National subsidies directly related to the supply of goods and services shall be subject to value-added tax.

The key national subsidy is that it was paid from the Plaintiff to the Plaintiff in return for the provision of exhibition services, such as the selection and management of a participant in an individual exhibition event, and it cannot be deemed that the national subsidy and the public subsidy not directly related to the supply of services under Article 48(10) of the former Enforcement Decree

Article 13 of the Value-Added Tax Act

2018 Disposition of revocation of imposition of value-added tax

Cck0

00 Other 1

July 6, 2018

August 17, 2018

1. The plaintiff's claim is dismissed.

2. The costs of lawsuit are assessed against the plaintiffs.

Cheong-gu Office

The Defendant’s disposition of imposition of value-added tax for the second period of 208 against the Plaintiff for the first period of 2008, 192,504,970, value-added tax for the second period of 2009, 77,409,470, value-added tax for the second period of 2009, value-added tax for the second period of 2009, 110,294,850, value-added tax for 234,828,200, 200, value-added tax for the second period of 2010, value-added tax for the second period of 201, 13,929,550, 158,490, 2011, value-added tax for the second period of 2012, 297, 260, 201, 360, 2061, 206

1. Details of the disposition;

A. Plaintiff’s status and payment of value-added tax

1) In order to efficiently carry out exhibition and convention projects on December 5, 1995, the Plaintiff is a taxable entrepreneur with a view to: (a) a Metropolitan City; (b) the management of exhibition and conference facilities; (c) holding domestic and foreign exhibitions and exhibitions; and (c) holding domestic and foreign exhibitions and exhibitions; and (d) holding domestic and foreign exhibitions, fairs, and conventions on land owned by a Metropolitan City, a Metropolitan City, the Korea Trade-Investment Promotion Agency; and private enterprises; and (e) holding domestic and foreign exhibitions, fairs, meetings, etc. by constructing a first exhibition and convention hall, an international exhibition facility, on land owned by a Metropolitan City, a Metropolitan City, located in May 28, 2007.

2) In holding exhibitions, etc. as indicated in the following table between the second half to the second half of 2008, the Plaintiff received subsidies from a Metropolitan City and the Ministry of Trade, Industry and Energy (hereinafter referred to as "sib subsidy", "sib subsidy", "sib subsidy from the Ministry of Trade, Industry and Energy", and "sibly," "sib subsidy". The Plaintiff returned the subsidies remaining after the settlement of project expenses to a Metropolitan City and the Ministry of Trade, Industry and Energy. As regards some of the subsidies in this case, the Plaintiff filed a value-added tax return after issuing a tax invoice for exhibition rent as a person to whom a Metropolitan City is supplied, and the remaining subsidies are not included in the tax base under Article 13 (2) 4 of the former Value-Added Tax Act (wholly amended by Act No. 11873, Jun. 7, 2013; hereinafter the same shall apply) at the time of reporting each taxable period.

B. Pre-assessment and the progress of related litigation

1) As a result of a periodic tax investigation conducted with respect to the Plaintiff from July 8, 2013 to July 26, 2013, the head of the competent tax office: (a) the instant subsidy that the Plaintiff received while holding the said exhibition, etc. is not a subsidy that is not included in the tax base pursuant to Article 13(2)4 of the former Value-Added Tax Act; and (b) is subject to value-added tax; (c) the Plaintiff’s subsidy that is not a subsidy that is provided to a Metropolitan City, the Ministry of Trade, Industry and Energy, etc.; and (d) the amount returned to a Aa Metropolitan City, etc., for which the Plaintiff issued a tax invoice under the name of rent was deducted from the subsidy that the Plaintiff was returned as the tax base; (d) the total amount of 10,368,756,273,70, 209, 209, 2015, 2015, 2016, 207, 2016, 2016, 2016

2) The Plaintiff appealed to the instant preceding disposition and filed a request for a trial with the Tax Tribunal on September 17, 2014, but was dismissed on December 15, 2014.

The former Joint 23100 filed a lawsuit seeking the revocation of the preceding disposition of this case, but it was dismissed on October 23, 2015.

