Cho Jae-2012-China-0307 ( October 28, 2013)

The amount of discount on sales shall not be limited to the time of occurrence prior to the time of supply for goods or services, and there is no special restriction in the method of deduction and deduction.

The amount of discount on sales shall not be limited to the time of occurrence prior to the time of supply for goods or services, and there is no special restriction in the method of deduction and deduction.

Article 13 of the Value-Added Tax Act

2014Guhap50539 Disposition rejecting the rectification of value-added tax

OO

AA, BB Head of the Tax Office

2017.04.25

2017.06.13

1. O.O.O.O.O. made by Defendant AB director of the tax office against the Plaintiff, the rejection disposition of the value-added tax for the first term of 2008 through 1, 2009, as described in paragraph (1) of the attached Table 1, and the rejection disposition by Defendant BB director of the tax office against the Plaintiff shall be revoked both for the second term of 209 through 2, 2010, as described in paragraph (2) of the attached Table 1.

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

Cheong-gu Office

The same shall apply to the order.

1. Details of the disposition;

A. The Plaintiff is a mobile communications business operator that provides mobile communications services to the subscribers to the mobile communications services (hereinafter referred to as "subscribers") and sells mobile communications terminal devices (hereinafter referred to as "terminals").

B. During the tax period from January 2008 to February 2010, the Plaintiff reported and paid the value-added tax as shown in the separate sheet No. 1, stating that the total amount of the ex-factory price is the value of supply while selling a device to an agent for the business related to the mobile communications service (hereinafter “agency”).

C. However, pursuant to Article 36-41 of the Telecommunications Business Act, as amended by Act No. 7916 of March 24, 2006, pursuant to Article 36-41 of the Telecommunications Business Act, the period of use of the mobile communications service is not less than 18 consecutive months, the Plaintiff granted subsidies to purchase the mobile communications service by means of discount of devices, cash payment, and subsidization of subscription fees. The Plaintiff provided subsidies to the subscribers who agreed to use the mobile communications service for a certain period during the taxable period from January 2008 to February 2010 by the following methods (hereinafter referred to as the “instant subsidies”), and received the payment from the agency by taking over the obligation to pay the cost of the mobile communications service to the subscribers, and received only the remainder from the subscribers except the instant subsidies during the aforementioned taxable period.

1) The Plaintiff and the agency shall be based on the ex-factory price determined by the Plaintiff for the supply price of goods, including terminals that the Plaintiff supplies to the agency, and the supply price shall be determined based on market conditions.

He agreed to amend the agency contract after consultation (Article 21 of the agency contract).

2) The Plaintiff paid a subsidy to a new device that is not capable of opening on condition that the Plaintiff would use the mobile service for a certain period of time, on condition that the Plaintiff provided an OO application (high class, dud type/i-type) at a discounted price of the device in accordance with the terms and conditions subsidy table (Articles 34 and 35 of theCCC Service Use Terms and Conditions).

3) In addition, the above OO application contains a statement to the effect that "no benefit can be obtained from terminal and fare rates equivalent to the remaining period upon the occurrence of full payment / compensation device alteration / change of name/ termination," and the amount of penalty shall be calculated on a daily basis, and shall be calculated by means of "the agreed amount x [the agreed remaining period / agreed period (day)] (Article 37 of the Agreement on the Use ofCC Services)."

4) Accordingly, the Plaintiff received a device from the manufacturer and sold the device at the ex-factory price to the agency. However, the agency sold the device at the price reduced by deducting the subsidy from the above purchase price with respect to a subscriber who meets the requirements for subsidy support publicly announced in advance to the agency, and received the price during the agreed installment sales period. The Plaintiff acquired from the agency all contractual status related to the above installment claim and installment trading, and the subscriber accepted it (Article 1 of the Agreement on the Purchase and Sale of Mobilephones).

D. Since then, on July 22, 2011, the Plaintiff filed a claim for correction against the Defendants for the reduction and refund of each value-added tax (hereinafter referred to as “each of the instant claim for correction”) with respect to each of the money indicated in [Attachment 1] column for the amount of tax reduction on July 22, 2011, on the ground that the instant subsidy, which was not deducted in calculating the value of supply of the device sold to an agency during the period of one or two years in 2008, falls under the discount under Article 13(2)1 of the former Value-Added Tax Act (wholly amended by Act No. 11873, Jun. 7, 2013; hereinafter the same).

E. The Defendants notified the Plaintiff of the rejection of each of the instant claims for correction on the ground that the instant subsidies cannot be considered as an overcharge amount (hereinafter “each of the instant dispositions”).

F. The Plaintiff appealed and requested the Tax Tribunal for a trial on OO.O.O.O., but the Tax Tribunal rendered a decision to dismiss the request.

