2014west 1011 ( October 24, 2014)

In the case of a difference between the service supplier of the Chapter and the food supplier, the duty-free provision shall not apply to the provision of food services.

In the case of a difference between the service supplier and the food supplier, it is difficult to deem that there is a reasonable ground to treat them as goods or services subject to tax exemption even in the case of a transaction of incidental goods or services by a separate service provider.

Article 12 of the former Value-Added Tax Act / [Tax Exemption]

2013Guhap53073 Revocation of Disposition of Imposition of Value-Added Tax

Isa and 1

○ Head of tax office

April 23, 2015

May 21, 2015

1. All of the plaintiffs' claims are dismissed.

2. The costs of lawsuit are assessed against the plaintiffs.

Cheong-gu Office

The Defendant’s imposition of value-added tax on August 5, 2013 for the second term portion of value-added tax on 2008, 009, 00, 209, 2009, 200, 2010, 200, 2010, 200, 200, 200, 2011, 200, 200, 200, 200, 2011, 200, 200, 300,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,00.

1. Details of the disposition;

A. During the taxable period of value-added tax from No. 208 to No. 2011, Plaintiff A filed a registration of business with the trade name of “CC restaurant” in Seoul ○○○○-ro 101, and Plaintiff B filed a registration of business with the trade name of “DD restaurant” in Seoul ○○-gu ○○○○-ro 1 to No. 2012 during the taxable period of value-added tax from No. 1 to No. 2012, Plaintiff B filed a registration of business and filed a notification and payment of value-added tax (hereinafter “instant service”).

B. Meanwhile, with respect to funeral services provided at the same place, Nonparty 1 and two others, the name “CC Funeral” from March 19, 2005 to January 4, 2012, and Nonparty 1F and two others, respectively.

1. From April to the date of the closing of argument in this case, the value-added tax is exempted for each trade name, "D funeral hall";

It is possible to complete business registration as a small business operator and conduct the relevant business.

C. The director of the Seoul Regional Tax Office confirmed, as a result of the investigation of value-added tax on the Plaintiffs, that the Plaintiff made the total sales of KRW 00 won from KRW 2008 to KRW 201, and that Plaintiff HanB omitted the total sales of KRW 00 from KRW 1 to KRW 2012, and notified the Defendant of relevant taxation data.

D. Accordingly, on August 5, 2013, the Defendant issued a revised and notified the Plaintiff EA of the value-added tax ○○○○ in 2008, the value-added tax ○ in 2009, the value-added tax ○ in 2009, the value-added tax ○ in 2010, the value-added tax ○ in 2010, the value-added tax ○ in 2010, the value-added tax ○ in 201, the value-added tax ○ in 201, the value-added tax ○ in 201, the value-added tax ○ in 201, the Plaintiff AB in 2012, and the value-added tax ○ in 2012 (hereinafter “instant disposition”).

E. The Plaintiffs were dissatisfied with the instant disposition and filed an appeal with the Tax Tribunal. However, the Plaintiffs were dismissed on April 24, 2014, while the Plaintiff Han-B was dismissed on May 14, 2014.

[Ground of recognition] Facts without dispute, Gap evidence 1, 2, Eul evidence 3-1 to 5, Eul evidence 1-1 to 7, Eul evidence 2-1, 2, Eul evidence 3 and 4, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiffs' assertion

Since the supply of the instant service is naturally incidental to the supply of funeral services subject to value-added tax exemption, it shall be exempted pursuant to Article 12(3) of the former Value-Added Tax Act (wholly amended by Act No. 11873, Jun. 7, 2013; hereinafter “former Value-Added Tax Act”), and it does not change solely on the ground that the entrepreneur is different.

B. Relevant statutes

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

C. Determination

1) Whether the supply of incidental services by a separate business entity is exempted from value-added tax

Article 12 (1) 5 of the former Value-Added Tax Act and Article 29 (6) of the Enforcement Decree of the same Act (amended by Presidential Decree No. 24359, Feb. 15, 2013; hereinafter the same) provide that "the supply of funeral services provided by the Chapter shall be exempted from value-added tax", and Article 12 (3) of the same Act provides that "the supply of goods or services essential for the supply of goods or services, which are exempt from taxes, shall be deemed to be included in the supply of exempted goods or services."

In this case, the issue is whether the above ancillary goods or services are subject to value-added tax exemption in a case where a third party independently supplies them, and it is reasonable to view them as negative for the following reasons.

① In full view of the provisions of Article 1(1), (2), and (3) of the former Value-Added Tax Act, the supply of all goods or services shall be subject to value-added tax, unless otherwise specifically provided for in Acts. The interpretation of tax laws and regulations is strictly interpreted according to the statutory text, barring special circumstances, and it is not allowed to expand or analogically interpret without reasonable grounds (see, e.g., Supreme Court en banc Decision 2000Du7131, Mar. 15, 2001).

② Under Article 3 subparag. 2 of the former Enforcement Decree of the Value-Added Tax Act, one of the above auxiliary goods or services provides that “goods or services deemed to be supplied incidental to the supply of goods or services ordinarily being the main transaction, considering the practice of transaction,” the fundamental purport of taxation policy is that, if the main goods or services of a business are the goods or services subject to tax exemption and ordinarily incidental to transaction practices against the fact that they are the goods or services subject to tax exemption, the calculation of the tax amount, such as calculating the input tax deduction amount, by separating the main goods or services from the main goods or services, and the procedures for tax payment, etc., shall be carried out for the purpose of promoting the simplification of business affairs, and if the main goods or services are the goods or services, such ancillary goods or services shall be treated as the goods or services subject to tax exemption. Therefore, it is difficult to deem that the incidental goods or services should be treated as the goods or services, even if they are traded by a separate business operator.

③ It appears that the Supreme Court precedents consistently held that “The scope of the supply of goods or services exempt from value-added tax pursuant to Article 12(3) of the former Value-Added Tax Act is limited to only a business operator who supplies goods or services essentially annexed thereto, while supplying the main goods or services exempt from value-added tax” (see, e.g., Supreme Court Decision 2001Du4849, Nov. 8, 2002).

④ The lower court’s judgment (Seoul High Court Decision 2011Nu24820 decided December 7, 2012) cited by the Plaintiffs (Supreme Court Decision 2013Du932 Decided June 28, 2013) clearly states that the provision on tax exemption for food supply does not apply to cases where the service supplier and the food supplier are different from the other service supplier, and the said Supreme Court’s judgment also does not seem to have followed such a determination.

⑤ Even if the burden of consumers increases due to the imposition of the instant service, it is only a result of the decision of a funeral home business operator to entrust another business operator with the provision of food incidental to the funeral service that he/she provided, taking into account the profitability, etc., and cannot be deemed as going against the legislative intent of the former Value-Added Tax Act.

2) Application to the instant case

In light of the above legal principles, in the case of the instant service that the Plaintiffs, an independent business entity under the former Value-Added Tax Act, provided food to the funeral hall operated by Nonparty SongCC and HanF, etc., a separate business entity, not included in the subject of tax exemption under Article 12(3) of the former Value-Added Tax Act, the Plaintiffs

3. Conclusion

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