Scope of export goods processing services to which zero tax rate applies

In light of the purport of Article 24 of the Enforcement Decree of the Tax Act, an exporter under Article 26 (1) 2 of the Enforcement Decree of the same Act shall be construed as a concept limited to exporters directly shipping specific domestic goods to a foreign country. On the other hand, an export goods processing service under a contract to which zero-rate tax applies under Article 26 (1) 2 of the same Decree is limited to a direct contract with an exporter. As such, an export goods processing service under a contract to which the zero-rate tax applies is limited to a direct contract with an exporter, the export goods processing service shall not be subject to zero-rate tax if the export goods are processed under a contract with a person registered as an exporter under the

Article 11(1) of the Value-Added Tax Act, Article 26(1)2 of the Enforcement Decree thereof

Bad Co., Ltd., Ltd. (Attorney Jeon Jong-gu, Counsel for defendant-appellee)

Daejeon Head of the tax office

Seoul High Court Decision 87Gu106 delivered on January 21, 198

The appeal is dismissed.

The costs of appeal are assessed against the plaintiff.

The grounds of appeal (1) and (2) are also examined.

Article 11 (1) of the Value-Added Tax Act stipulates that ① exported goods eligible for zero-rate tax rate shall be offered overseas. ② International navigation services of ships or aircraft (4) Other goods or services for earning foreign currencies as prescribed by the Presidential Decree. Article 26 (1) 2 of the Enforcement Decree of the Value-Added Tax Act provides that exported goods or services for acquiring foreign currencies as prescribed by Article 11 (1) 4 of the Act are exported goods or services for processing exported goods under direct contract with the exporter, and export goods or services for processing by local letters of credit.

Meanwhile, Article 24 (1) of the Enforcement Decree of the Value-Added Tax Act provides that exports provided for in Article 11 (1) 1 of the Value-Added Tax Act shall be deemed to be shipping domestic goods to foreign countries, and Article 11 (2) of the same Act provides that goods exported by an entrepreneur shall include goods supplied by a local letter of credit and a purchase approval as provided for in the Trade Act. Article 11 (1) of the Value-Added Tax Act provides that each zero-rate tax shall be applied to goods exported by an exporter, and it shall be the primary purpose of preventing double taxation between countries. Further, the provision that goods exported by an entrepreneur under a local letter of credit and a purchase approval as provided for in the Trade Act shall be included in the goods exported by an exporter to a foreign country, not in the domestic exporter itself, but in the case of goods supplied by an exporter to an exporter, it shall not be deemed to be directly supplied by an exporter under the Enforcement Decree of the zero-rate Tax Act, but in the case of goods supplied by an exporter to an exporter.

Therefore, the Plaintiff’s voluntary service contract for the instant goods supplied by Nonparty 3, registered as an exporter under the Trading Business Act, to another general trading company through a local letter of credit is not subject to zero tax rate, and it is not determined by the Plaintiff’s failure to know that the said three industries were goods supplied by the local letter of credit. Therefore, the lower court’s decision that reached the said conclusion was somewhat somewhat certain in the process of explaining the reasoning, but was just and there were no errors in the misapprehension of legal principles, lack of reasons, or incomplete deliberation.

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 on the bench.

Justices Park Jong-dong (Presiding Justice)