National Tax Service Review Division 2012-0069 (Law No. 17, 2012)

The subject of the interest and loss of the instant restaurant shall be deemed not the hospital but the Plaintiff.

In light of the detailed contents on the operation of the restaurant in this case, and the statement of the relevant person at the time of the tax investigation, as well as the objective facts such as the withdrawal of the Plaintiff’s account, it is reasonable to deem that the hospital had the appearance as long as it seems that it directly manages the restaurant in this case, but it was actually operated by the Plaintiff.

Article 14 of the Framework Act on National Taxes

2012 disposition of revocation of imposition of value-added tax

The United States of America

The Director of Budget Office

May 22, 2013

June 28, 2013

1. All of the plaintiff's claims are dismissed.

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

The imposition of value-added tax by the Defendant on April 6, 2012 on the first term of 2007, 000 won for the second term of 2007, 0000 won for the second term of 2007, 000 won for the first term of 2008, 0000 won for the second term of 2008, 0000 for the first term of 2009, 000 for the second term of 2009, and 000 won for the second term of 2009, and 000 won for the second term of 2010.

1. Details of the disposition;

A. The Plaintiff invested a total of KRW 000 in the process of the new construction and operation of the budget OO hospital located in the budget Eup 000 in the budget Cheongnam-do (hereinafter “the instant hospital”), and entered into a contract with the head of the instant hospital YB on September 16, 2006 and a contract for the operation of the restaurant on August 21, 2009.

B. On August 201, the Director of the Daejeon Regional Tax Office determined that the Plaintiff was not the hospital, but the actual business owner of the instant hospital, and notified the Defendant of the result of the investigation. The Director of the Daejeon Regional Tax Office determined that the Plaintiff was the actual business owner of the instant hospital, and that the Plaintiff was the actual business owner of the instant hospital during the period from February 2007 to August 201.

C. Accordingly, the Defendant imposed value-added tax on the Plaintiff on April 6, 2012, on the Plaintiff, on the first half of 2007, on the second half of 2007, on the second half of 2007, on the first half of 2008, on the first half of 2008, on the second half of 2008, on the first half of 2009, on the second half of 2009, on the second half of 2000, and on the second half of 2000 for the second half of 2010 (hereinafter “instant disposition”).

D. The Plaintiff dissatisfied with the instant disposition and filed a request for examination with the Commissioner of the National Tax Service on May 16, 2012, and was dismissed on August 17, 2012.

[Based on Recognition] The non-contentious facts, Gap evidence 1 to 8, Gap evidence 2, 3, and 5, and the purport of the whole pleadings

2. Whether the disposition of this case is unlawful

A. The plaintiff's assertion

In the hospital, the employees directly employed the instant restaurant employees, and the employees were under the control of the hospital’s administration, and the employees’ benefits and insurance money were paid from the hospital. In addition, the operation of the instant restaurant was practically paid to the hospital by the hospital, such as the cost of materials in the instant restaurant was also paid to the hospital. The Plaintiff invested the new construction cost of the hospital and the relevant investment lease deposit was made in the form of a lease deposit, and the Plaintiff did not actually operate the instant restaurant in an independent position. Accordingly, the instant disposition was unlawful on the premise that the Plaintiff is the actual business operator of the instant restaurant.

B. Relevant statutes

Attached Table 1 shall be as stated in the relevant statutes.

C. Facts of recognition

1) The major contents of the contract concluded on September 19, 2006 by the Plaintiff’s wife KimCC and the head of the instant hospital and the head of the instant hospital are as stated in the attached Form 2 of the exclusive restaurant operation agreement.

2) The main contents of the business contract and performance note prepared by the Plaintiff’s wife KimCC, KimD, and EE on May 1, 2007 are as shown in the attached business contract and performance note (1).

3) On May 8, 2007, KimD made a power of attorney to delegate the affairs pertaining to the operation of the instant restaurant to the Plaintiff.

4) The main contents of the business contract and performance note prepared by the Plaintiff’s wife KimCC, KimD, and EE on August 18, 2009 are as shown in the attached business contract and performance note (2).

5) On August 21, 2009, the Plaintiff and the head of the instant hospital and the head of the instant hospital established a contract for the entrusted operation of the restaurant, and most of the contents are the same as the contents of the contract for the entrusted operation of the restaurant, signed on September 19, 2006, and the main contents of the monthly are as the same as the contents of the contract for the entrusted operation of the restaurant.

6) From January 2, 2007 to December 28, 2010, the total amount of KRW 393,000 has been transferred from the bank and the Agricultural Cooperative account under the Plaintiff’s name to the 393rd time from January 2, 2007 to December 28, 2010, and most of them were confirmed as food materials, monthly salary management expenses, etc. related to the instant restaurant.

