early 20101 middle 2268 (Law No. 19, 2011)

The burden of proving the transfer of business not deemed the supply of goods shall be borne by the person liable for duty payment.

In order to constitute a transfer of a business that does not constitute a supply of goods, the business must be separated from the business entity as an organic combination of human and physical facilities so that the business can be recognized as a social independence, and the fact that the business subject to transfer is not a simple physical facility, but a organic combination is not a real facility, the burden of proving that the business is a cause of a tax disability in value-added tax.

Article 6 of the Value-Added Tax Act

Article 17 of the Enforcement Decree of the Value Added Tax Act

2011Revocation of revocation of the imposition of value-added tax, 1602

XX

Head of Sungnam Tax Office

March 2, 2012

March 30, 2012

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 of KRW 93,922,700 on February 1, 201 against the Plaintiff on February 1, 201 shall be revoked.

1. Details of the disposition;

A. On April 8, 2009, the Plaintiff sold each of the 101 to 103, 217 to 220, 222 and 223 (hereinafter “each of the instant real estates”) among the 4 underground floors located in 000-0 of Sungnam-si, Sungnam-si, and the 15th main complex buildings (hereinafter “instant building”) on the 15th floor, and completed each registration for the transfer of ownership on April 10, 2009.

B. The Plaintiff did not report the value-added tax by regarding the transfer of each of the instant real estate to EA as the comprehensive transfer of the business subject to non-taxation of value-added tax. However, the Defendant deemed the said transfer as the supply of general goods, not the comprehensive transfer of the business, and imposed and notified the Plaintiff the value-added tax of KRW 93,922,70 for the first period of January 2009 (hereinafter “instant disposition”).

C. The Plaintiff dissatisfied with the instant disposition and filed an appeal with the Tax Tribunal on September 19, 201, but the said claim was dismissed.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 8, 14, 15, Eul evidence Nos. 1 and 2, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

Since the Plaintiff comprehensively transferred all physical, human, rights, and obligations related to each of the instant real estate to EA, it constitutes a transfer of business that does not constitute the supply of goods under the Value-Added Tax Act, the Defendant’s deeming the transfer of each of the instant real estate as the supply of general goods is unlawful.

(b) Related statutes;

It is as shown in the attached Form.

C. Determination

(1) Article 6(6)2 of the former Value-Added Tax Act (wholly amended by Act No. 915, Jan. 1, 2010; hereinafter the same) and Article 17(2) of the former Enforcement Decree of the Value-Added Tax Act (wholly amended by Presidential Decree No. 22043, Feb. 18, 2010; hereinafter the same) mean the transfer of a business that does not constitute the supply of goods under Article 6(6)2 of the former Value-Added Tax Act (wholly amended by Presidential Decree No. 22043, Feb. 18, 2010; hereinafter the same shall apply) refers to the comprehensive transfer of physical and human facilities, including business property, and the replacement of a management body while maintaining the identity of the business. Thus, the business must be separated from the management body and can be recognized as social independence. The fact that the object of transfer is not a simple physical facility, but a person liable to bear the burden of proof on the grounds of a tax impairment (see, e.g.

(2) Based on the above legal principles, each of the statements in Gap evidence Nos. 1, 2, 4 through 7, 10 through 12, and 19 through 21 (including each number), and part of Gap evidence Nos. 9 may be written as evidence as to whether the transfer of each of the instant real estate constitutes a comprehensive transfer of business exempt from value added tax. However, in light of the following circumstances recognized by Gap evidence Nos. 3, 8, 13 through 15, Eul evidence Nos. 1 and 2 (including each number), and the purport of Gap evidence Nos. 9 and all of the pleadings, it is insufficient to view that each of the above evidence alone constitutes a comprehensive transfer of business.

(A) On April 9, 2007, the Plaintiff purchased a total of 36 units of real estate (including each of the instant units of real estate), including 101 through 110, 201 through 223, and 410 through 412, from among the instant buildings, from Non-Party OGeneral Construction Co., Ltd., and completed each registration of ownership transfer on April 13, 2007, and sold a total of 24 units of each of the instant units of real estate in succession for about two years thereafter.

(B) On April 16, 2007, immediately after the purchase of the instant building, the Plaintiff registered the business as a real estate rental business; however, on June 12, 2008, the sales period of each of the said real estate was in existence, adding the real estate sales business to the relevant type of business retroactively from the first registration date.

(C) The sales contract for each real estate of this case, prepared on April 8, 2009 between the Plaintiff and EA, entered the amount of purchase price for each real estate in accordance with the general sales contract form. Although the phrase "comprehensive transfer contract including value-added tax" is written in the column for special agreement, the contents of the sales right, etc. concerning each real estate of this case are not entirely stated, and there is no other circumstance to deem that the appraisal of assets and liabilities related to each of the real estate of this case was made in the course of transferring each of the real estate of this case, or that there was a transfer of factual relations, such as transaction secrets, management organization, etc.

(D) The total value of each of the instant real estate reaches at least 1.4 billion won, and the transfer value of each of the instant real estate transferred in 2007 and 2008 exceeds 4.3 billion won, while the total value exceeds 4.3 billion won, the period during which the Plaintiff owned each of the instant real estate is less than 2 years.

(3) Therefore, the Defendant’s disposition that imposed value-added tax on the Plaintiff is lawful on deeming that the transfer of each real estate of this case is not a comprehensive transfer of business.

3. Conclusion

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