National subsidies and public subsidies paid directly related to the supply of goods or services shall be included in the tax base.

The subsidies of this case are those paid by the government agencies or local governments for the provision of exhibition services, such as the selection and management of participating companies in exhibition events, and are included in the tax base with subsidies directly related to the provision of services.

Article 13 of the Value-Added Tax Act

2014Guhap23100 Disposition to revoke the imposition of value-added tax

AAAA

BB Director of the Tax Office

on January 18, 2015

October 23, 2015

1. The plaintiff's claim is dismissed.

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

The Defendant’s disposition of imposition of value-added tax for the second period portion of 2008 against the Plaintiff on October 7, 2013 (including additional tax; hereinafter the same shall apply), for the first period of 2009 (including additional tax; hereinafter the same shall apply), for the first period of 201,391,050 won, for the second period of 209 (105,996,900 won, for the second period of value-added tax for 2009 (171,303,150), for the first period of 2010 (2,272,950 won, for the second period of 2010 (2), for the second period of value-added tax for 2010 (2), for 261,267,430 won, for the second period of 201, for the second period of 2011 (169,295,580 won, for the second period of value-added tax for 134,2715

1. Details of the disposition;

A. On December 5, 1995, the Plaintiff is a taxable entrepreneur with a domestic and foreign exhibition, exhibition, or conference by constructing the first exhibition and convention conference, which is an international exhibition facility, on the land owned byCC, DaDDDD Promotion Corporation, and private enterprises, to efficiently carry out the exhibition and convention project. On May 28, 2007, the Plaintiff is a taxable entrepreneur with a domestic and foreign exhibition, exhibition, and conference, which is an international exhibition facility.

B. The Plaintiff received subsidy of KRW 10,368,756,273 (hereinafter referred to as “instant subsidy”) from the CC and the EEEEE division during the period from 2008 to 2012, while running an agency business, such as exhibition, but such subsidy was deemed a subsidy not included in the tax base pursuant to Article 13(2)4 of the former Value-Added Tax Act (wholly amended by Act No. 11873, Jun. 7, 2013; hereinafter referred to as the “former Act”), and was not included in the tax base at the time of the return of value-added tax for each of the following taxable periods.

C. From July 8, 2013 to July 26, 2013, the Defendant issued a regular tax investigation against the Plaintiff, and the instant subsidies that the Plaintiff received while holding exhibitions, etc. are not a subsidy not included in the tax base pursuant to Article 13(2) Subparag. 4 of the former Act, but rather a subsidy that the Plaintiff received for services provided toCC City, EEEEE Ministry, etc., and thus subject to value-added tax. On October 7, 2013, the Defendant issued 208 value-added tax 276,453,700, 201, 391, 050, 209, 2050, 2005, 105, 105, 105, 96, 90, 171, value-added tax, 303, 1703, 150, 2015, 2016, 216, 2017, 2016.

D. The Plaintiff appealed and filed an appeal with the Tax Tribunal following the procedure for filing an objection, but was dismissed on September 17, 2014.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1, 3 and 4 (including each number; hereinafter the same shall apply), the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

1) Article 13(2)4 of the former Act provides that “National Treasury subsidies and public subsidies” shall be included in the list of value-added taxes.

As regards the scope, requirements, etc. that were excluded from quasi-laws, no delegation was made to the Presidential Decree. Article 48(10) of the former Enforcement Decree of the Value-Added Tax Act (wholly amended by Presidential Decree No. 24638, Jun. 28, 2013; hereinafter referred to as the "former Enforcement Decree of the Act") provides that “National subsidies and public subsidies under Article 13(2)4 of the Act shall be national subsidies and public subsidies that are not directly related to the supply of goods or services and shall be national subsidies and public subsidies that are not directly related to the supply of goods and services,” a new requirement is added to the subsidy excluded from the tax base, and the above Enforcement Decree is null and void as there is no ground for delegation