7) On August 31, 2010, the Plaintiff and EE stipulate that the receipt received from the side of the instant hospital, and that the Plaintiff and E shall receive KRW 000 as a return of the deposit for rental in the premises of the instant hospital.

8) On November 9, 2010, the Plaintiff’s statement of receipt and confirmation prepared on the side of the instant hospital, and the statement that “the receipts and confirmation,” written from the beginning date of the instant hospital’s business to the end of August 2010, the remainder of KRW 000 shall be received on November 2010, and all of them shall be settled and completed, and no legal person thereafter raises objection.”

9) The Plaintiff’s wife ○○, a joint business proprietor, was the Plaintiff’s wife KimCC, and the Plaintiff’s exclusive business operator agreement, business license agreement, and performance note were merely borrowed from the Plaintiff’s wife KimCC, but actually, the Plaintiff performed all of the Plaintiff, and the reason why the instant restaurant was treated as being directly operated by the hospital in appearance was that the insurance amount was higher, and that the hospital was found to have been directly operated by the hospital, etc. externally from the hospital to the Plaintiff, etc., as the insurance amount was set higher.

10) The chief of the general affairs division of the instant hospital stated that "," while employed by the employees of the instant restaurant, the head of the general affairs division of the instant hospital externally proceeded with the procedures on the side of the hospital, employed with the prior consent of the Plaintiff, and paid wages, etc., the Plaintiff was employed as a person in charge of the instant restaurant, and the Plaintiff’s wife Nonparty KimO participated in the operation of the restaurant on behalf of the Plaintiff, such as the management of employees, but the Plaintiff did not state the cooking as the beneficiary of the benefits, and the hospital did not pay the benefits for the kitchen."

11) The planning directorO of the instant hospital borrowed funds from the Plaintiff first, and the financial situation at the time was not good, making it difficult for the Plaintiff to pay interest, and the Plaintiff’s experience in the operation of the restaurant was in charge of the operation of the restaurant and the profits accrued therefrom, and the purchase of food materials other than the food materials supplied by the restaurant equipment, the main consumable, and the enterprise selected by the hospital was in charge of the operation of the restaurant, and the purchase of food materials other than the food materials supplied by the restaurant equipment, the main consumable, and the reasons for directly treating the instant restaurant directly was that the number of patients was increased.

12) Unlike the instant restaurant, the retail stores, funeral parlors, etc. within the instant hospital are registered separately.

13) Meanwhile, the contents of the agreement prepared on January 19, 2007 by the president of the instant hospital and the Plaintiff’s wife KimCC are as shown in the attached agreement 3.

[Based on Recognition] The non-contentious facts, Gap evidence 4, Eul evidence 2 to 10, and the purport of the whole pleadings

D. Determination

1) Comprehensively taking into account the above facts and evidence, the following circumstances, i.e., the entire operation agreement, and the details of the operation of the restaurant stated in the entrusted operation agreement, i.e., the actual operation of the restaurant, as stated in the report on tax investigation by O, O, and dedicatedO, and there is no ground to deem that some of the contractor’s name is in the name of the Plaintiff’s account instead of the Plaintiff, and there is no reason to believe that the above contract was falsely prepared. (ii) The hospital’s employees were not in the sales of the restaurant of this case under direct contract with the Plaintiff, and that the number of patients who were not in charge of the hospital’s health insurance premiums, etc. were in charge of the Plaintiff’s operation of the restaurant, and that the hospital’s employees were not in charge of the Plaintiff’s operation of the hospital, and that the hospital’s employees were not in charge of the Plaintiff’s operation of the restaurant, and that the hospital’s employees were not in charge of the Plaintiff’s profits or losses.

2) Meanwhile, the evidence as shown in the Plaintiff’s argument is evidence, including the statement of the agreement (No. 4) dated January 19, 2007, witnessO, OO, and OOO testimony. However, considering that the expenditure of employees’ monthly salary, food materials, etc. from the account in the Plaintiff’s name continues to exist, the content on the direct management of the hospital of the instant restaurant under the above agreement does not coincide with objective facts. ② In addition, even though there is no obvious change after the tax investigation, the witnessO, OO, and OO made a testimony contrary to the stated in the initial tax investigation, and the content of the testimony also conforms with the entry details of the Plaintiff’s account in the name of the Plaintiff at the time of the tax investigation, and consistent with the entry in the restaurant operation agreement, the consignment operation agreement, the business agreement, and the implementation note, etc., and it is consistent with the interests of the restaurant in the instant case, while it is consistent with the Plaintiff’s assertion that the witness’s testimony was not consistent or consistent with the objective evidence of the Plaintiff’s assertion.

3. Conclusion

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