Seoul Administrative Court 2016Guhap58765 ( February 10, 2017)

The right to motion pictures has been transferred from motion picture companies to companies engaged in cultural industries, and the right of the plaintiff does not change.

(1) The disposition imposing the value-added tax is unlawful on the ground that the right to the film was merely transferred from the film company to the company engaged in cultural industries, and the status related to the plaintiff's film has changed.

Article 1 of the Value-Added Tax Act

2017Nu39756 Revocation of Disposition of Imposition of Value-Added Tax

○○○○ Incorporated Company

AA Head of the Tax Office

Seoul Administrative Court Decision 2016Guhap58765 decided February 10, 2017

November 22, 2017

December 13, 2007

1. The defendant's appeal is dismissed.

2. The costs of appeal shall be borne by the Defendant.

1. Purport of claim

The Defendant’s value-added tax for the first period of April 1, 2014 3,845,701,900 won against the Plaintiff on April 1, 2012

Over KRW 768,242,425 of the imposition disposition and value-added tax for the second period of 2012

The imposition of KRW 1,896,448,680, which exceeds KRW 27,784,393, shall be revoked.

2. Purport of appeal

The judgment of the first instance is revoked. All of the plaintiff's claims are dismissed.

1. Quotation, etc. of judgment in the first instance;

The reasoning for the court’s explanation concerning this case is as stated in the reasoning of the judgment of the court of first instance, except for the modification of the pertinent part of the judgment of the court of first instance as follows. Thus, this is cited in accordance with Article 8(2) of the Administrative Litigation Act and Article 420 of the Civil Procedure

○ 4.9 On the 9th page the following shall be added:

Article 5 (Production Shares)

(1) The Plaintiff and the film company shall jointly hold the production shares as follows:

(a) Movies: 60% of the total production shares;

(b) Plaintiff: 40% of the total production shares;

○ 6. The following shall be added to five pages:

§ 7. (Conducts after Conclusion of this Agreement)

(3) The Parties shall, as soon as possible after the establishment of a literature museum pursuant to this Agreement, enter into the necessary contract with the literature museum or with a third party, and shall, as appropriate, cooperate in and implement the contract with the third party, including the following contracts:

A. The Plaintiff concludes an investment contract and a business management agreement and receives a share of profits as stipulated in Article 8 in return for investment.

B. Motion picture makers and the Plaintiff enter into a joint production contract on motion pictures with motion picture writers.

C. Motion picture makers and the Plaintiff receive the profits prescribed in Article 8 in return for their joint production.

(d) Asset management contracts or other contracts ordinarily necessary for the operation of literary work and the production of principal movies;

E. The business management contract to be concluded between the Plaintiff and the literature company must include the following:

1) The Plaintiff’s business management fee is the amount set forth in the special agreement clause of Appendix 41.

2) The Plaintiff’s best best in good faith to maximize the profits of literary writers using the film as seen in the instant case.

shall make every effort.

3) The distribution and sales commission in Korea and abroad shall cause the amount set forth in the special agreement of up in Appendix 4.

section 60.

○ 6. 16. The following shall be added to each other:

(3) The Plaintiff has all the authority to create profits by using the intellectual property rights of this case, including the right to distribute (including, but not limited to, the content in Appendix 3), and as the sole event of this, has the right to determine sales strategies and profit-making methods necessary for the creation of profits.

(4) The authority to receive all sales generated from the instant film is a literature producer, and the Plaintiff, as a business manager, shall perform the business manager’s duty to distribute and settle profits from the sales.

1) The entry is entirely omitted.

○ 7 the following shall be added to the 13th page:

(4) As of the date of the conclusion of this contract, the Plaintiff’s Equi Investment in the instant film is US$25,000 (USD 25,000,00) and its investment ratio is 100%. Accordingly, the Plaintiff has the right to receive each distribution of the amount equivalent to the above investment ratio out of the Equiti Investment and Equisium, and to receive an amount equivalent to the above investment ratio out of 50% of the amount obtained by deducting the Equisium from net income, and to receive an amount equivalent to the above investment ratio out of 50% of the amount obtained by deducting the Equisium from the Equisium. However, the Equi Investment and Equisium are to be finally determined at the time of the first settlement in accordance with the definitions of terms, and if the Plaintiff attracts other investors, part of the Plaintiff’s investment shares may be transferred, and the Plaintiff’s investment ratio is reduced to the extent of the transferred amount.

