In a case where an entrepreneur, while operating a system of mutual aid by accumulating points with other entrepreneurs, has accumulated points in each of the primary transactions with each other, and thereafter has made it possible for the customer to pay in cash only the remaining amount after deducting the value equivalent to the points accumulated in the secondary transactions with the entrepreneurs, whether the value reduced by the amount equivalent to the points accumulated in the secondary transactions corresponds to the accumulated amount, and not included in the value of supply in the secondary transactions (affirmative)

[Majority Opinion] In a case where an entrepreneur has accumulated points equivalent to a certain ratio of sales in the primary transaction of supplying goods to customers and subsequently made it possible to settle in cash only the remainder after deducting a certain amount of points accumulated from the secondary transaction of supplying goods again to customers, the value of the secondary transaction reduced equivalent to the points accumulated in the secondary transaction is ultimately the amount of discount, which is ultimately a direct deduction and reduction of the value of supply under the pre-determined terms and conditions of settlement of the consideration for supply between the entrepreneur and the customer. In other words, the points accumulated in the primary transaction is merely a numericalization of the terms and conditions of the discount agreement promised to the customer at the time of the primary transaction, and the amount deducted as much as the points is deducted from the value of the secondary transaction cannot be included in the value of supply.

In addition, in a case where an entrepreneur, while operating the price deduction system based on accumulation of points together with other entrepreneurs, sets aside points to customers in their primary transactions, and thereafter makes it possible for customers to pay in cash only the remaining amount after deducting the price equivalent to the accumulated points from the price when they engage in the secondary transactions with the entrepreneurs, this also applies to the case where the value of supply is directly deducted and reduced from the price of supply under the pre-determined terms and conditions of payment between many entrepreneurs and customers, and the deducted amount equivalent to the points cannot be included in the value of supply in the secondary transactions.

Meanwhile, even if enterprisers have to settle the points used within a certain period of time with regard to the points used in the mutual aid for secondary transactions and pay the difference amount as a settlement amount, this would compensate for losses arising from the mutual aid for supply price exceeding the points accumulated individually on the premise of a continuous settlement relationship with each other as well as a specific secondary transaction, and on the premise of a continuous settlement relationship with the accumulation and use of points agreed in advance, many enterprisers intend to share risks arising from the integration and operation of the mutual aid system with the accumulation of points, and to promote the benefits of all the relevant enterprisers by inducing active purchase of the customers by expanding the subject transaction eligible for the mutual aid. In other words, even in this case, the accumulated points are merely limited to the ones indicated in the numericalizing the amount of discount made jointly with the customers according to the agreement with the multiple enterprisers, and even if they are used in the secondary transaction, it is difficult to view that the amount of settlement between the secondary and continuous transaction should be included in the amount of discount, not in the amount of discount made by the two enterprisers.

[Dissenting Opinion by Justice Lee In-bok, Justice Park Poe-dae, Justice Kim Chang-suk, Justice Kim Shin, and Justice Park Sang-ok] The supply value, which is the tax base of value-added tax, includes the sum of money received in return for the supply of goods and any other consideration than money (Article 13(1) of the former Value-Added Tax Act); and the “compensation other than money” includes “any monetary value in a quid pro quo-related relationship regardless of the nominal title” (Article 48(1) of the former Enforcement Decree of the Value-Added Tax Act). In the second transaction, the issue of whether the points received by an entrepreneur from a transaction partner are “other than money,” or whether the accumulated amount is “money value”

Points received by business operators in secondary transactions are commendationing the right to receive money equivalent to the points later, and therefore constitutes “money other than money,” and as a matter of course, it should be included in the supply value. In the case where the points used in secondary transactions are those accumulated in any other association than the secondary supplier of transactions, and where all or part of the points used in secondary transactions are those accumulated in the primary transaction (hereinafter referred to as “self-deposit accumulated points”), the points themselves do not change from “money worth monetary value.” Once the points are used in the secondary transaction, the amount received by business operators is less than the total amount of the ordinary supply value of the primary and secondary transactions, but this is not due to the fact that the points are accumulated as grants in the secondary transaction, not only because the points used in the secondary transaction are those accumulated in the primary transaction.

The points are not directly used by the customer at the time of the second transaction, but are still able to maintain the value as a unit of settlement and receive money among the partnership operators. Thus, points cannot be considered as “price” received from the customer due to the second transaction from the standpoint of the second transaction.

In conclusion, the point is deemed to be included in the supply value, which is the tax base for secondary transactions, as it falls under “money value” and falls under “value other than money,” and thus, is not only consistent with the principle on the calculation of the supply value under the Value-Added Tax Act, but also a reasonable interpretation that is consistent with the transaction reality and the parties’ intent and does not cause confusion in existing transaction practices.

Article 13(1) and (2) (see current Article 29(3) and (3) of the former Value-Added Tax Act (Amended by Act No. 915, Jan. 1, 2010; see current Article 29(5)); Article 29(3) (see current Article 29(6) and (5) (see current Article 29(12)); Article 13(1) (see current Article 29(3) and (2) (see current Article 29(5)); Article 29(5) (see current Article 29(6)); Article 29(3) of the Value-Added Tax Act; Article 29(3) of the former Enforcement Decree of the Value-Added Tax Act (Amended by Act No. 11129, Feb. 31, 201; see current Article 29(2) and (3)); Article 13(2) (3) (see current Article 29(3)); Article 29(3) of the former Enforcement Decree of the Value-Added Tax Act (see current Article 25(3) and (2)(3)(4).

Law Firm Shopping Co., Ltd. and one other (Law Firm Square, Attorneys Seo-Jon et al., Counsel for the plaintiff-appellant)

See Attached List of Defendants (Law Firm Barun et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2014Nu71704 decided October 29, 2015

The judgment below is reversed and the case is remanded to Seoul High Court.

The grounds of appeal are examined.

1. As to the grounds of appeal Nos. 1 through 4

A. Article 13 of the former Value-Added Tax Act (amended by Act No. 11129, Dec. 31, 201) provides that “The tax base of value-added tax on the supply of goods or services shall be the sum of the values prescribed in the following subparagraphs (hereinafter “value of supply”)” under each subparagraph, and provides for “where payments are made in money: The payment is made (Article 1); and “where payments are made in money other than money: the market price of goods or services supplied by the person himself/herself (Article 2);” Paragraph (2) provides that incentives and similar amounts shall not be deducted from the tax base of value-added tax; Paragraph (3) provides that “The matters necessary for the calculation of the tax base other than those prescribed in paragraphs (1) through (4) shall be prescribed by Presidential Decree” (Article 5(1) of the former Value-Added Tax Act, and Paragraph (5) of the same Article provides that “In addition to the matters prescribed in paragraphs (1) through (3) of the same Article, Article 5(1) of the Value-Added Tax Act shall be prescribed by Presidential Decree.”

