Seoul Administrative Court 2013Guhap21816 (O1, 2014)

Service World Business is subject to value-added tax, and additional tax for unfaithful payment is a legitimate party.

Operating fees received from the other party to the transaction by the plaintiff who operates a serviced word wor business is subject to value-added tax, and disposition for imposing additional tax on non-paid tax is legitimate.

2014Nu45767 Disposition to revoke the imposition of value-added tax.

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Head of the tax office;

Seoul Administrative Court Decision 2013Guhap21816 decided October 11, 2014

July 10, 2014

July 24, 2014

1. The part against the defendant in the judgment of the first instance shall be revoked;

2. The plaintiff's claim as to the above cancellation part is dismissed.

3. All costs of the lawsuit shall be borne by the Plaintiff.

1. Purport of claim

On February 1, 2013, the Defendant’s imposition of the value-added tax for the second year of value-added tax for the Plaintiff, for the second year of 2007, for the first year of value-added tax for the first year of 2008, for the second year of 2008, for the second year of value-added tax for the second year of 2008, for the first year of 2009, is revoked (the Plaintiff corrected the date of such disposition in the appellate court).

2. Purport of appeal

The same shall apply to the order.

1. The part of a judgment of the first instance;

The reasoning of this court's decision is as follows: "1. The details of the disposition in this case are as follows: (a) the legitimacy of the disposition in this case; (b) the summary of the plaintiff's assertion; (c) the relevant laws and regulations; (i) judgment; (iii) the principal value-added tax portion; and (vi) the part of the principal tax of the value-added tax, among the grounds of the judgment of the court of first instance, "Evidence Nos. 1, 2, 3, 5" and "Evidence Nos. 1, 2, 3, 5, and 6 (including additional numbers)" are the same as the corresponding parts of the judgment of the court of first instance (including additional numbers), and thus, it is consistent with Article 8 (2) of the Administrative Litigation Act; and the main sentence of Article 420 of the Civil Procedure Act.

2. Determination on the additional tax amount for insincereful payment

A. Relevant legal principles

Under the tax law, penalty taxes are administrative sanctions imposed, as prescribed by individual tax law, in cases where a taxpayer violates various duties, such as a return and payment of taxes, without justifiable grounds, in order to facilitate the exercise of the right to impose taxes and the realization of a tax claim (see, e.g., Supreme Court Decision 2013Du17633, May 16, 2014). Moreover, the taxpayer’s intentional and negligent acts do not constitute justifiable grounds for not causing the breach of his/her duty (see, e.g., Supreme Court Decision 2013Du17633, May 16, 2014). Furthermore, justifiable grounds constituting grounds for preventing the imposition of penalty taxes are deemed grounds for exemption of penalty taxes, and it is reasonable to deem that the taxpayer is responsible for proving that there exists justifiable grounds (see, e.g., Supreme Court Decision 2012Du2

B. Determination

In full view of the facts cited earlier and evidence as well as the overall purport of the statements and arguments set forth in subparagraphs 3 through 6 and the following circumstances revealed in light of the above legal principles, it is insufficient to conclude that the evidence submitted by the Plaintiff and the assertion alone have justifiable grounds for not neglecting the duty to pay the value-added tax of this case, and there is no other evidence to acknowledge this otherwise. Ultimately, the Plaintiff’s assertion on this part is not acceptable (On the other hand, with respect to the amount equivalent to the value-added tax out of the fees paid to the seller of the building of this case, including the Plaintiff, on the basis of the fact that the tax authority excluded the Z from deductible expenses and imposed the Z from deductible expenses and all the imposition of corporate tax and additional tax thereon are legitimate (Supreme Court Decision 2013Du1225 Decided June 13, 2013).

(1) According to Article 5 of the Asset Management Delegation Agreement between the Plaintiff and the Z, the Z agreed to pay the Plaintiff operating fees equivalent to 7.5% per annum, including the value-added tax, on the premise that the Z is subject to taxation. Article 4(5) provides that the Plaintiff, its lineal ascendants and descendants, and their spouses may use the Z's "air-type guest rooms and ancillary welfare facilities" within a certain number of annual days through the Plaintiff's application, not within the Plaintiff's own ownership, but within a certain period of time. Therefore, it is determined that the Plaintiff could have known that the Z's business was the accommodation business.

(2) The Korean Standard Industrial Classification publicly notified by the Commissioner of the Statistics Korea differs from the imposition of value-added tax, and the imposition of value-added tax shall be made by deeming the service string business as the lodging business on August 7, 2007, which was prior to the taxable period subject to the instant disposition by the National Tax Service, and the same shall be applied from October 1, 2007, and the Defendant’s failure to actively induce the Plaintiff to report and pay value-added tax on the Plaintiff or Z holding that the violation of the Plaintiff’s duty is naturally justified.

(3) Criminal cases such as violation of the Public Health Control Act with respect to Z were indicted on July 31, 2007, and the Plaintiff had already been in the position of knowing that the lease of the instant building constitutes a lodging business around 2007 and constitutes a subject of the return and payment of value-added tax.

(4) Business registration is merely an application made by a taxpayer to run a business, and the head of a tax office only issues business registration upon application for business management and does not determine specific business contents and the type under the tax law, and thus, it is difficult to regard the issuance of business registration as a public opinion list of any administrative agency (see Supreme Court Decision 2007Du23255, Jun. 12, 2008).

(5) In addition, on the ground that the taxation authority imposed the comprehensive real estate tax or the property tax on the instant building on the Plaintiff’s future, it cannot be deemed that the tax authority granted the Plaintiff trust that the Plaintiff would still not impose the value-added tax even after October 1, 2007, stating the taxation policy of the value-added tax, by the special words and actions beyond a simple omission of taxation, on the sole basis of the fact that the said

(6) Although the Plaintiff was aware of the lease of the part of the instant building that was sold from the Z as a house lease, it can be said that it constitutes mistake or misunderstanding of the facts based on the interpretation of the Plaintiff’s oil, and it is not recognized that only the Plaintiff was registered as a duty-free entrepreneur from among those who purchase part of the instant building from the Z, and as long as only the Plaintiff registered as a duty-free entrepreneur and paid the business income faithfully, the Plaintiff’s assertion that this part of the penalty tax should be exempted against the Plaintiff, as there is a difference between the other buyers of the instant building and the other buyers of the instant building.)

(7) Furthermore, from the standpoint of the Plaintiff or Z, there is room to view that the type of the instant building project is reported as the leased business of a residential building in order to benefit from tax exemption, and that the Plaintiff or Z did not receive tax invoices differently from the terms of the entrustment contract for the management of living Fin Asset

3. Conclusion

Therefore, the plaintiff's claim of this case seeking the revocation of the disposition of this case shall be dismissed in all of the grounds. Since the judgment of the court of first instance is unfair with some conclusion, the part against the defendant in the judgment of the court of first instance which accepted the defendant's appeal and dismissed the plaintiff's claim as to the revocation part, it is so decided as per Disposition.