Do46015-12028 ( October 10, 2001)

Addition

Where a person who has registered a joint business without registering a joint business operator transfers a real estate rental business by dividing it into shares, it shall not fall under the transfer of business.

In the case of E-Question, it is the time to refer to the details of the attached inquiry reply (Additional 46015-116, 197.01.17).* Where an entrepreneur who runs a real estate rental business transfers to another entrepreneur of the other entrepreneur who runs a real estate rental business comprehensively all the rights and obligations on the relevant lease business, the transfer of the business is applicable, or where a real estate rental business is transferred by dividing the relevant real estate rental business into shares, to a person who has registered his/her business without registering his/her joint businessman, the transfer of the relevant real estate rental business does not fall under the transfer of business provided for in Article 6(6) of the Value-Added Tax Act.

Article 6 of the Value-Added Tax Act

1. A summary of the contents of inquiry;

If a business operator registered as an individual owns the business assets jointly with a scholarship foundation (2/3) and a literature (1/3) that separately registered the business assets, an inquiry as to whether it falls under the transfer of business under Article 6 (6) of the Value-Added Tax Act?

2. Materials on the contents of questioning;

(a) relevant tax laws and regulations (law, enforcement decree, enforcement rule, basic rules);

Article 6. Supply of Goods

- Article 6 of the Value-Added Tax Act

- 5 omitted

(6) Any of the following shall not be deemed the supply of goods:

1. Offering any goods as security, which are prescribed by the Presidential Decree; and

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.

3. Paying taxes in kind under Acts, as prescribed by the Presidential Decree.

○ Transfer of business and payment of taxes in kind

-Article 17 of the Enforcement Decree

(1) omitted.

(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 to each place of business (including the case of division meeting the requirements under 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 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. Land, buildings, etc. which are not directly related to the relevant business and prescribed by the Ordinance of the Ministry of Finance and Economy.

○ General Rule 6-17-1 【Scope of Business Transfer】

(1) The term "transfer of business not deemed the supply of goods" in Article 6 (6) 2 of the Act means the transfer of physical and human facilities and rights (excluding rights to amounts receivable), obligations (excluding duties concerning unpaid amounts), etc., including business assets, to replace only the managing body while maintaining the identity of the business.

(2) The transfer of a business shall be deemed a transfer of the business even if the business is not directly related to, or does not lose, the identity of the business. In such cases, land, buildings, etc. which are not directly related to, the business shall be as follows:

(a) If the business transferor is a corporation, the assets under Article 49 (1) of the Enforcement Decree of the Corporate Tax Act;

(b) In the case of an entrepreneur who is not a juristic person, the assets equivalent to those under paragraph (a).

(3) Even in cases falling under a transfer of business, where a business transferor issues a tax invoice under Article 16 of the Act and the tax amount collected through transactions under Article 15 of the Act has been returned or paid under Article 18 or 19 of the Act, it shall be deemed the supply of goods.

(b) Similar cases (judicial precedents, judicial precedents, review precedents, and established rules);

○ Additional 46015-116, 1997.017

Where a businessman who runs a real estate rental business transfers comprehensively all the rights and obligations on the relevant rental business to another joint businessman who runs a real estate rental business, the transfer of the relevant real estate rental business shall not fall under the transfer of the business, but where the relevant real estate rental business is transferred by dividing it into the shares of each joint businessman without registering a joint businessman, it shall not fall under the transfer of the business as