In addition, Article 48(1) of the former Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 23595, Feb. 2, 2012; hereinafter the same) provides that “The tax base stipulated under Article 13(1) of the former Value-Added Tax Act includes all monetary values in a quid pro quo relationship, regardless of the pretext, such as payments, charges, fees, and other payments, which are received from a trader,” and Article 52(2) of the former Value-Added Tax Act provides that “The amount of overcharges stipulated under Article 13(2)1 of the former Value-Added Tax Act, in the supply of goods or services, shall be the amount which deducts a specified amount from the ordinary supply value at the time of the supply of the goods or services, in accordance with the settlement of quality, quantity

B. According to the text and structure of Article 13(1) of the former Value-Added Tax Act and Article 48(1) of the former Enforcement Decree of the Value-Added Tax Act, in order to be included in the tax base of value-added tax, not only must it be subject to a quid pro quo relationship with the supply of goods or services,

However, the amount of overcharge shall be excluded from the tax base of value-added tax, as it is directly deducted from the ordinary supply value due to the conditions of supply, such as quality, quantity, and settlement of delivery and supply prices, in connection with the supply of goods or services, and it is not the amount actually received from the other party to the transaction. There is no special limitation on the methods of deduction and reduction (see, e.g., Supreme Court Decisions 2001Du6586, 6593, 6609, 6616, 6623, 6623, 6630, 6647, 6654, 6661, April 11, 2013).

Therefore, in cases where a customer receives a discount on a part of the price in accordance with a prior agreement between the business operator and the business operator when purchasing goods, this falls under the discount amount directly deducted and reduced from the usual value of supply, and such discount amount is not included in the tax base.

C. (1) In light of such legal principles, in a case where an entrepreneur, while making a primary transaction of supplying goods to a customer, set aside scores equivalent to a certain percentage of sales, and thereafter makes the secondary transaction of supplying goods again to that customer, deducts the value equivalent to the accumulated scores and makes the remainder in cash, etc., the value reduced equivalent to the accumulated scores in the secondary transaction constitutes the amount of discount, which is ultimately the direct deduction and reduction of the value of supply under the pre-determined terms and conditions of settlement of the consideration for supply between the entrepreneur and the customer. In other words, the accumulated scores in the primary transaction are merely an expression of the terms and conditions of the discount agreement made by the customer at the time of the primary transaction, and the amount deducted equivalent to the scores under the said discount agreement cannot be included in the value of the secondary transaction.

(2) In addition, in a case where an entrepreneur, while operating the above system of deduction based on accumulation of points together with other entrepreneurs, sets up points to customers in their primary transactions, and thereafter, the customer deducts the value equivalent to the accumulated points from the price and makes payments in cash only in the remaining amount after deducting the value equivalent to the remaining amount from the price when the entrepreneur makes a secondary transaction with the entrepreneurs, this also constitutes a discount amount as it directly deducts the value of supply under the pre-determined terms and conditions of settlement between several entrepreneurs and the customer, and the deducted amount equivalent to the points cannot be included in the value of supply in the secondary transaction.

Meanwhile, even if enterprisers have to settle the points used within a certain period of time with regard to the points used in the mutual aid for secondary transactions and pay the difference amount as a settlement amount, this would compensate each other for losses arising from the supply price deduction exceeding the points accumulated individually on the premise of a continuous settlement relationship with each other, not only a specific secondary transaction but also a specific secondary transaction, and on the premise of a continuous settlement relationship with the accumulation and use of points, the majority enterprisers would like to share risks arising from the integration and operation of the system of mutual aid based on accumulation of points, while inducing customers to actively purchase by expanding the subject transaction eligible for mutual aid. In other words, even in this case, the accumulated points are merely limited to the amount indicated by numericalizing the amount possible according to the discount agreement that has been made jointly with the customers, and even if the supplier himself/herself has accumulated in the primary transaction, it is difficult to view the amount to be settled from the other enterprisers as a settlement agreement and a continuous settlement relationship between the secondary and secondary transaction. Therefore, it is difficult to view that the amount should be included in the amount to be accumulated from the secondary transaction.

(3) Meanwhile, Article 48(13) of the former Enforcement Decree of the Value-Added Tax Act (hereinafter “Enforcement Decree of this case”) provides that “Where a business operator sets aside a mileage corresponding to a certain ratio of sales to customers and makes a settlement with a mileage with which the customer is supplied with goods and pays all or part of the price, the amount equivalent to the mileage shall be included in the tax base.”

However, as seen earlier, Article 13 of the former Value-Added Tax Act specifically prescribes the criteria and scope of the value of supply, which serves as the basis for calculating the tax base of value-added tax (Paragraph 1), and stipulates each item of the value included in the value of supply, such as amounts not included in the amount of supply such as overcharge (Paragraph 2) and incentives (Paragraph 3), and delegates only the matters necessary for calculating the tax base, other than these matters, to the Enforcement Decree (Paragraph 5). Thus, the instant Enforcement Decree of the Value-Added Tax Act has meaning within the scope of the said provision. Moreover, the instant provision does not provide for the specific meaning of “mail” and “the case of settlement with mileage.”

In light of the above, it cannot be readily concluded that the Enforcement Decree of the instant case includes the amount equivalent to the mileage, which is a conditionless tax base, in the supply value, regardless of whether the amount falls under the discount amount. Ultimately, the interpretation of the scope of the tax base and the discount amount under Article 13 of the former Value-Added Tax Act only with the provision of the Enforcement Decree of the instant case cannot be viewed differently as to the interpretation of the scope and the discount amount.

D. Review of the reasoning of the lower judgment and the evidence duly admitted by the lower court reveals the following facts.

(1) The Plaintiffs, which are corporations, as affiliates of a lot group, engaged in the distribution business, etc., as affiliates of the lot group, enter into a bus business partnership agreement with other lot group affiliates, including the Plaintiffs, and operate a lot point system with which customers can deduct the instant points from the price or exchange the instant points with the goods or services as the goods when they purchase the goods or services from the business stores, such as department stores, lot cards, and lot cards, and offer a membership card (hereinafter referred to as “the point in this case”).

Accordingly, the plaintiffs set aside an amount equivalent to 0.1% or 1% of the amount settled at the plaintiffs' business stores as the points in this case, so that the points accumulated by each customer are more than 1,000 points, and customers have joined a bus card service for members of a lot and accumulated and used the points in this case according to the contents of the service agreement.

(2) In addition, when the customer purchases goods in excess of a certain amount, the Plaintiffs increased the agreed gift certificates in advance (hereinafter “instant gift certificates”) and the customer deducted the value of the instant gift certificates from the price of the gift certificates when the customer purchases goods or services at the above sales store and pays the price. Such increased amount of gift certificates were managed separately from the gift certificates sold to the customer in electronic form.

(3) Meanwhile, according to a bus business partnership agreement, the Plaintiffs and other affiliates of the bar group, who were employed in settling the secondary transactions, deemed the instant points used by each affiliate prior to the said customer’s accumulation of each affiliate, and calculated the sharing ratio, while a corporation, which is a supplier of secondary transactions, as a certain period of time, was paid the settlement amount from other corporations. However, under convenience, the card company led the settlement process, leading the settlement of accounts, the card company paid the settlement amount to other corporations as a supplier of secondary transactions, on the other hand, by the method of paying the settlement amount to other corporations as a lump sum, and paying the said settlement amount from other corporations. Moreover, the said settlement was made in the same manner as the instant gift certificate, even in the case of the secondary transaction.

