early 2012 Mine2320 (Law No. 113.09)

Construction services for balcony expansion shall not be deemed essential or ordinarily incidental to national housing supply services, and shall be subject to taxation.

The service of this case is determined by the choice of the buyer, and it is difficult to view that the supply of each apartment of this case is ordinarily included in the supply of each apartment of this case, or that it is incidental to the supply of each apartment of this case in light of transaction practice. Thus, it cannot be deemed that each apartment of this case is a service necessarily incidental to the supply of each apartment of this case.

Article 1 of the Additional Corpses Act

Article 106 of the Restriction of Special Taxation Act

2013Guhap10205 Disposition to revoke the imposition of value-added tax

○○ Housing Corporation

Head of Seogju Tax Office

July 11, 2013

September 5, 2013

1. On February 9, 2012, the Defendant issued a disposition of imposition of additional tax on the value-added tax on the second quarter of 2007 against the Plaintiff, additional tax on the value-added tax on the first quarter of 2008, additional tax on the second quarter of 2008, additional tax on the value-added tax on the second quarter of 2008, additional tax on the value-added tax on the first quarter of 2009, additional tax on the value-added tax on the second quarter of 2009, additional tax on the value-added tax on the second quarter of 209, additional tax on the value-added tax on the second quarter of 209, additional tax on the value-added tax on the first quarter of 2010, and additional tax on the value-added tax on the second quarter of 2010, respectively.

2. The plaintiff's remaining claims are dismissed.

3. 7/10 of the costs of lawsuit shall be borne by the Plaintiff, and the remainder by the Defendant, respectively.

The defendant revoked the disposition of value-added tax imposed on the plaintiff on February 9, 2012, 207, OOO for the second term in 2008, OO for the second term in 2008, OO for the second term in 2009, OO for the second term in 2009, OO for the second term in 2009, OO for the first term in 2009, OO for the first term in 2010, OO for the first term in 200, and OO for the second term in 2010.

1. Details of the disposition;

A. From February 2, 2007 to February 2, 2010, the Plaintiff supplied each apartment of not more than national housing size (hereinafter “each apartment of this case”) in the Gwangjujin-gu, and supplied the balcony expansion service for part of each apartment of this case (hereinafter “instant service”). The Plaintiff deemed that the supply of this case’s service naturally incidental to each apartment of this case’s apartment is subject to value-added tax exemption, and reported its value-added tax exemption.

B. As a result of conducting an investigation of value-added tax on the Plaintiff from September 1, 2011 to October 17, 201, the Defendant determined that the supply of the instant service constitutes subject to value-added tax, and on February 9, 2012, on the Plaintiff on February 9, 2012, the Defendant included the value-added tax OO(including additional OOO) for the second term of 2007, OOO(including additional tax), OOO(including additional tax) for the first term of 2008, OOO(including additional tax) for the second term of 2008, OOO(including additional tax) for the second term of 209, OOO(including additional tax) for the second term of 2009, OO(2010,O200,O(2010,0000,0000) additional tax for the second term of 209,000 won.

C. The Plaintiff appealed and filed an appeal with the Tax Tribunal on May 3, 2012, but the Tax Tribunal dismissed the Plaintiff’s appeal on January 9, 2013.

[Reasons for Recognition] Each entry of Gap evidence Nos. 4 and 6 (including each number), the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

1) The Plaintiff entered into a balcony expansion contract with multiple buyers on the same opportunity in concluding the sales contract for each apartment of this case. In light of the fact that the balcony expansion contract actually constitutes a single contract, not a contract separate from the sales contract, the price due to the expansion of balcony also received in the same unit as the sales price, and balcony is not merely an additional installation space abutting on the outer wall of the building, but a space that can be used for the original purpose of the house, the supply of the service of this case constitutes a supply of services essential to the supply of each apartment of this case.

Furthermore, in the case of a balcony expansion-type house by dividing into the balcony expansion-2 block and the non-extension-type house, the apartment is designed to expand the balcony-type house from the beginning and supplied the balcony expansion-type house, and as long as the buyer selects the balcony expansion-type house, it is essential to provide the balcony expansion-type service. As long as the buyer selects the balcony expansion-type house, at least in the case of the above Gwangju Jin monthly B-2 block and three districts, the balcony expansion-type service is naturally incidental to the supply of national housing. Therefore, the value-added tax on the supply of the service in this case should be exempted, and the disposition in this case imposing the value-added tax is unlawful.

2) Even if the supply of the instant service does not fall under value-added tax exemption, the penalty tax is an administrative sanction imposed when a taxpayer violates the duty to report and pay taxes under the Act without justifiable grounds. In light of the fact that the taxpayer did not impose value-added tax for a considerable period of time on the balcony expansion service, and that the Tax Tribunal has made a decision that the balcony expansion service constitutes an object of value-added tax exemption, it is reasonable for the Plaintiff to believe that the instant service constitutes an object of value-added tax exemption. Therefore, it is unlawful and unfair to impose penalty tax on the Defendant on the ground that the Defendant violated the duty to report and pay value-added tax on the supply of the instant service.