(5) The Plaintiff shall have the authority to receive all incomes, including sales flowing into the entire process of production and distribution of the instant film, and supervise and manage all the expenses incurred in the process of production and distribution, and shall perform management duties such as settlement and distribution of sales, and shall be paid 2% of the net production cost as the production management fee in return for the pertinent business.

(b)

(6) 원고는 선리쿱 조달금과 그에 대한 이자를 이 사건 영화를 선 판매함으로써 발생한 매출액에서 매출관리수수료, Guild 수수료, 해외판매수수료 및 해외판매비용을 공제한 금원으로부터 최우선적으로 상환받기로 한다.

○ 8. The following shall be added to the 1st day of each page:

(4) The Plaintiff is paid the following distribution fees in return for the distribution service.

(a)in Korea;

(1) Power theater fees: 10% of the turnover of a theater.

(2) Value-added license fees: 10% of the sales of the value-added license.

2) The entry is also omitted below all.

(3) Other sales tickets: 10% of the sales of other sales tickets.

(b) Overseas;

(1) Overseas distribution commission: 15% of the net sales from overseas distribution.

(2) Overseas sales commission: Not exceeding 15 percent of the sales revenue from overseas sales (including sales revenue from North Korea-unlisted sales) for each region.

○ 8 2. The following shall be added to the two pages:

(2) The Plaintiff shall deposit the amount remaining after deducting the amount falling under each of the following items from the total amount of theater sales generated domestically and the sales of value-added tickets generated domestically, i.e., the domestic net sales within 90 days from the closing date of the first CGV., within 90 days from the closing date of the second CGV., within 90 days from the settlement date of the second or fourth electric vehicles, and every one year from the date of the fifth or fourth settlement, into the sales management account at the end of the following month: Provided, That the order of mutual aid shall be as follows:

(each subparagraph omitted)

○ 10면 8행의 "미화 15,000,000달러" 다음에 "(이하 '선리쿱 조달금'이라 함)"을 추가 한다.

○ 10. 14. The following shall be added to each other:

(6) If a third investor makes an investment in the film of this case, the investor's shareholding ratio shall be determined in accordance with Article 4.

Article 4 (Investment Ratio)

(1) 어느 투자자의 투자지분율이란 제3조 제1항의 순제작비 예산에서 세금환급액과 문전사에 투자된 선리쿱 조달금을 공제한 금액, 즉 이 사건 영화에 대한 투자금 중 그 투자자가 투자한 금액이 차지하는 비중을 말한다.

○ 10. 18. The following shall be added to each other:

Article 9 (Recovery of Investment Funds)

(1) A class 5 net profit shall be settled among investors in accordance with the investment share ratio after settling the total sales in accordance with the order of distribution of the following total sales (hereinafter referred to as “Lolol”) before the net profit from the total sales generated from this case accrues, in accordance with the formula of calculating the net profit of the class 5:

9. 선리쿱 조달금 및 그에 대한 이자(이자 기산일 2012년 5월 31일, 이자율 연 7.5%)

10. The total amount of the quota investment fund and the quota quota premium;

(2) 제9조 제1항에도 불구하고 선리쿱 조달금 및 그에 대한 이자는 본건 영화의 제작이 완료되기 전에 본건 영화를 선 판매함으로써 발생한 매출액으로부터 해외판매수수료 및 해외 판매비용을 공제한 금원에서 최우선적으로 지급되어야 하며, 이 경우에는 제9조 제1항을 적용하지 아니한다.

(3) In accordance with Article 3(1) (excluding the money paid to the Plaintiff pursuant to Article 3(5)) and the amount of investment under Article 3(1) (excluding the money paid to the Plaintiff pursuant to Article 3(5)) in a manner that directly or by entrusting the Plaintiff with the agency business to a third party.

