early 2010 Heavy3160 ( November 30, 2010)

shall not be deemed a comprehensive business transfer of the rental business.

In the event that a real estate sales businessman newly built a house for multiple households and commercial buildings and transferred the house temporarily in an unsold housing unit, it cannot be deemed as a comprehensive business transfer of the rental business, and thus constitutes the supply of goods, and the content of the reply by the General Counseling Center head is merely a general theoretical opinion statement as to the transfer of the business.

2011Guhap2553 Revocation of Disposition of Imposition of Value-Added Tax

X et al.

O Head of tax office

June 30, 2011

August 11, 2011

1. All of the plaintiffs' claims are dismissed.

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

The Defendant’s imposition of value-added tax of KRW 28,757,620 against Plaintiff ChoB on July 16, 2010, and the imposition of value-added tax of KRW 22,370,670 against Plaintiff ChoB, respectively, shall be revoked.

1. Details of the disposition;

A. The Plaintiffs registered a real estate sales business in around 2006.

B. Plaintiff Cho Jae-A newly constructed a multi-household and commercial-use house on the XX 000-0 - and temporarily leased it on or around December 27, 2007. Plaintiff Cho Jae-A also newly constructed a multi-household and commercial-use house on or around the 000-0 - and then temporarily leased it on or around June 28, 2007 (hereinafter referred to as “each building of this case”).

C. The Defendant deemed that the transfer of each of the above buildings of this case is the supply of goods and rendered a disposition of taxation, such as the written claim, on the ground that the Plaintiffs omitted the return and payment of value-added tax (hereinafter “instant disposition”).

D. The Plaintiffs appealed and filed a request for a trial with the Tax Tribunal on March 6, 2009, but the claim was dismissed on August 10, 2010.

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

2. Whether the disposition is lawful;

A. The plaintiffs' assertion

1) Violation of the principle of good faith

The head of the National Tax General Counseling Center, which is an affiliated agency of the National Tax Service, sent a reply to the plaintiffs' questioning that "the transfer of each of the buildings of this case constitutes a "transfer of business" subject to the non-value-added tax, with the trust of such public opinion statement, and thus, the plaintiff did not issue a tax invoice to the assignee of each of the buildings of this case, and did not receive value-added tax from the assignee. However, the defendant's reversal of the above reply without the lapse of three years after the above reply violates the principle of trust protection or the principle of trust and good faith, which is the general principles of law.

2) Violation of the principle of equity.

If the head of the National Tax Counseling Center replys that the transfer of each of the buildings of this case does not correspond to the "transfer of business" subject to non-taxation, the plaintiffs were to receive value-added tax separately from the transferee while transferring each of the buildings of this case, and the State paid value-added tax from the plaintiffs. However, the plaintiffs believed that the head of the National Tax Counseling Center constitutes the "transfer of business" as above, and the plaintiffs were to dispose of each of the buildings of this case as a result of the disposition of this case, and there was no way to compensate for the losses as a result of the disposition of this case, while the State became to gain profit equivalent to the value-added tax, this is in violation of the principle of equity.

(b) Related statutes;

It is as shown in the attached Form.

C. Determination

1) Whether the transfer of each of the instant buildings constitutes "transfer of business" subject to non-taxation

Transfer of business refers to the transfer of business under Article 6(6) of the Value-Added Tax Act and Article 17(2) of the Enforcement Decree of the same Act, which provides that the transfer of business shall not be deemed the supply of goods, by comprehensively transferring physical, human, rights, and obligations, including business property, to replace only the managing body while maintaining the identity of the business (see Supreme Court Decision 91Nu13014, May 26, 1992).

As seen earlier, the Plaintiffs are merely those who are engaged in real estate sales business and temporarily leased each of the instant buildings before they are sold, and since they do not have been engaged in the type of business in making business registration under the Value-Added Tax Act, even if they transferred each of the instant buildings under the lease condition, they are merely the transfer of each of the instant buildings under the condition that they acquire lease deposit money to the assignee, and cannot be deemed as a comprehensive transfer of property, human resources, rights, and obligations related thereto. Accordingly, the transfer of each of the instant buildings by the Plaintiffs constitutes a taxable object of value-added tax under Articles 1(1)1 and 6(1) of the Value-Added Tax Act as a supply of goods.

2) Whether the principles of good faith and equity are violated

(a)a fact of recognition;

The following facts are acknowledged according to the contents of Gap evidence Nos. 1, 2, and 4 and the purport of the whole pleadings.

(1) On April 9, 2007, on the one hand, KimCC, an employee of the plaintiffs' tax agent office, newly constructed a multi-family housing (multi-family and commercial buildings) with a commercial building and transferred the housing to the rental business operator when he/she temporarily leases the housing.

(2) On April 19, 2007, the Director of the National Tax General Counseling Center responded to the above questions as follows:

(2) The following statements are omitted:

B) In general, in order to apply the principle of trust and good faith to the acts of the tax authorities in tax and legal relations, the tax authorities should name the public opinion that is the object of trust to taxpayers, the tax authorities should not cause the taxpayer to believe that the name of the opinion is justifiable, and there should be no reason attributable to the taxpayer. The taxpayer must act in trust in the name of the opinion, and the tax authorities should make a disposition against the above opinion that goes against the above opinion list, thereby infringing the taxpayer's interest. If the tax authorities' expression of intent is merely a general theoretical opinion statement, the application of the above principle is denied (see Supreme Court Decision 2007Du1947, 19454, Apr. 29, 2010).

As seen earlier, the content of the reply at the General Counseling Center’s meeting is merely a general theoretical statement on the transfer of business, and thus, it cannot be said that the principle of trust and good faith is applied to such content, and it cannot be said that the case of quality constitutes the transfer of business. Therefore, the above assertion by seafarers is without merit on different premise.

3. Conclusion

Thus, the plaintiffs' claims are dismissed as it is without merit.