Disposition Revoking Value-Added Tax Correction

Whether the input tax deduction can be received in the case of removal after purchase of the building

The contents of the judgment are the same as attachment.

Article 39 (1) 7 of the Value-Added Tax Act

2017Nu70184 Disposition of revocation of disposition of rectification of value-added tax

*

Head of Ansan Tax Office

on October 21, 2018

November 2018

1. The plaintiff's appeal is dismissed.

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

Cheong-gu and purport of appeal

The judgment of the first instance shall be revoked. On June 13, 2016, the defendant revoked the correction, notification, and disposition of value-added tax of KRW 18,177,240 (including additional tax) against the plaintiff.

1. Quotation, etc. of judgment in the first instance;

The reasoning for this Court’s explanation concerning this case is as follows: (a) the pertinent part of the judgment of the court of first instance is modified as stated in the following 2; and (b) the reasoning for the judgment of the court of first instance (including its attached Form, but excluding its attached Form, 3. conclusion) is the same as the part of the judgment of the court of first instance (excluding its attached Form, 3. conclusion). Thus, this Court shall accept it as it is in accordance with Article

2. Parts to be corrected;

○ Following the three pages of the first instance judgment, the phrase “(3) No. 3” means “No. 3, 4, and No. 1 through 3(including the number of pages)”.

○ It appears that the “receiving” under 3 pages of the first instance judgment is “submission”.

Then, the Plaintiff concluded a fire insurance contract with an insurance company on May 26, 2015, which completed the registration of ownership transfer concerning the building of this case under its own name, on the following grounds: Provided, however, on the same day, the Plaintiff appears to have been in need of a fire insurance contract regarding the building of this case in order to obtain a loan from the Industrial Bank of Korea as collateral.

3. Additional determination

A. The plaintiff's assertion

Article 39 (1) 7 of the Value-Added Tax Act, which excludes input tax amounts, refers to capital expenditures for the creation, etc. of land, and this refers to expenses incurred in realizing the value of the land. Since acquisition and demolition of the building of this case cannot be deemed to have actually increased the value of the building of this case due to the acquisition and demolition of the building of this case, the input tax amount related to the acquisition and demolition costs of the building of this case is not subject to input tax deduction. Therefore, the disposition of this case is unlawful.

B. Determination

Article 39 (1) 7 of the Value-Added Tax Act provides that "the input tax amount related to the land prescribed by Presidential Decree" shall be excluded from input tax amounts, and Article 80 of the Enforcement Decree of the Value-Added Tax Act provides that "the input tax amount related to the land prescribed by Presidential Decree" shall be the input tax amount related to capital expenditures for the creation, etc. of land, which falls under any of the following cases:

In light of the contents and legislative intent of the above provisions, Article 80 subparag. 2 of the Enforcement Decree of the Value-Added Tax Act provides for an input tax amount related to capital expenditures, considering that the Plaintiff’s purchase tax amount related to the acquisition and removal of the instant land and the instant building are deemed to be included in the deduction of input tax amount under Article 80 subparag. 2 of the Enforcement Decree of the Value-Added Tax Act, and only the land is used, the “cost for the acquisition and removal of the removed building” was stated in a preparatory document as of August 21, 2017, stating the above assertion on August 21, 2017 at the first day of pleading. The Plaintiff’s legal representative is deemed to fall under the “capital expenditure for the creation, etc. of the land.” As seen earlier, insofar as it is deemed that the Plaintiff purchased the instant land and the instant building on its ground for the construction of the building, so the disposition of this case is legitimate on the premise that the input tax amount related to the acquisition and removal cost of the instant building

4. Conclusion

Thus, the plaintiff's claim shall be dismissed as it is without merit. The judgment of the court of first instance is just in conclusion, and the plaintiff's appeal is dismissed as it is without merit.