early 2010 Heavy2430 ( October 04, 201)

Since part of the commercial building is remodeled and leased to a house, it constitutes private supply according to the exclusive use of tax exemption.

From the beginning, the Plaintiff did not receive the deduction of the input tax amount for the housing portion among the buildings in this case, received the deduction of the input tax amount for only the commercial portion, and remodeled and leased only the main part of the commercial portion into a house. As such, the key part of the building in this case can be deemed to be used exclusively for the tax-free business, and the entire building in this case cannot be deemed to constitute a depreciable asset,

Article 6 of the Value-Added Tax Act and Article 15 of the Enforcement Decree thereof.

Article 49 of the Enforcement Decree of the Value Added Tax Act

2012 disposition of revocation of imposition of value-added tax

XX

Head of Suwon Tax Office

May 25, 2012

June 22, 2012

1. The plaintiff's claim is dismissed.

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

The Defendant’s imposition of value-added tax of KRW 000 on December 1, 2009 against the Plaintiff on December 1, 2009, exceeds KRW 000,000 (the Plaintiff appears to be a simple clerical error in the claim column of the complaint).

1. Details of the disposition;

A. The Plaintiff newly constructed a 7-story building with a total floor area of 835.75 square meters on the ground located in the area XX 576-1, Suwon-si, Suwon-si (hereinafter “instant building”). On December 8, 2006, the Plaintiff registered the preservation of ownership. The 5 to 7-story of the instant building was subject to the permission of completion of construction of a residential facility, and 2 to 4-story (hereinafter “the key part of the instant building”) after completion of construction of a residential facility.

B. After completing business registration as a real estate trading business on May 6, 2006, the Plaintiff received a purchase tax invoice for KRW 338,400,000 of the construction cost of the first to fourth floor of the building of this case, and filed a value-added tax return for the taxable period from January 2006 to January 1, 2007 with the Defendant.

C. The Defendant: (a) deemed that the Plaintiff’s residential facilities, which were originally built for the purpose of leasing a commercial building subject to value-added tax, was a studio housing and operated a housing rental business exempt from value-added tax by remodeling the key part of the instant case’s construction for the purpose of leasing a commercial building, which is subject to value-added tax, as one of the studio housing; and (b) constituted “the deemed supply of goods due to the self-supply of goods by the exclusive use of tax exemption” under Article 6(2) of the Value-Added Tax Act (amended by Act No. 9915, Jan. 1, 2010; hereinafter the same shall apply) and Article 15(1) of the Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 20626, Feb. 22, 2008). Accordingly, on December 1, 2009, the Defendant corrected the value-added tax base under the said input

D. The Plaintiff, who was dissatisfied with the instant disposition, filed an objection on February 25, 2010 and filed an appeal with the Tax Tribunal on July 9, 2010, but was dismissed on October 4, 201.

[Ground of recognition] Facts without dispute, Eul evidence No. 1, Eul evidence No. 4-2, 3, Eul evidence No. 6, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

(1) The key part of the instant case is used for the tax-free business without actually being used for the taxable business, and thus, it is deemed as the deemed supply of goods and thus, rather than applying Article 6(2) of the Value-Added Tax Act and Article 15(1) of the Enforcement Decree of the Value-Added Tax Act, the tax amount should be calculated pursuant to Article 17(5) of the Value-Added Tax Act and

(2) Of the new construction cost of the part of the building 1 through 4 of this case (the supply price of KRW 000 and the purchase tax invoice of KRW 2000 for the second supply price in 2006, hereinafter “instant key construction cost”) is an additional construction cost that was paid only for the first floor after the completion of approval for use of the building upon the request of an OO store, etc. that decided to move into the first floor, and thus, it is unlawful to allocate input tax amounts by regarding the construction cost of the key part of this case as the new construction cost of the key part.

(b) Related statutes;

It is as shown in the attached Table related statutes.

C. Determination

(1) Determination on the first argument

Where an entrepreneur acquires a building to be used for the business subject to the imposition of value-added tax and uses it for the business subject to the exemption of value-added tax, the value-added tax shall be imposed by deeming the supply of goods as the supply of goods under Article 6(2) of the Value-Added Tax Act and Article 15(1) of the Enforcement Decree of the Value-Added Tax Act, and the tax base is calculated under Article 49 of the Enforcement Decree of the Value-Added Tax Act.

On the other hand, Article 62-2 of the Enforcement Decree of the Value-Added Tax Act, if an entrepreneur concurrently operates a taxable business and a tax-free business acquires depreciable assets that cannot be classified into actual reversion as they are used for a taxable business and a tax-free business,

As to the key issues of this case, the Plaintiff did not receive the input tax deduction for the housing portion (5 to 7th floor) of the building in this case from the beginning, and only the commercial area (1 to 4th floor) obtained the input tax deduction for the commercial area (1 to 4th floor), and the key issues of this case, which are the 2 to 4th floor, are remodeled and leased as a house. As such, the key issues of this case can only be deemed to be exclusively used for the tax-free business, and the entire building of this case cannot be deemed to be depreciable assets, the actual reversion of which is unclear. Therefore, it is legitimate for the Defendant to regard the key issues of this case as being used for the tax-free

(2) Judgment on the second argument

In addition, there is no evidence supporting the Plaintiff’s assertion, and rather, if the purport of the entire argument is added to the statement No. 8-2 of the evidence No. 8-2 of the pleading, it is recognized that the FF, who leased the first floor of the building of this case, paid KRW 000 to AA for the construction cost of the first floor. Therefore, the Plaintiff’s assertion that the key construction cost of this case was paid to the first floor is without merit.

(3) Sub-decisions

Therefore, the instant disposition that imposed value-added tax is legitimate, considering that the key issue portion of the instant case constitutes private supply under the exclusive use of tax exemption.

3. Conclusion

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