(Reasons for recognition) Facts that there has been no dispute, Gap's 1 through 6 (including paper numbers), Eul's 1 and 2

Statement, the purport of the whole pleading

2. Whether each of the dispositions of this case is legitimate

A. The plaintiff's assertion

The Plaintiff, while selling a device to an agency, supplied the full amount of the ex-factory price as the supply price. The Plaintiff provided the instant subsidy to the subscriber who agreed to use the mobile communications service for a certain period, and received the remainder of the ex-factory price of the device, other than the instant subsidy, from the agency, after taking over the claim against the subscriber to the mobile communications service. Accordingly, the instant subsidy should be excluded from the value-added tax base on a different premise. Accordingly, each of the instant dispositions based on the different premise is unlawful.

B. Relevant statutes

Attached Form 2 is as shown in the relevant statutes.

C. Determination

1) Determination as to whether the instant subsidy constitutes a discount amount

Supply in connection with the supply of goods or services, such as the quality and quantity, or the settlement of prices for delivery and supply, etc.

The amount of discount, which is directly deducted and reduced from the ordinary supply value as the cause of the condition, is not limited to the time of supply for goods or services, and the method of deduction and reduction does not have any special limitation (see Supreme Court Decision 2001Du6586, 6593, 6609, 6616, 66230, 6647, 666661, etc.). Therefore, in light of the aforementioned legal principles, it is reasonable to view that an agreement was made between the Plaintiff and the agent to deduct and reduce the amount of discount from the ordinary supply value of the goods or services, as well as to receive the amount equivalent to the amount of discount from the agent’s sales price for the period of 20 years after receiving the total amount of discount from the agent’s price, and thus, the Plaintiff is entitled to receive the amount equivalent to the amount of discount from the agent’s sales price for the period of 20 years, excluding the amount of discount from the agent’s sales price.

2) Determination as to the scope of revocation

A) In a case where a taxpayer contests the legitimacy of a tax disposition after the tax authority imposed a tax disposition, in principle, the tax authority that issued the disposition is liable to submit data to support the legitimacy of the final tax base and amount of tax determined and the legitimacy of the tax amount. On the other hand, in a tax return method, where a taxpayer requests the tax authority to correct the tax base and amount reported on the grounds that the reported tax base and amount of tax were erroneous, it is reasonable to view that the taxpayer is liable to submit data to support the erroneous filing of the initial tax base and amount of tax by the taxpayer. However, inasmuch as the tax authority that received a request for correction of a tax amount has the duty to investigate and confirm whether the tax base and amount of tax recorded in the tax return exceed the objectively legitimate tax base and amount of tax that should be reported under the tax law, as in the ordinary tax disposition revocation lawsuit, the revocation lawsuit against the request for correction of a tax disposition also becomes the ground for revocation of the tax disposition's substantial and procedural illegality and the subject matter of the trial is the objective existence of the tax base and amount of tax recorded in the tax return (see, etc.)

In light of the above legal principles, in a case where the Plaintiff, who is liable for tax payment, has revealed to the extent that it reasonably acceptable to accept the circumstances of errors in the tax base and tax amount originally reported, it is reasonable to deem that there exists the grounds for requesting a reduction unless the Defendant, who is the taxation authority, proves that the relevant grounds for requesting

B) According to the above facts and the above evidence, (1) the Plaintiff submitted the detailed details of the subsidy payment by customer in 2008 to 2010, the Plaintiff appears to have received each of the following circumstances, i.e., O.,O.O.O.O.O., within the scope of the subsidy payment. The Plaintiff appears to have received each of the above detailed statements within the scope of the subsidy payment. The Defendants did not assert any specific assertion or prove any error in the calculation of the above detailed contents, and (2) the Plaintiff’s OO’s application states that it is impossible to receive any benefit equivalent to the remaining period when the cause such as termination occurs, and that the amount of penalty is calculated by the computation of the agreed amount x [the remaining period of agreement/agreement (day)]. (3) The Plaintiff cannot be deemed to have received the above excessive subsidy payment only after the termination of the contract, and thus, it cannot be deemed that the Plaintiff’s request for correction was not included in the calculation of the amount of the subsidy for each of the Plaintiff’s tax base before the termination of the contract.

3) Sub-decisions

Therefore, the value-added tax amount to be reduced according to each of the instant requests for correction is as indicated in the separate sheet No. 1, 2008 through 2, 2010, as stated in the separate sheet No. 1, and each of the instant dispositions rejecting each of the instant requests for the reduction of the value-added tax amount is unlawful.

3. Conclusion

Therefore, the plaintiff's claim against the defendants is justified, and it is so decided as per Disposition by the assent of all.