3) The appellate court’s appeal that continued as Busan High Court No. 2015Nu23687 on October 28, 2016, which included the amount of the State subsidy among the instant subsidies and the amount of the subsidies between the second and second countries in 2008 to 2012, which included the amount of the subsidies for the international environment and energy industry (ENECHHH Hai), the Busan High Court’s international contact, the cutting, and the Malaysia equipment industry, and the amount of the subsidies for the Busan International Atomic Energy Industry in 2012, which were calculated on the grounds that the subsidies cannot be included in the tax base as subsidies not directly related to the provision of the Plaintiff’s exhibition event. The foregoing court’s prior disposition was unlawful in calculating the amount of the subsidies for the Plaintiff to be paid to the Plaintiff for the reason that the Plaintiff’s prior decision to participate in the international environmental and energy industry (hereinafter referred to as “the Plaintiff’s prior decision to participate in the exhibition”) and that the Plaintiff’s prior decision to participate in the exhibition can not be included in the Plaintiff’s individual exhibition event.

4) In the final appeal pending by the Supreme Court No. 2016Du60034 as the Defendant’s objection, the Supreme Court rendered a judgment dismissing the final appeal on March 16, 2017, and the preceding judgment became final and conclusive on the same day.

C. The defendant's disposition of this case

1) According to the judgment of the court of first instance on May 10, 2017, the Defendant: (a) returned the amount of national subsidy during the taxable period to KRW 208, KRW 205, KRW 207, KRW 250, KRW 208, KRW 207, KRW 208, KRW 205, KRW 208, KRW 208, KRW 250, KRW 208, KRW 205, KRW 208, KRW 205, KRW 208, KRW 205, KRW 10, KRW 10, value-added tax for KRW 10, KRW 294, KRW 298, KRW 205, KRW 208, KRW 250, KRW 205, KRW 10, KRW 298, KRW 205, KRW 205, KRW 209, KRW 2010, KRW 295, KRW 2010, KRW 295,2085.

2) The Plaintiff was dissatisfied with each of the instant dispositions and filed an appeal with the Tax Tribunal on July 4, 2017, but was dismissed on December 5, 2017, and was served on December 7, 2017.

[Ground of recognition] Facts without dispute, Gap evidence 1 through Gap evidence 7, Gap evidence 9, Gap evidence 10, Gap evidence 22 and the purport of whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

1) Article 13(2)4 of the former Value-Added Tax Act provides that Article 48(10) of the former Enforcement Decree of the Value-Added Tax Act (wholly amended by Presidential Decree No. 24638, Jun. 28, 2013; hereinafter the same) provides that “National subsidies and public subsidies under Article 13(2)4 of the former Value-Added Tax Act (wholly amended by Presidential Decree No. 24638, Jun. 28, 2013; hereinafter the same) shall consist of national subsidies and public subsidies not directly related to the supply of goods or services that are not included in the tax base shall be added to new requirements not prescribed in the Act regarding subsidies that are not included in the tax base. Such provisions of the former Enforcement Decree of the Value-Added Tax Act are null

2) For the following reasons, since the Plaintiff did not provide the instant exhibition event agency services to Aa Metropolitan City, the Si subsidy for the instant exhibition event is a subsidy not directly related to the service, and thus, it should be excluded from the value-added tax base, but each of the dispositions of this case on different premise is unlawful.

A) Whether the instant subsidy is a subsidy for the event of exhibition does not need to be determined on the basis of the formal description of the organizer and manager indicated in the agreement, etc. prepared between the Plaintiff and aa Metropolitan City, or the fact of scarbing in relation to the operation of individual exhibitions. Rather, given that the Plaintiff had received and applied for and received a vision subsidy in accordance with the procedures prescribed by the Local Subsidy Management Ordinance of a Metropolitan City, and undergone a very strict guidance and supervision procedure, it should be deemed as a subsidy. If the Plaintiff is not a subsidy but a subsidy for the event of exhibition, such as a contract, and receives the cost of service for the event of exhibition,

B) In relation to the event of exhibition in this case, a person who actually performs the actual duties is not aa Metropolitan City. It is merely limited to preparing a plan for holding in a Aa Metropolitan City on the basis of the Plaintiff’s submission of a plan for planning of the exhibition and a project plan. Since a Metropolitan City imposes a condition of granting subsidies imposed on the Plaintiff for the follow-up management after granting subsidies, it is unreasonable to deem that a Metropolitan City has the authority to make all decisions on the operation of the exhibition. An agreement, agreement, joint promotion agreement, etc. prepared with a Metropolitan City is reasonable. The Plaintiff’s establishment of the grounds and procedures for granting subsidies, mutual confirmation of the methods and contents of the management and supervision of a local subsidy-based local subsidy management ordinance of a Metropolitan City, and the method of ex post payment is merely to determine the method of ex post facto settlement, it cannot be deemed that a Aa Metropolitan City is the subject of the instant exhibition event.

