Cho High Court Decision 2010Da3927 ( November 24, 2011)

Goods and services supplied to ships that perform petroleum drilling works outside of Korea shall be subject to the zero-rate tax rate.

It can be recognized that the Plaintiff received goods and services from the Plaintiff in the course of drilling operations abroad and going through Korea. In addition, considering the fact that the instant vessel appears to fall under the case of obtaining foreign currencies because it could reduce foreign currencies because the instant vessel could be supplied with goods, etc. in the Republic of Korea, the Plaintiff’s supply of goods and services to the instant vessel constitutes goods and services acquired foreign currencies, and thus, the zero-rate tax rate shall apply.

Article 11 of the Value-Added Tax Act and Article 26 of the Enforcement Decree thereof.

2011Revocation of revocation of the imposition of value-added tax

XX Co., Ltd

Head of Central Tax Office

July 27, 2012

August 31, 2012

1. On September 1, 2010, the Defendant revoked the imposition disposition of value-added tax of 000 won for the second term portion of value-added tax (including additional tax), 000 won for the first term portion of value-added tax (including additional tax), 000 won for the second term portion of value-added tax (including additional tax), 000 won for the second term portion of value-added tax in 2008, 000 won for the first term portion of value-added tax (including additional tax), 000 won for the second term portion of value-added tax in 2009, and 000 won for the first term portion of value-added tax (including additional tax) for the second term portion of value-added tax in 209, respectively.

2. The costs of the lawsuit are assessed against the defendant.

The same shall apply to the order.

1. Details of the disposition;

A. The Plaintiff is a company established on March 21, 1989 for the purpose of the agency business for internal and foreign vessels and vessel supplies business, and the twoA (hereinafter “instant vessel”) is a petroleum drilling vessel owned by the Korea National Oil Corporation.

B. The Plaintiff reported and paid the value-added tax calculated at the zero tax rate to the Defendant on the ground that the vessel supplies vessel supplies and crew supplies to the instant vessel from the latter half of 2007 to the first half of 2010, and that the vessel supplies goods and services to the vessel navigating a foreign country.

C. After conducting on-site verification of the refund of value-added tax against the Plaintiff, the Defendant denied the Plaintiff’s zero-rate declaration by deeming that the instant vessel, which is a drilling vessel, was not affected by the “ship navigating to a foreign country” under Article 26(1)3 of the Enforcement Decree of the Value-Added Tax Act. Accordingly, on September 3, 2010, on 2007, the Plaintiff included KRW 000 of the value-added tax for the second period (including additional tax 000), KRW 000 of the value-added tax for the first period of 2008 (including additional tax 00 won), KRW 00 of the value-added tax for the second period of 2008 (including additional tax 00 won), KRW 00 of the value-added tax for the first period of 1,209 (including additional tax 00 won), KRW 2,000 for the second period of 209 (including the value-added tax) and KRW 00 for the second period of 00 (000).

(hereinafter referred to as "instant disposition" in total of the imposition of the above value-added tax.

D. On November 25, 2010, the Plaintiff dissatisfied with the instant disposition, filed a request for a trial with the Tax Tribunal, but the Tax Tribunal dismissed the Plaintiff’s request on November 24, 201.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 22, 23, and 24, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. Both claims

1) The plaintiff's assertion

The plaintiff argues that the value-added tax on the goods and services supplied by the plaintiff to the ship of this case should be applied at zero tax rate because the ship of this case constitutes "a ship going to a foreign country" under Article 26 (1) 3 of the Enforcement Decree of the Value-Added Tax Act with its domestic and overseas navigation vessel. Accordingly, the defendant's disposition of this case on

2) The defendant's assertion

In light of the purport of Article 25(1) of the Enforcement Decree of the Value-Added Tax Act provides that the zero-rate tax rate of the Value-Added Tax Act applies to the provision of goods or services to acquire foreign currencies; the Plaintiff’s provision of goods and services to the instant vessel does not constitute a transaction for acquisition of foreign currencies; ② the vessel navigating to a foreign country refers to the vessel providing overseas navigation services; ③ Article 25(1) of the Enforcement Decree of the Value-Added Tax Act provides that “foreign navigation services shall transport passengers or freight to a foreign country, etc.”; ③ Article 11-26-8 of the Value-Added Tax Act provides that the instant vessel is not included in a vessel navigating to a foreign country as provided in subparagraph 3 of Article 2

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

According to the above legal principles, Gap's evidence 7, 9, 10, and 11's 1, 2, and 3, the vessel of this case can navigate with its own power as an ocean-going port, but it mainly moves by tugboats, such as Russia and Myanmar, and is provided with goods and services from the plaintiff when it goes through Korea. ① Article 1-2 of the Ship Act is divided into "ship promoted by using its engine, sailing vessel with its own navigation capacity," and Article 1-2 of the Enforcement Decree of the Value-Added Tax Act provides that the vessel of this case shall be exempted from the supply of goods and services to a foreign country, and the vessel of this case shall be exempted from the supply of goods and services to a foreign country, and the vessel of this case shall be exempted from the supply of goods and services to a foreign country under Article 1-1 of the Enforcement Decree of the Value-Added Tax Act, and shall be exempted from the supply of goods and services to a foreign country. ② The vessel of this case shall be exempted from the supply of goods and services to a foreign country.

3. Conclusion

If so, the plaintiff's claim shall be accepted on the grounds of its reasoning, and it is so decided as per Disposition.