Whether the instant service constitutes a tax exemption

It is reasonable to view that the instant services provided by the Plaintiff during the taxable period of value-added tax from the first to the second half of 2011 constitutes the supply of human resources to nursing workers who are managed by the Plaintiff as an employer under the Civil Act for a certain period under a contract with the instant convalescent hospital.

Article 12 of the Value-Added Tax Act

Incheon District Court 2014Guhap2274 Disposition revoking Value-Added Tax Imposition

AA

BB Director of the Tax Office

February 26, 2016

Mar. 26, 2016

1. The plaintiff's claim is dismissed.

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

1. Details of disposition;

A. On April 25, 2007, the Plaintiff registered as a non-value-added tax-free business operator on the type of human resources supply business, and operated a placement office in the name of "CC" at 00 Dong-dong Seoul, Seongdong-gu, and sent nursing workers to a large number of convalescent hospitals (hereinafter referred to as "convalescent hospitals of this case") and received wages of the said nursing workers in the lump sum from the above convalescent hospitals (hereinafter referred to as "services services provided to the convalescent hospitals of this case").

B. On August 1, 2013, the Defendant did not constitute a job placement business, which is value-added tax-free business, for which the Plaintiff engaged in the nursing supply business during the taxable period from No. 1 to No. 2011.

Each disposition of this case was taken on the ground that it constitutes a value-added taxable business.

C. On October 23, 2013, the Plaintiff filed an objection with the Director of the Daejeon Regional Tax Office against each of the instant dispositions, but was dismissed on November 21, 2013. The Plaintiff filed a request for examination with the Commissioner of the National Tax Service on February 14, 2014, but was dismissed on May 12, 2014.

[Ground of recognition] The facts without dispute, Gap evidence Nos. 1 through 5 (including branch numbers in the case of additional numbers), Eul evidence No. 1 (including branch numbers), the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The plaintiff recruited nursing workers and introduced them to the hospital. Since 60,00 won (30,000 won for hospital side fee, 30,000 won for nursing and 30,000 won for nursing) and the amount excluding the amount of business income tax withheld for nursing workers, the plaintiff asserts that the service in this case constitutes a job placement business, which is not a taxable business, but a tax-free human resources supply business, and thus, the value-added tax should be exempted.

(b) Related statutes;

It is as shown in the attached Form.

C. Determination

1) Article 12(1)14 of the former Value-Added Tax Act provides that one of the objects eligible for value-added tax exemption refers to the supply of human services by writers, musicians or other persons prescribed by Presidential Decree for occupation. Article 35 subparag. 2(e) of the former Enforcement Decree of the Value-Added Tax Act provides that "job placement and other services provided by a person who operates a counseling center, etc. prescribed by Ordinance of the Ministry of Strategy and Finance as personal services under Article 12(1)14 of the former Enforcement Decree of the Value-Added Tax Act.

Meanwhile, Article 1(3) and (5) of the former Value-Added Tax Act and Article 2(3) of the former Enforcement Decree of the Value-Added Tax Act provide that the classification of the business that supplies services shall, in principle, be based on the Korean Standard Industrial Classification publicly notified by the Commissioner of the Statistics Korea. According to the Korean Standard Industrial Classification in the attached Form, the operation of a job placement office belongs to the employment placement business, which is the primary industrial activity to select, arrange, and place human resources on behalf of the employer or job seeker based on the information on jobs and job seekers. In this case, job seeker is not an employee of the employment placement business, and the job seeker is a human resources supply business that

separate category.

In full view of the above provisions, the body distinguishing between the job placement service provider who is a value-added tax-free business operator and the manpower supplier who is a tax-free business operator is whether these business operators are in the position of employer under the Civil Act.

2) In the instant case, the following circumstances can be acknowledged in full view of the purport of the entire pleadings in the descriptions of the health room, Gap evidence Nos. 7 through 11, Eul evidence Nos. 4, 5, and 6.

A) The Plaintiff recruited nursing workers by receiving a written consent to the application for membership (Evidence A9) from nursing workers, and entered into a supply contract (Evidence A7) with the instant convalescent hospital in the name of the Plaintiff.

When entering into a contract for the supply of nursing workers, the Plaintiff and the instant convalescent Hospital set forth that the hospital must work for nursing workers and adjust the number of hours to the Plaintiff, and the Plaintiff shall educate nursing workers, examine the body of nursing workers once a year, and notify the hospital to the patient. The Plaintiff shall endeavor to fulfill his responsibility for damages caused by the care worker’s intention or negligence, and the Plaintiff shall subscribe to a liability insurance policy and submit the insurance policy to the hospital to the hospital, and the Plaintiff shall be liable for the damages caused by the non-performance of the insurance policy.

In addition, in the written consent for the application for joining the membership system prepared between the plaintiff and the nursing service provider, the fact that the plaintiff can replace the nursing service provider if the nursing service provider causes the problem, the nursing service provider must wear the uniforms designated by the plaintiff, the nursing service provider must submit to the plaintiff a document evidencing the health condition once a year, and the nursing service provider must subscribe to the organization nursing liability insurance and pay the insurance premium.

B) The instant convalescent hospital received nursing fees (including the amount of withholding tax from the sick and wounded) from the patient and paid the Plaintiff. The Plaintiff delivered the account statement stating the full amount of nursing fees received from the instant convalescent hospital as the value of supply to the hospital. The Plaintiff paid to the nursing worker the remainder of the amount calculated by deducting the amount of withholding business income tax from the nursing fees received from the instant convalescent hospital (30,000 won for the hospital, the nursing worker, and 30,000 won) and the business income tax for the nursing worker.

C) In 2011, the Plaintiff delivered to the hospital an account statement of approximately KRW 8.3 million, including the total value of the supply for the nursing fees (including the amount of the nursing fees that were subsequently deducted from the sick and wounded) received from the instant convalescent hospital. At the time of filing the global income tax return, the Plaintiff filed a return on the amount of money equivalent to approximately KRW 7.8 billion paid to the nursing personnel as necessary expenses, and withheld business income tax of approximately KRW 23.47 million from the nursing personnel.

3) In light of the aforementioned legal principles, it is reasonable to deem that the instant services provided during the period of value-added tax period from the first to second period of the year 2011 constituted human resources supply services for which the nursing personnel managed by the Plaintiff as an employer under the Civil Act are supplied to the convalescent hospital for a given period according to a contract with the instant convalescent hospital. Therefore, each of the instant dispositions is lawful.

3. Conclusion

Therefore, the plaintiff's claim is dismissed as it is without merit. It is so decided as per Disposition.

(c)