(4) However, in the course of the secondary trade in which the plaintiffs purchased goods at their business stores, the plaintiffs reported and paid the value-added tax for the second term portion on the grounds that all of the tax base was added to the amount that was treated by the points or merchandise coupons in this case and was not actually paid (hereinafter “instant key amount”) in 209 to the tax base, but the key issue amount in this case constitutes the discount amount under Article 13(2)1 of the former Value-Added Tax Act.

(5) As to this, the Defendants notified that the issue amount of this case was included in the value-added tax base and thus rejected it, or did not notify within two months, thereby rejecting the Plaintiffs’ claim for correction.

E. Examining these facts in light of the legal principles as seen earlier, the following is determined.

The instant points are organized between the Plaintiffs and other affiliates of a lot group by a business partnership agreement and a lot point integrated settlement agreement, and the customers expressed their agreed status in advance so that they can be discounted at the time of the secondary transaction from the business stores of the Plaintiffs or the above affiliates. As such, customers’ deduction of the price in the course of paying the price for the secondary transaction using the instant points is ultimately subject to a direct deduction of the price for supply under the terms and conditions of use as stipulated in the instant agreement, etc. In short, even if the Plaintiffs received the settlement payment from the lot card corporation, which is the numerical value of the price discount agreement, even if the Plaintiffs received the settlement payment from the lot card corporation, it cannot be deemed as the supply payment received from the second transaction because it is based on the integrated settlement agreement and the continuous settlement relationship arising from the business partnership agreement and contract concluded with the affiliates of the instant lot group, and thus, it cannot be deemed that the amount equivalent to the price for the instant transaction should not be included in the supply price for the instant case.

In addition, since the gift certificates of this case were increased without additional consideration according to the purchase records of the first transaction and were managed separately from other gift certificates sold for consideration, and the integrated settlement was conducted between the affiliates of the Culture Group like the point in this case, the Plaintiffs cannot be said to have received the payment by itself, and eventually, the gift certificates of this case are placed in a position to be discounted from the price in the second transaction like the point in this case, and the customers may be deemed to have directly deducted the supply value equivalent to the value of the gift certificates of this case from the price under the conditions of use set in advance with the Plaintiffs.

Therefore, the key part of the instant points or merchandise coupons is the discount amount directly deducted and reduced from the value of supply in the secondary transaction, and it cannot be included in the value of supply in the secondary transaction.

F. Nevertheless, on the grounds indicated in its reasoning, the lower court erred by misapprehending the legal principles on the scope of the value of supply, the amount of discount, and the validity of the Enforcement Decree of this case, which are the tax base of value-added tax, and thereby adversely affected the conclusion of the judgment, on the grounds indicated in its reasoning. The ground of appeal assigning this error is with merit.

2. Conclusion

Therefore, without examining the remaining grounds of appeal, the judgment of the court below shall be reversed, and the case shall be remanded to the court below for a new trial and determination. It is so decided as per Disposition.

Except for a dissenting opinion by Justice Lee In-bok, Justice Park Poe-dae, Justice Kim Chang-suk, Justice Kim Shin, and Justice Park Sang-ok, the opinion of all participating Justices is consistent.

3. Dissenting Opinion by Justice Lee In-bok, Justice Park Poe-dae, Justice Kim Chang-suk, Justice Kim Shin, and Justice Park Sang-ok

The Majority Opinion states that, in a case where the Plaintiffs and other affiliates who entered into a contract for a bus business partnership with a member of the instant point system with the Plaintiff and other affiliates enter into the said contract with the customers for the first transaction, set aside points equivalent to a certain percentage of sales, and thereafter make the remainder after deducting the value equivalent to the points accumulated in the second transaction that again supplies goods to the customer, and make the payment in cash, etc., the points accumulated in the first transaction are merely those indicated by numericalization of the terms of the discount agreement as promised to the customer at the time of the first transaction, and even if the points were used in the second transaction, the amount reduced in the second transaction falls under the discount because they directly deducted and reduced the value of supply under the terms of the payment for the value of supply set in advance between the business operators and the customers, and thus, the amount of the reduced points should not be included in the value of supply for the second transaction.

However, we cannot agree with the Majority Opinion for the following reasons.

A. The value of supply, which is the tax base of value-added tax, includes the sum of money received in return for the supply of goods and any other consideration than money (Article 13(1) of the former Value-Added Tax Act); and “price other than money” includes “any other monetary value in a quid pro quo regardless of the name” (Article 48(1) of the former Enforcement Decree of the Value-Added Tax Act). Therefore, whether the points in this case constitute “price other than money,” which is included in the value of supply, constitutes “money having a quid pro quo value,” thereby falling under “money having a quid pro quo

Meanwhile, although Article 13(2)1 of the former Value-Added Tax Act provides that the amount of discount is not included in the tax base of value-added tax, it does not mean that the amount of discount is merely reduced from the amount of ordinary supply value, and it does not receive the amount of discount. Therefore, there is no room to evaluate that the entrepreneur received “amount of discount with monetary value.” Therefore, the amount of discount is naturally excluded from the calculation of the value of supply, even if there is no statutory provision.

Therefore, Article 48(1) of the former Enforcement Decree of the Value-Added Tax Act, which defines the meaning of “price other than money,” provides that Article 52(2) of the former Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 2010, Jan. 1, 2011) provides that “The value of supply under Article 29(3) of the former Enforcement Decree of the Value-Added Tax Act, reflecting the meaning of the provision in principle, is the value under each of the following subparagraphs. In this case, the value of supply under Article 29(1) of the Value-Added Tax Act, which reflects the meaning of the provision in principle, gives more strong legal effect as to the matters under Article 48(1) of the former Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 2

Ultimately, in the second transaction, the issue of whether the points received by an entrepreneur from a transaction partner constitutes “money other than money” or “amount of discount” is determined depending on whether the points are “money value” or “amount of discount.” That is, in other words, if the points are evaluated as “money value” and deemed as “money other than money”, there is no room to constitute “amount of discount” any longer. Although a business operator can be deemed to have received a “price other than money” by receiving the points from a transaction partner, the value equivalent to the points cannot be deemed as “amount of direct deduction of a certain amount from the normal value of supply at the time of the supply of the goods.”

B. However, it is clear that the points in this case have monetary value in itself as seen below.

(1) The issue of whether the points received from a customer in connection with the secondary transaction ought to be determined from a business entity’s standpoint. Value-added tax is imposed on a business entity that supplied the goods or services. Therefore, when considering the business entity’s side, the points in this case are “money value”, it should be included in the tax base and should be excluded from the tax base. Whether the point has any meaning and value from a customer’s standpoint is irrelevant to the tax base of value-added tax on the business entity.

In the second transaction, where the points in this case have been settled as a part of the price, a customer shall be deemed to have received a discount equivalent to the said amount. However, in view of the business operator’s side, the point in this case is not simply received as a supporting document verifying whether the other party to the transaction has a certain condition of discount. The point numerical value 1 is paid “other than money” in which the right to receive money is given by converting the point into one won, and the right is realized by receiving money equivalent to the points from the bar card, which is the operating company of the transaction of the points in this case. This cannot be said to be “money worth money.”

