(a) Criteria for determining whether real estate transactions constitute the supply of goods under the Value-Added Tax Act and income accrued therefrom is business income;

(b) The case holding that the disposition of imposition of value-added tax and global income tax are lawful on the real estate transaction, which was transferred within a short time as part of business activities, after acquiring real estate through an auction procedure for 17 times during the period of 4 years without employing any workplace and employees

A. Since real estate transactions are conducted as part of business activities, whether the act of transferring a building constitutes the supply of goods subject to taxation under the Value-Added Tax Act and thereby the income therefrom belongs to the business income shall be determined according to social norms, considering whether the real estate transactions are conducted for the purpose of profit-making and the degree of continuity and repetition of business activities in light of the scale, frequency, mode, etc. of the sale and purchase of real estate,

(b) The case holding that the disposition of imposition of value-added tax and global income tax are lawful on the real estate transaction that acquired real estate through an auction procedure 17 times for a period of four years without any place of business and employees, considering it as part of business activities, and subsequently transferred within a short period

Article 20 (1) 8 of the former Income Tax Act (amended by Act No. 4281 of Dec. 31, 1990), Article 36 (3) of the Enforcement Decree of the same Act, Article 1 of the Enforcement Rule of the Value-Added Tax Act

A. Supreme Court Decision 90Nu1045 decided Sep. 25, 1990 (Gong1990, 2197) 90Nu6217 decided Feb. 26, 1991 (Gong112) 91Nu6559 decided Nov. 26, 1991 (Gong192, 356)

Plaintiff’s Attorney Lee Jae-soo

The Director of Gangnam District Office

Seoul High Court Decision 91Gu13634 delivered on August 21, 1992

The appeal is dismissed.

The costs of appeal are assessed against the plaintiff.

We examine the grounds of appeal.

Since real estate transactions are conducted as part of business activities, the issue of whether the transfer of a building constitutes the supply of goods subject to taxation under the Value-Added Tax Act, and whether the income from the sale of real estate constitutes the business income shall be determined according to ordinary social norms, considering whether the sale of real estate for the purpose of profit-making and the scale, frequency, mode, etc. of the sale of real estate and the degree of continuity and repetition of business activities, etc.

According to the reasoning of the judgment below, even if the Plaintiff acquired real estate at the court 17 times from 1986 to 1989 through the above fact-finding process, it was merely 2 times acquired during the first period, 2 times acquired during the second period, 3 times acquired during the second period, 4 times acquired during the first period in 1987, 2 times, 4 times acquired during the second period, 3 times during the second period, 1989, 4 times acquired during the second period, 4 times during the second period, 1989, 4 times during the second period, and 2 times during the second period, and 1989, the Plaintiff’s acquisition of real estate at the first period during the second period is no longer than 16 lots of land, 896, 164, 166, and 297, 3 times during the first period after the acquisition of real estate by the Plaintiff’s independent sale business, and thus, it is reasonable to view that the Plaintiff’s total acquisition value of real estate at the second period is less than 166 months.

There is no reason to discuss this issue.

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