[1] The criteria for determining a public interest purpose organization subject to exemption of value-added tax under Article 12(1)16 of the Value-Added Tax Act, Article 37(1)1 of the Enforcement Decree of the same Act, and the meaning of its supply

[2] The case holding that the working environment measurement service of a nonprofit incorporated association constitutes an exemption of value-added tax under the above / [1] even before the amendment of the Enforcement Rule on March 30, 1996 becomes a medical and health service exempt from value-added tax

[1] Article 12(1)16 of the Value-Added Tax Act provides that goods or services supplied by religious, charity, academic, relief, and other organizations for public interest, as prescribed by the Presidential Decree, shall be exempted from value-added tax. Accordingly, Article 37 subparag. 1 of the Enforcement Decree of the same Act provides that services provided by the Presidential Decree, which are provided temporarily or gratuitously for their own business purposes, mean services provided by religious, charity, academic, relief, or other public interest organizations registered with the competent authority for religious, charity, or services provided temporarily or gratuitously for their own business purposes. The determination of whether such services are for public interest shall be made depending on whether their inherent purpose is the promotion of social welfare, and shall not be determined depending on whether individual services performed by such organizations are against specific persons, and shall not be determined based on whether such services are provided temporarily, but shall not be provided temporarily or gratuitously, but shall be provided temporarily or provided at cost or free of charge.

[2] The case holding that if a nonprofit incorporated association established with the permission of the Minister of Labor on July 6, 1964 is designated as a working environment measuring agency under the Occupational Safety and Health Act on July 20, 192 and has received fees determined by the working environment measurement technology council in consideration of personnel expenses, equipment depreciation expenses, management expenses, etc. from the working environment measurement technology council in accordance with the criteria for technical service charges publicly notified by the Ministry of Labor on July 20, 192, the above service cannot be deemed to constitute medical health service under Article 12 (1) 4 of the Value-Added Tax Act, Article 29 of the Enforcement Decree of the same Act and Article 11-2 of the Enforcement Decree of the same Act (amended by Ordinance of the Prime Minister No. 563 of March 30, 196), but since an organization for public interest purpose under Article 12 (1) 16 of the same Act and Article 37 subparagraph 1 of the Enforcement Decree of the same Act provides actual expenses for its proper business purpose, the above service is exempted.

[1] Article 12 (1) 16 of the Value-Added Tax Act, Article 37 (1) of the Enforcement Decree of the Value-Added Tax Act / [2] Article 12 (1) of the Value-Added Tax Act, Article 29 of the Enforcement Decree of the Value-Added Tax Act, Article 37 subparagraph 1 of the Enforcement Decree of the Value-Added Tax Act, Article 11-2 of the former Enforcement Rule of the Value-Added Tax Act

[1] Supreme Court Decision 86Nu824 delivered on December 8, 1987 (Gong1988, 286), Supreme Court Decision 95Nu14428 delivered on June 14, 1996 (Gong1996Ha, 2251) / [2] Supreme Court Decision 97Nu5978 delivered on August 29, 197 (amended by the same purport) and Supreme Court Decision 97Nu643 delivered on September 5, 197 (the same purport)

Korea Industrial Health Association (Attorney Jeong Sung-sung et al., Counsel for defendant-appellee)

Head of the Office of Government

Seoul High Court Decision 96Gu9470 delivered on October 18, 1996

The appeal is dismissed. The costs of appeal are assessed against the defendant.

We examine the grounds of appeal.

Article 12(1)16 of the Value-Added Tax Act provides that goods or services supplied by religious, charity, academic, relief, and other organizations for public interest as prescribed by the Presidential Decree are services exempt from the value-added tax. Accordingly, Article 37 subparag. 1 of the Enforcement Decree of the same Act provides that services prescribed by the Presidential Decree refer to services provided temporarily or provided free of charge by religious, charity, academic, relief, or other organizations registered with the competent authority for their own business purposes. The issue of whether an organization is a public interest purpose shall be determined depending on whether its proper purpose is the promotion of social welfare, and shall not be determined depending on whether its individual business performed by such organization is against a specific person (see Supreme Court Decision 95Nu1428, Jun. 14, 1996, etc.). It is clear that the supply of services should not be provided temporarily or gratuitously, but it should be provided temporarily or gratuitously, or if it is provided temporarily or free of charge or free of charge.

According to the reasoning of the judgment below, on July 6, 1964, the plaintiff, a non-profit incorporated association established with the permission of the Minister of Labor on July 20, 192 with the permission of the Minister of Labor as a working environment measurement agency under the Occupational Safety and Health Act, has received fees from the working environment measurement technology council in consideration of personnel expenses, equipment depreciation expenses, management expenses, etc. according to the criteria for technical service charges publicly notified by the Ministry of Science and Technology since the designation as a working environment measurement agency under the Occupational Safety and Health Act. On May 17, 1995, the court below acknowledged that on May 17, 1995, the defendant imposed value-added tax on each period from 192 to 194 on the plaintiff's working environment measurement service where the working environment measurement service is subject to value-added tax. The court below determined that the service in this case constitutes a non-profit incorporated association under Article 12 (1) 4 of the Value-Added Tax Act, Article 29 of the Enforcement Decree of the same Act, and Article 11-2 (1) of the Enforcement Decree of the same Act.

In light of the above relevant laws and records, the above determination of recognition by the court below is just and it is not recognized as unlawful in the misapprehension of legal principles, such as the theory of lawsuit. There is no ground for argument.

Therefore, the appeal is dismissed and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices.

Justices Lee Don-hee (Presiding Justice)