According to the agreement among the association members participating in the instant points system, each association member, as a manager, shall settle the cards by allowing each association member to pay or be repaid the settlement money according to the results of mutual calculation of points given and received between the association members upon request for settlement at a certain period of time with respect to the points that each association member received in transactions with customers. This is merely intended to make a simple settlement of the ex post facto accounts pursuant to allowing each association member to use the accounts mutually, regardless of whether the points used in the secondary transaction are accumulated in a business establishment or not. Such settlement procedures are conducted separately after individual secondary transactions. However, this does not change the intrinsic nature of the instant points, namely, “money worth money” by allowing each association member to settle the accounts at the time of transactions.

Ultimately, points received by business operators in secondary transactions are commendationing the right to receive money equivalent to points later, which constitutes “money other than money,” and thus, should be included in the value of supply as a matter of course. Although the Majority Opinion was actually paid with “money value”, it is deemed that the Majority Opinion is sufficient to state the terms and conditions of the discount agreement. Such understanding is difficult to deem that the issue of “money value” ought to be understood from the business operator’s standpoint to conform to the basic principle of the Value-Added Tax Act.

(2) If the point used in the second transaction has accumulated in another association, not a business entity of the second transaction, it is difficult to deem that there is a discount, since the business entity of the second transaction receives money equivalent to the said point and ultimately receives all the ordinary supply price. If the whole or part of the points used in the second transaction has been accumulated in the first transaction by the business entity himself/herself (hereinafter “self-employed accumulated points”), there is room for doubt as to whether it can be said that the points are finally paid less than the said points, even if the said business entity undergoes the settlement process, even if there is room for doubt as to whether it can be said that the said amount is not the accumulated amount.

If an entrepreneur solely issues discount coupons in the primary transaction and operates a system to reduce the amount of the discount from the price in the primary transaction, the amount indicated on the coophone is merely a numericalization of the amount possible as stated in the Majority Opinion. This is because there is no room for the entrepreneur to receive any amount equivalent to the coophone at any place. However, as in this case, the points accumulated in the transaction structure where multiple affiliated companies participate in the coophone system and settle accounts after the amount of the points in the first transaction after each affiliated company enters the coophone system is different from all levels of legal nature in the above case. The point in this case is that the entrepreneur who has accumulated the coophone is obliged to pay money to the coophone card in the same amount as in the first transaction (However, this case’s payment obligation takes place on the condition that the coo is used in the 2nd transaction), and it is not necessary to pay money to the entrepreneur as it is equivalent to the amount of the coophone’s obligation to receive money from the coo.

Moreover, given that a business operator pays a bounty to a person who is supplied with goods, the issue of whether the points in this case is a bounty is related to the primary transaction that the business operator accumulates it to the customer, and there is no relationship with the secondary transaction that is used by the points in this case. In the secondary transaction, the issue is only whether the points in this case are monetary value and whether the said points constitute “price other than money.” Ultimately, in the secondary transaction, the total sum of the supply value of the primary and secondary transaction is the sum of the amounts actually paid by the customer and the amount equivalent to the points in this case used after being accumulated in the primary transaction. This is merely the result of the pre-determined under Article 13(3) of the former Value-Added Tax Act, and there is no inconsistency.

(3) Therefore, the points used in secondary transactions are not only those accumulated in other affiliate companies than suppliers of secondary transactions, but also those accumulated in company companies, even if they are accumulated in the secondary transactions. In the event that the accumulated points are used in the secondary transactions, the amount received by a business operator is less than the total amount of ordinary supply in the primary and secondary transactions. However, given that the accumulated points are used in the secondary transactions, it is not because the points used in the secondary transactions are less than the total amount of ordinary supply in the primary and secondary transactions. However, the reduction in revenues from the payment of incentives do not affect the tax base of value-added taxes (Article 13(3) of the former Value-Added Tax Act) and can be included in the deductible expenses in calculating the corporate tax base on the business operator’s income. Nevertheless, the Majority Opinion argues that the amount of the accumulated points used in the secondary transactions is not only the difference between the amount actually received by the business operator and the amount actually paid by the business operator, but also the amount of the accumulated money cannot be interpreted as a “money accumulated amount.”

(4) Even when comparing the point in this case with the point in white and white, the point in this case is revealed to be “moneyly valuable.”

In the case of a white point that can alter the points accumulated by a business operator in cash in a primary transaction, a customer may change the point in cash, and may use it in the secondary transaction. Such a white point cannot be said to be a “money-valueing point.”

If a customer uses such a white point in a secondary transaction, he/she is entitled to receive money equivalent to the given white point from the operator of the given white point. In this respect, the given white point is not entirely different from the given point in this case. This difference is merely a difference between the given point and the given point in that the customer can change in cash in addition to the use in the payment in the secondary transaction. However, this difference is not meaningful from the business operator’s standpoint. This is because the business operator is only entitled to receive money equivalent to the given point from the given point in the same way as the given point in the instant case, regardless of whether he/she received the given point from the customer, or is subject to the given point in the instant case. Ultimately, if a business operator considers the given white point from the customer as a “money value”, the given point cannot be deemed as a “money value” and, therefore, should be included in the supply value as a tax base.

C. In addition, even if examining the terms and conditions, transaction reality, etc., which serve as the basis for the instant points system, the points in this case should be deemed to have been received by the business operator as the price for the secondary transaction.

(1) If the points in this case merely indicate by numericalizing the contents of the discount agreement promised to a customer at the time of the first transaction, and it is merely offered for the purpose of confirming it, it may be deemed that the second transaction is not a “price”. However, as seen earlier, as seen earlier, the points in this case are not only used by the customer at the time of the second transaction but also used by the customer at the time of the second transaction, but also becomes a basis for maintaining the value as a unit of settlement and receiving money among the affiliates. Thus, from the standpoint of the second transaction, the points in this case cannot be deemed a “price” received from the customer due to the second transaction.

(2) The fact that the points in this case still functioned for settlement even after the second transaction is confirmed as also in a business partnership agreement for the operation of the instant points system. According to a membership bus business partnership agreement entered into between the association members participating in the instant point system and the operating company, the points that allow customers to enjoy certain profits or benefits are “slater points” (Article 2 Subparag. 12), and all of the two points are defined as “slater points” (Article 11) and “slater points” (Article 13). Ultimately, the instant points are defined as “later points” not only as “later points” but also as “later points” which constitute “laters and operating companies.

(3) Accordingly, even in transactions in which the points are used, recognizing that both a business operator and a customer have settled part of the price for the secondary transactions. The same applies to transaction practices regarding other points similar to the points in this case. A business operator, who has been paid part of the price for the instant transaction with the points, is obligated to compensate for the total amount of the ordinary supply price by receiving money equivalent to the points from the card later, and cannot be deemed as a transaction with an intention to receive less than the amount equivalent to the points in this case’s points out of the ordinary supply price. The purport of the instant points as the price for the supply of goods is to directly indicate the substance and legal character of the said transaction, and it does not simply mean that the parties to the transaction have been treated as a part of the supply price, not the amount of discount for a long time among the parties to the transaction.

D. In addition, the issue of whether the points in this case constitute part of the supply value of secondary transactions as “compensation other than money,” or whether the points are overcharged amounts excluded therefrom should be determined only on the basis of secondary transactions.