C) The direct purpose of granting the instant non-exclusive subsidy is to hold and support exhibitions, and the fostering of the exhibition-related industry is limited to the effect of publicity through the holding and support of exhibitions. The final recipient of the Plaintiff’s services is to supply exhibition services to participants and visitors, as well as to receive participation fees and entrance fees. The Plaintiff supplied exhibition services to aa Metropolitan City and supplied exhibition services to participants or visitors are inconsistent with the Act on the Tax Credit for Value-Added Tax.

D) If we focus on the division of roles indicated in the agreement, etc., the Plaintiff and Aa Metropolitan City constitute a Dong company to view that the exhibition was conducted. In such a case, subsidies granted to the Plaintiff by Aa Metropolitan City to the Plaintiff is not subject to value-added tax because they constitute internal cost sharing.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

1) Determination on the first argument

A) The Enforcement Decree or the Enforcement Rule of the Act cannot change or supplement the contents of an individual’s rights and duties or prescribe new contents that are not prescribed by the Act, unless otherwise prescribed by the Act. However, even though the Enforcement Rule or the Enforcement Rule of the Act provides the legislative intent of the parent law and the entire provisions of the relevant provisions in an organic and systematic manner, it is nothing more than specifying that it is possible to interpret the parent law, or if it is intended to embody them based on the purport of the provisions of the mother law, it shall not be deemed to go beyond the scope of the parent law’s regulation. Thus, it shall not be deemed null and void even if there is no provision directly delegated to the parent law (see Supreme Court Decision 2008Du13637, Jun. 11,

B) Article 13 of the former Value-Added Tax Act provides that the price received for the goods or services provided in relation to the business shall be the base of value-added tax. Meanwhile, Article 2 subparag. 1 of the Subsidy Management Act provides that a subsidy means a subsidy granted by the State for the affairs or services conducted by a person other than the State or for the purpose of creating it or providing financial assistance, and other benefits that are granted without receiving any corresponding consideration. Article 13(2) of the former Value-Added Tax Act excludes a subsidy from the base of value-added tax. The reason why Article 13(2) of the former Value-Added Tax Act excludes a subsidy from the base of value-added tax is that a subsidy is granted for the purpose of promoting or promoting a specific project without any direct supply of goods or services

C) A public subsidy is given free of charge to a subsidy recipient. Thus, even if Article 48(10) of the former Enforcement Decree of the Value-Added Tax Act provides that a national subsidy and a public subsidy not included in the tax base shall be a national subsidy and a public subsidy not directly related to the supply of goods or services, it is nothing more than a clear fact that it is possible in the interpretation of Article 13(2)4 of the former Value-Added Tax Act, which is a parent company, or it cannot be deemed as a modification or supplement of the contents of an individual’s rights and duties or a new provision that is not prescribed by the law, and it does not exceed the scope of the regulation of the mother law.

D) Therefore, the Plaintiff’s assertion that the above provision violates the principle of statutory reservation is null and void is without merit.

2) Determination on the second argument

In full view of the following circumstances, Gap evidence and evidence Nos. 8, Gap evidence No. 22, Eul evidence No. 24, Eul evidence No. 33 through No. 50, Eul evidence No. 53 through No. 61, and Eul evidence No. 53 through No. 61 (including various numbers), the Si expenses subsidies related to the event of exhibition in this case are paid to the plaintiff in return for the payment of exhibition services, such as the selection of a participant in the event of display by the plaintiff, management, etc., which are not directly related to the supply of services under Article 48 (10) of the former Enforcement Decree of the Value-Added Tax Act.

