[1] The method of calculating the value-added tax base for the supply of goods where an entrepreneur in a bonded area supplies the goods and is supplied with the goods within the bonded area and all imports of the goods become subject to the imposition of value-added tax

[2] The meaning of "business operator within a bonded area" under Article 48 (7) of the Enforcement Decree of the Tax Act

[1] According to Article 13(4) and (5) of the Value-Added Tax Act and Article 48(7) of the Enforcement Decree of the same Act, in calculating the tax base of value-added tax, where an entrepreneur in a bonded area supplies goods to another country than a bonded area, and where the goods fall under the import goods under Article 8 of the same Act, the base amount of value-added tax on the import of the goods under Article 13(4) of the same Act shall not be included in the supply value. Thus, in a case where an entrepreneur in a bonded area supplied goods and received them from a supplier in a bonded area and becomes subject to value-added tax on both the supply of goods and the import of the goods, the tax base for the supply of the goods shall be the remainder after deducting the base amount of value-added tax on the import

[2] The "business operator within a bonded area" under Article 48 (7) of the Enforcement Decree of the Value-Added Tax Act refers to a person who supplies goods or services independently for business within a bonded area, regardless of whether it is for profit in the bonded area, and it is not limited to a business operator

[1] Article 13(4) and (5) of the Value-Added Tax Act, Article 48(7) of the Enforcement Decree of the Value-Added Tax Act / [2] Article 13(4) and (5) of the Value-Added Tax Act, Article 48(7) of the

[1] Supreme Court Decision 92Nu9715 delivered on July 27, 1993 (Gong1993Ha, 2446)

Co., Ltd.

Seoul Special Metropolitan City (Law Firm Sejong, Attorneys Osung-hwan et al., Counsel for the plaintiff-appellant)

Seoul High Court Decision 96Na25151 delivered on October 24, 1997

The appeal is dismissed. The costs of appeal are assessed against the plaintiff.

The grounds of appeal Nos. 1 and 2 are also examined.

According to Article 13(4) and (5) of the Value-Added Tax Act and Article 48(7) of the Enforcement Decree of the same Act (hereinafter referred to as the "Decree"), where an entrepreneur in a bonded area supplies goods to any country other than a bonded area in calculating the tax base of value-added tax, the value-added tax base of value on the import of goods under Article 13(4) of the Act should not be included in the value-added tax base of the goods if the goods are imported goods under Article 8 of the Act. Thus, where an entrepreneur in a bonded area supplies the goods within a bonded area and the supplied goods are subject to value-added tax, the value-added tax base for the supply of the goods is the remaining amount excluding the value-added tax base of value-added tax on the import of the supplied person, and the value-added tax on the import of the supplied person is not superior (see Supreme Court Decision 92Nu9715, Jul. 27, 199).

According to the reasoning of the judgment below, the court below found that the plaintiff purchased the goods of this case from a foreign country and delivered all shipping documents to the defendant, and that the defendant transferred the goods of this case to a foreign country and taken them over from a bonded area, and on the premise that the supply of the goods of this case to the defendant is not limited to a business operator who has his place of business within a bonded area, the plaintiff's supply of the goods of this case to the defendant constitutes a case where the goods are supplied to a foreign country outside a bonded area, and therefore, the tax base of value added tax shall be the tax base of value added tax, regardless of whether the value added tax on the import of the goods of this case is exempted from part of the supply price of the goods of this case pursuant to Article 48 (7) of the Decree. In light of the above legal principles and records, the judgment of the court below is just, and there is no error in the misapprehension of legal principles as to the scope of application of Article 48 (7) of the Decree and calculation of tax base.

Therefore, the appeal is dismissed and all costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Lee Jae-hee (Presiding Justice)