Seoul Administrative Court 201Guhap29649 ( October 27, 2012)

Cho High Court Decision 201Do1036 (Law No. 106.08)

Services such as loan solicitation, loan consultation, etc. provided by a specialized credit financial business entity, etc. shall not be exempt from finance and insurance services.

The Plaintiff only provided services, such as recruitment of loan loans, consultation on loan, and guidance on repayment date, which are not essential elements of financial and insurance services, by a specialized credit financial business entity or mutual savings bank. As such, the Plaintiff’s services are not financial and insurance services exempt from value-added tax, and if a third party independently operates incidental services, they are not included in the business subject to tax exemption.

Article 12 of the Value-Added Tax Act and Article 33 of the Enforcement Decree thereof.

2012Nu18143 Revocation of Disposition of Revoking Value-Added Tax Correction

XX Stock Company

Head of Central Tax Office

Seoul Administrative Court Decision 2011Guhap29649 decided April 27, 2012

October 31, 2012

November 14, 2012

1. The plaintiff's appeal is dismissed.

2. The costs of appeal shall be borne by the Plaintiff.

The decision of the first instance court is revoked. The defendant's rejection disposition against the plaintiff on November 30, 2010 against the value-added tax of 00 won is revoked (the plaintiff's "00 won" stated in the application for amendment of the purport of the claim seems to be erroneous, and evidence A No. 5 is proved).

The reasoning of this court's judgment is the same as that of the court of first instance, and thus, it shall be quoted in accordance with Article 8 (2) of the Administrative Litigation Act and Article 420 of the

Article 12(1)1 of the Value-Added Tax Act; Article 33(1)8, 11, and 18 of the Enforcement Decree of the Value-Added Tax Act; Article 12(1)11 of the Value-Added Tax Act; or the proviso of Article 33(4)1 of the Enforcement Decree of the Value-Added Tax Act. The Plaintiff asserts that this case’s service constitutes a financial and insurance service under Article 12(1)11 of the Value-Added Tax Act. The Plaintiff’s assertion is premised on the fact that this case’s service constitutes a financial and insurance service under Article 12(1)11 of the Value-Added Tax Act; Article 12(1)11 of the Value-Added Tax Act provides a financial and insurance tax exemption item due to its nature. However, according to the Plaintiff’s assertion, the Plaintiff did not include a special credit financial business entity under the Specialized Credit Financial Business Act or a mutual savings bank under the Mutual Savings Banks Act that is not an essential element of financial and insurance service.

In addition, the Plaintiff asserts that the instant services should be exempted as incidental services to financial and insurance services. This part of the Plaintiff’s assertion is without merit, where a person engaged in a banking or financial business is engaged in a banking or financial business, it shall be exempted from taxes in accordance with the essential legal doctrine of subsidiary nature (Article 12(3) of the Value-Added Tax Act). However, where a third party independently runs the incidental business (see, e.g., Supreme Court Decision 2001Du4849, Nov. 8, 2002).

The judgment of the first instance is justifiable. The plaintiff's appeal is dismissed.