The Value-Added Tax Act provides that a certain taxable period should be considered as a taxable unit based on an individual transaction. Thus, even if the primary and secondary transactions belong to the same taxable period, the value of supply for the secondary transactions should be determined regardless of the primary transaction. The explanation of the difference between the total sum of the amounts paid by the customer in the primary and secondary transactions and the total value of supply, which is a premise for the imposition of value-added tax, does not coincide with the primary transaction, cannot be in line with the recognition system of the Value-Added Tax Act that grasps the value of supply for each individual transaction. There is no need to conclude any difference between the taxable periods of the primary and secondary transactions.

Notwithstanding the fact that the points received in the second transaction cannot be denied that it is a “money value” to a business operator, deeming it as an overcharge amount is no different from the supply value determined by the total sum of the first and second transactions. However, if the point starts to determine as a related transaction by combining it, it would be a problem from where to where the scope of the relationship would be limited. However, there is no room to recognize the calculation of supply value within the framework of the current Value-Added Tax Act.

E. Meanwhile, the points in this case should be deemed to be included in the supply value in terms of equity and legal stability among business operators related to the points in this case.

(1) The party liable to pay the amount equivalent to the points used in the instant transaction is an enterpriser who accumulated the instant point in the primary transaction, and the party whose output amount has been reduced is considered as an enterpriser who obtained the use of the instant point in the secondary transaction is unreasonable in terms of economic burden. Since a business operator liable to pay the amount equivalent to the said points in the primary transaction is the amount of incentives granted in the primary transaction, it is reasonable that the amount of output amount does not decrease in the primary transaction. However, even if the secondary transaction was paid an amount equivalent to the said points, if the output amount has been reduced as much as the amount equivalent to the said points, it is not completely inconsistent with the substance of the transaction.

Such unreasonable may arise from the standpoint of a customer of the secondary transaction, i.e., the recipient., the customer of the secondary transaction. This is because, in the event that the customer of the secondary transaction is a “business entity,” not a final consumer, the instant points are excluded from the supply value of the secondary transaction, the input tax deduction would inevitably result in unfavorable consequences.

Ultimately, the point of this case should be included in the supply value of the second transaction even in terms of equity among the relevant enterprisers.

(2) It is not desirable to interpret that the points of this case are excluded from the value of supply in order to prevent confusion of taxpayers and burden of taxation administration.

If, in cases where the customer is a “business entity,” which is not a final consumer, the points in this case are considered to have to be excluded from the supply value of the secondary transaction, and as a result, the customer has been subjected to excessive deduction of the input tax amount related to the secondary transaction so far, so the exclusion period for imposition remains, and thus, it should be taxed as long as the exclusion period for imposition remains. This is not only an unexpected disadvantage from the standpoint of the customer, but also

Value-added tax, which is subject to multiple transactions, needs to be interpreted simply and clearly as possible in respect of legal stability. This is more so in cases where the value of supply is at issue in relation to transactions between a distributor and an unspecified number of customers, such as the point in this case.

F. In conclusion, the points in this case constitute “money other than money” as “money value” and are deemed to be included in the supply value, which is the tax base for secondary transactions, is not only consistent with the principle on the calculation of the supply value under the Value-Added Tax Act, but also a reasonable interpretation that accords with the transaction reality and the intent of the parties concerned and does not cause confusion in the existing transaction practices. The same applies to the gift certificates in this case operated with the same structure between the Plaintiffs and the lot cards.

Meanwhile, there is no reason to deny the validity of the instant enforcement decree merely because it is a confirmation that the instant points and merchandise coupons are stipulated as natural legal principles on the gift certificates.

Therefore, the judgment of the court below to the same purport is justifiable for the plaintiffs to make a claim for correction on the premise that the points and merchandise coupons received from the customers are excluded from the value-added tax base for the supply of goods, and that the defendant's rejection of the claim is legitimate. Therefore, the plaintiffs' appeal should be dismissed in entirety.

For the foregoing reasons, I oppose the Majority Opinion.

4. Concurrence with the Majority by Justice Kim Yong-deok and Justice Lee Ki-taik

A. In relation to the supply of goods, Article 13(1) of the former Value-Added Tax Act excludes the amount calculated by adding up the sum of “price received for money,” “market price of goods or services supplied by the person himself/herself in cases of receiving any consideration other than money,” and “market price of goods supplied by the person himself/herself in cases of receiving any consideration or not receiving any consideration for the supply of goods” as the tax base of value-added tax. Meanwhile, Article 13(2) of the former Value-Added Tax Act excludes discount amount ( Subparagraph 1), national subsidies and public subsidies ( Subparagraph 4), and discount amount ( Subparagraph 6) as prescribed by Presidential Decree on the value of supply after the supply of goods or services.

Article 48(1) of the former Enforcement Decree of the Value-Added Tax Act provides that “In the supply of goods or services, the amount calculated by deducting a specified amount directly from the ordinary supply value at the time of the supply of the goods or services according to the quality, quantity, settlement of the cost of delivery and supply, and other terms and conditions of supply” with respect to the discount excluded from the tax base.

Therefore, in cases where a customer directly deducts a certain amount from the ordinary supply value in the course of purchasing goods from a business operator, if such deduction is determined in accordance with the quality, quantity, settlement of the price for delivery and supply and other terms and conditions of supply, it shall be excluded from the tax base of Article 13(2)1 of the former Value-Added Tax Act as an overpaid amount under Article 13(2)1 of the former Value-Added Tax Act, and it does not affect the conclusion whether the reason or status for receiving such overpaid amount has monetary value.

In addition, the amount of discount refers to the deduction of a certain amount from the ordinary value of supply after being supplied with goods or services as such. On the premise of determining whether a certain amount has been deducted from the value of supply, it is necessary to consider whether an entrepreneur has received money, etc. from a customer other than receiving money, etc. equivalent to the value of supply after discount from a customer. However, as long as the customer is supplied with goods or services and fails to pay the amount at a discount higher than the ordinary value of supply pursuant to the prior agreement with the entrepreneur, it shall be deemed that the amount of discount is deducted from the ordinary value of supply, and barring any special circumstance, it is difficult to deem that the deduction itself can be denied based on

B. The key issue in this case is whether the discount falls under the discount amount in a case where the parties agreed to continue a transaction between multiple enterprisers and customers, and agreed to discount the price by reflecting the results of the first transaction in the transaction after the second transaction. In accordance with the agreement, if the parties received the discounted price from the customers in the second or subsequent transaction, the discount falls under the discount amount.

However, it constitutes “the direct deduction of a certain amount from the ordinary supply value at the time of supply of goods or services according to other supply terms” under Article 48(1) of the former Enforcement Decree of the Value-Added Tax Act by reflecting the performance of the first transaction. The amount paid by the customer through the second transaction is limited to the remainder after deducting the amount discounted as above from the ordinary supply value. It cannot be said that the business operator received the payment exceeding the discounted or deducted amount.

