The supply of officetels shall not be exempt from value-added tax.

Since officetels is separate from housing, it does not constitute the supply of national housing subject to the exemption of value-added tax to newly construct and sell it.

Article 106 of the Restriction of Special Taxation Act (Exemption of Value-Added Tax)

2018Guhap20957 Revocation of Disposition Rejecting Value-Added Tax;

AA Development Corporation

BB Director of the Tax Office

o October 2, 2018

November 8, 2018

1. The plaintiff's claim is dismissed.

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

Cheong-gu Office

The defendant's rejection disposition against the plaintiff on August 23, 2016 against the second half-year value-added tax of 52,110,410 won against the plaintiff on August 23, 2016 is revoked.

1. Details of the disposition;

A. The Plaintiff is a company established on November 2, 2007 to conduct apartment sale business, land development business, etc.

B. On August 2015, the Plaintiff: (a) newly constructed a complex facility with the size of 1st underground and 10 floors above ground in the name of “CC on the ground of 1,686 square meters of OO-dong O-dong O-dong, BB-si; and (b) sold 14 officetels units (hereinafter “the instant officetel”).

C. On January 2016, the Plaintiff reported and paid the value-added tax on the total amount of sales revenue, including the instant officetel, to the Defendant on two occasions in 2015.

D. On June 21, 2016, the Plaintiff filed a claim for correction to refund KRW 52,110,410, value-added tax on the ground that the instant officetel was newly built for residential use from the beginning and that most of the rooms are actually used for residential use, and the instant officetel’s supply constitutes the subject of value-added tax exemption.

E. On August 22, 2016, the Defendant rejected the Plaintiff’s request for correction on the ground that the instant officetel cannot be deemed as the supply of national housing under Article 106 subparag. 4 of the Restriction of Special Taxation Act (hereinafter “instant disposition”).

F. On November 2, 2016, the Plaintiff filed an objection with the commissioner of a regional tax office, but the application was dismissed. On February 21, 2017, the Plaintiff filed an appeal with the Tax Tribunal. The Tax Tribunal dismissed the said claim on December 21, 2017.

G. The statutes related to the disposition of this case are as shown in the attached Form (attached Form omitted).

Facts with no basis for recognition, Gap's Nos. 1, 3 through 6, 8 (including Serials), Eul's Nos. 1 through 5, 7, and 8, and the purport of the whole pleadings.

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

From the beginning, the instant officetel was newly constructed for residential purposes with three dwelling rooms, three rooms, main rooms, restaurants, beer and multi-purpose rooms, toilets, etc., and pipes, water supply and drainage facilities, etc. are installed as a brick reclamation, and it is impossible to later alter or remodel the instant officetels for other purposes.

In addition, the occupants located in the instant officetel pay property tax at the tax rate applicable to the housing, and are supplied with electricity as housing, and 11 households among 14 households are used for residential purposes, such as filing a moving-in report for resident registration, and the area is not more than 85§³ per house or household.

Therefore, this case’s officetel constitutes “national housing prescribed by Presidential Decree” under Article 106 of the Restriction of Special Taxation Act, and thus, the defendant should be exempted from value-added tax on the supply of the goods, but the defendant rejected the plaintiff’s request for correction on a different premise, so the disposition of this case should be revoked illegally.

B. Determination

1) Organization of issues

The facts that the instant officetels constitute business facilities (offices) in the public register (construction permits, aggregate building registers, and real estate registers) do not conflict between the parties concerned.

Therefore, the issue of this case is whether the structure is designed for residential purposes even though the public register of the above officetel falls under business facilities, and if the tenant actually uses it for residential purposes, it shall be deemed as a house below the scale of national housing under the Housing Act under the Restriction of Special Taxation Act, and whether the value-added tax should be exempted for supply.

