(a) Where it constitutes a supply of services subject to value-added tax;

(b) Where the lessee continues to use the object after the termination of the lease contract and the lessor has notified that he would deduct the amount equivalent to the rent from the rental deposit, whether it corresponds to the supply of service;

(c) Value-added tax base where the overdue rent is deducted from the rental deposit.

A. The reason why the free supply of services is not considered the supply of services under the Value-Added Tax Act is that it is not easy to calculate the tax base because the free supply of services is not the market value, unlike the supply of goods. Therefore, if the value of services is determined and can be seen as the price for the supply of services between the parties concerned, it constitutes the supply of services subject to taxation.

B. Even if a lessee becomes an illegal possession due to the termination of a building lease agreement upon the lessor’s notification of termination, if the lessee continues to use the building without ordering it, and the lessor also holds a rental deposit without returning it and notifies the lessor that the amount of the monthly rent would be deducted from the deposit, it constitutes a supply of services subject to value-added tax.

(c) The amount of a monthly rent corresponding to the price of real estate rental services or a rental deposit which serves as the basis for the calculation of deemed rent, regardless of whether the amount has been actually paid or not, shall be the basis for the calculation of the deemed rent, if the lessor is to pay a monthly rent separate from the rental deposit and the lessee is to deduct and appropriate the amount of the monthly rent from the rental deposit each month, not the total amount of the rental deposit received or to be received by the lessor at the time of the first supply of services, but only the amount remaining after the overdue rent as of the end of the taxable period under Article 9(4) of the Value-Added Tax Act and subparagraph 4 of Article 22 of the Enforcement Decree of the same Act,

(a)Article 7(1), Article 7(3), Article 13(1) of the Value-Added Tax Act, Article 48(1)(c) of the Enforcement Decree of the Value-Added Tax Act, Article 9(4) of the Value-Added Tax Act, Article 2 subparag. 4 of the Enforcement Decree of the Value-Added Tax Act, and Article

Plaintiff 1 and one other

[Judgment of the court below]

Head of Dong Busan District Office

Busan High Court Decision 94Gu57 delivered on February 9, 1995

The part of the judgment below against the plaintiff among the imposition disposition of value-added tax for the second period of February 1991 and the imposition disposition of value-added tax for the second period of 192 are reversed, and this part of the case is remanded to the Busan High Court.

The remaining appeals by the plaintiffs are dismissed and the costs of appeal against this part are assessed against the plaintiffs.

1. We examine the grounds of appeal.

A. On the first ground for appeal

Article 7(1) of the Value-Added Tax Act provides that the supply of services means either providing services or allowing others to use goods, facilities or rights, and Paragraph (3) of the same Article provides that the supply of services without receiving any consideration shall not be deemed the supply of services. Thus, the reason for not deeming the free supply of services as the supply of services is that it is not easy to calculate the tax base on the grounds of the lack of marketability, unlike the supply of goods. Therefore, if the value of services is determined or can be seen as the consideration for the supply of services between the parties concerned, such provision constitutes the supply of services subject to taxation.

In theory, as the plaintiffs' notification of termination on August 27, 191, even if the lease contract for the part of the building of this case is terminated and the tenant's possession is illegal, if the tenant continues to use the building without ordering it, and the plaintiffs also possess it without returning the rental deposit and notify that the amount of monthly rent will be deducted from the deposit, it constitutes a supply of services subject to value-added tax. The argument is without merit.

B. On the second ground for appeal

According to the reasoning of the judgment below, the court below rejected the plaintiffs' claim that 300,000,000 won should be paid monthly from 1.5% per month until 1990 to 300,000 won for the remainder of 300,000,000 won for the second floor store of the 3rd floor building of this case without monthly rent, and that 300,000,000 won should be paid monthly rent from 30,000 won for the remaining 30,000,000 won for the remaining 30,000,000 won for the unpaid amount of 3,00,000,000 won for the unpaid amount of 3,00,000,000 won for the 1,000,000 won for the 3,000,000 won for the remaining 1,000,000 won for the 1,000,000 won for the above 9,00.

A rental deposit, which serves as the basis for calculating the rent for real estate rent or deemed rent, shall refer to the amount agreed upon, regardless of whether the amount has been actually paid or not. However, in cases where a lessee fails to pay a rental deposit, he/she shall pay a monthly rent in addition to the rental deposit, and where he/she intends to deduct the amount of monthly rent from the rental deposit, he/she shall use only the amount remaining after the overdue rent as of the end of the taxable period pursuant to Article 9 (4) of the Value-Added Tax Act and Article 22 (4) of the Enforcement Decree of the same Act, not the total amount of the rental deposit received or to be received at the time of the first supply of the above service, as of the end of the taxable period.

According to the records of Eul's evidence 4 (Notice) used as data for recognition of monthly rent increase under the lease agreement of this case, the court below acknowledged that the plaintiffs notified the above pension store on August 27, 1991 that the termination of the contract should be deducted from 4,500,000 won each month from the deposit for the next two months (which seems to be up to the date of surrender). In such a case, the court below acknowledged that the above pension store did not continue to pay damages equivalent to the monthly rent or monthly rent after the above notice, and it should be specifically viewed as the date the above building portion was ordered to the plaintiffs, and the remaining amount after the deduction of monthly rent or monthly rent from the deposit can be determined as the basis for calculation of the tax base of the value-added tax of this case after the second half of 191, but it did not reach the conclusion of the judgment, and it did not err in the misapprehension of legal principles as to the plaintiffs' assertion that the above reasons for the exemption of monthly rent or monthly rent should not be accepted.

2. Meanwhile, with respect to the imposition of value-added tax on the second half of 1990 and the first half of 1991, there is no indication in the grounds of appeal even after examining the petition of appeal or the grounds of appeal submitted by the Plaintiff’s agent, and thus, the appeal on this part shall not be dismissed.

3. Therefore, the judgment of the court below against the plaintiff among the imposition disposition of value-added tax for the second term of February 1991 and the imposition disposition of value-added tax for each of the first and second years of 1992 are revoked, and this part of the case is remanded to the court below for further proceedings consistent with this Opinion. The remaining appeals by the plaintiffs are dismissed and the costs of appeal for this part are assessed against the losing party. It is so decided as per Disposition

Justices Lee Yong-hun (Presiding Justice)