The case holding that it does not constitute a service identical or similar to the “receiving and paying agency service” subject to value-added tax exemption, where a person who mainly engages in the development, manufacture, sale, etc. of a financial automation device provides the bank with a subsidy for cash withdrawal, account transfer, and balance inquiry service while installing and managing an automatic payment machine, and in return, receives fees from the bank;

The case holding that it cannot be seen as a service identical or similar to the "receiving and paying agency service" subject to value-added tax exemption, where a person who mainly engages in the development, manufacture, sale, etc. of a financial automation device provides the bank with a subsidy for cash withdrawal, account transfer, and balance inquiry service while installing and managing an automatic payment machine, and in return, receives fees from the bank.

Article 12 (1) 10 of the Value-Added Tax Act, Article 33 (1), (2), and (4) 1 of the Enforcement Decree of the Value-Added Tax Act

Plaintiff (Attorneys Son Ji-yol et al., Counsel for the plaintiff-appellant)

The Head of Gangnam District Tax Office (Law Firm Han, Attorney Park Jong-soo, Counsel for the plaintiff-appellant)

Seoul High Court Decision 2007Nu9961 decided Oct. 23, 2007

The appeal is dismissed. The costs of appeal are assessed against the plaintiff.

The grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed).

Article 12(1)10 of the Value-Added Tax Act (hereinafter “the Act”) provides that “financial and insurance services prescribed by Presidential Decree as financial and insurance services exempt from value-added tax.” Article 33(1)10 of the Enforcement Decree of the Value-Added Tax Act provides that “financial and insurance services shall be included in the banking and insurance services provided under Article 12(1)10 of the Act, and Article 12(4)1 proviso of the Enforcement Decree of the Value-Added Tax Act provides that “the banking business under the Banking Act” shall be included in the financial and insurance services provided under Article 12(1)10 of the Act, and Article 12(4)1 proviso of the Value-Added Tax Act shall be included in the financial and insurance services provided under Article 12(1)10 of the Act, while Article 12(2) provides that “a person who operates a business other than those provided under any subparagraph of paragraph (1) shall be included in the financial and insurance services

According to the reasoning of the judgment below, the court below determined that the service of this case is not identical with or similar to the "collection and payment agency service" subject to value-added tax exemption, since the Plaintiff, whose main business is to develop, manufacture, and sell the financial automation device, installs and manage the cash automatic machine, provides the bank with assistance to cash withdrawal and account transfer provided to its customer, and received fees from the bank in return, and thus, it cannot be viewed as being identical with or similar to the "collection and payment agency service" subject to value-added tax exemption. In light of the relevant provisions and records of the Value-Added Tax Act and the laws and regulations related to the Value-Added Tax Act and the banking business, the above judgment of the court below is just, and there is no

Therefore, the appeal is dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Park Si-hwan (Presiding Justice)