Cho High Court Decision 201Do1429 (O2.01)

The key issue amount of this case is that the Plaintiff paid the land purchase price on behalf of the Plaintiff, not the transfer price of business rights.

The key issue amount of this case is not the price for the transfer of the new business right of apartment houses, but the price for the purchase of the land to be paid by the transferee of the business right after the contract for the transfer of the business right is the price for the transfer of the business right.

Article 1 of the Value-Added Tax Act and Article 12 of the Value-Added Tax Act

2012 disposition of revocation of imposition of value-added tax, 14095

XX Stock Company

The Director of the Pacific District Office

August 28, 2012

September 20, 2012

1. The Defendant’s imposition of value-added tax of KRW 000 on December 1, 2010, which was ordered to the Plaintiff on December 1, 201, shall be revoked.

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 entered into a contract with the head office of Songpa-gu Seoul Metropolitan Government 11-9 Ptel 404, which is a corporation engaged in real estate development and sale business, and the Plaintiff entered into a contract on May 11, 2005 to transfer all of the business rights, etc. related to the instant project to XX Development Co., Ltd. (hereinafter referred to as the “P development”), while running a new apartment construction business (hereinafter referred to as the “instant business”) from around 2004 to the Seoul Gwangjin-gu, Seoul Special Metropolitan City 530-14 and 55 parcels.

B. On September 6, 2005, in relation to the transfer of the instant business right, the Plaintiff issued a tax invoice of KRW 000 (the supply price is KRW 000,000, including value-added tax 00,000), but did not file a value-added tax return. On February 8, 2010, the Defendant corrected and notified KRW 200,000, which was the value-added tax for KRW 200,000, which was the tax return omitted.

C. After that point, the director of the Seoul Regional Tax Office pointed out that the proceeds from supply following the transfer of the instant business right shall not be deemed 000 won, but be deemed 000 won (+0000 won +000 won). Accordingly, on December 1, 2010, the Defendant corrected and notified the Plaintiff of KRW 000 of the value-added tax for the second period of value-added tax in 2005.

D. On April 7, 2011, the Plaintiff appealed to the Tax Tribunal, and the Tax Tribunal partially accepted the Plaintiff’s claim on February 1, 2012, and rendered a decision that “the imposition of value-added tax of KRW 000 on December 1, 2010 that the Defendant rendered to the Plaintiff on December 1, 2010 shall be KRW 00 (00 +000) for the proceeds from the transfer of the instant business right, with the Plaintiff’s price for the transfer of the business right as KRW 00 (00 +00).”

F. Accordingly, on February 13, 2012, the Defendant corrected the disposition of imposition of the said KRW 000 won by reducing the amount of KRW 000 (hereinafter the Defendant’s disposition on December 1, 2010, which was imposed on the Plaintiff on December 1, 2005 (hereinafter “instant disposition”).

[Based on recognition] Each entry of Gap evidence Nos. 1, 2, 4, 5, and Eul evidence Nos. 1, 2, 5, and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The Defendant considered the transfer price of the instant business right as KRW 000 (00 +000) for the consideration for the transfer of the business right. The part remaining 000 won other than the original tax invoice issued by the Plaintiff (hereinafter “instant key amount”) is not paid by the Plaintiff as the consideration for the transfer of the instant business right. This is merely a fact that the Plaintiff paid a price equivalent to the intermediate payment to the real estate for which the purchase of the land was conducted at the time of concluding the contract for the transfer of the instant business right, instead, for the part part of the instant business right, and returned from the PP development. Therefore, the Defendant’s disposition of the instant case, premised on the premise that the Plaintiff received the said KRW 00 from the PP development as the consideration for

B. Relevant statutes

The entries in the attached Table-related statutes are as follows.

(c) Fact of recognition;

1) The main contents of the instant contract for the transfer of business rights between the Plaintiff and the Plaintiff on May 11, 2005 are as follows.

(Contents omitted)

2) Meanwhile, the Plaintiff concluded a real estate sales contract with five owners within the instant project site (Seoul Special Metropolitan City Gwangjin-dong 530-35 and 530-36 landowners Lee, Dong-dong 530-45 land owners, KimCC, 530-50 land owners KimCC, 530-50 land owners, 530-59 land owners, 530-17 land owners, 530-17 land owners, hereinafter referred to as "A, etc.") before entering into the instant project site transfer contract. The Plaintiff was unable to complete the registration of ownership transfer in the Plaintiff’s name since the payment was not made until the time of the instant project right transfer contract. From May 18, 2005 to May 23, 2005, the Plaintiff paid KRW 00, 000, 000,000,000,000,000,00.