In this context, even if a business entity or a business entity that entered into a joint agreement as above grants a points by numericalizing the amount of discount for customers in a transaction after the second and the second transactions, it is merely a way to manage the status at which the price can be discounted, taking into account the fact that various subsequent transactions have been conducted, actual discounts, and the amount of discount may vary depending on the customer’s choice. If a discount is granted after the second and subsequent transactions, the customer is merely a reduced point and the status at which the price can be discounted is extinguished, and as such, the position at which the price can be discounted is not transferred to the business entity. As such, the customer cannot be deemed to have paid the price to the business entity with the result of the discount. Furthermore, if the transaction constitutes grounds for exclusion of tax base, such as “influence amount” under Article 13(2) of the former Value-Added Tax Act, even if there is monetary value per se, and thus, whether the possibility of discount or the amount of discount can be assessed as to whether there exists a monetary value or the relevant reason for exclusion from the tax base.

In addition, as seen above, even if the business entity engaged in the second or subsequent transactions after the discount price and the business entity engaged in the first or subsequent transactions, which forms the basis of such discount, are to settle accounts on the points terminated between the business entity, this is merely limited to those made within the business entity other than the customer in accordance with the agreement made by the joint business entity after the second or subsequent transactions are completed, and profits and losses arising from such discount or settlement are reflected in the taxation of income and corporate tax thereon. Whether the business entity would make a settlement and how much amount would have been given or not, the customer has no interest in such settlement. The actual meaning of such settlement is as follows. In fact, in the instant case, the business entity would have paid or received only the amount based on the final result of the settlement for a certain period of time in the internal settlement process, and the amount would not have any effect on the amount of discount or discount from the customer’s relationship after the second or subsequent transactions. As such, it cannot be said that the result would not have been reflected in the settlement of accounts between the two or subsequent transactions.

C. Such interpretation on the points of this case accords with the substance of the price paid by the customer in the intended transaction subsequent to the first transaction, i.e., the value of supply of goods or services subject to value-added tax, following the second transaction.

(1) In order to determine whether the points in this case constitute a discount amount deducted from the value of supply in the secondary transaction, not only the secondary transaction but also the primary transaction should be examined.

The Value-Added Tax Act, based on individual transactions, takes a certain taxable period as a taxable unit, so it should be determined on the basis of secondary transactions when determining whether the points in this case are cumulative amounts of the secondary transactions. However, on the other hand, when determining the character of the points in this case, all transactions other than the secondary transactions cannot be considered. This is because the taxable period under the Value-Added Tax Act is only a technical and convenient system to define the taxable unit, and there is no inevitable reason that the subject and scope to be considered in determining the value of supply of the secondary transactions in this case. Rather, the points in this case are accumulated and generated in the primary transactions and used and terminated in the secondary transactions. Accordingly, it is possible to grasp the character of the said two transactions by examining the first and the second transactions as to whether they are cumulative amounts of the secondary transactions.

(2) In the first transaction, business entities, including the plaintiffs, set aside the point of this case equivalent to a certain amount of money related to receiving the full amount from customers, while in the second transaction, if such points are used against another business entity, the amount corresponding thereto shall be paid as the settlement money and no settlement money shall be paid if they are used against themselves. Therefore, the instant point of this case, which allows customers not to pay part of the price in the second transaction, may be deemed as being appropriated as part of the price received in the first transaction. If it is deemed that the instant point of this case is not the accumulated amount in the second transaction, as shown in the Dissenting Opinion, the instant point of this case, which has the substance appropriated as a part of the price received in the first transaction, is ultimately included in the supply price in the first transaction and the second transaction, which is nothing more than that included in the tax base in duplicate.

For example, in comparison with the case where two buyers purchase the same product with retail stores operating the customer loyalty system, such as the point in this case, and trades with the retail stores operating the immediately discount system, these substance is clearly revealed. In a case where a certain retail store provides two customers who purchase the same product with 10% of the second product while operating the immediately discount system, there is no dissenting opinion regarding the fact that if the customer purchases two goods with the same product at the retail stores, the value of the second product is 9,000 won. However, according to the Dissenting Opinion, if the customer purchases 1,000 points from the retail stores operating the point in this case and without accumulation of 1,000 points, the supply value of the first product is 10,000 won in purchasing the goods from the retail stores operating the point in this case and immediately uses 1,000 points in both at the same time, it should be viewed as 100,000 won in the second transaction and 100 points in the second transaction with the same product in this case.

Such three transactions are simply based on the difference in marketing law between distributors, and all kinds and quantities of goods offered to customers, and the amount of fees paid by customers are identical. Considering that value-added tax is a tax transferred to customers who are not suppliers, it is reasonable to view that the size of value-added generated by the said three transactions is the same as that of final consumers. Even if the marketing method, which is a point or a human right, has occurred during the course of transactions, and the marketing method, which is a point or a human right, has ceased to exist, this would have no meaning at the time of complying with the value-added tax base.

(3) The Dissenting Opinion considers that the settlement of accounts with respect to the points in this case constitutes “money valuable.” However, this is an outward view of various forms of settlement made in the transaction reality. Even if all customers are points with a discount value per point, the content of actual settlement may be one won per point between the points operator and the participants and may be 0.9 or 0.1 won per point depending on the economic friendly relationship between the points operator and the participants. For example, in any case where a customer who uses 1,000 points receives less than 1,000 won from the clients who use 1,000 points, any of the points systems may compensate for 1,000 won from the points operator, while a supplier who participates in the other points system may be compensated for 1,00,000 won from the points operator, as a whole, if the value-added tax base is grasped only by the Dissenting Opinion, it will be 1,000,0000 won as to the market value of the goods that were supplied as a whole.

(4) If the points in this case are deemed to have monetary value as stated in the Dissenting Opinion, it is rather unreasonable to regard it as a discount amount for the first transaction only, but it as a length to avoid such double calculation, and to regard it as a incentive for the first transaction, and deeming it not to be excluded from the value of supply. It is reasonable to view it as limited to the above double calculation, since the supplier’s receipt of a consideration for supply from a person being supplied with a supply and payment of money contrary thereto may cause concerns over not excluding this from the value of supply, and thus, it is reasonable to regard it as applicable only to the extent of limited calculation. The Majority Opinion considers that the point in this case’s situation accumulated in the first transaction is difficult to be deemed as a discount amount, and it is a view that can avoid double calculation and reasonably calculate the value of supply.

D. The Supreme Court precedents have consistently determined that the matter similar to the points of this case falls under the discount amount.

In Supreme Court Decision 2013Du19615 Decided December 23, 2015, where a mobile communications company sold a device to an agency, and an agency sells a device at the time of the mobile communications company’s sales of a device at the price equivalent to the subsidy to the subscribers who meet certain requirements, the amount equivalent to the subsidy was reduced by the amount equivalent to the subsidy, on the condition that the mobile communications company sells the device at the price equivalent to the subsidy to the mobile communications agency’s supply price to the mobile communications company, the amount equivalent to the subsidy was determined to be the discount that directly deducts the supply price to the agency’

In addition, Supreme Court Decision 2014Du144 Decided June 23, 2016, where a home shopping operator issues the home shopping operator's discount, where the home shopping operator sells the goods at a discounted price and instead pays sales commission calculated by deducting the discounted amount from the discounted amount to the home shopping operator, it determined that the discounted amount falls under the discount amount that is directly deducted from the price of the goods supplied by the home shopping operator's stores. In addition, Supreme Court Decision 2014Du298, 304, 311 Decided June 23, 2016 (Supreme Court Decision 2014Du298, 304, 311 Decided June 23, 2016, where a company operating the Internet open market issued the discount phone so that the goods can be purchased from the discounted amount from the enterprise located in the open market and instead deducted the discounted amount of goods from the service fee received from the occupant's stores, the remaining deducted amount constitutes a direct discount amount from the service charge.

