Cho Jae-2013-west-4908 (Law No. 12, 2014)

In addition, the use amount of discount coupons issued by the operator of an open market Internet shopping mall shall be deemed to constitute "the amount of discount coupons excluded from the value-added tax base."

In addition, the use of discount coupons issued by the operator of the Open Market Internet shopping mall meets the requirements of "a certain amount of money to be directly deducted from the supply price of trade" and "a certain amount of money to be determined in accordance with its quality, quantity, and other terms and conditions of supply".

Article 13 of the Value-Added Tax Act

2013Guhap63216 Disposition rejecting the rectification of value-added tax

AAA, Inc.

BB Director of the Tax Office

September 18, 2015

December 4, 2015

1. On August 26, 2013, the Defendant’s refusal of a request for reduction or correction of the value-added tax for the first period of value-added tax for the year 2010, 000 won for the second period of value-added tax for the year 2010, 000 won for the first period of value-added tax for the year 201, 200 won for the second period of value-added tax for the year 201, 000 won for the first year of the value-added tax for the year 2012, and 00 won for the second year of the value-added tax for the second year

2. The costs of the lawsuit are assessed against the defendant.

Cheong-gu Office

The same shall apply to the order.

1. Details of the disposition;

A. The Plaintiff is an operator of AAA, an open market-type Internet shopping mall. The Plaintiff has provided various services necessary for transactions, such as registration, search, order, settlement, settlement, payment deposit, delivery tracking, order cancellation, refund, and documentary evidence issuance, so that a seller who has joined the open market as a member and an unspecified number of buyers can trade goods and services in the AA system, and received sales commission calculated by the seller according to the terms and conditions of the Plaintiff’s terms and conditions.

B. In order to increase the sales of the seller and the Plaintiff, the Plaintiff implemented the “CR oophone” system in AA. This was a method of discounting the sales price of the product in question when using the oophone when it provides a certain amount of discount oophone to the buyer who purchased at least a certain number of times or amount at AA to the buyer who purchased the product that the buyer wants.

C. The Plaintiff reported and paid value-added tax on sales commission for the first to second period from 2010 (hereinafter referred to as the “instant taxable period”) based on the sales commission that the Plaintiff was entitled to receive from the seller as the amount of the discount (hereinafter referred to as “the instant deductible amount”), and the sales commission calculated based on the pre-sale price, which was the value-added tax base for the sales commission for the first period from 2010 to 2012 (hereinafter referred to as “instant taxable period”).

D. On July 25, 2013, the Plaintiff filed a request for correction of reduction of the amount of the value-added tax for KRW 000 out of the value-added tax for the first year of 2010, KRW 00 among the value-added tax for the second year of 201, KRW 00 among the value-added tax for the second year of 201, KRW 000 among the value-added tax for the second year of 201, KRW 00 among the value-added tax for the second year of 201, KRW 00 among the value-added tax for the first year of 201, and KRW 00 among the value-added tax for the first year of 2012, and KRW 00 among the value-added tax for the second period of 20.

E. On August 26, 2013, the Defendant notified the Plaintiff of the refusal of the request for the above reduction (hereinafter referred to as “instant refusal disposition”).

2. Whether the rejection disposition of this case is legitimate

A. Grounds for the rejection disposition of this case asserted by the defendant

“The Plaintiff’s accounting of the instant deduction amount as sales promotion cost, the Plaintiff’s method of reporting and paying value-added tax, and the Plaintiff’s receipt of input tax deduction from sales commission before discount. Considering that the Plaintiff’s sales commission agreed between the seller and the seller at the time of registration of goods, the Plaintiff’s agreed amount as sales commission is the tax base for value-added tax on sales commission. In addition, the instant deduction amount is irrelevant to the sales service provided by the Plaintiff, ② the amount of the instant deduction is not determined in accordance with the quality of the above sales service and the terms and conditions of the settlement of sales commission and other supply, ③ CRMphone is a kind of bond issued by the Plaintiff to the buyer, and the sales commission is deemed as being succeeded to the Plaintiff’s claim against the buyer at the time of purchase of the goods, and thus, it cannot be deemed that the instant deduction amount is directly deducted from sales commission, and ④ there is no prior agreement between the Plaintiff and the seller that the sales commission is changed, and the Plaintiff’s claim for correction is merely a voluntary abandonment of the sales commission amount.”