Article 10 (Distribution of Net Profits)

(1) After deducting the total expenses from the total sales generated from the instant film, the Plaintiff has the right to receive a distribution of the amount equivalent to the investment share prescribed in Article 4, out of 50% of the amount remaining after deducting the deferred payment and the incentives to ○○○○○ from the net income generated from the instant film, in case where the net income is generated in accordance with the formula for calculating the separate net income, the Plaintiff has the right to receive a distribution of the amount equivalent to the investment share prescribed in Article 4, among the 50% of the remaining amount after deducting the incentives to the deferred payment and the incentives to Da○○○○○○, from the net income generated from the instant film. However, the Plaintiff should have agreed before deducting the specific amount of the deferred payment and the incentives to

(2) In accordance with the equity ratio of investment and the settlement period under Article 11, a literaturer shall pay to the Plaintiff the net profit under Article 10(1), either directly or by entrusting a third party with the agency business.

○ 2. The following shall be added to the two pages 11:

Article 12 (Liability for Loss)

In the event that no net profit has accrued as a result of the settlement of accounts pursuant to Article 11 and attached Table 5, the plaintiff shall not claim the difference between the total ratio and the total sales according to the investment ratio under Article 4.

○ 12 up to 13 pages 8 up to 13 shall be amended as follows:

The defendant asserts that the plaintiff's right to distribute the film of this case, "goods" and 40% of the production shares as co-producers, and the film company transferred the right to exclusively exercise all intellectual property rights, including all intellectual property rights held in relation to the film of this case, and all rights to receive all sales by using intellectual property rights of the film of this case, and received the loan and investment in return for the payment. However, even according to all the evidence submitted by the defendant, it is insufficient to acknowledge it, and there is no other sufficient evidence to acknowledge it (it is difficult to conclude that even if the plaintiff paid the fine after receiving the notice from the director of Seoul Regional Tax Office on the ground of violation of the duty to receive the tax invoice in relation to the film of this case, it is difficult to conclude that the disposition of this case is a time limit to the legality of the disposition of this case (the actual record shows that the plaintiff filed a lawsuit against the country seeking the return of the fine, and the fact that the plaintiff dealt with accounts as "republic goods" related to the film of this case is also difficult to judge whether the goods or services are supplied subject to taxation of value-added tax.

Rather, in light of the following circumstances, the Plaintiff appears to have entered into a contract with a film company on April 27, 2012, a contract signed by June 15, 2012, and a contract signed by June 30, 2012, with the film company, based on the following circumstances: (a) evidence Nos. 2 and evidence Nos. 3-1, 2, and 3-3.

It appears that the right to the film of this case, which was flexible, was possessed even after the conclusion of the contract with the literature company on November 7, 2012, and it is difficult to view that the Plaintiff’s legal status changed in relation to the Plaintiff’s right to the film of this case, and thus, the “goods,” which were transferred from the Plaintiff to the literature company, is unlawful. Accordingly, the prior Defendant’s disposition on a different premise, is unlawful.

① On June 15, 2012, when entering into a basic contract for the production and use of a snow station train, the Plaintiff and the film company agreed to establish a literature company and transfer all rights and assets related to the film of this case held by the film company as of the date of the conclusion of this contract to the literature company (Article 4).

② As a result, a film company and a literature company entered into a contract for asset transfer on October 1, 2012. According to the contract, the film company transferred all the rights and assets held by the film company in relation to the film of this case to the literature company (Articles 1 and 6), and for the production, screening, distribution, and other use of the film of this case, such as copyright, neighboring rights, name-use rights, and scenarios copyright, or for the production, screening, distribution, and other use of the film of this case or in relation thereto, the rights currently acquired by the film company and all the rights, assets,

On the other hand, the contract concluded on November 7, 2012 with the Plaintiff was confirmed to have the above right (Article 16) and there is no provision that the Plaintiff transfers the right to the film of this case to a literature museum.

