Whether the supply of balconys falls under the national housing construction services

The supply of balcony new shall not constitute a national housing construction service under an individual contract concluded on the buyers who wish to be supplied after completion of construction.

Article 106 of the Act on Special Cases concerning Taxation Restriction

1. The plaintiff's claim is dismissed.

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

1. Details of the disposition;

A. On September 19, 1998, the Plaintiff was a juristic person established with the business purpose of manufacturing and selling Aluminium for the purpose of business, which obtained a construction business license from the Governor of the Gyeonggi-do on January 30, 1999, and provided, mainly, apartment construction companies, apartment buyers, etc. with a window and balcony syke syke sy, etc. to the buyer of apartment

B. During the period from January 200 to February 2004, the Plaintiff supplied installation services at balcony new city (hereinafter “instant services”) to the buyers of apartment buildings below national housing size. In the internal context, the Plaintiff determined that the said supply constitutes national housing and the construction services of the relevant housing, and filed a VAT exemption report with the Defendant.

C. As a result of the corporate tax investigation conducted on the Plaintiff from April 12, 2005 to May 24, 2005, the Defendant denied the Plaintiff’s tax exemption return and applied the non-issuance penalty tax on the ground that the Plaintiff did not issue a tax invoice in the supply of the instant service. In addition, on July 8, 2005, the Defendant issued the Plaintiff a disposition imposing KRW 497,571,510 in total, including value-added tax and corporate tax, etc., as stated in the Plaintiff’s claim, on the ground that the supply of the instant service does not constitute national housing construction services.

[Ground of recognition] Facts without dispute, Gap evidence 2, Eul evidence 1, Eul evidence 2-1 to 10, Eul evidence 3-1 to 5, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The plaintiff asserts that the following part of the disposition of this case is illegal for the following reasons.

(1) According to the relevant provisions that are exempt from value-added tax on national housing construction services, the supply of the instant service constitutes a construction service of national housing supplied by a person registered under the Framework Act on the Construction Industry, and thus, value-added tax should be exempted on such supply.

(2) Since the Plaintiff issued and delivered an invoice or credit card sales slip in lieu of the receipt to the buyer of apartment buildings to whom the instant service was supplied, the additional tax due to the non-issuance of the tax invoice cannot be applied.

(b) Related statutes;

It is as shown in the attached Form.

C. Determination

(1) Determination on the first argument

Articles 106 (1) 4 and 106 (4) 2 of the Act on Special Cases concerning the Restriction of Taxation (amended by Act No. 7281 of Dec. 31, 2004) and Article 106 (1) 2 of the Enforcement Decree of the same Act provide that the supply of a house below the national housing scale by a person registered under the Framework Act on the Construction Industry, etc. shall be exempted from value-added tax. The above provision is prepared to contribute to residential stability, etc. of ordinary people by facilitating the construction of a house below the national housing scale by exempting a value-added tax on the construction of a national housing. Since Article 1 (4) of the Value-Added Tax Act provides that the supply of a chemical or service inevitably annexed to the supply of a main transaction shall be deemed to be included in the supply of a main transaction, it is difficult to view that the construction of a house below the national housing scale and the supply of the above service are naturally incidental to the supply of the goods or service, such as the Plaintiff’s supply of a housing below the national housing scale.

(2) Judgment on the second argument

Article 16 (1) of the Value-Added Tax Act provides that if an entrepreneur registered as a taxpayer supplies goods or services, the entrepreneur shall issue a tax invoice to the supplier, and according to Article 32 (1) of the Value-Added Tax Act and Article 79-2 (1) 7 of the Enforcement Decree of the same Act, a receipt shall be issued to the entrepreneur who mainly supplies goods or services to consumers who are not an entrepreneur, instead of exempting the entrepreneur from the obligation to issue the tax invoice. Accordingly, Article 25-2 of the Enforcement Rule of the Value-Added Tax Act provides that "the entrepreneur who mainly supplies goods or services to consumers who are not an entrepreneur, shall not be a entrepreneur, but a receipt shall be issued."

