Korea Exchange Bank and 9 others (Law Firm Han & Han, Attorneys Lee E-ju et al., Counsel for the plaintiff-appellant)

Other than the director of the Southern District Tax Office 2

may 13, 2004

Seoul Administrative Court Decision 2002Guhap23991, 39484 decided May 2, 2003

1. All appeals filed by the plaintiffs are dismissed.

2. The appeal costs are assessed against the plaintiffs.

The judgment of the court of first instance is revoked. The disposition of imposition of each value-added tax listed in the attached Table 1 through 6 by the director of the tax office of Seodaemun-gu against the plaintiff 1 through 6, the attached Table 7, 8, and 11 by the director of the tax office of Yeongdeungpo-gu with respect to the plaintiff 7, 8, and 10, and each of the attached Table 9 and 10 by the director of the tax office of Nam-gu with respect to the plaintiff 7 and 9 shall be revoked.

1. Quotation of the first instance judgment

The reasoning of the court’s reasoning concerning this case is as follows, except for the part on the 7th to 7th of the judgment of the court of first instance, the part on the 7th to 7th of the judgment of the court of first instance is as stated in the column of the reasoning of the judgment of the court of first instance. Thus, this Court shall apply Article 8(2) of the Administrative Litigation Act, and

2. The corrected part;

(B) On the other hand, the principle of taxation by a consuming country, which is generally adopted in the value-added tax system, is justified in that it is generally taxed at a certain tax rate in Korea in cases where goods or services are offered for consumption in Korea, and that value-added tax is levied at a consumption place by applying the zero-rate rate in cases where goods or services are supplied abroad, and that in cases where goods produced in Korea and imported from the perspective of international trade are finally liable for value-added tax, they do not cause distortion of trade because all of the goods produced in Korea have the same tax burden. In this context, the value-added tax system of a consumption country is used as a concept to determine where the duty to pay for the transaction of goods and services arises in the value-added tax system of the consumption country. The core of the right to taxation of value

In Korea, the principle of taxation of the country of consumption is also adopted and systematically reflected in the value-added tax, and the application of zero tax rate for export goods, the imposition of value-added tax on imported goods, and the system of vicarious payment is corresponding thereto. Article 10 (2) 1 of the Value-Added Tax Act clearly stipulates the concept of the place of supply by "the place of service transaction is provided or the goods, facilities, or rights are used."

According to the above facts, the main service of the WT is to transmit transaction messages to financial institutions, such as notice of remittance request, money transfer, notice of confirmation of foreign currency funds transaction, establishment of loan and deposit contract, etc., and the place of transmitting such transaction messages is the terminal of the plaintiffs' store where the software necessary to use the WT Telecommunication network is installed. The nature of the WT Telecommunication fee is the cost to be calculated and borne by the amount of transmission according to the line of transmission of the message by the plaintiffs transmitting the transaction messages. When entering the message, the message already sent using the standardized format is transmitted without going through the process of transmission of the message. Thus, in view of the plaintiffs who use the WT Telecommunication network, the substantial and main contents of the service supplied to the plaintiffs are to input the message on the foreign exchange transactions, so it is necessary to transmit the message to the plaintiffs, so it is necessary to determine where the message is entered into the domestic place of transmission and the domestic place of transmission, and it is necessary to transmit the message from the point where the message is made by the plaintiff's stores.

3. Conclusion

Therefore, the judgment of the first instance is legitimate, and the plaintiff's appeal is dismissed.

Judges Park Jong-soo (Presiding Judge)