New Franc Co., Ltd. (Law Firm Chungcheong, Attorneys Kim Jung- enterprise et al., Counsel for the plaintiff-appellant)

port of origin

January 19, 2012

1. The plaintiff's claim is dismissed.

2. The costs of lawsuit shall be borne by the Plaintiff.

The Defendant’s imposition of value-added tax of KRW 9,286,270 for the first year of 2006, value-added tax of KRW 220,796,450 for the second year of 2006, value-added tax of KRW 9,924,820 for the second year of 207, value-added tax of KRW 34,06,100 for the second year of 207, value-added tax of KRW 35,987,370 for the first year of 2008 is revoked.

1. Details of the disposition;

A. The Plaintiff, a corporation established for the purpose of the Housing Construction and Sales Business, etc., was running the business of newly constructing and selling apartment units from Apr. 2, 2006 to Jun. 20, 2006 (hereinafter “instant business”).

B. On July 25, 2008, the Plaintiff deducted the input tax amount of PM management service costs, financial consulting fees, etc. (hereinafter collectively referred to as “instant service costs”) paid to the Defendant during the process of the said project, and filed a value-added tax return from the first to the first period of 2006, on the basis that the non-deductible tax amount related to the common input tax exemption for common input tax amounts is zero.

C. From August 13, 2008 to August 22, 2008, the Defendant entered the “on-site verification of value-added tax refund” with respect to the Plaintiff’s reported value-added tax amounting to KRW 4,691,600,00,000 as indicated in the attached purchase price non-deduction list (hereinafter “the details list”) as to the service cost of this case: ① deeming the input tax amount of value-added tax on the service cost as a tax invoice different from the facts as the input tax invoice, the Defendant is not allowed to deduct the input tax amount of KRW 1,60,000,00 from the input tax amount; ② regarding the financial advisory fee, appraisal fee, credit assessment fee, legal advisory fee, value-added tax on the ratio of the use of land, value-added tax on the land trust registration and ownership transfer registration fee, value-added tax on the value-added tax exemption tax amount on the newly constructed apartment project under Article 9268 of the Act on December 26, 2008, and Article 17 of the Enforcement Decree of the Value-Adde.

D. According to the above findings, the Defendant imposed on the Plaintiff the value-added tax of KRW 9,286,270 for the first year of December 1, 2006, KRW 220,796,450 for the second year of value-added tax of KRW 20,796,450 for the second year of 2006, value-added tax of KRW 9,924,820 for the first year of 207, KRW 34,066,100 for the second year of 2007, and KRW 35,987,370 for the first year of 208 (hereinafter “instant disposition”).

E. The Plaintiff dissatisfied with the instant disposition and filed an appeal with the Tax Tribunal, but on July 14, 2010, the said claim was dismissed.

【Ground of recognition】 The fact that there has been no dispute, all or part of the evidence Nos. 1 through 10, and the purport of the whole pleading

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

(1) A tax invoice on the cost of PM services for network consulting is not false.

(2) An input tax amount undeductibled by the Defendant, such as various fees, for the purchase of land (see the attached Table) is not a capital expenditure for the creation of land, since there is no element to deem that each service has practically increased the value of the land. Therefore, the input tax amount is not subject to non-deduction.

Even if not, it is against the principle of no taxation without law that the defendant calculated the input tax amount subject to non-deductible based on the ratio of the money corresponding to the funds for acquiring the land for the loan with respect to the expenses, such as the loan-related fees, has no legal basis.

(3) It is unreasonable that the Defendant calculated a portion of the instant service cost in proportion to the estimated supply price by deeming it as a common purchase with taxation and tax-free business even though there is no scheduled supply quantity without obtaining approval for apartment business. In addition, the Defendant’s common purchase cost is a management cost for the pertinent period in which the actual reversion can be separated, and thus, the input tax

(b) Related statutes;

It is as shown in the attached Form.

C. Determination

(1) Part on the cost of PM services for large network consulting

Comprehensively taking account of the purport of the whole argument in the above evidence, even though the plaintiff was provided with consulting services for the purchase of land and the securing and management of the project site from April 17, 2006 by an unregistered business operator who is not a large-scale consulting business operator, the plaintiff received a tax invoice prepared as being provided with services from the large-scale consulting business operator on March 10, 2008 immediately before the completion of the provision of services under the service contract ( March 25, 2008). According to the above facts of recognition, the tax invoice for the above large-scale consulting is a tax invoice different from the fact that the supplier supplies the above large-scale consulting, so the input tax amount stated therein cannot be deducted from the output tax amount pursuant to Article 17 (2) 1-2 of the Value-Added Tax Act. Accordingly, the plaintiff's assertion against this cannot be accepted.