B. Relevant statutes

- The former Value-Added Tax Act (Amended by Act No. 11873, Jun. 7, 2013)

Article 13 (Tax Base)

① 재화 또는 용역의 공급에 대한 부가가치세의 과세표준은 다음 각 호의 가액(價��)을 합한 금액(이하 공급가액 이라 한다)으로 한다. 다만, 부가가치세는 포함하지 아니한다.

1. Where payments are given in money: The payments;

(2) The following amounts shall not be included in the tax base:

1. The amount of discount;

③ 재화 또는 용역을 공급한 후의 그 공급가액에 대한 대손금(������)・장려금(������)과 이와 유사한 금액은 과세표준에서 공제하지 아니한다.

- The former Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 24638, Jun. 28, 2013)

Article 52 (Scope of Unreasonable Consideration and Earries, etc.)

(2) The amount of discount prescribed in Article 13 (2) 1 of the Act shall be the amount which deducts a specified amount from the ordinary supply value at the time of the supply of goods or services in accordance with the terms and conditions of the quality, quantity, settlement of delivery and price, and other supply.

- The former Framework Act on National Taxes (Amended by Act No. 12848, Dec. 23, 2014)

Article 45-2 (Request for Correction, etc.)

(1) In any of the following cases, a person who has filed a return on a tax base by the statutory due date of return may request the head of the competent tax office within three years after the statutory due date of return elapses to determine or correct the tax base and amount of the national tax for which the initial return and revised return have been filed: Provided, That with respect to the increased tax base and amount of tax due to a determination or correction, a request for correction may be made within 90 days (limited to within three years after the statutory due date of return expires) from the date he/

1. Where the tax base and amount of tax on a return of tax base (referring to the tax base and amount of tax after determination or correction is made, if such determination or correction is made pursuant to the tax-related Acts), exceed those to be reported under the tax-related Acts;

(c) Fact of recognition;

1) The main contents of the terms and conditions of the Plaintiff’s terms and conditions previously amended by April 15, 2010 are as follows.

The terms and conditions of this contract are the basic agreements between the plaintiff and the seller on open market service contracts. The plaintiff may, if necessary, determine and publicly notify the matters to be applied to specific services (hereinafter referred to as "individual terms and conditions") in advance. When the seller consents to such individual terms and conditions and uses specific services, the individual terms and conditions are preferentially applied, and these terms and conditions have complementary effects (Article 1).

○ In the case of notification to a large number of unspecified sellers, the Plaintiff may place it on the Plaintiff’s bulletin board or open market sellers in lieu of individual notification (Article 10).

○ Seller shall be deemed to have consented to all systems (e.g., ‘blolographer’ on tables) implemented by the Plaintiff for the purpose of marketing and increase in sales in the management of information on goods unless special objection is raised (Article 16).

The selling price of the ○○ product shall be determined by the seller. The sales commission of the product shall be determined by the Plaintiff and shall be appropriately indicated at the time of registering the product so that the seller can know it. The fees imposed by the Plaintiff shall be classified into registration fees, fee-charging services fees, sales commission and other service fees as advertising effects of the product and open market system usage fees provided by the Plaintiff. The details of each service and service fee shall be separately posted on the service screen concerned. The sales commission shall be imposed on the seller in the amount equal to the quantity of the product sold as determined on the basis of each product category, and the sales commission shall be deducted at the time

The settlement of sales proceeds refers to the amount that the plaintiff is obligated to pay to the seller. The subject amount shall be calculated by subtracting the sum, etc. of all commissions determined pursuant to the provisions of Article 17 from the aggregate of the amounts carried forward of the preceding settlement and the persons eligible for the payment determined

2) On April 15, 2010, the main contents of the amended terms and conditions of the seller are as follows (in the following:

Matters not mentioned separately shall be the same as the contents of the seller's terms and conditions before the above amendment.

○○ means the target, method, time limit and limitations of the use as cyber or off-line coophones that can receive a discount on the amount or percentage of goods marked at the time of purchase of goods: Provided, That the type and content of the discount coophones may vary according to the company policy (Article 3).

