Review Division 2008-0132 ( October 22, 2008)

Whether the value-added tax exemption for forest tending projects is granted

Value-added tax is levied on a forest tending project under a contract for forest project concluded with a local government because it does not constitute a transaction of supplying goods such as forest products, but does not fall under services essential to supply forest products.

The contents of the decision shall be the same as attached.

Article 1 (Taxable Objects)

Article 12 (Exemption from Value-Added Tax)

1. The plaintiff's claim is dismissed.

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

The Defendant’s imposition of value-added tax against the Plaintiff on June 2, 2008 is revoked in all of the imposition of KRW 5,475,50 for the second term of February 2, 2005, KRW 628,860 for the first term of February 2006, KRW 271 for 271, KRW 9,731,140 for the second term of February 2, 2006.

1. Details of the disposition;

A. The plaintiff is a corporate entity that started business on December 22, 2004 with the business type of "forest/forest business" as "forest/forest business", "forest-forest-tending business", "forest-tending business", "forest-tending business", and "forest-tending business" (hereinafter "the project of this case") between February 2, 2005 and February 2006, and did not issue an invoice under Article 163 of the Income Tax Act by considering the price received from ○○ City as the object of value-added tax exemption, and did not report value added tax.

B. The Defendant: (a) deemed that the instant business constituted a taxable object of value-added tax; (b) deemed that the value-added tax was included in the proceeds from supply received from ○○ City; and (c) notified the Plaintiff on June 2, 2008 of the amount calculated by dividing the price for supply by 1.1 for each of the above taxable periods (the value-added tax was included in KRW 389,548,181, KRW 4,590,906, KRW 4,590, KRW 74,023,636 for the first period of February 2, 2006, KRW 74,023, and KRW 636 for the second period of February 2, 2008, KRW 55,475, and KRW 528,860 for the second period of January 2, 2006, KRW 9,731, and KRW 140 for each of the following dispositions (hereinafter referred to as the “instant disposition”).

C. The Plaintiff appealed and filed a request for examination with the Commissioner of the National Tax Service on July 17, 2008, but the Commissioner of the National Tax Service.

On October 22, 2008, the above request for review was dismissed.

[Ground of recognition] Facts without dispute, Gap evidence 1, 2, 3 (including branch numbers, hereinafter the same shall apply), Eul evidence 1 to 6, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

(1) The instant project provides services essential for the supply of services related to forest products.

Since value-added tax is a business exempt from value-added tax, value-added tax on the business of this case is imposed.

The instant disposition is unlawful.

(2) At the time of the instant contract, ○○○ City entered into a contract on the premise that the instant project is subject to value-added tax exemption. The Defendant also did not impose tax on the instant project for several years, and thus ordered a public opinion that the instant project is subject to tax exemption. As such, the instant disposition was unlawful by violating the principle of good faith and the principle of protection of trust and trust.

(b) Related statutes;

(Omission)

C. Determination

(1) Whether the instant business is subject to value added tax

(A) Articles 1, 2, and 7 of the Value-Added Tax Act provide that the value-added tax is imposed on the supply transaction of goods or services, and the taxpayer is an independent supplier of goods or services for a business purpose. The supply of services is provided on all contractual or legal grounds in return for payment, or is allowed to use goods, facilities, or rights. The supply of goods or services essential for the supply of goods or services, which is the main transaction, shall be deemed to be included in the supply of goods or services. Article 12(1)1 of the Value-Added Tax Act provides that the supply of forest products is exempt from value-added tax.

(B) On the instant case, the Plaintiff is a corporation entity established for the purpose of forest project, such as the ○○ city and the place of order for the development of a natural recreation forest, and the Plaintiff entered into a contract for the forest project with ○○ city, which is the place of order, and received the payment from the ○○ city for the instant project. As such, the instant project is subject to value-added tax as a subsequent supply of services under Article 7.

In addition, the business of this case does not fall under the supply of services essential to the supply of forest products, rather than the supply of goods that are forest products, and thus, it cannot be viewed as the business exempt from value-added tax pursuant to Article 12 (1) of the Value-Added Tax Act. Thus,

(2) Whether the principle of trust and good faith and the principle of trust protection are violated

○○ Market concluded a contract on the premise that the instant project is subject to value-added tax exemption, or that the Defendant did not impose tax on the instant project for several years, cannot be deemed as a statement of view that the instant project constitutes a tax-free project, and there is no other evidence to support that the Defendant issued a public statement of opinion that the instant project constitutes a tax-free project, and there is no reason for the Plaintiff’s assertion on this part.

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and it is so ordered as per Disposition.

shall be ruled.