③ Article 8(2) of the contract between the Plaintiff and the film company on June 15, 2012 provides that the Plaintiff shall have the right to share the profits and the order of the literature company. Paragraph (3) of the same Article provides that the Plaintiff shall have all the rights to enjoy profits from the film of this case including the right to distribute profits, and that the right to receive sales strategies and profits from the film of this case shall have the right to determine profits from the film of this case. Paragraph (4) of the same Article provides that the right to receive all sales generated from the film of this case shall have the right to receive profits from the film of this case and the Plaintiff shall carry out the business of distributing profits and settlement of profits from the film of this case as the business manager. Meanwhile, Article 11 of the contract provides that the Plaintiff shall independently own all intellectual property rights, including intellectual property rights, and shall have the right to receive profits from all sales, including sales, from the entire process of producing and distributing profits from the film of this case, and shall have the right to receive and manage profits from all sales, including sales fees, and sales fees, and shall be paid at 2% of this case (3).

In full view of the content of the contract between the Plaintiff and the film company as above, the Plaintiff has the right to receive sales flowing from the Plaintiff with the right to use the intellectual property right of the film of this case including the right to distribute, but it does not ultimately belong to the Plaintiff. However, the Plaintiff is merely entitled to receive commission due to the distribution service and commission due to the settlement and distribution of sales, and the sales arising from the film of this case ultimately belong to the literature company. The provision that the right to receive all sales arising from the film of this case between the Plaintiff and the literature company in Article 11 of the Contract dated November 7, 2012 between the Plaintiff and the literature company provides that a literature company or literature company has the right to receive all sales generated from the film of this case is reflected in the content of the contract between the said Plaintiff and the film company, and it is difficult to view that the Plaintiff’s right to receive the film of this case has been transferred to the literature company due to the said provision. In fact, the Plaintiff, even after the establishment of the literature company, issued a tax invoice to the Plaintiff, with priority over its profits accrued.

④ Meanwhile, according to a contract between the Plaintiff and the film company on June 30, 2012, when the Plaintiff attracts another investor, part of the Plaintiff’s investment shares may be transferred, and the Plaintiff’s investment shares shall be reduced to the extent of transfer amount (Article 3(4)). According to a contract between the Plaintiff and the literature company on November 7, 2012, the Plaintiff is exempted from the obligation to procure investment funds within the extent of the amount invested by the third investor, and the literature company shall pay the Plaintiff the amount invested by the third investor without delay within the extent of the amount actually paid by the third investor. In the event the third investor makes an investment, the pertinent investment share ratio shall be determined pursuant to Article 4 (Articles 3(5) and (6). The Plaintiff’s investment share ratio is expected to be transferred to the third investor (Article 3(1)0, 200, 300, 208, 2015, 200, 2015, 2018.

⑤ 원고와 문전사 사이의 2012. 11. 7.자 계약에 의하면 문전사는 이 사건 영화로부터 발생하는 총매출에서 각종 수수료 및 비용, 선리쿱 조달금과 에쿼티 투자금을 정산한 다음 그 순이익을 투자지분율에 따라 투자자들에게 정산할 의무를 부담하고(제9조 제1항), 선리쿱 조달금(이는 미화 15,000,000달러이다) 및 그에 대한 이자는 이 사건 영화의 선 판매 매출액으로부터 해외판매수수료 및 해외판매비용을 공제한 금원에서 최우선적으로 지급되어야 한다(제9조 제2항, 이는 원고와 영화사 사이의 2012. 6. 30.자 계약 제3조 제6항과 같다). 이를 고려하면 피고가 거론하는 원고가 문전사로부터 상환받은 17,245,500,000원(미화 15,000,000달러를 원화로 환산한 금액이다)도 위 조항에 따라 선리쿱 조달금에 충당된 것으로 보이고, 원고의 이 사건 영화에 관한 권리를 양도한 대가로 위 금원을 지급받았다고 볼 별다른 근거가 없다[원고는 순이익이 발생하지 않은 경우 문전사에게 총비용과 총매출의 차액을 청구하지 않기로 하였는바(원고와 문전사 사이의 2012. 11. 7.자 계약 제12조), 원고가 이 사건 영화에 대한 투자금을 회수하고 이 사건 영화에 관한 각종 권리를 행사할 수 있었던 것은 위와 같이 투자 위험을 부담한 대가라고 볼 수 있다].

2. Conclusion

Then, the plaintiff's claim is accepted for the reasons, and the judgment of the court of first instance is delivered with this conclusion.

Therefore, the defendant's appeal is just, and it is dismissed.