This is determined as constituting a discount amount under Article 48(1) of the former Enforcement Decree of the Value-Added Tax Act on the basis of the substance that the price of goods equivalent to a discount coupon is directly deducted between a customer and a business operator in the market, even if an ex post facto compensation is made for a discount amount equivalent to a discount coupon pursuant to a prior agreement between the operator of the market for trading goods and the business operator in the market. Therefore, it conforms to the purport of the Supreme Court precedents to regard the points and merchandise coupons of this case as an discount amount in relation to the customer.

E. (1) In the case of a white point that can be changed in cash, the nature or function of the white point may be diverse, and thus, it cannot be simply compared to the point in this case. However, in a case where a certain point has both the function that can be changed in cash and the function that can be used for the price discount of goods, the substance of the customer’s goods payment would not be readily denied if the customer simply uses it for the price discount of goods. Meanwhile, even if there are such points, the price of goods would not be reduced if it is paid in cash without any discount, and the process of forming cash payment made by the customer does not need to be considered. Moreover, as the customer did not use the above points, the point may be terminated on the grounds of agreed terms such as the lapse of a certain period. Ultimately, the customer’s choice would depend on whether to use the said points, and how to use it by any means, and it would be sufficient to impose taxes depending on the substance of the method of use.

(2) In addition, the Dissenting Opinion argues that in the existing transaction circumstances, an entrepreneur receives cash and the point in this case as the price for the secondary transaction, as well as the cash portion, and calculated the transaction value including value-added tax on the portion received as the point in this case. However, even if there exist such cases in the actual transaction process, it cannot be maintained as it was based on the erroneous premise that the point in this case is not the overpaid amount. If it is deemed that such a error was made by the Majority Opinion, there is a need to change the wrong tax treatment in accordance with the correct legal doctrine, and there is no reason for continuing to maintain any wrong tax treatment contrary to the legal doctrine on the ground that the case was ever. Rather, it is against the substance of transaction that the customer can receive refund by deeming that the value-added tax was paid to the Plaintiff, a supplier, as the result, constitutes an excessive amount equivalent to the part of the customer’s payment of the value-added tax which is not the overpaid amount.

F. In conclusion, the instant points are merely numericalization of the terms of discount agreements made by a business operator at the same time as a single-person point, and thus, the amount equivalent thereto is directly discounted and deducted from the value of supply that the customer pays. Therefore, it is reasonable to deem that the deducted amount falls under the discount amount and is not included in the value of supply which is the tax base of value-added tax

As above, I express my concurrence with the Majority Opinion.

5. Opinion concurring with the Dissenting Opinion by Justice Kim Chang-suk

A. Inasmuch as the points in this case are deemed to constitute “money valuable”, there is no room to regard them as a discount amount for secondary transactions.

(1) The “amount of discount” refers to the amount of money directly reduced from the ordinary price. As such, the part is not paid by a business entity, and thus, it cannot be deemed that the amount of discount is a monetary value in light of the business entity’s standpoint. On the contrary, if an business entity received a “money value” in return for the “money value,” there may be room for falling under the amount of discount. Nevertheless, the logic of the supplementary opinion to the Majority Opinion is that the points received by the Plaintiffs, the business entity, can be excluded from the tax base by falling under the amount of discount, even if the point is “money value.”

Of course, in a case where an entrepreneur returns a certain amount of money to a customer after receiving the full payment, the issue may arise as to whether the so-called “ex post facto discount amount” falls under the so-called “ex post facto discount amount,” and such ex post discount amount falls under the category of “ex post facto discount amount” after being included in the tax base. However, in the instant case, the entrepreneur does not return a certain amount after receiving the full payment of the secondary transaction, but rather received a settlement with the point in this case and did not return it to the customer. Therefore, there is no room for constituting ex post discount amount. Accordingly, the points in this case are deemed to correspond to “ex post discount amount.” However, the points in this case constitute “money value” as stated in the Dissenting Opinion, but the points in this case constitute “money value” as stated in the Dissenting Opinion.

(2) The Majority Opinion is premised on the basic legal doctrine that “in order to be included in the tax base of value-added tax, not only must the goods or services be provided in a quid pro quo relationship but also should have money or money value.”

However, if the points that the Plaintiffs received from the transaction partner are “money value”, the Plaintiffs are bound to receive the “price other than money” from the transaction partner. Nevertheless, the Concurrence with the Majority Opinion states that even if the points in this case are “money value”, they may constitute a discount under Article 13(2)1 of the former Value-Added Tax Act. This is no choice but to be a contradiction. Furthermore, the Majority Opinion argues that the part settled with the points in this case can be seen as falling under the “value” under Article 13(1)2 of the former Value-Added Tax Act, and does not consider whether it falls under the “value other than money” under Article 13(1)2 of the former Value-Added Tax Act, and thus, without examining whether it falls under the “value other than money” under Article 13(1)2 of the former Value-Added Tax Act and Article 48(1)2 of the former Enforcement Decree of the Value-Added Tax Act, it does not have any relation with Article 13(2)2 of the former Value-Added Tax Act and Article 15(2)2)2 of the former Enforcement Decree.

If the Majority Opinion is to be justified, even though the points in this case do not correspond to “compensation other than money” under Article 13(1)2 of the former Value-Added Tax Act, and should give reasonable explanation as to why it can be excluded from the tax base by falling under “influence amount” under Article 13(1)1 of the former Value-Added Tax Act. If so, the Majority Opinion gives up the criteria for distinguishing the relationship under Article 13(1)2 of the former Value-Added Tax Act by means of private culture without any basis.

As to this, the majority opinion and the concurring opinion suggest that the relationship between the points in this case and the points in this case were abolished immediately after being used in the secondary transaction, and thereafter repaid the equivalent value of the points in this case from the points transaction is a separate part unrelated to the instant points transaction. However, it cannot be denied that the business operator who received the instant points has the right to receive reimbursement of the equivalent value from the lot card itself, and it cannot be said that the legal assessment is carried out separately from the transaction in which the said right to receive reimbursement of the equivalent value of the points is received. It is not reasonable to say that the legal assessment is made separately from the transaction in which the said right to receive reimbursement of the equivalent value of the points is made. The relationship between the business operator including the plaintiffs and the lot card is defined as the right to receive discount from the business operator and the business operator who received the instant points in this case as a comprehensive right to receive reimbursement of the equivalent value of the points in this case from the lot card.

B. In light of the substance of the transaction related to the points in this case, it is reasonable to view the points in this case as being included in the value-added tax base.

(1) The concurring opinion with the Majority Opinion is that there may be cases where one point is settled at 0.9 won or 0.1 won whose won does not exceed one won in the actual process of settlement, and thus, if so decided by the Dissenting Opinion, an equitable problem arises.

In the case of points in this case, one point is settled as one won value, and thus, in such a sense, the point in this case can be deemed as being included in the tax base as a means of settlement.

