[1] Standard for determining whether a real estate transaction constitutes the supply of goods subject to taxation under the Value-Added Tax Act

[2] Whether the transfer of a building after the sale of the building in lots is subject to the value-added tax in cases where the transfer of the building constitutes the business activity as a real estate sales businessman even though the building was transferred while making a temporary business after making a business registration as to Schlage (affirmative)

[1] Whether a real estate transaction constitutes a supply of goods subject to taxation under the Value-Added Tax Act, should be determined in light of ordinary social norms, considering whether the transaction’s purpose is profit-making and whether the transaction is continuity and repetition of business to the extent that it can be seen as business activities in light of its size, frequency, mode, etc.

[2] Even if a building was sold in lots and was transferred for temporary operation after registering the business of Smarket, if it can be deemed that the act of transfer constitutes business activity as a real estate sales businessman, it shall be subject to the assessment of value-added tax.

[1] Articles 1(1) and 2(1) of the Value-Added Tax Act, Article 2(1)5 of the Enforcement Decree of the Value-Added Tax Act, Article 1(1) of the Enforcement Decree of the Value-Added Tax Act / [2] Articles 1(1) and 2(1) of the Value-Added Tax Act, Article 2(1)5 of the Enforcement Decree of the Value-Added Tax Act, Article 1(

[1] [2] Supreme Court Decision 94Nu8617 delivered on October 21, 1994 (Gong1994Ha, 3145) / [1] Supreme Court Decision 95Nu92 delivered on November 7, 1995 (Gong1995Ha, 3941) Supreme Court Decision 95Nu10969 delivered on February 23, 1996 (Gong196Sang, 1150) Supreme Court Decision 96Nu8758 delivered on October 11, 1996 (Gong196Ha, 3362)

Plaintiff

Head of North Busan District Tax Office

Busan High Court Decision 98Nu3877 delivered on April 23, 1999

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

Whether the transaction of real estate constitutes a supply of goods subject to taxation under the Value-Added Tax Act, which are the part of a real estate trading business, shall be determined in light of social norms by taking into account whether the transaction purpose is profit-making and the continuity and repetition of the degree that it can be seen as business activities in light of its size, frequency, mode, etc. (see, e.g., Supreme Court Decision 96Nu8758, Oct. 11, 1996). Even if a building was sold in lots and used for a temporary business after completing business registration as a real estate sales businessman, if the transfer of the building constitutes business activities as a real estate sales businessman, it shall be subject to value-added tax (see, e.g., Supreme Court Decision 94Nu8617, Oct. 21, 1994).

According to the facts established by the court below, the plaintiff purchased 404.65 square meters of the commercial building in the apartment complex from the Korea National Housing Corporation in 407,00,000 and completed the registration of ownership transfer on July 31, 1992. On August 10, 1992, the plaintiff promptly closed the business at 00,000, and sold it to another person only once for about nine months from August 24, 1992 to May 21, 1993. In light of the above legal principles and the circumstances, size, frequency, attitudes, etc. of each transaction, it is sufficient to view that the plaintiff sold each of the above real estate over 11 times in a short period of time, and it is sufficient to view that the plaintiff acquired the real estate sales business as a whole, and that the plaintiff did not have denied the acquisition value of the commercial building in this case or did not have any damage to the sales price of the commercial building in this case.

Nevertheless, the court below determined that the divided sale of the commercial building of this case does not constitute real estate sales business on the grounds as stated in its reasoning. The court below erred by misapprehending the legal principles on real estate sales, which is a person liable to pay value-added tax, and thereby affecting the conclusion of the judgment. The grounds for appeal

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

Justices Park Jae-sik (Presiding Justice)