As acknowledged earlier, it is difficult to view that the instant service is an essential construction service in the supply of a residential building to the extent that it is possible to supply the residential building itself or to equal it, and it does not constitute a business that is impossible or considerably difficult to issue a tax invoice (Article 53(2) of the Enforcement Decree of the Value-Added Tax Act provides that a tax invoice may be issued by entering the address, name and resident registration number of the person who receives the goods or services in lieu of the registration number of the person who receives the goods or services in case of a person who is not a business operator) in the supply of the instant service, and thus, it cannot be deemed that the duty to issue a tax invoice is exempted pursuant to Article 32(1) of the Value-Added Tax Act and Article 79-2(1)7 of the Enforcement Decree of the same Act. Thus

3. Conclusion

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

Related Acts and subordinate statutes

The Doz. Act on Special Cases concerning Tax Restriction

Article 106 (Exemption, etc. of Value-Added Tax)

(1) The supply of goods or services falling under any of the following subparagraphs shall be exempted from value-added tax:

4. National housing prescribed by the Presidential Decree and the construction services of the relevant housing (including the remodelling services prescribed by the Presidential Decree);

The Enforcement Decree of the Act on Special Cases concerning Tax Restriction

Article 106 (Exemption, etc. of Value-Added Tax)

(4) For the purpose of Article 106 (1) 4 of the Act, the term “national housing as prescribed by the Presidential Decree and construction services for the relevant housing” means:

1. Houses not more than the size under Article 51-2 (3);

The Value-Added Tax Act

Article 1 (Talopies)

(4) The supply of goods or services naturally annexed to the supply of goods which is the main transaction shall be deemed to be included in such supply of goods, and the supply of goods or services inevitably annexed to the supply of services which is the main transaction shall be deemed to be included in such supply of services.

Article 16 (Tax Invoice)

(1) If an entrepreneur registered as a taxpayer supplies goods or services, he shall deliver an invoice stating the following matters (hereinafter referred to as “tax invoice”) to the person who receives the supply as prescribed by the Presidential Decree at the time prescribed in Article 9: Provided, That in the case prescribed by the Presidential Decree, the delivery time may vary:

Article 32 (Receipt)

(1) Notwithstanding Article 16 (1), where an entrepreneur prescribed by the Presidential Decree supplies goods or services, he shall issue a receipt under the conditions as prescribed by the Presidential Decree.

[Seoul High Court Decision 2007Nu33292, July 17, 2008]

1. The plaintiff's appeal is dismissed.

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

The judgment of the court of first instance shall be revoked. The defendant revoked on July 8, 2005 value-added tax of 18,273,480 won, value-added tax of 200 for the plaintiff on 200, value-added tax of 5,74,80 won, value-added tax of 17,693,630 won, value-added tax of 1 year 2001, value-added tax of 39,198,980 won, value-added tax of 5,958,740 won, value-added tax of 2 year 2002, value-added tax of 1 year 5,590,870 won, value-added tax of 2 year 203, value-added tax of 45,252,570, 203, value-added tax of 26,476, value-added tax of 2 year 207, 2004, 20753, 208

1. A cited part;

This court's reasoning is as follows, except for addition and modification, and therefore it is identical to the entry of the reasoning of the judgment of the court of first instance. Thus, it is also accepted by Article 8 (2) of the Administrative Litigation Act and Article 420 of the Civil Procedure

A. From 1 to 2th of the first instance judgment, “in addition, applying the tax invoice on the ground that the tax invoice was not issued” in the first instance trial No. 3 to “in the end, the additional tax to be submitted by buyer (hereinafter “instant additional tax”) shall be applied on the ground that the list of the total tax invoice was not submitted due to the failure to issue the tax invoice,” and the change to

B. The part 3, 14-16 of the judgment of the court of first instance is that the Plaintiff constitutes a business operator exempt from the duty to issue a tax invoice, and even if not, there is a justifiable ground for not issuing and issuing a receipt, such as a credit card sales slip, to the apartment purchaser who received the service of this case, and thus, the imposition of the penalty tax of this case is unlawful.

C. The construction completion of the first instance court No. 4, 11 was changed to “after the completion of the first house”.

D. On the 5th judgment of the first instance court, the part concerning the 5th judgment of the court of first instance is without merit, and as long as it cannot be deemed that the obligation to issue a tax invoice is exempted to the Plaintiff, it cannot be deemed that there is a justifiable reason for not issuing a tax invoice on the grounds that the tax invoice was issued in lieu of the provision of a credit card sales slip.

(e) 15 pages 8, 15, following the first instance judgment:

"(3) Where an entrepreneur falls under subparagraphs 1 and 2, an amount equivalent to 1/100 of the value of supply not submitted or entered in the list of the total tax invoice by buyer or entered differently from the fact shall be added to the tax payable or deducted from the tax refund.

1. Where the list of the total tax invoice by buyer is not submitted under Article 20 (1) and (2);

2. Conclusion

Therefore, the judgment of the court of first instance is legitimate, and the plaintiff's appeal is dismissed as it is without merit. It is so decided as per Disposition.