National Tax Service Review Division 2010-0154 ( October 12, 2010)

The imposition of additional tax on unregistered real estate rental business is legitimate.

Where a person who has previously operated another business starts a real estate rental business in a new area, he/she shall register the real estate with the head of the competent district tax office having jurisdiction over the place of business within 20 days from the date on which the business commences, and if he/she violates this, he/she shall impose an unregistered penalty tax and an unregistered

Article 22 of the Value-Added Tax Act

Article 47-2 (1) of the Framework Act on National Taxes

2010Guhap4560 Revocation of Disposition of Imposition of Value-Added Tax

△△ Development Co., Ltd.

○○ Head of tax office

April 29, 2011

June 1, 2011

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

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

The Defendant’s imposition of value-added tax on June 1, 2010, 892,180 won, 1,959,270 won (unregistered additional tax, 1,182,156 won, 77,122 won), and 3,571,480 won (unregistered additional tax, 1,439,996 won, 2,131,484 won, 2,484 won) for the second term portion of 2009, respectively, shall be revoked.

1. Details of the disposition;

A. On November 29, 2005, the Plaintiff was established for the purpose of housing construction project, new construction and sale of housing and commercial buildings, real estate lease, management and sale business, etc., and the head office was changed from 106 to 1808, 2007, which is the location of the head office, from 106 to 141-12, 207, at the time of the establishment of the head office.

B. Around January 24, 2007, the Plaintiff Company acquired land 260-8, Daegu Northern-dong 260-8, and constructed the first class neighborhood living facilities on the above land (hereinafter “instant building”). On June 13, 2008, the Plaintiff Company obtained approval for the use of the above building on June 13, 2008 and completed registration for the preservation of ownership on June 30, 2008. However, the Plaintiff Company leased part of the unsold stores since October 2008.

D. On June 1, 2010, the Defendant imposed each value-added tax on the Plaintiff Company pursuant to Article 22 of the former Value-Added Tax Act (amended by Act No. 9268 of Dec. 26, 2008; hereinafter referred to as the “former Value-Added Tax Act”) and Article 47-2(1) of the former Framework Act on National Taxes (amended by Act No. 9911 of Jan. 1, 2010; hereinafter referred to as the “former Framework Act on National Taxes”) on the grounds that the Plaintiff Company did not report and pay the value-added tax without registering its place of business, even if it commenced the real estate leasing business by having its place of business as the place of business (hereinafter referred to as the “each of the instant dispositions”).

[Ground of recognition] Facts without dispute, Gap evidence 1, 3, and 4-1, 2, 3, and 5-1, 4-2, and the purport of the whole pleadings

2. The assertion and judgment

A. The plaintiff's assertion is as follows.

① The Plaintiff Company newly constructed the instant building for sale in lots, but temporarily leased some stores due to unsold housing units. As such, the instant building business should be deemed not real estate rental business but real estate sales business. ② The Plaintiff Company registered its business place with the head office of the competent district tax office, the head office of the competent district tax office, and reported and paid taxes on rental income. Therefore, each of the instant dispositions is unlawful.

(b) Related statutes;

Attachment 'Related Acts and subordinate statutes' shall be as shown.

C. Determination

(1) According to Articles 4(1), 4(2), and 5(1) of the former Value-Added Tax Act, and Article 4(1)3 and 4(1)4 of the former Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 21304, Feb. 5, 2009), value-added tax shall, in principle, be reported and paid at each workplace. However, where there are more than one workplace, the head of the competent district tax office having jurisdiction over the principal workplace, he/she may make an overall payment at the principal workplace. In addition, a person who is not a business unit taxable business shall register with the head of the competent district tax office within 20 days from the date of commencing business at each workplace, and the location on the register of real estate

Therefore, in principle, where a person who had previously operated another business starts a real estate rental business in a new area, he/she shall register the real estate with the head of the competent district tax office having jurisdiction over the place of business within 20 days from the date of commencing the business, and where there are no special circumstances such as obtaining approval of the general payment by the head of the competent district tax office having jurisdiction over the principal place of business, he/she shall report and pay the value-added tax for each place of business. If he/she violates each of the above obligations, he/she shall pay the penalty tax for failing registration under Article 22(1)1 of the former Value-Adde

(2) The plaintiff's above 2. A. (1) Judgment on the claim

As seen earlier, the lease by the Plaintiff Company for the purpose of leasing the store of the instant building to another person constitutes a real estate leasing business, and the construction of a building for the purpose of selling the building is merely a reason leading to the lease. Therefore, the above assertion is without merit.

(3) Judgment on the plaintiff 2.b.2

위 인정사실 및 갑 제2, 8호증의 각 기재에 변론 전체의 취지를 종합하면, 원고 회사가 2007. 12. 7. 용인세무서장에게 본점소재지인 BB시 CC구 EE동 141-12 2층을 사업장 소재지로 하여 주택신축판매, 임대, 건물신축판매업의 사업자등록을 하였을 뿐이고, 이 사건 건물을 임대하기 시작한 2008. 10.부터 20일이 경과할 때까지 관할세무서장인 피고에게는 사업장등록을 하지 아니하다가 2010. 4. 6.에 이르러서야 비로소 피고에게 대구 Z구 YY동 260-8 XXXXX를 사업장 소재지로 하여 건물신축판매, 주택신축판매, 임대업의 사업자등록을 한 사실, 원고 회사가 피고에게 이 사건 건물을 사업장으로 한 부동산임대업에 관한 2008년 2기분, 2009년 1, 2기분의 부가가치세를 신고 ・ 납부하지 아니한 사실이 인정되고, 원고 회사가 사업자단위과세자라거나 주된 사업장의 관할세무서장인 용인세무서장에게 부가가치세 총괄납부의 승인을 얻었다는 등의 특별한 사정을 인정할 증거가 없으므로, 원고의 주장은 이유 없다.

3. Conclusion

Therefore, all of the plaintiff's claims are dismissed as it is without merit. It is so decided as per Disposition.