[1] The case holding that in a case where an advertising agency who has entered into an advertising agency contract on behalf of a domestic advertising agency and a foreign corporation's advertiser for advertising business such as the conclusion of an advertising service contract is requested to produce an advertisement and post an advertisement in the domestic advertising media agency and then paid the remainder after deducting the agency fee from the advertiser's fees to the advertising media agency, the advertising agency may be deemed to have directly provided the foreign corporation's advertiser with the advertising service

[2] Whether Article 6(5) of the Value-Added Tax Act applies mutatis mutandis to the supply of services by quasi-Commission agents (affirmative)

[3] Whether an advertising media company, the principal of which is a quasi-Commission agent, provides advertising services to foreign advertisers through the event constitutes a transaction subject to the application of zero-rate tax rate under Article 11(1)4 of the Value-Added Tax Act and Article 26(1)1 of the Enforcement Decree of the same Act (affirmative)

[1] In a case where an advertising agency who has entered into an advertising agency contract on behalf of a domestic advertising agency and a foreign corporation's advertiser for advertising business such as the conclusion of an advertising service contract is requested to produce an advertisement and post an advertisement in the domestic advertising media agency, and posted the advertisement to the foreign corporation's advertiser, and then paid the remainder after deducting the agency fee from the advertiser, the case holding that the advertising agency may be deemed to have directly supplied the advertising service to the foreign corporation's advertiser

[2] Article 6(5) of the Value-Added Tax Act, which provides that where goods are supplied or supplied through a commission agent or agent, the principal shall be deemed to have supplied or received goods directly by the principal or the principal, except when the principal or the principal is unknown, applies by analogy to the supply of goods in light of its purport.

[3] The provision of advertising services by an advertising media company, the principal of which is a quasi-Commission agent, to a foreign advertiser, constitutes a transaction subject to the zero-rate tax rate under Article 11(1)4 of the Value-Added Tax Act and Article 26(1)1 of the Enforcement Decree of the same Act.

[1] Article 6 (5) of the Value-Added Tax Act / [2] Article 6 (5) of the Value-Added Tax Act / [3] Article 11 (1) 4 of the Value-Added Tax Act, Article 26 (1) 1 of the Enforcement Decree of

Korea Economic Examination Co., Ltd. (Law Firm, Kim & Lee, Attorneys Lee Jae-hwan et al., Counsel for the defendant-appellant)

The director of the tax office

Seoul High Court Decision 2003Nu14996 delivered on October 8, 2004

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

We examine the grounds of appeal.

1. Whether the Plaintiff can be deemed to have provided the advertisement services directly to the foreign advertiser that is the foreign corporation of this case

A. In light of the records, the court below, based on the selected evidence, concluded an advertising agency contract with the advertising agency to entrust the advertising service contract that the plaintiff publishes the advertisement with the advertising agency, and the advertising agency entered into an advertising agency contract with the advertiser, and agreed upon the date of publication, unit price, and other matters necessary for publication under the advertising agency contract with the plaintiff while providing the plaintiff with the advertisement produced accordingly, and the plaintiff inserted the advertisement. After the plaintiff's advertisement, the advertising agency separately prepares a written request for advertising cost and the written request for advertising production cost, and the advertising agency pays the remainder of the advertising price to the plaintiff except for the fees. In this case, the advertising agency shall issue a tax invoice with the plaintiff as the consignee, and if the advertising agency is a foreign corporation, it shall be deemed that the zero-rate tax rate is applied to the advertising price, and the advertising agency shall not be deemed as the one for which the plaintiff is supplied with the advertising agency's own corporate accounting fees and the one for which the plaintiff is provided with the advertising agency's own advertising fees, and shall not be deemed as the one for which the plaintiff is provided with the advertising agency fee.

B. Furthermore, in light of the purport of Article 6(5) of the Value-Added Tax Act, which provides that where goods are supplied or supplied through a commission agent or agent, the principal shall be deemed to be directly supplied or supplied by the principal, except when the principal or the principal is unknown, it shall also be applicable by analogy to the supply of the services. In addition, in the supply of the advertising services, the instant advertisement agency is not only the Plaintiff’s associate commission agent, but also the Plaintiff’s associate agent, in the supply of the advertising services, and the advertising agency directly claims the advertising amount that was consulted with the Plaintiff after the advertisement is published, and the remainder after deducting the agreed agency fee from the advertising amount received from the Plaintiff is paid to the Plaintiff, and the remainder of the advertising amount paid to the Plaintiff was not appropriated as its own income. In the issuance and delivery of the tax invoice, the Plaintiff as the supplier, and the tax invoice stating himself as the trustee has been issued and issued among the parties. Thus, it can be deemed that the Plaintiff directly provided the advertising service to the foreign advertiser.

Therefore, the judgment of the court below is just, and there is no error in the misapprehension of legal principles as to the supplier of advertising services.

2. Whether the supply of the instant advertising services by the Plaintiff through an advertising contest is subject to the zero tax rate.

In light of the fact that an advertising agency, a quasi-agent, has the economic effect of concluding an advertising service contract with a foreign advertiser that is a principal for the Plaintiff, and thus, the economic effect that a foreign advertiser pays the advertising price in foreign currency shall also belong to the Plaintiff. In light of the purport of applying the zero-rate tax rate to the transactions under Article 11(1)4 of the Value-Added Tax Act and Article 26(1)1 of the Enforcement Decree of the same Act, etc., the purpose of applying the zero-rate tax rate is to promote foreign exchange acquisition, even if the advertising service contract was not concluded directly between the Plaintiff and the advertiser that is a foreign corporation, the supply of the

The Supreme Court precedents cited in the ground of appeal by the defendant cannot be invoked in the instant case.

Therefore, the ground of appeal on this is without merit.

3. Conclusion

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 on the bench.

Justices Kim Yong-dam (Presiding Justice)