3) The Plaintiff’s former Value-Added Tax Act (amended by Act No. 11873, Jun. 7, 2013; hereinafter the same shall apply)

(E) Article 32(1) of the Enforcement Decree of the same Act (amended by Presidential Decree No. 23595, Feb. 2, 2012; hereinafter the same) and Article 79-2(1)7 of the same Act and Article 25-2(3) of the Enforcement Rule of the same Act (amended by Ordinance of the Ministry of Strategy and Finance No. 194, Mar. 24, 2011; hereinafter the same) may issue a receipt instead of issuing a tax invoice to the buyer who is supplied with the instant service. As such, the penalty tax imposed on the ground of the failure to issue a tax invoice

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

1) Of the instant disposition, whether the supply of the instant service constitutes subject to value-added tax exemption

A) Article 106(1)4 of the former Restriction of Special Taxation Act (amended by Act No. 11133, Dec. 31, 2011) and Article 106(4)1 of the Enforcement Decree of the same Act stipulate that the supply of housing below national standard housing scale shall be exempted from value-added tax. Article 1(4) of the former Value-Added Tax Act provides that the supply of goods or services inevitably annexed to the supply of goods or services, which is the main transaction, shall be deemed to be included in the supply of goods or services, which is the main transaction. As such, the supply of housing below national housing size subject to exemption from value-added tax, shall include the supply of goods or services necessarily annexed thereto.

B) Meanwhile, in interpreting the supply of goods or services that are indispensablely annexed to the supply of goods or services, it shall be interpreted by taking into account Article 1(4) of the former Value-Added Tax Act and each subparagraph listed in Article 3 of the Enforcement Decree of the same Act (see Supreme Court Decision 2013Du932, Jun. 28, 2013). Article 3 of the former Enforcement Decree of the Value-Added Tax Act provides that "the goods or services that are deemed to be included in the supply of goods or services that are the main transaction under Article 1(4) of the former Value-Added Tax Act shall be defined as follows." subparagraph 1 provides that "the relevant price is ordinarily included in the supply price of goods or services that are the main transaction; subparagraph 2 provides that "goods or services that are deemed to be incidental to the supply of goods or services that are the main transaction;" subparagraph 3 provides that "goods or services that are specifically produced in connection with any contingent or temporary supply of goods or services that are the main transaction."

C) In addition, the interpretation of tax laws and regulations shall be interpreted in accordance with the text of the law, barring special circumstances, and it is not allowed to expand the interpretation without reasonable grounds (see, e.g., Supreme Court Decision 2008Du11594, Oct. 9, 2008).

D) In full view of the overall purport of the statements and arguments, the plaintiff entered into a elective formation contract with the buyer separately from the sales contract for each apartment of this case. The same applies to the apartment of this case. The plaintiff calculated the sales price for each apartment of this case separately from the sales contract for each apartment of this case. The buyer can choose whether to expand the balcony at the time of entering into the sales contract for the apartment of this case. The buyer can choose whether to expand the balcony at the time of entering into the sales contract for the apartment of this case. The apartment of this case supplied not only the balcony expansion-2 block block but also the balcony non-extension-type apartment of this case to three districts outside the G-2 block block block district of Seoul, where the apartment of this case was supplied. In light of these facts, some of the buyers of the apartment of this case did not enter into the balcony expansion contract for the apartment of this case. In light of this, the service of this case is determined according to the choice of the buyer of the apartment of this case, and the supply of each apartment of this case does not necessarily constitute the supply of each apartment of this case.

2) As to the penalty portion among the instant disposition

A) When a single tax notice imposes both the principal tax and the additional tax, the individual tax amount and the basis for calculation shall be stated in the tax notice separately. In addition, where multiple types of additional tax are imposed, it is natural that the taxpayer can per se know the details of each tax disposition by classifying the amount and the basis for calculation of the respective tax amount, even between the additional tax and the additional tax. As such, in a case where the imposition of additional tax is deemed a disposition imposing additional tax, and only the total amount of additional tax is stated without disclosing the type and the basis for calculation of the relevant tax amount (see Supreme Court en banc Decision 2010Du12347, Oct. 18, 2012).

However, even if there is any defect in the tax payment notice, if it is evident that the necessary entry of the tax payment notice to the taxpayer was already written prior to the taxation disposition, and it does not entirely interfere with the decision of whether the taxpayer is dissatisfied with the disposition and the appeal of dissatisfaction, the defect in the tax payment notice may be corrected or cured (see Supreme Court Decision 9Du8039, Mar. 27, 2001).

B) According to the statements in Gap evidence Nos. 4-1 to 7, the defendant's disposition of this case was found to have not stated the basis or type of the additional tax in the tax payment notice, and there are no other circumstances to deem that the defect was supplemented or cured. Thus, the additional tax part of the disposition of this case is unlawful without examining the plaintiff's above argument.

3. 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.