Where a transferee is registered as a simplified taxable person in violation of an agreement, whether the business is a comprehensive transfer;

Where a general taxable person transfers a business comprehensively to a simplified taxable person, including real estate, the supply of goods.

Article 6 of the Value-Added Tax Act

1. All of the plaintiffs' claims are dismissed.

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

The Defendant’s disposition of imposition of value-added tax of KRW 207,801,810 on January 9, 2006 against the Plaintiffs on January 9, 2006 is revoked.

1. Details of the disposition;

A. After completing business registration as a general taxable person on December 1, 2003, the plaintiffs operated accommodation business under the trade name of '○○○○○○○-dong ○○○○-dong 572-2 and 633.7 square meters on the ground of reinforced concrete structure and six-story accommodation facilities (hereinafter "the real estate in this case"). On February 23, 2005, the plaintiffs agreed to transfer all rights and obligations on the above ○○○○○-dong business including the real estate in this case to ○○○○-dong ○○-dong ○○○-dong ○○, ○○-dong 572-2 and 633.7 square meters on the ground of reinforced concrete structure (hereinafter "the real estate in this case"). According to the above agreement, the transferee head of ○○-si should make business registration as a general taxable person identical to the type of taxation of the plaintiffs (Article 7).

B. The plaintiffs, on April 8, 2005, completed the registration of ownership transfer of the real estate of this case with the head of ○○○○ on April 21, 2005 in accordance with the above transfer agreement, and completed the report on closure of business on April 21, 2005. However, on August 31, 2005, the head of ○○○ is running a telecom accommodation business with the trade name called “○○○ hotel” from the real estate of this case after completing the registration of business as a simplified taxable person and completing the business registration in

C. As to this, the Defendant, unlike the Plaintiffs who are general taxable persons, deemed that the transfer of real estate in this case constitutes the supply of goods subject to value-added tax on the ground that a general taxable person transfers its business to a simplified taxable person, Article 17(2) of the former Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 1930 of Feb. 9, 2006) was excluded from the comprehensive transfer of business, and imposed value-added tax 207,801,810 won on the Plaintiffs on January 9, 2006 (hereinafter “instant disposition”).

D. On March 7, 2006, the Plaintiffs filed a petition for review seeking revocation of the instant disposition with the Commissioner of the National Tax Service, but was dismissed on January 15, 2007.

[Ground of recognition] Evidence Nos. 1, 2-1, 2-1, 3-1, 4, 5, 6, 1, 2-2, 5-1 and 5-2, and the purport of the whole pleadings.

2. Whether the instant disposition is lawful

A. The parties' assertion

In light of the circumstances of the instant disposition and relevant Acts and subordinate statutes, the Defendant asserted that the imposition of the value-added tax on the Plaintiffs is lawful, and the Plaintiffs against this, despite the fact that ○○○ constitutes a general taxable person in light of the following circumstances, the Defendant merely accepted the application for a simplified taxable person’s business registration, and the Defendant asserts that the instant disposition is unlawful on the ground that ○○○ is a simplified taxable person.

① The ○○○○ apartment is a single-story underground floor with a lot area of 633.7 square meters, a total floor area of 2,973.85 square meters, and a six-story building with a lot of 42 guest rooms, and is a relatively large accommodation facility.

② The sales revenue of the Plaintiffs’ 2004 for 2004 was 269,337,00 won for purchase amount, 71,577,000 won for purchase amount, 19,775,000 won for value-added tax, and 38,959,000 won for sales from January 1, 2005 to April 21, 2005 for business closure from January 1, 2005, and the amount of value-added tax was 14,171,00 won for purchase amount, and 2,478,000 won for value-added tax, and is not compared to the sales revenue of simplified taxable persons;

③ The location of ○○○Moel is the station area in the vicinity of the ○○ Station, which is the most part of the Defendant’s jurisdiction, and that a simplified taxable person is excluded from the station area;

④ In the contract for transfer and takeover of business submitted by the Plaintiffs at the time of reporting the closure of business, the transferee ○○ shall be registered as a general taxable person (Article 7).

(5) A business name of a transferee ○○○○○○ in an application for business registration is the highest accommodation business place.

(b) Related statutes;

It is as shown in the attached Table related statutes.

C. Determination

(1) Whether the defendant's acceptance of a simplified application report by the head of ○○

The Value-Added Tax Act provides that, in cases where a private entrepreneur newly starts a business, the total proceeds from supply are anticipated to fall short of 48 million won in a calendar year including the date on which the business commences, an individual entrepreneur who has filed a report on the application for a simplified tax application stating the expected annual amount of supply and other reference matters (Article 25(3) of the Act and Article 74(1) and (4) of the Enforcement Decree of the Value-Added Tax Act, shall submit a report on the application for a simplified tax application stating the expected annual amount of supply and other reference matters (if the application for a business registration states the expected annual amount of supply and other reference matters, it shall be deemed that a report on the application for a simplified tax application has been filed). As such, an individual entrepreneur who has filed a report on the application for a simplified tax application shall be deemed to be a simplified tax in the first taxable period except for the entrepreneur who has another place of business

In this case, on August 31, 2005, ○○○○ was registered as a simplified taxable person upon filing an application for business registration with the Defendant. There is no dispute between the parties that ○○○○○○ is registered as a simplified taxable person. According to health standards as to whether the filing of a simplified taxable person’s application for the simplified taxable person and the acceptance of the Defendant’s application therefor is legitimate, ① the long-term mining income does not have any other place of business that is not subject to the simplified taxable person, and the accommodation business operated by ○○○ does not belong to the category of simplified taxable business prescribed in subparagraphs 1 through 7 of Article 74(2) of the former Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 1930, Feb. 9, 2006). Furthermore, according to the former Standard for Exclusion from Simplified Taxation (Public Notice No. 2005-18, Jul. 1, 2005, 2007).

(2) Whether a general taxable person constitutes the supply of goods subject to value-added tax, because it constitutes a transfer of business to a simplified taxable person

Article 6 (6) of the former Value-Added Tax Act (amended by Act No. 8142 of Dec. 30, 2006) provides that "the transfer of business which is prescribed by Presidential Decree is not the supply of goods subject to value-added tax," and Article 17 (2) of the former Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 1930 of Feb. 9, 2006) provides that "transfer of business which comprehensively succeeds to all rights and obligations relating to such business by place of business shall not be regarded as the supply of goods, but "general taxable person transfers the business to a simplified taxable person" is excluded.

In this case, the plaintiffs comprehensively transfer to ○○○○○○○○ business including the real estate in this case to a simplified taxable person, which constitutes a supply of goods subject to value-added tax (Article 25(4) and the proviso of Article 25(1) of the Value-Added Tax Act), with respect to whether a general taxable person comprehensively transfers to ○○○○○○○○○ business including the real estate in this case, constitutes a supply of goods subject to value-added tax, and an individual entrepreneur who has filed a lawful application of simplified taxation shall be a simplified taxable person in the first taxable period (Article 25(4) and the proviso of Article 25(1) of the Value-Added Tax Act), and even if the proceeds from supply in the first taxable period to 48 million won or more are over, the first taxable period type shall not be directly converted to a general taxable person, but shall be converted to a general taxable person from the taxable period beginning after the final tax return for the first taxable period (Article 74-2(1)6 of the Enforcement Decree of the Value-Added Tax Act).

(3) Sub-decisions

Ultimately, it is legitimate for the Defendant to consider that the transfer of the instant real estate to ○○○ constitutes the supply of goods subject to value-added tax.

3. Conclusion

Therefore, the plaintiffs' claims are without merit, so it is so decided as per Disposition.