2) Contents of the relevant provisions

Article 106 (1) 4 of the Restriction of Special Taxation Act, Articles 51-2 (3) and 106 (4) 1 of the Enforcement Decree thereof, and Article 2 subparagraph 5 of the Housing Act shall exempt the supply of national housing and the housing construction services (including remodeling services prescribed by Presidential Decree) prescribed by Presidential Decree, and (2) "national housing and the housing construction services prescribed by Presidential Decree" means housing below the scale of national housing (referring to the area based on the exclusive area per household in cases of multi-family houses prescribed by Ordinance of the Ministry of Strategy and Finance) under the Housing Act; and (3) The term "scale of national housing" means housing the area of which used exclusively for residential purposes does not exceed 85 square meters per house or household (referring to housing the exclusive area of which does not exceed 100 square meters per house or household in Eup/Myeon area other than the Seoul Metropolitan area under Article 2 subparagraph 1 of the Seoul Metropolitan Area Readjustment Planning Act).

Meanwhile, pursuant to Article 2 subparags. 1 through 4 of the Housing Act and Articles 2, 3 (1) and 4 of the Enforcement Decree thereof, “house” means all or part of a building with a structure wherein members of a household can carry on an independent residential life for a long time as well as land attached thereto; “house” means a detached house and multi-family housing; “multi-family housing” means multi-family housing under subparagraph 1 (a) and (b) of attached Table 1 of the Enforcement Decree of the Building Act among housing with a structure wherein a household can carry on an independent residential life within one building; and “multi-family housing” means multi-family housing under subparagraph 1 (a) and (c) of the same Table; and “multi-family housing” means multi-family housing under subparagraph 2 (a) of attached Table 1, multi-family housing under subparagraph 2 (b) of the Enforcement Decree of the Building Act and multi-household housing under subparagraph 14 (b) of the same Table among buildings and land annexed thereto;

In addition, Article 2 of the Enforcement Decree of the Building Act [Attachment 1] subparagraph 14 (b) of the Enforcement Decree of the Building Act and Article 2 of the "Building Standards for Officetels" shall meet the standards publicly notified by the Minister of Land, Infrastructure and Transport, such as ① Officetels shall be a kind of general business facility; ② Officetels shall be a building which enables accommodation in a part of a division among the buildings sold or leased; ② Officetels shall not be installed for each office section; ② an office building shall not be installed for each office section; and where a building is constructed in combination with other purposes, an office building shall be installed separately; and where the exclusive area for each office section exceeds 85 square meters, an office building shall not be installed with a floor heating unit using a hot, hot,

3) Determination on issues

A) Relevant legal principles

In light of the principle of no taxation without law, or the requirements for tax exemption or tax exemption, the interpretation of tax laws shall be interpreted as the text of the law, barring any special circumstances, and shall not be extensively interpreted or analogically interpreted without reasonable grounds to the taxpayers. In particular, the strict interpretation of the provisions that clearly see the preferential provisions among the requirements for tax exemption and exemption accords with the principle of fair taxation (see, e.g., Supreme Court Decisions 2003Du7392, May 28, 2004; 2007Du21242, Feb. 14, 2008).

In addition, a national housing exempt from value-added tax under Article 106 (1) 4 of the Restriction of Special Taxation Act is a national housing exempt from value-added tax under the above provision even if its area constitutes national housing scale, in light of its purpose, etc., if it falls under at least a building constructed for a housing purpose by obtaining a building permit lawfully, and the building is altered into a housing without obtaining a permit for alteration of use after obtaining the building permit and obtaining the approval for use. (See Supreme Court Decision 96Nu8758 delivered on October 11, 196).

B) Whether the instant officetel supply is subject to value-added tax exemption

Considering the contents of the relevant provisions and the above legal principles and the following circumstances, the instant officetel cannot be deemed as falling under the “national housing” under Article 106(1)4 of the Restriction of Special Taxation Act.