2) In relation to each exhibition project held by the Plaintiff, a person who actually performs the business as its principal agent

The Plaintiff is not theCC City or the Government Department, and the instant subsidy is merely a private event subsidy, not a price for the provision of exhibition agency services to theCC City or the Government Department. In addition, even though it was not anticipated in the actual process of the compilation of the subsidy that the Plaintiff would pay value-added tax equivalent to 10% of the subsidy to the other party, such as the Plaintiff, in the actual process of the compilation of the subsidy, it is not consistent with the overall domestic order to regard the subsidy as taxable subject to value-added tax even in the event that no exceptional ground, such

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

1) Whether Article 48(10) of the former Enforcement Decree of the Value-Added Tax Act is invalid

The Enforcement Decree or the Enforcement Rule of the Act may not change or supplement the rights and obligations of an individual, or prescribe new contents that are not prescribed by the Act, unless otherwise delegated by the Act. However, the legislative purport of the Act and the entire provisions of the Enforcement Rule of the Act are merely to stipulate the possibility of interpretation of the parent law by systematically and systematically examining the legislative purport of the parent law and the whole of the relevant provisions, or if it is intended to embody them based on the purport of the provisions of the parent law, it shall not be deemed to exceed the scope of the parent law’s regulation. Thus, even if there is no provision directly entrusting the parent law, it shall not be deemed null and void (see Supreme Court Decision 2008Du13637, Jun. 11, 200

On the other hand, the purpose of excluding subsidies from the value-added tax base is to achieve effectively the purpose of financial support by non-taxation of value-added tax on a subsidized project subject to subsidies, and if the government or public organization grants a policy subsidy to promote or promote a specific project without being directly supplied with goods or services, the subsidy concerned is because there is no direct quid pro quo relationship with the supply of goods or services.

However, Article 48(10) of the former Enforcement Decree of the Act provides that a national subsidy and a public subsidy not included in the tax base without delegation under Article 13(2)4 of the former Act shall be a national subsidy and a public subsidy not directly related to the supply of goods or services. However, such subsidy is merely nothing more than a specification that is possible in the interpretation of Article 13(2)4 of the former Enforcement Decree of the Act, or it is merely a specification based on the purport of Article 13(2)4 of the former Enforcement Decree of the Act, or it cannot be deemed as a modification or supplement of the rights and obligations of an individual, or a new provision that is not prescribed by the Act.

Therefore, the plaintiff's assertion that the above enforcement decree is invalid because it violates the principle of statutory reservation.

shall not be held.

2) Whether the instant subsidy is directly related to the supply of goods or services

The evidence mentioned above and the statements mentioned in Nos. 3 through 50 shall include the whole purport of the pleading.

In full view of the following circumstances, i.e., (i) the Plaintiff’s individual exhibition events: (i) the dateCC or the Government Department represents the Plaintiff as its organizer; and (ii) the Plaintiff led to the actual plan and operation of the individual exhibition events, the final authority to determine important matters, such as whether to hold the event and the details of the event, has been held byCC or the Government Department; (iii) the Plaintiff was not granted regular and comprehensive subsidies on exhibition programs, but granted subsidies for each individual exhibition project supervised by the Plaintiff; (iv) the Value-Added Tax Act was wholly amended by Act No. 11873 on June 7, 2013 and Article 48(10) of the Enforcement Decree of the former Enforcement Decree of the Act was enacted; and (v) the Plaintiff reported and paid value-added tax on subsidies received fromCC or the Government Department; and (v) the subsidies in this case cannot be deemed to have been paid in return for the provision of individual exhibition services to the Plaintiff, such as the selection and management of individual exhibition programs.

Therefore, it is reasonable to see that the subsidy of this case is included in the tax base, and it is different.

Now, the Plaintiff’s assertion on this part is without merit.

3. Conclusion

Thus, the plaintiff's claim is dismissed as there is no ground.