If there are exceptional cases cited in the concurring opinion with the Majority Opinion, this is an agreement at the risk of being treated unfavorably in calculating the value-added tax base against the secondary trader, and thus, tax disadvantages therefrom are inevitably borne by itself. However, it is difficult to see that one point has a value at one source of discount to customers, while it is difficult for a business entity to agree that one point has a value less than one source of won in the process of receiving redemption of the value equivalent to one source of points from the point operator, and therefore, it would be too difficult to see the reason why it is agreed that the business entity has a value less than one source of won in the course of receiving reimbursement from the point operator. Accordingly, other points than the point in this case, the same value as one point in the course of redemption is set at the same level of value as one point in the course of discount. Interest between the business entity and its operator should be adjusted by an agreement different from the one in terms of the type of goods supplied at the time of the primary transaction.

(2) It does not change the nature of the points in this case on the ground that only the balance remaining after deducting the commission fee in the course of settlement of the points in this case.

Fees to be deducted by a lot card is based on a separate cause from the first and second transaction in which the points in this case are accumulated and used as consideration for the services provided to the business operators while operating the point system in this case. However, it is merely a settlement by calculating it in the process of the settlement of points in convenience. For example, even if a business operator is actually paid the remainder after deducting the merchant fees from a credit card company after deducting the merchant fees from the credit card company, the tax base cannot be viewed as different on this ground.

(3) The concurring opinion with the Majority also criticizes the Dissenting Opinion that there is no difference between the two in comparison with the case where the customer who purchases the same product trades at retail stores operating the customer loyalty system such as the point of this case and the case where the customer trades at retail stores operating the immediately discount system.

However, in the case of the former, the Dissenting Opinion is related to the “self-generating points” as already expressed in the Dissenting Opinion. As such, it appears that a business entity in the second transaction appears that the obligation to pay money to a points operator and the right to receive money from him/her inevitably accrue as a result of belonging to the same business entity, and that the substance of the right to receive money equivalent to the points is maintained as it is. Rather, from the perspective of the second transaction business entity, if the points were used against another business entity, the business entity bears the obligation to pay money equivalent to the whole amount of money to the points operator, even if it was used against the other business entity, and even if it was exempted from the obligation to pay such money to the points operator, it should be deemed that there is an essential difference from the case of a person immediately to pay such money to him/her. In the case of an immediate increase, the issue of whether the business entity is exempt from the obligation to pay money to anyone or whether it comes to have the right to receive money from him/her is similar to the value-added tax system.

C. The precedents cited in the Concurrence with the Majority Opinion do not conflict with the Dissenting Opinion, but rather accords with the Dissenting Opinion accurately.

(1) In the case of Supreme Court Decision 2013Du19615 Decided December 23, 2015, the mobile communications company supplied a device to an agent. The Plaintiff Company, the mobile communications company, was given a reduction of the amount equivalent to the subsidy paid to the agent, when the customer who subscribed to the mobile communications service satisfies certain requirements. In this case, from the standpoint of the mobile communications company, the mobile communications company, as the supplier, was given the reduction of the amount of the device paid to the agent, but did not receive any money corresponding thereto from any place, and thus, it is entirely consistent with the Dissenting Opinion.

(2) Supreme Court Decision 2014Du298, 304, 311 Decided June 23, 2016 (hereinafter referred to as “open Market Service Supply Decision”) issued by the Internet Open Market Operation Company (hereinafter referred to as “Open Market Service Supply Decision”) at issue, where it is the Plaintiff, and the supply price of open Market-related services provided to the occupant company, and Supreme Court Decision 2014Du144 Decided June 23, 2016 (hereinafter referred to as “The decision on the supply of home shopping products”) became an issue of the supply price of goods supplied to the customer when the home shopping company is the Plaintiff.

(A) In the decision on the supply of open market services, the Plaintiff’s Internet open market operation company, instead of issuing a discount coupon and allowing the occupant to supply goods at a discounted price to the customer, at a discounted rate of the service fees that the Plaintiff would receive from the occupant company. Accordingly, the Plaintiff’s Internet open market operation company only reduced the service fees that it would receive, but did not receive any money equivalent thereto from any other person. Thus, the Plaintiff’s Internet open market operation company is consistent with the Dissenting Opinion.

(B) In the decision on the supply of home shopping products, the Plaintiff’s home shopping sales shop store, which is the Plaintiff, reduced the amount of goods from customers due to the discount coophone issued by the home shopping operator, while the fee to be paid to the home shopping operator was reduced to the same amount and there was no economic change.

Therefore, the issue was whether the Plaintiff’s amount equivalent to the fee reduced by the discount coupon actually corresponds to the so-called “third party payment” paid by a third party, i.e., home shopping operator, not the customer, but the transaction partner. However, the profit from such reduction was not included in the tax base for the supply of goods because it is directly related to the Plaintiff’s service supply transaction to the Plaintiff by the home shopping operator rather than the Plaintiff’s product supply transaction to the customer. In other words, it may be determined that the Plaintiff’s product supply transaction to the customer and the home shopping operator’s service supply transaction to the Plaintiff at once, and that it was concluded as above by determining only the Plaintiff’s product supply transaction at issue.

The Plaintiff’s discountphones does not acquire the right to receive any money from a customer or home shopping operator, who is a transaction partner, in connection with the transaction of goods, but can be reduced from the commission amount to be paid to the home shopping operator in connection with the transaction of service. Thus, the Plaintiff’s considerable value of discount coupons is not deemed to have received “price other than money,” which is included in the tax base for the supply of goods provided to the Plaintiff, and is deemed to fall under “amount of discount” that is excluded from the tax base for the supply of goods provided to the Plaintiff by the home shopping operator. This conclusion is acceptable from a concrete perspective of validity. In short, the Plaintiff’s duty base for the service provided by the home shopping operator is reduced, while the tax base for the goods supplied to the customer is maintained and the sales amount is not reduced. This is because it is unfair because the Plaintiff, who is not the issuer of discount coupon, is disadvantageous to the Plaintiff.

Ultimately, as long as the transaction of supplying goods and providing services is separate taxable objects of value-added tax, it shall be determined whether an entrepreneur received “money-valueing transaction” in relation to each transaction as a unit of each transaction, and the Dissenting Opinion’s principle that the two transactions should not be determined in total has been carried out accurately.

D. The Majority Opinion states that even if a business entity, including the Plaintiffs, who entered into a membership bus business partnership agreement with a lot card operating the instant points, has set aside the instant points in the primary trade, and uses the accumulated points to any of the business entities, the amount equivalent to the points used in the primary trade and the secondary trade may be considered as a “amount of discount” if the business entity uses the said points together with any of the secondary trade, it can be established only if the business entity is deemed as a single business entity, and the points operator is deemed as not having any separate business entity. This can be deemed as a matter of course. Such interpretation may not be permitted. Such a legal doctrine does not allow any such interpretation. Accordingly, it should be determined whether the tax base should be included in the secondary trade tax base on the premise that the said transaction should be included in the secondary trade base.

As above, I express my concurrence with the Dissenting Opinion.

[Separate] List of Defendants: omitted

Justices Lee In-bok (Presiding Justice)