Seoul High Court Decision 2008-0052 ( October 15, 2009)

Value-added tax reduction for general taxi transport business operators

If the reduced amount of value-added tax is used as the operating expenses of the call center, it cannot be deemed to be used for improving the treatment and welfare of general taxi drivers under the conditions as prescribed by the Minister of Construction and Transportation.

The contents of the decision shall be the same as attached.

1. The plaintiff's claim is dismissed.

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

The Defendant’s disposition of imposition of KRW 72,142,250 for the sum of the value-added tax for the first and second years of 2007 against the Plaintiff on August 1, 2008 is revoked.

1. Circumstances of the disposition;

A. Pursuant to Article 106-4(1) of the former Restriction of Special Taxation Act (wholly amended by Act No. 8827 of Dec. 31, 2007; hereinafter “former Restriction of Special Taxation Act”), the Plaintiff filed a return on the amount of value-added tax for the first half of 2007 and the second half of 20,480,650 won for the second half of 2007 and each value-added tax for the second half of 2007 pursuant to Article 106-4(1) of the former Restriction of Special Taxation Act (wholly amended by Act No. 8827 of Dec. 31, 2007).

B.** On June 12, 2008, the Mayor notified the Defendant of the use of KRW 28,415,314, and KRW 27,114,892, out of the amount of reduced value-added tax for the first term portion of the year value-added tax for 2007, as the operating expenses of the call center (the call center staff’s salary and allowances) by A A A A A A A A A A A A A A A taxi company.

C. Accordingly, on August 1, 2008, the Defendant notified the Plaintiff of the amount of value-added tax reduced to KRW 28,415,314 on the ground that the amount of value-added tax reduced to KRW 37,683,318 on the ground that it was not used for improving the treatment and welfare of general taxi drivers, plus the amount of value-added tax reduced to KRW 9,268,004 on the ground that it was not used for improving the treatment and welfare of the general taxi drivers, and that the Defendant notified the Plaintiff of the amount of value-added tax reduced to KRW 37,683,318 on the first term portion of 207, adding the amount of value-added tax reduced to KRW 27,114,892, and the amount of value-added tax reduced to KRW 7,34

D. On September 17, 2008, the Plaintiff dissatisfied with each of the dispositions in this case, filed a request for review with the Board of Audit and Inspection, but the Board of Audit and Inspection dismissed the said request on June 11, 2009.

[Reasons for Recognition] Facts without dispute, Gap evidence 1-2, Eul evidence 1-1, 2-2, Eul evidence 1-2, Eul evidence 2, Eul evidence 3-1 through 4, the purport of the whole pleadings

2. Whether each of the dispositions of this case is legitimate

A. The plaintiff's principal

The Plaintiff’s employees use the reduced amount of value-added tax as operating expenses of the call center, and use the reduced amount of value-added tax as operating expenses of the call center under an agreement with workers, and operate the call center more beneficial than granting the reduced amount to workers equally. As such, the Plaintiff uses the reduced amount of value-added tax to improve the treatment and welfare of the general taxi drivers. Accordingly, the Defendant’s disposition of this case should be revoked.

(b) Related statutes;

It is as shown in the attached Form.

C. Determination

Article 106-4 (1) of the Restriction of Special Taxation Act provides that 50/100 of the payable amount of value-added tax shall be reduced to a general taxi transport business entity under the Passenger Transport Service Act by the taxable period ending on or before December 31, 2008, and Article 106-4 (2) of the same Act provides that the abated tax amount under paragraph (1) shall be used for improving the treatment and welfare of general taxi transport business entities under the conditions as prescribed by the Minister of Construction

In addition, according to Gap evidence No. 2, the Ministry of Construction and Transportation policies and 1532 and 1533 of the Ministry of Construction and Transportation on April 8, 2005, under the above law, the taxi industry's guidelines for the use of the taxi industry's tax reduction amount are to be used only for the purpose of improving the treatment and welfare of workers, and in principle, the full amount of the tax reduction amount is to be paid in cash to each worker. However, the exception is recognized when a part of the reduced tax amount is requested to be used in a manner other than cash by more than a majority of workers at each place of business. The detailed measures and prohibitions are stipulated. The call center's operating expenses are used for the improvement

The tax amount to be reduced under Article 106-4 (2) of the former Restriction of Special Taxation Act provides that the tax amount to be used for the improvement of the treatment and welfare of general taxi drivers under the Passenger Transport Service Act as prescribed by the Minister of Construction and Transportation, and the guidelines for the use of the tax amount to be reduced shall be used only for the purpose of improving the treatment and welfare of workers. The use of the reduced tax amount as the expenses for the operation of the call center is prohibited by deeming that the use of the reduced tax amount is for the improvement of the management of the user's management. ② Even if the worker receives the call fee of 1,000 won from the customer through the call center operation and does not operate the call center, it appears that the operation of the call center is for the improvement of the management of the plaintiff, who is the business operator, even if the number of workers increases, the use of the reduced tax amount as the expenses for the operation of the call center cannot be considered as the "use for the improvement of the treatment and welfare of general taxi drivers

Therefore, the defendant's objection disposition is legal.

3. Conclusion

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