Whether a real estate broker is a real estate broker

Although real estate was transferred in a short period, there was no transfer of other real estate only once, and since a transferee continues to operate a lodging business of the same business type until now, it cannot be viewed as a real estate sales businessman, and it should be viewed as a comprehensive transfer of business

Article 6 (Supply of Goods)

1. The disposition of imposition of value-added tax for the second period of 2003 against the Plaintiff on July 5, 2004 is revoked.

2. The costs of lawsuit shall be borne by the defendant.

1. Details of the disposition;

A. The Plaintiff purchased an OO-O-O-O-12,13, and a total of 629.76 meters (hereinafter referred to as the "in the instant leisure building") and its site (hereinafter collectively referred to as the "in combination thereof) from an OO-O-O-O-O-12, 13, and 629.76 meters (hereinafter referred to as the "O-O-O-O-14") and applied for registration of a lodging business with the trade name called O-O telecom, around July 30, 2003, and operated a lodging business. On October 7, 2003, the Plaintiff transferred the instant real estate to the Nonparty O-O-O-O-O-O-

B. The Defendant deemed that the Plaintiff’s transfer of the instant leisure building constitutes the supply of goods subject to value-added tax, and imposed value-added tax of KRW 64,530,90 on the Plaintiff on July 5, 2004 (hereinafter the instant disposition) on the Plaintiff in 203.

C. On August 12, 2004, the Plaintiff appealed to the National Tax Tribunal, but the appeal was dismissed on May 16, 2005.

[Grounds for Recognition: Evidence No. 1, Evidence No. 6, and the purport of the whole pleadings]

2. Whether the instant disposition is lawful

A. The parties' assertion

(1) The Plaintiff cannot be deemed a real estate sales businessman because the Plaintiff did not engage in real estate sales business. The Plaintiff’s transfer of the instant leisure building constitutes a real estate sales businessman, and the Plaintiff’s transfer of a lodging business including all buildings and fixtures, which constitutes a transfer of business pursuant to Article 6(6) of the Value-Added Tax Act, and thus cannot be deemed a supply of goods subject to value-added tax. Thus, the instant disposition is unlawful. Accordingly, the Defendant asserts that the instant disposition is lawful, on the following grounds: (i) the Plaintiff, who did not have any particular business experience, obtained a bank loan without any particular funds, purchased the instant leisure building; and (ii) sold it within a short time after the purchase, etc., the Plaintiff acquired the instant real estate for the purpose of sale; and (iii) the Plaintiff appears to have earned considerable profits in the process of selling the instant leisure building; and thus, the Plaintiff constitutes a real estate sales

(b) Related statutes;

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

(c) Fact of recognition;

(1) GabO purchased the instant real estate from 00,000,000 won from 1,030,000,000 won. The Plaintiff purchased the instant real estate from 200,000 won from 00,000, and received a registration of ownership transfer directly from 000,000 OO's shares on the 16th of the same month. The Plaintiff completed a registration of ownership transfer with the title of 910,00,000 won for the instant real estate. The Plaintiff paid the remainder of 700,000,000 loans from OOO, and the Plaintiff paid the remainder of 0,000,000 won for the instant real estate to 0,000,0000 won for 10,000,000,0000,0000 won for the instant real estate from OOOO and 10,0000,0000 additional certificates and 10,000,00,000,0000 O.

(2) The Plaintiff registered the business of accommodation with the trade name called OMoel on July 30, 2003, and operated accommodation business from around that time in the instant inn building.

(3) On October 2, 2003, the Plaintiff transferred all rights and obligations with respect to the OM business including the instant real estate to the Nonparty GaO in price of KRW 1,050,000,000, and completed the registration of ownership transfer to GaO on the 7th of the same month (The Plaintiff’s sales contract for real estate) was sold to GaO in price of KRW 700,000,000, while it is inconsistent with the entries in the evidence No. 16 (real estate sales contract). However, there is no special circumstance that the Plaintiff should sell the instant real estate at a price lower than KRW 1,030,00,000, which is the price of the instant real estate. Accordingly, it is recognized that the Plaintiff made a false preparation to avoid the imposition of capital gains tax as recognized by the Plaintiff, and therefore, it is not believed that the above evidence No. 5 is also stated].

(4) After having taken over the instant leisure building, ProfessorO runs a lodging business with the trade name “OMoel” in the instant leisure building until now.

