The method of determining whether value-added tax is included in the successful bid price and whether the input tax deduction is made if the price is not included in the value-added tax (negative)

According to the provisions of Articles 615, 631, and 728 of the Civil Procedure Act, when a court of execution intends to attach real estate to an auction, it shall have an appraiser evaluate it, taking into account the appraised value, and determine the minimum auction price determined as the basis for determining the minimum amount of the purchase price of the auction property. Therefore, whether the auction price includes the value-added tax on the auction price can be immediately known if the assessment statement is examined. As a result, if the auction price does not include the value-added tax on the auction price, the successful bidder does not have the input tax on the auction price, and even if the successful bidder receives and submits a tax invoice from the auction owner on the premise that the auction price includes the value-added tax, it is not likely to deduct it as the input tax amount under the principle of value-added tax even if the successful bidder receives and submits it, and such legal principle does not change because it bears the duty to pay the value-added tax in relation to the auction.

Articles 615, 631, 728 of the Civil Procedure Act, Articles 16, 17 of the Value-Added Tax Act, Article 58(5) of the former Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 17460, Dec. 31, 2001) (see current Article 58(6))

Supreme Court Decision 88Nu2977 delivered on September 12, 1989 (Gong1989, 1413), Supreme Court Decision 90Nu10209 Delivered on April 23, 1991 (Gong1991, 1539), Supreme Court Decision 90Nu6873 Delivered on July 12, 1991 (Gong1991, 2178), Supreme Court Decision 95Nu9136 Delivered on May 10, 196 (Gong196Ha, 1917)

Plusia Co., Ltd. (Law Firm Samduk, Attorney Kim Ba-young, Counsel for the defendant-appellant)

head of Dongjak-gu Tax Office

Seoul High Court Decision 2001Nu7277 delivered on December 13, 2001

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

1. According to the provisions of Articles 615, 631, and 728 of the Civil Procedure Act, when a court of execution intends to attach real estate to auction, it shall have an appraiser conduct an appraisal, taking into account the appraised value, and the minimum auction price determined so would be the basis for determining the minimum amount for the purchase price of the auction real estate. Therefore, whether the auction price includes value-added tax on the auction real estate can be determined by examining the assessment report (see Supreme Court Decisions 88Nu2977, Sept. 12, 1989; 95Nu9136, May 10, 196). Accordingly, if the auction price does not include value-added tax on the auction real estate, the successful bidder is not subject to the transaction collection, and thus, even if the successful bidder submitted a tax invoice from the owner of the auction real estate under the premise that the auction price includes the value-added tax, it shall not be subject to the principle of value-added tax, and such legal principle shall not be subject to the obligation to deduct the auction real estate under the Value-Added Tax Act.

2. Based on the evidence employed by the court below, the appraisal of the auction real estate of this case owned by the non-party is assessed only the objective asset value of the relevant land and building, and this is not included in the subject of consideration in the case of the value-added tax transaction. The court of execution determined the minimum auction price based on the above appraised value and appropriated the entire successful bid price for the execution cost and the dividends to creditors, since the auction falls under the transaction of the non-party that is a business operator, and thus, the part of the successful bid price is deemed to be the transaction of value-added tax, and the non-party was delivered to the non-party or was not paid to the tax authority. Since the bid price paid by the plaintiff is not included in the value-added tax on the acquisition of the building, the judgment below held that the amount equivalent to the value-added tax on the tax invoice received by the non-party based on the purchase price cannot be included in the scope of the input tax amount. In light of the records and the above legal principles, the fact finding and judgment of the court

However, the court below cited Article 17 (2) 1-2 of the Value-Added Tax Act on the ground that the amount equivalent to the value-added tax claimed by the plaintiff cannot be included in the scope of the input tax amount. However, even if there is an input tax amount to be collected at the time of purchase, the above provision merely purports to deny the deduction on an exceptional basis in terms of the convenience of taxation procedures or the tax policy where all or part of the necessary entries are not entered or entered differently from the fact, and where there is no input tax amount to be collected as in this case, the above provision cannot be applied. Therefore, the above decision of the court below is inappropriate, and the remaining grounds of appeal, such as the above provision is unconstitutional, are without merit. The plaintiff's assertion in the grounds of appeal (including supplement) is without merit

3. Therefore, the appeal shall be dismissed and all costs of appeal shall be assessed against the losing party. It is so decided as per Disposition.

Justices Lee Yong-woo (Presiding Justice)