(2) The portion of the input tax related to the land, including fees

(A) Relevant legal principles

Article 17(2) of the Value-Added Tax Act provides that an input tax amount related to the business that supplies goods or services exempt from value-added tax (including an input tax amount related to investment) and an input tax amount related to land as prescribed by the Presidential Decree are stipulated in subparagraph 4 as one of the input tax amounts not deducted from the output tax amount. Article 60(6) of the former Enforcement Decree of the Value-Added Tax Act provides that an input tax amount related to the land-related business that supplies goods or services exempt from value-added tax refers to an input tax amount related to capital expenditures for the creation, etc. of land, etc. of land, and Article 17(2) of the former Enforcement Decree of the Value-Added Tax Act provides that an input tax amount

(B) Facts of recognition

The following facts may be acknowledged in full view of the whole purport of the pleadings, unless there is a dispute between the parties, or in light of the evidence as mentioned above and the statements as set forth in Gap Nos. 1 through 6.

1) Around December 2006, the Plaintiff borrowed 93 billion won from the Korean bank, etc. for the purpose of acquiring land and using 75 billion won as land acquisition fund. In the process, the Plaintiff paid 1,350,000,000 won for financial advisory fees to Hyundai Securities Co., Ltd.; 61,49,090 won for appraisal fees to the future appraisal corporation; 30,000,000 won for legal advisory fees to the current Civil Law Office; and 50,000,000 won for credit assessment fees to the Korean Credit Assessment Co., Ltd....

2) Around May 2008, the Plaintiff obtained a loan of KRW 265 billion from the Korean bank, etc. for the purpose of acquiring land and using project costs, and planned to use KRW 193 billion as land acquisition funds. In that process, the Plaintiff paid KRW 700,000,000 for financial advisory fees to Korea Securities Co., Ltd.; KRW 70,000,000 for appraisal fees to a new appraisal corporation in the future; KRW 30,00,000 for legal advisory fees under the law firm tax; and KRW 35,00,000 for credit assessment fees to Korea Credit Rating Co., Ltd....

3) The Plaintiff paid KRW 233,245,750 to Nonparty 2, a total of the fees for registration of land trust and registration of ownership transfer during the period from the second to the first period of the year 2006 to the first period of the year 2008, and the Defendant considered it as expenses for land acquisition and deducted input tax during the relevant quarter, such as the statement in the attached Table.

4) The Plaintiff paid KRW 75,00,000 to Jintec Co., Ltd. during the second period of 2006, and KRW 206,00,000 to Jintec Co., Ltd during the second period of 2007, while the Plaintiff did not fully own the newly built apartment site for the instant project, at the cost of establishing the district unit plan, and the Defendant considered it as the land purchase-related cost and deducted the input tax amount during the relevant quarter as shown in the attached Table.

(C) Determination

Considering the above facts in light of the legal principles as seen earlier, it is reasonable to view that the nature of the consulting service accompanying the loan of funds from the financial institution is determined according to the purpose of the procurement fund. As such, it is reasonable to regard the amount paid to the Plaintiff for the acquisition of land under Article 60 (6) 1 of the Enforcement Decree of the Value-Added Tax Act as the rate used for the acquisition of land out of the loan, and to deduct the input tax amount for each of the fees of this case based on the ratio of the amount corresponding to the funds for the acquisition of land from the total loan is calculated on the basis of the ratio of the amount corresponding to the funds for the acquisition of land, and thus, it cannot be said that it violates the principle of no taxation without the law.

In addition, according to the above facts, registration fees paid to a certified judicial scrivener shall be the input tax amount required for acquiring the land as a matter of course, and it is reasonable to view that the service fees related to the establishment of district unit planning constitute the pre-evaluation service fees prior to the acquisition of the land and the alteration of the form and quality of the land and the formation of the factory site

In addition, it does not interfere with the above judgment that the plaintiff managed the above expenses as beneficial expenditure.

In the end, the plaintiff's assertion on this part is without merit.

(3) Common input tax amount portion

In full view of the reasoning of the aforementioned evidence, the Plaintiff was expected to newly construct both apartments exceeding the national standard housing size and those below the above size subject to tax exemption, and the estimated supply price ratio was 20.9% tax exemption, and 79.1% tax exemption. Accordingly, the Defendant calculated the total input tax amount of KRW 965,450,000 (763,673,00) calculated by calculating the estimated supply price according to the above ratio according to the Plaintiff’s business plan, and deducted the input tax amount (763,673,00) from the estimated supply price (763,673,00). Meanwhile, in light of Article 61(1) and (4) of the Enforcement Decree of the Value-Added Tax Act, it cannot be confirmed that the Plaintiff’s scheduled use of the pertinent apartment as well as the estimated use price of the pertinent taxable business cannot be verified as tax exemption under Article 61(1) and (4) of the Enforcement Decree of the Value-Added Tax Act.

In addition, whether business approval has been granted or not shall not be deemed to affect the above judgment.

Therefore, we cannot accept the plaintiff's assertion.

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and it is so decided as per Disposition.

[Attachment]

Judge Lee Han-hoon (Presiding Judge)