Whether the value-added tax assessed by the lessee is included in the “rent” under Article 2(2) of the Commercial Building Lease Protection Act (negative)

As to whether the value-added tax imposed on the lessee is included in the “rent” under Article 2(2) of the Commercial Building Lease Protection Act, a rental business operator who is provided with services by leasing a commercial building on behalf of the lessee is obligated to collect value-added tax from the lessee and pay it to the State on behalf of the lessee, barring any special circumstance, if the parties to the lease agree to the lease agreement that the value-added tax is separate from the lessee, barring any special circumstance, the person liable to pay value-added tax on the lease service is the lessee, and the lessor is to collect the said value-added tax separately from the lessee. Furthermore, it is interpreted to mean that the lessor and the lessee agreed to do so, as well as the rent prescribed by Article 2(2) of the Commercial Building Lease Protection Act, and there is no reason to include the said value-added tax in the “rent.”

Article 2(2) of the Commercial Building Lease Protection Act, Article 2 of the Enforcement Decree of the Commercial Building Lease Protection Act (amended by Presidential Decree No. 20970 of August 21, 2008), Articles 2, 13, and 15 of the Value-Added Tax Act

Plaintiff (Law Firm Dal, Attorney Lee Gyeong-woo, Counsel for plaintiff-appellant)

Defendant (Attorney Choi Young-soo, Counsel for the defendant-appellant)

Suwon District Court Decision 2008Gadan20027 decided Nov. 6, 2008

April 8, 2009

1. Revocation of the first instance judgment.

2. The plaintiff's claim is dismissed.

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

1. Purport of claim

The defendant shall order the plaintiff by May 31, 2008 to order the real estate stated in the attached list to the plaintiff.

2. Purport of appeal

The same shall apply to the order.

As the cause of the instant claim, the Plaintiff sent a notice to the Plaintiff on March 17, 2008 that the Defendant, who leased and used the building listed in the separate list from the Plaintiff at KRW 50 million for the lease deposit, and KRW 90 million for the monthly rent (Additional rent separate). However, Article 2(2) of the Commercial Building Lease Protection Act and Article 2 of the Enforcement Decree of the Commercial Building Lease Protection Act (amended by Presidential Decree No. 20970, Aug. 21, 2008) of the same Act (amended by Presidential Decree No. 20970, Aug. 21, 2008) provide that the lease contract for the building, the sum of the lease deposit amounts of KRW 100,000 for the lease exceeds KRW 140,000,000 for the building is not subject to the application of the Commercial Building Lease Protection Act. Accordingly, the lease contract between the Plaintiff and the Defendant is also included in the value-added tax amount to be borne by the lessee.

Therefore, as to whether the value-added tax imposed on the lessee is included in the “rent” under Article 2(2) of the Commercial Building Lease Protection Act, the lessee, who is provided with the services by leasing a commercial building on behalf of the lessee, is obligated to collect the value-added tax from the lessee (hereinafter “transaction collection”) and pay it to the State on behalf of the latter. If the parties to the lease agree that the “value-added tax separate” is the lessee, barring any special circumstance, it shall be interpreted to mean that the person liable to pay the value-added tax on the leased services is the lessee, the lessor is not a lessee, and the lessor is to separately collect the said value-added tax from the lessee. Furthermore, it shall be interpreted to mean that the lessor and the lessee agreed to collect the said value-added tax, as well as the rent determined by the lessor and the lessee, has no reason to include the said value-added tax in the “rent” under Article 2(2) of the Commercial Building Lease Protection Act. Therefore, the Plaintiff’s assertion on the premise is without merit.

Therefore, the plaintiff's claim of this case shall be dismissed as it is without merit. Since the judgment of the court of first instance is unfair with different conclusions, the defendant's appeal is accepted, and the judgment of the court of first instance is revoked, and the plaintiff's claim is dismissed as per Disposition.

[Attachment] List of Real Estate: (Omission)

judge last head of the (Presiding Judge) Lee-hee