A) Article 2 subparag. 1 of the Subsidy Management Act defines the term "subsidies" as "subsidies, charges, and other benefits that are granted without receiving any corresponding consideration from the State to create them or provide financial assistance with respect to affairs or projects performed by a person other than the State". Article 2 subparag. 1 of the Local Subsidy Management Ordinance of a Metropolitan City defines "local subsidies" as "funds that are granted to create a market price or to provide financial assistance in accordance with the needs of public interest and policy measures with respect to affairs or projects performed by a person other than the State or aa Metropolitan City," and Article 2 subparag. 1 of the Local Subsidy Management Ordinance of a Metropolitan City is also defined as "funds that are granted to create a market price or to provide financial assistance in accordance with the definition of subsidies." According to such definition of subsidies, it cannot be deemed as excluded from the tax base of money paid in return for such provision.

B) The Local Finance Act aims to ensure the sound and transparent operation and autonomy of local finance by prescribing the basic principles for the finances of local governments. The Ordinance on the Management of Local Subsidies of a Metropolitan City was established for the purpose of prescribing matters necessary for the compilation, target of provision, method of provision, use, disclosure, etc. of local subsidies financed by the budget of a Metropolitan City pursuant to Articles 17 and 32-2 through 32-10 of the Local Finance Act. The provision that a Metropolitan City imposes an obligation to pay and report subsidies on the Plaintiff in the Convention on Exhibition events and the Agreement on the Management of Local Subsidies of a Metropolitan City, which requires the Plaintiff to comply with the Ordinance on the Management of Local Subsidies of a Aa Metropolitan City, is merely a provision that provides subsidies to comply with the control and supervision prescribed in the above Ordinance. Thus, it is reasonable to determine whether to apply Article 13(2)4 of the former Value-Added Tax Act and Article 48(10) of the former Enforcement Decree of the Value-Added Tax Act solely on the sole basis of the fact that such subsidies were paid in accordance with the above procedure.

C) Each of the instant agreements and business plans are agreed upon and planned as follows with respect to a Metropolitan City and the Plaintiff’s roles, etc., and as a result, a Metropolitan City, as an host organization, has the authority to exercise overall control over the project, to make a final decision on major matters regarding the exhibition event, and it is reasonable to deem that the Plaintiff was in practical affairs such as preparation and operation of the exhibition event as an host organization.

(1) In 2005, the Han-il cartoon Pest was held as a joint agenda by the Busan, Jeonnam-do, Gyeongnam-do, Gyeongnam-do, Jeju-do and Japan in order to jointly hold the events in 2007, after which the Republic of Korea was held as a host organization by the Metropolitan City in 2008, and the Seoul Metropolitan City was held as a host organization in 2008, and the Plaintiff was organized as a joint supervisor with the Korea Creative Design Association and the Korea Creative Design Association in 2008, which was held by a Metropolitan City. In addition, a Metropolitan City established the Organizing Committee (a Metropolitan City Mayor was in charge of the organizing committee at the time of the Organizational Committee in 2009) in relation to the Korea Ga Pest.

(2) Under an agreement or agreement on international environment and energy industry and Busan, Busan, Busan, International Fisheries Trade X-Span, Busan, Busan, Busan International New Airport, Fiber X-Span, Busan, and Busan, a Metropolitan City, as an host organization, has given administrative and financial support, such as solicitation of participation by a participant company, visitors, and overseas free trade. The host organization, as a host organization, has agreed to directly dispatch a public official to the Plaintiff, as the host organization, when planning and executing the design of exhibitions, printed materials, display devices, and related work, such as design and production, and related work, shall be conducted in consultation with a A Metropolitan City. A, a Metropolitan City, as the host organization, shall use the name of a Metropolitan City, and shall be conducted with prior approval from a Aa Metropolitan City, with prior approval from a A.a. City. A, a Metropolitan City and the Plaintiff agreed to frequently consult with a Metropolitan City when the Plaintiff selected a joint supervisor and establish a detailed execution plan. In addition, aa Metropolitan City and the Plaintiff agreed to directly dispatch a public official to the Plaintiff as a public official directly signing service contract.

(3) At each exhibition event to which the instant non-subsidized subsidy was granted, the Plaintiff, as a general manager or a joint manager, performed the event together with other general managers, and performed the work of formulating a general plan, participating companies, attracting babb fish, etc., or granted a non-subsidized subsidy from a Metropolitan City to each general manager.

