of incidental businesses among the banking businesses delegated by Article 27 (2) of the Banking Act (Notice No. 2003-13 of the Ministry of Finance and Economy of July 3, 2003) include 24 businesses such as deposit, installment savings, receipt of money or issuance of securities, lending or discount of bills, receipt and payment as incidental businesses of foreign exchange, and the scope of banking businesses (Article 33 (4) of the Enforcement Decree of the Value-Added Tax Act, even if it is included in the scope of banking businesses of the Banking Act, it does not include lottery, payment of admission tickets, gift certificates, value-added tax or gold bullion, financing business, loan of companies, company purchasing services, credit information companies, etc.

(2) Therefore, as to whether the instant service does not constitute an exemption from value-added tax under Article 33(4) of the Enforcement Decree of the Value-Added Tax Act, and whether it constitutes a service belonging to the law of banking business under the Banking Act, the health care institution, and the content of the Plaintiff’s services provided to the National Bank pursuant to the contract for the use of the cooperation cdy service of this case, which is to enable customers of ○○ Bank to receive financial services, such as deposit withdrawal and balance account transfer through the cash automatic payment made by the Plaintiff. This is to say that the Plaintiff’s services themselves cannot be deemed as bank services under the law of the Banking Act, which are related to the Plaintiff’s services itself, which are incidental to the financial contract (deposit, installment savings contract, etc.) entered into between ○ Bank and its customers.

In light of the fact that the service provided by the Plaintiff constitutes a "payment and payment on behalf of the Plaintiff" under subparagraph 9 of the scope of incidental business for the period of finance; however, the term "payment business of deposits and installment savings" within the scope of unique banking business in banking business includes the business of receiving or paying deposits, installment savings from customers, and that the business of receiving or paying deposits and installment savings from customers, and subparagraph 9 of the above Banking Business Directive provides that the business of receiving or paying the principal and interest on behalf of customers is not a business of receiving or paying the principal and interest on behalf of the bank business, and that it is not a business of receiving or paying the balance and payment on behalf of the Plaintiff, the term "payment and payment on behalf of the Plaintiff" under the above Guidelines does not refer to a banking business of a unique meaning, but a "payment and payment on behalf of the Plaintiff" business of receiving or paying the principal and interest on behalf of the customers, such as various public charges, management fees, registration fees, etc., and receiving fees from the financial institution and the business of receiving fees on behalf of customers.

Therefore, the plaintiff's assertion is without merit, whether the service of this case constitutes "collection and payment agency business" under the above guidelines.

Furthermore, as seen earlier, the ○ bank provides customers of the ○ bank with funds required for the use of the ○ bank’s automatic cash payment service. However, the Plaintiff: (a) receives funds from the ○ bank to charge cash to the ○ bank so that customers of the ○ bank do not have inconvenience in using the ○ bank’s automatic payment service; (b) manage operating funds as a good manager; and (c) compensates customers of ○○ bank or ○ bank for damages only when the Plaintiff’s liability incurred losses to ○○ bank or customer of the ○○ bank; (d) the Plaintiff cannot be viewed as providing ○ bank’s cash payment service under the Plaintiff’s responsibility; (e) the Plaintiff is responsible for installing, managing, maintaining, and maintaining the ○ bank’s automatic payment instrument; and (e) all expenses incurred in installing, operating, maintaining, and repairing the ○ bank’s automatic payment instrument are the Plaintiff’s burden; and (e) the nature of the instant service is to have the ○ bank use it to its customers; and (e) it does not vary the amount paid by the Plaintiff’s fee out of the instant payment.

Therefore, the plaintiff's assertion based on the premise that the service of this case constitutes a bank service under the Banking Act-related Acts and subordinate statutes is without merit.

(3) Therefore, the rejection disposition of the Plaintiff’s request for correction of reduction is lawful.

5. Conclusion

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

shall be ruled.