Seocho 2014west 4170 ( December 18, 2014)

The sale of buildings through consultation to redevelopment cooperatives constitutes the supply of goods.

The sale of a building to a redevelopment association that is not an expropriation procedure constitutes the supply of goods, and there is no justifiable reason to believe that the violation of the duty is not caused, and the additional tax is legitimate.

Article 14 of the former Enforcement Decree of the Value-Added Tax Act

2015Guhap57215 Revocation of Disposition of Imposition of Value-Added Tax

KimA

BB Director of the Tax Office

September 4, 2015

September 25, 2015

1. The plaintiff's claim is dismissed.

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

Cheong-gu Office

The imposition of value-added tax of KRW 112,76,760 (including additional tax) imposed on the Plaintiff on June 2, 2014 by the Defendant on June 2, 2014 shall be revoked.

1. Details of the disposition;

A. On September 21, 201, the Plaintiff sold 00 land and its ground buildings (hereinafter referred to as “each of the instant real estate”) in Mapo-gu Seoul Metropolitan Government (hereinafter referred to as the “instant redevelopment project association”) to the Plaintiff on September 21, 201, and agreed on KRW 0 billion. The instant redevelopment project association completed the registration of ownership transfer on each of the instant real estate on January 12, 2012.

B. On June 2, 2014, the Defendant calculated the supply value of the building of this case as KRW 00,000,000 on the ground of the omission in the return of value-added tax following the transfer of the building of this case, and notified the Plaintiff of the correction and notification of the value-added tax of KRW 200,000,000 (including the total amount of the additional tax on the issuance of tax invoices, the additional tax on the return and the additional tax on the additional tax on the return,00,000) in 2011 (hereinafter “instant disposition”).

C. On August 5, 2014, the Plaintiff appealed and requested for adjudication on August 5, 2014, but the Tax Tribunal decided to dismiss the Plaintiff’s request on December 18, 2014.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1, 2, 3, 6 through 9, Eul evidence Nos. 1 and 2, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

1) Considering that the instant building was transferred to the redevelopment association for public works, and the ultimate objective of the instant redevelopment association was land acquisition, and the instant building was removed. Considering that the imposition of value-added tax varies depending on the removal of the building owner and the public nature of housing redevelopment projects, etc., Article 14(4) of the Enforcement Decree of the Value-Added Tax Act was amended as follows: “The Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (hereinafter “Urban Improvement Act”) on February 15, 2013, and the Act on the Acquisition of Land, etc. for Public Works and the Compensation for Land, Etc. for Public Works (hereinafter “Land Compensation Act”), if the owner of the goods receives the price for the goods expropriated, the compensation for the instant building constitutes “the case where the price for the relevant building was paid on the condition of removal,” and thus, the instant building should not be considered as the supply of goods. Therefore, the instant disposition is unlawful.

2) ① At the time when the Plaintiff reported and paid the transfer income tax and local income tax on the transfer of each of the instant real estate, a certified tax accountant representing the Plaintiff at the time of reporting and paying the instant real estate shall not be subject to value-added tax; ② The amendment of Article 14(4) of the Enforcement Decree of the Value-Added Tax Act was made; ② the consultation and sale of the instant building under the amended Act and subordinate statutes is exempt from taxation; ③ even if Article 14(4) of the former Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 24359, Feb. 15, 2013; hereinafter the same shall apply), the Plaintiff’s disposition of this case differs from the legislative intent of imposing value-added tax pursuant to the former Enforcement Decree of the Value-Added Tax Act prior to the amendment, and thus, the Plaintiff’s justifiable

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

1) Whether the agreement on sale of the instant building constitutes the supply of goods

A) According to Article 6(1) of the former Value-Added Tax Act (wholly amended by Act No. 11873, Jun. 7, 2013; hereinafter the same) and Article 14(1)1 and 4 of the former Enforcement Decree of the Value-Added Tax Act, “the supply of goods” includes the transfer or transfer of goods under all contractual or legal grounds. “The supply of goods” includes ① the transfer or transfer of goods by means of cash sales, extra-board sales, installment sales, long-term installment sales, condition-term sales, installment sales, consignment sales, and other sales contract; ② the transfer or transfer of goods by auction, expropriation, investment in kind or other contractual or legal grounds. However, according to Article 14(4) of the former Enforcement Decree of the Value-Added Tax Act, in the expropriation procedure under the Act on the Compensation for Land, etc., where the owner of the goods subject to expropriation receives the price for the goods on the condition that the goods are removed.