(5) On February 1, 1990, 1990, ○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○ on February 25, 1995, and transferred it on May 16, 1997. On June 10, 197, ○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○ was purchased and operated until now, and there was no fact that the Plaintiff, other than the instant real estate, did not engage in any specific business, such as the sale

[Reasons for Recognition: Each of the evidence mentioned above, evidence Nos. 3-1, 2, 3, 6, evidence No. 9, evidence No. 10, evidence No. 13, evidence No. 14, evidence No. 15, evidence No. 16, evidence No. 2, evidence No. 3-1, 2, evidence No. 5-2, and evidence No. 7, respectively, and the result of the Plaintiff’s personal examination];

D Judgment

(1) Whether a person is a real estate sales business operator

Whether the transaction of real estate constitutes a real estate trading business, which is a requirement for the imposition of value-added tax, shall be determined in light of social norms, considering whether the transaction is for profit, and whether the transaction is continuous and repeated to the extent that it can be seen as business activities in light of its size, frequency, mode, etc. In making such judgment, not only the transaction of real estate for the purpose of transfer, but also the overall real estate owned by the transferor, throughout the entire real estate held by the transferor, and all the circumstances surrounding before and after the time the transfer took place (see Supreme Court Decision 96Nu18557 delivered on April 25, 197). In addition, Article 2(1) of the Value-Added Tax Act provides that the person who supplies goods or services independently from the business is the person liable for value-added tax, and the person who supplies goods or services independently here shall be deemed the person who supplies goods or services with a continuous and repeated intent, meeting the business form to create value added (see Supreme Court Decision 92Nu52525 delivered on July 24, 1992).

As seen earlier, the Plaintiff owned the instant leisure building for a short period of up to three months and sold the said building. While the sale price was a considerable price at which the Plaintiff sold the said building up to KRW 1,050,000,000, the Plaintiff did not have any record of selling and selling real estate by constructing and selling other buildings. In addition, considering the size, frequency, mode, etc. of the Plaintiff’s sales of the instant leisure building, it is difficult to deem that the Plaintiff had engaged in real estate sales business as a continuous and repeated intent, by meeting a specific business form under the social norms, and having no record of selling and selling real estate by constructing and selling other buildings. In the event of transferring and disposing of the instant leisure building, the Plaintiff appears to have never performed business activities, such as advertising for the said transaction or installing and operating offices or utilizing sales brokers.

(2) Whether the case constitutes transfer of accommodation business

However, since the Plaintiff was operating a lodging business in the instant leisure building, it constitutes a person liable to pay value-added tax. Unless there is any special provision that the proprietor is exempt from or exempt from value-added tax in the event that he transfers or transfers goods on contractual or legal grounds, it is subject to taxation regardless of whether it is for the maintenance and expansion of the business, or for liquidation and disposal, even in the event that the proprietor supplies goods on a sudden basis or temporarily in connection with the principal business. However, Article 6(6) of the Value-Added Tax Act provides that the transfer of business under Article 6(6) of the Enforcement Decree of the Value-Added Tax Act does not constitute a supply of goods subject to value-added tax, and Article 6(2) of the Value-Added Tax Act provides that the transfer of business under Article 6(6) of the Value-Added Tax Act shall be comprehensively succeeded to all rights (excluding those related to outstanding amounts) and obligations (excluding those related to unpaid amounts) with respect to each

As recognized earlier, the Plaintiff comprehensively transferred to ProfessorO all rights and obligations regarding the business of accommodation business including the instant real estate, and Professor is recognized as having been operating the lodging business with the same trade name in the instant leisure building after acquiring the instant leisure building. As such, the transfer of the instant leisure building constitutes a transfer of business under Article 6(6) of the Value-Added Tax Act, and it cannot be deemed as a supply of goods subject to value-added tax.

(3) Nevertheless, the instant disposition that determined on different premise that the Plaintiff is a real estate sales business operator, or that the transfer of the instant leisure building does not constitute a transfer of business is unlawful.

3. Conclusion

Therefore, the plaintiff's claim of this case is reasonable, and it is decided as per Disposition by the assent of all participating Justices.

Relevant statutes

Value-Added Tax Act

Article 1 (Taxable Objects)

1. Value-added tax shall be imposed on the following transactions:

1. Supply of goods or services; and

2. Import of goods.

Article 2 (Taxpayer)

1. A person who independently supplies goods (referring to the goods prescribed in Article 1; hereinafter the same shall apply) or services (referring to the services prescribed in Article 1; hereinafter the same shall apply) on a business basis, regardless of whether it is for profit making or not (hereinafter referred to as the “business operator”) shall be liable to pay value-added taxes under this Act;

Article 6 (Supply of Goods)

1. The supply of goods shall be a delivery or transfer of goods pursuant to all contractual and legal grounds;

6. The supply of goods shall not be deemed to fall under any of the following subparagraphs:

2. Transfer of business as prescribed by the Presidential Decree: Provided, That this shall not apply in case where an entrepreneur delivers a tax invoice under Article 16, and as prescribed by the Presidential Decree.

Enforcement Decree

Article 17 (Provision of Security. Transfer of Business and Payment of Taxes in Kind)

2. The term “those as prescribed by the Presidential Decree” in the main sentence of Article 6 (6) 2 of the Act means comprehensively succeeding to all rights and obligations with respect to the business at each place of business (including the case of division meeting the requirements of Article 46 (1) of the Corporate Tax Act, but excluding the case where a general taxable person transfers the business to a simplified taxable person). In this case, even if he succeeds to the business without including those falling under any of the following subparagraphs from among the rights and obligations with respect to the business, it shall be deemed that the business concerned has comprehensively succeeded to:

1. The amount receivable;

2. A document concerning accounts payable;

3. The end of land, buildings, etc. which are not directly related to the business as prescribed by the Ordinance of the Ministry of Finance and Economy.