3) On July 12, 2005, the Plaintiff entered into an settlement agreement on development and the transfer of business rights of this case (hereinafter referred to as “instant settlement agreement”) and its main contents are as follows.

(Contents omitted)

4) After the formation of the instant settlement agreement from July 19, 2005 to August 16, 2005, the development was completed by paying the remainder of the purchase price except for the purchase price already paid by the Plaintiff to the remaining owners (EE, KimCC, GongD, and EA) except for both BB from July 19, 2005 to August 16, 2005, and the Plaintiff received KRW 00,000 as agreed in the instant settlement agreement and issued a tax invoice for it.

5) XX Development shall be completed on September 16, 2005 by paying the remainder of the purchase price except for the purchase price that the Plaintiff paid to bothB and completed the registration of ownership transfer on the land owned by bothB.

6) On November 4, 2005, the Plaintiff entered into the final settlement agreement on the development and the transfer of the instant goodwill (hereinafter referred to as the “final settlement agreement”). The key contents are as follows. On the same day, the Plaintiff was paid KRW 000 (00 +00,000, the key amount of the instant settlement agreement) in accordance with the said final settlement agreement.

【Reasons for Recognition】 Each entry in the Evidence Nos. 2, 3, 6, 7, and 11, and the purport of the whole pleadings

D. Determination

In full view of the following circumstances acknowledged by comprehensively taking account of the purport of the entire pleadings, it is reasonable to deem that the key issue amount in this case is not the cost of the transfer of the instant business right, but the amount of the purchase price that the development is to be paid to thisA, etc. after the contract for the transfer of the instant business right was made by the Plaintiff. Therefore, the instant disposition based on the premise that the key issue amount in this case

① According to Articles 1 and 3 of the instant contract for the transfer of business rights, the subject matter of the contract includes not only the instant business rights, but also all rights related to the instant business, such as the land in the instant project site (the land that has completed the registration of ownership transfer in the name of the Plaintiff, the land that was concluded by the Plaintiff as the purchaser), deposit claims, obligations, etc. Therefore, even if the Plaintiff was paid the price from XX development in accordance with the instant contract for the transfer of business rights, it is not the price for the transfer of the instant business rights subject to value-added tax, and thus, the costs related to the purchase of the instant business site, which cannot be deemed the transfer price for the instant

② According to Article 5 of the contract for the transfer of business right of this case, after the contract for the transfer of business right of this case, the purchase price of the business site of this case shall be paid in XX, and the plaintiff shall cancel the contract for the sale of real estate that was already concluded in his own name, and at the same time actively cooperate with the PP development so that the transfer of ownership can be completed. Thus, the plaintiff is not obliged to pay the purchase price of the business site

③ The Plaintiff paid KRW 000 in total as part of the intermediate payment of each real estate sales contract concluded with EA et al. after the instant contract for the transfer of business rights was concluded with EA et al., which appears to have been paid on behalf of XX development in order to cooperate in entering into a real estate sales contract with EA et al., even though the Plaintiff did not have a duty

④ According to Articles 1, 2, and 4 of the instant settlement agreement concluded after the settlement of expenses incurred in the project, the Plaintiff and the Plaintiff confirm that they were not obligated to pay the Plaintiff the price under the instant business right transfer agreement. Meanwhile, when the ownership transfer registration has been completed in relation to the land owned by EA, etc., the Plaintiff shall pay KRW 00 to the Plaintiff. However, in light of the fact that the ownership of the land, other than the land owned by both BB, is paid KRW 00 to the Plaintiff within five days after the transfer of the right to the land owned by both BB, and KRW 00 to the Plaintiff within five days after the transfer of the right to the land owned by both BB, it is reasonable to deem that the said KRW 00 includes the purchase price (the amount is not clearly specified, but at least KRW 00,000 in light of the above three and the above circumstances) of the instant business site that the Plaintiff paid to EA, etc.

⑤ According to Article 2 and 2 of the final settlement agreement of this case, the above KRW 000 out of the above KRW 000 is the transfer price of the business right of this case, and the remainder 00 (the key amount in this case) is the Plaintiff’s payment of the purchase of the project site of this case and the incidental expenses.

3. Conclusion

The plaintiff's claim is justified and accepted.