(4) In the agreement on the promotion of the project for the International Environment and Energy Industry, the Busan International Trade X-PPP, the Busan International New International Trade Organization Agreement, the Busan International Organization X-PPP, etc., a Metropolitan City agreed to allow the termination of the agreement in cases where the Plaintiff considers it inappropriate to continue the project due to the Plaintiff’s waiver of the project, lack of full capacity, serious violation of the agreement, unfaithful conduct of the project, etc. In particular, in the case of the Busan International Trade X-PPP in Busan, the 5-year development plan promoted by a Metropolitan City may not reconven the next year with the Plaintiff according to the Plaintiff’s performance of the project, and the Plaintiff agreed to comply with the agreement in cases where a Metropolitan City changes the general manager.

(5) In the Busan International Scams Joint Promotion Agreement, a Metropolitan City agreed that the Plaintiff may pay the performance fee for the joint promotion to the Plaintiff. Under the 15% project agreement of the Republic of Korea, if the commission for the event is calculated and paid, the Plaintiff and Ccams Korea agreed to allocate the performance fee to the Plaintiff at the 3:7% ratio of total revenue, and the remaining balance excluding the portion to be returned to the State and the Si as a result of the settlement after the event is completed, was distributed according to the above allocation ratio of the commission. In other words, the Plaintiff was paid the commission for the event preparation and operation fee in the International Environment, Energy Industry, Busan International Trade, Busan International Trade, and Busan International New Fcams and Textiles Exhibitions, etc., and the performance analysis report for the results of the event after the completion of the Busan International Financial EXPO project, and received the performance analysis fee therefor.

(d)A Metropolitan City has established its own implementation plan with respect to the holding of Busan International Trade X-Seb and Busan International New and Fiberization Exhibitions. The plan includes the details of the Plaintiff’s selection as a responsible manager, the work allocation and required budget for each responsible manager, and also includes the Busan International Embrat Promotion Committee and the Secretariat as a Metropolitan City public official.

E) As such, in light of the fact that a Metropolitan City is closely involved in a specific exhibition event to the extent that it is its organizer, it has the authority to exercise overall control over and make a final decision on important matters, and that a non-subsidized subsidy was paid while entering into an agreement to terminate a specific exhibition event where the plaintiff's ability is not desirable, the purpose of granting a non-subsidized subsidy is not to limit the promotion of the specific exhibition and convention industry, but to directly promote the automobile industry in Aa Metropolitan City, to foster the environment and energy industry, to revitalize trade in fishery products, and to foster new and textile industry, etc. (aa Metropolitan City is established by investing in collaboration with the Korea Trade-Investment Promotion Agency, etc. in order to efficiently carry out the exhibition and convention project (aa Metropolitan City is deemed to have the objective of fostering the exhibition and convention project operated by the plaintiff in connection with each individual exhibition). In other words, aa Metropolitan City is to provide an international exhibition and convention subsidy from the plaintiff in order to achieve the objectives of fostering the automobile industry, fishery products trade in Aa Metropolitan City, etc., with the Busan X X and other services.

F) Ultimately, taking into account the aforementioned circumstances, it is reasonable to deem that the Plaintiff’s provision of the instant exhibition services to a Metropolitan City as an agency for exhibition, and that the participant companies and visitors are provided with the “exploiting services” as a manager in charge of the practical affairs of the instant exhibition, so it is not incompatible, and thus, it is not impossible to render the instant disposition with respect to the instant non-subsidized subsidies paid for such services as the Plaintiff’s assertion. It does not contravene the Act on the Tax Credit of the Value-Added Tax.

G) As seen earlier, aa Metropolitan City has the authority to finally decide important matters in general as an organization hosting the event of this case as an organization holding the event of this case, and the Plaintiff was engaged in practical affairs as an organization holding the event of this case. Therefore, it cannot be deemed that the Plaintiff had a joint business relationship with a Metropolitan City, and thus, it is difficult to accept the Plaintiff’s assertion

3) Sub-decisions

Therefore, the defendant's each disposition of this case included in the tax base on the ground that the plaintiff's non-subsidized subsidy of this case received from Aa Metropolitan City during the event of the exhibition of this case constitutes not a subsidy not included in the tax base but a subsidy received from Aa Metropolitan City pursuant to Article 13 (2) 4 of the former Value-Added Tax Act.

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.