The selling price of the goods shall be determined by the seller. However, where a discount coupon is used, the selling price shall be deemed to be based on the amount obtained by subtracting the discount coupon. (1) The Plaintiff may issue and apply a discount coupon in consultation with the seller and where the buyer uses it (excluding where the seller discountss the selling price without consultation with the Plaintiff).

The settlement of sales proceeds refers to the procedure or result that the Plaintiff is liable to pay to the seller (Article 24).

The terms and conditions of this Agreement shall enter into force on October 0, 2010 (Article 1 of the Addenda).

3) If the buyer purchases the goods in AA and uses the CRM coophones, the buyer’s fixed purchase price is discounted as the discounted amount, and the buyer pays the discounted amount. In the course of the transaction of the goods, the seller can confirm whether the CR coophones were applied to an individual transaction for his or her goods through confirmation of the progress of the sale.

4) The “the screen for the settlement management service of the seller”, applied in the instant taxable period, is posted to determine the settlement amount to be paid to the seller after receiving the sales commission calculated by deducting the sales commission from the discounted discount amount in lieu of the sales commission at the time of discount.

5) In the instant taxable period, the Plaintiff possesses only the remainder of sales commission calculated on the basis of the pre-sale price at a discount, out of the sales commission received from a purchaser for the goods covered by CRMphones, as sales commission, and the remainder has been paid to the seller. As a result, the seller received the settlement of the same amount of sales commission from the Plaintiff, regardless of whether the CRphone is applied or not.

6) Meanwhile, on April 15, 2009, the Plaintiff asked the National Tax Service on whether the deduction amount was included in the value-added tax base on the seller’s sales price and the Plaintiff’s sales commission. On September 29, 2009, the Commissioner of the National Tax Service responded that such discount amount is included in the tax base as the seller’s sales price and the sales commission of the Internet shopping mall operator.

D. Determination

1) The former Value-Added Tax Act (wholly amended by Act No. 11873, Jun. 7, 2013; hereinafter the same shall apply)

C) Article 13(2) of the former Enforcement Decree of the Value-Added Tax Act provides that "the following amounts shall not be included in the tax base." Article 52(2) of the former Enforcement Decree provides that "The overcharge amount under Article 13(2)1 of the former Enforcement Decree of the Value-Added Tax Act shall be the amount directly deducted from the ordinary supply value at the time of supply of goods or services in accordance with the quality, quantity, payment of the cost of delivery and supply, and other terms and conditions of supply." The legislative intent of the above provision is to exclude the amount deducted or deducted from the supply value due to the conditions of supply, such as quality, quantity, delivery, etc. of goods or services, from the tax base of value-added tax (see, e.g., Supreme Court Decision 2011Du8178, Apr. 11, 2013). In light of the text and purport of the relevant provision, if the amount of overcharge amount under Article 13(2)1 of the former Enforcement Decree of the Value-Added Tax Act is determined to be deemed as the tax base.

On the other hand, Article 13(3) of the former Value-Added Tax Act provides that "the bad debts, incentives, and other similar amounts for the value of supply after the supply of goods or services shall not be deducted from the tax base, regardless of the title, if the company pays the incentives, etc. after the transaction is made in cash, it shall not be deducted from the tax base of value-added tax. In other words, the sales unit costs incurred by the company in relation to the sale according to the transaction terms and conditions may constitute a discount, and may constitute an amount similar to the incentives, etc., but in relation to the imposition of value-added tax, only the amount directly deducted from the sales can be excluded from the value-added tax base

2) Considering the following circumstances that can be seen by adding the aforementioned facts and the purport of the entire arguments as seen earlier, the deductible amount of the Plaintiff’s open market service contract between the Plaintiff and the seller should be deemed as the amount directly deducted from the sales commission, which is the Plaintiff’s price for the provision of the above services, as the Plaintiff’s conditions for the provision of services, such as the purchase and sale of goods using the CRM mobile phone, have been fulfilled upon the Plaintiff’s issuance of the CRM mobile phone to the buyer, and the Plaintiff’s provision of services necessary for the said transaction have been fulfilled.