(1) Article 2 of the Housing Act separately defines quasi-housing that includes a house and its subordinate concept, a detached house, an apartment house, and an officetel. The Enforcement Decree of the Building Act (attached Table 1) provides different definition of housing and an officetel which is a business facility, and the ‘housing' and ‘quasi-housing' differ in the relevant construction requirements and standards (housing: Housing Act Article 35, etc., and Officetel construction standards: Building Act and officetel construction standards).

Therefore, as long as the Enforcement Decree of the Restriction of Special Taxation is clearly defined as a "house below the scale of national housing under the Housing Act" as an object of value-added tax exemption, it is not allowed to expand or analogically interpret it as a "quasi-housing" in the above "house."

Sheb and officetels are the buildings that can board and lodging in the first place in accordance with the construction laws and regulations, and they cannot be said to constitute the "housing" under the Housing Act only on the ground that the buildings were constructed for the purpose of residence or are currently being used for the purpose of residence.

In addition, according to Article 2 of the construction standard of officetels, officetels is prohibited from being installed in each office section, so it cannot be said that officetels is installed in the same structure as the plaintiff's assertion.

Article 4 of the Value-Added Tax Act provides that "The supply of goods" is subject to taxation (Article 4 of Value-Added Tax Act).

Therefore, whether the supply of goods is subject to tax exemption or is subject to tax exemption should be determined by the objective type or use of the building at the time of the supply, and especially the entry in the public register at the time of the supply.

Although the occupants of the instant officetel make a move-in report on resident registration and use it for residential purposes, it is merely a situation that occurred after the supply of the instant officetel.

Rather, the owners and occupants of the instant officetel may use it as a general business facility at any time according to its original purpose. According to the entry of the certificate No. 9, some occupants (No. 00) set the instant officetel as the address and registered the business of fisheries, etc.

Therefore, it is unreasonable to interpret that the taxation of value-added tax, which is subject to the supply of goods, differs from each other depending on the circumstances after the supply, would seriously undermine the legal stability of the tax law relationship.

And the introduction of the concept of quasi-housing into the Housing Act amended by Act No. 10237, Apr. 5, 2010 is to activate the supply of facilities that can be utilized for residential purposes without being classified as a house in response to the changed housing demand conditions, and it does not aim to include officetels as the concept of a house, thereby supporting the stability of ordinary people and tax benefits.

In particular, quasi-housing stipulated in Article 4 of the Enforcement Decree of the Housing Act includes dormitories and communal living facilities, which is related to housing supply for residential stability of ordinary people, which is the legislative purpose of Article 106 (1) 4 of the Restriction of Special Taxation Act.

(v) above all, if the Plaintiff intended to use the instant officetel for the purpose of residence, it newly constructed and supplied the instant officetel at the free will of the Plaintiff and self-responsibility while recognizing that the instant officetel constitutes subject to taxation, even though it could have been subject to the application of special cases of VAT exemption from the value-added tax at the same place from the beginning.

⑹ 결국 조세특례제한법령에서 정한 면세요건인 '주택법에 따른 국민주택 규모이하의 주택의 공급'에 해당하는지 여부는 다른 특별한 사정이 없는 한 건축허가, 사용승인, 건축물관리대장, 부동산등기부 등 공부상 용도에 따라 객관적으로 판단하여야 한다.

Therefore, "Housing below the scale of national housing under the Housing Act" is only a building constructed for the purpose of housing after obtaining a building permit legally.

Unlike this, even though a building permit and approval for use for business facilities, such as officetels, are stated in the building management ledger and real estate register for the same purpose, only the subjective circumstance where a large number of occupants are actually used for residential purposes as the current status is suitable for the purpose of residence, does not constitute a “house below the scale of national housing under the Housing Act” (see Supreme Court Decision 2007Du21242, Feb. 14, 2008).

Therefore, it is legitimate for the Defendant to refuse the Plaintiff’s request for correction on the ground that the instant officetel supply is not subject to value-added tax exemption.

3. Conclusion

Therefore, the plaintiff's claim is dismissed as it is without merit. It is so decided as per Disposition.