B) Where an entrepreneur delivers or transfers goods due to contractual or legal grounds, the object of the value-added tax shall be both taxable unless there is a separate provision that the goods are exempted or non-taxable, and as long as the supply of the goods falls under the supply of the goods under the Value-Added Tax Act, whether the supply of the goods is continuously maintained, expanded, or for liquidation, reorganization, or discontinuance of the business, or not, it shall be subject to taxation (see, e.g., Supreme Court Decisions 95Nu12132, Jan. 23, 1996; 2005Du17157, Feb. 14, 2008). Meanwhile, Article 14(4) of the former Enforcement Decree of the Value-Added Tax Act cannot be extended until the operator of the public service project removes the goods acquired through consultation prior to the expropriation procedure (see, e.g., Supreme Court Decision 2010Du2647, Dec. 22, 2011).

C) the facts of recognition

(1) In determining 00,000,000,000 won for consultation and sale of the instant building between the redevelopment cooperative and the instant redevelopment cooperative, the Plaintiff determined the land as KRW 00,000,000,000,00 for the instant building, and the compensation for losses as KRW 00,000,000.

(2) On April 10, 2012, the redevelopment cooperative removed the instant building, including the instant building, after the ownership of each of the instant real estate was transferred.

[Ground of recognition] Facts without dispute, Gap evidence 1, 2, 8, Eul evidence 2, the purport of the whole pleadings

D) In full view of the aforementioned legal principles and the facts acknowledged earlier, and the following circumstances revealed together with the purport of the entire pleadings, the sale of the instant building through consultation ought to be deemed to constitute the supply of goods.

(1) The Plaintiff used not only the instant land but also the instant building as the subject of the consultation and sale, and was paid the price for the instant building by the redevelopment association separate from the compensation for losses.

(2) In a case where the owner of a building removes a building and transfers only the site to a project implementer under the Urban Improvement Act, even if there is no goods subject to the provision of compensation for the building. However, in a case where a project implementer removes a building by taking over the building and site, the right to dispose of the building and the right to use and profit from the building were entirely transferred to the project implementer for the removal of the building and the supply of the goods itself. Whether to use the building as it is or not can vary depending on the purpose of the acquisition of the building, which is not the issue determined by the project implementer after the completion of the transfer of the building.

(3) The acquisition by consultation can be seen as identical to a private sales contract, but since the expropriation is a procedure under public law through adjudication by the Land Tribunal, both are different in legal nature. Therefore, Article 14(4) of the former Enforcement Decree of the Value-Added Tax Act cannot be extended to the case of acquisition by consultation, other than the expropriation procedure

E) Therefore, the instant disposition based on the same premise is lawful.

(ii) the existence of justifiable grounds for an additional duty reduction or exemption

A) In order to facilitate the exercise of taxation rights and the realization of tax claims, additional tax under the tax law is an administrative sanction imposed in accordance with the provisions of the tax law in cases where a taxpayer violates a tax return and tax liability without justifiable grounds, and the taxpayer’s intention and negligence is not considered. On the other hand, it is unreasonable to deem that the taxpayer was not aware of his/her duty, and that such a sanction is unreasonable, or that it is unreasonable to expect the taxpayer to fulfill his/her duty, and that it is unreasonable to assume that the taxpayer was not aware of his/her duty (see, e.g., Supreme Court Decision 2010Du1622, Apr. 28, 201).

B) Considering the facts and circumstances acknowledged earlier and the overall purport of the argument as seen earlier, the Plaintiff did not report and pay the value-added tax on the instant building site under the Value-Added Tax Act or by misapprehending the legal doctrine on the sales of the instant building.

(1) At the time of the consultation and sale of the instant building, Article 14(4) of the former Value-Added Tax Act was applied, and no value-added tax was imposed on the instant building only when the owner of the building receives the price for the building on condition that the building be demolished. As such, insofar as the instant sales agreement did not fall under the expropriation procedure and the instant redevelopment association, other than the Plaintiff, removed the instant building, the sales agreement on the instant building was subject to value-added tax.

(2) By completing the registration of transfer of ownership of the instant building to the redevelopment association, the Plaintiff’s transfer of the instant building was deemed to have been completed on January 12, 2012, and on February 15, 2013, Article 14(4) of the former Enforcement Decree of the Value-Added Tax Act was revised to the effect that, even if the owner of the goods subject to expropriation did not remove the relevant goods, the payment for the expropriated goods is not deemed the supply of the goods.

(3) Even pursuant to Article 14(4) of the former Enforcement Decree of the Value-Added Tax Act (wholly amended by Presidential Decree No. 24638, Jun. 28, 2013), the consultation and sale of the instant building is not included in the expropriation procedure, and is not excluded from the scope of supply of goods.

C) Therefore, since it cannot be deemed that there is a justifiable reason that cannot be deemed to have been caused by the Plaintiff’s breach of duty, the penalty part among the instant disposition is legitimate.

3. Conclusion

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