A) If a seller joins as a member, the Plaintiff provided the seller with education on the Plaintiff’s open market services. In this case, the Plaintiff appears to have explained to the seller about the discount system in AA, such as joint professionalization discount coupons (as well as goods discount coupons), seller discount coupons, and CRM coupons, and the settlement of sales proceeds therefrom.

B) The agreement between the Plaintiff and the seller is concluded in the form of agreement between the seller of the terms and conditions established by the Plaintiff and the seller. In the event that the Plaintiff and the seller have made an individual agreement contrary to such agreement, the individual agreement takes precedence over the terms and conditions established by the Plaintiff. Furthermore, if there is no or insufficient entry of the agreement between the seller and the seller, the intent of the Plaintiff and the seller should be inferred based on the actual transaction form between the Plaintiff and the seller. However, in light of the transaction practices between the Plaintiff and the seller with respect to the transaction subject to the application of the CRM mobilephone, the seller is frequently implementing the Plaintiff’s sales promotion system, such as the explanation at the time of membership, the notice in the AA system, the settlement process, etc., and the amount discounted from the sales commission to the extent that the deduction was made, and as a result, there seems to have been no difference between the Plaintiff and the seller before and after the amendment of the terms and conditions, the Plaintiff would have agreed to the payment of the sales amount to the seller before and after the amendment of the terms and conditions.

C) Meanwhile, even if the Plaintiff accounts for the instant taxable period as sales promotion cost, and the seller reported and paid the value-added tax as seen earlier, and the seller received the input tax deduction based on sales commission calculated on the sales price before discount even in the transaction to which the CTRphone was applied during the instant taxable period, it cannot be presumed that there was an implied agreement between the Plaintiff and the seller to use the sales commission calculated on the basis of the sales price before discount as the tax base for the transaction to which the CTRphone is applied. This is because the Plaintiff’s return and payment of value-added tax and accounting are based on the administrative guidance of the National Tax Service, which had different opinion from the Plaintiff, around September 2009, as seen earlier, by the increase in the amount of the input tax deduction from the Plaintiff, it seems that there was no objection to the receipt of the sales tax invoice on the sales commission calculated on the basis of the sales price before discount from the Plaintiff.

D) In addition, the Defendant’s taxation argument appears to be premised on the premise that the selling price of the goods is prior to the discount. In light of transaction practices in the case of application of CRphones, the buyer and the intent of the seller, etc., the selling price of the goods shall be deemed to be the discounted price equivalent to the discounted price. This provision, as amended on April 15, 2010, concluded that the Plaintiff’s terms and conditions of the Plaintiff’s seller as amended on April 15, 2010, the selling price of the goods, etc. shall be deemed to be the basis for the deduction of discountphones.”

E) In addition, the Defendant’s taxation argument also establishes a claim amounting to the Plaintiff in the event that the CR coophone is provided to a buyer, and the buyer pays part of the sales price of the goods, etc. to the seller by the method of transferring such claim, and the Plaintiff’s deduction from the sales commission amount equivalent to the CR coophone amount is a seller’s passive claim, which offsets the seller’s claim against its sales commission by its automatic claim. Therefore, the instant deduction amount cannot be considered as the amount directly deducted from the proceeds of ordinary sales. However, this is an excessive legal agenda in light of the structure and substance of the transaction, such as the goods to which the CR coophone applies, and the structure and substance of the transaction, the Plaintiff, the buyer, and the seller’s intent, and the form of legal act related to the said transaction. Therefore, it is difficult to view that the Plaintiff may reconconsting the transaction, like the Defendant

3) Therefore, the value-added tax for the taxable period of this case for which the Plaintiff reported and paid sales commission, including the amount of deduction in this case, constitutes “where the tax base and tax amount entered in the return of tax base exceeds the tax base and tax amount to be reported under the tax law” pursuant to Article 45-2(1)1 of the former Framework Act on National Taxes (amended by Act No. 12848, Dec. 23, 2014) and thus becomes subject to correction. Nevertheless, the Defendant refused the Plaintiff’s request for correction of reduction, deeming the amount of deduction in this case to be included in the value-added tax base for the taxable

3. Conclusion

Therefore, the plaintiff's claim of this case is reasonable, and it is so decided as per Disposition.