(a)The nature of the item of premiums received by a corporation operating a vehicle leasing business from its customers;

(b) requirements for establishing non-taxable practices;

(a) The actual amount of money received from a customer in lending a vehicle by a corporation operating a vehicle leasing business is equivalent to the price for services provided by the said corporation;

(b)in order for a non-taxable practice to be established, there is a lack of simple omission of taxation, and there must be a declaration of non-taxation by the taxation authority, explicitly or implicitly, and such declaration of intention must be determined by the taxation authority, with the knowledge that it is subject to taxation, which needs not be imposed.

Article 7 of the Value-Added Tax Act, Article 18(3) of the Framework Act on National Taxes

Seoul High Court Decision 200Na1484 decided May 1, 200

Head of the Office of Government

Seoul High Court Decision 86Gu245 delivered on April 13, 1987

The appeal is dismissed.

The costs of appeal are assessed against the plaintiff.

As to the ground of appeal by the Plaintiff’s attorney:

1. We affirm the judgment of the court below that the actual amount of money in the name of the insurance premium received from the customer while lending a vehicle that is a juristic person operating a vehicle leasing business constitutes the price for the service provided by the plaintiff. The theory of lawsuit only functions to collect and deliver the insurance premium from the vehicle user, and Article 33 of the Enforcement Decree of the Value-Added Tax Act provides that the plaintiff shall not be subject to value-added tax because the insurance business of the insurance company is exempted from value-added tax, or that the above provision provides that the insurance business of the insurance company shall be exempted from value-added tax for the insurance services provided by the person operating the insurance business. According to the facts acknowledged by the court below, since the plaintiff concludes an insurance contract for the automobile that is its asset, the insurance premium paid by the plaintiff is only the expenses paid by the plaintiff for the business,

There is no misapprehension of the legal principle as to the theory of lawsuit in the judgment of the court below.

2.In order for a non-taxable practice to be established, a mere omission of taxation is insufficient, and there must be a tax authority’s expression of non-taxable intent, explicitly or implicitly, and such expression of intent must be in accordance with the determination of the tax authority’s attitude not to impose taxes for any needs, knowing that it is taxable.

The judgment of the court below which rejected the establishment of non-taxation practice is just, and there is no misapprehension of the legal principles of Article 18(2) of the Framework Act on National Taxes, such as theory of lawsuit, on the ground that it is difficult to say that the defendant did not point out the payment of value-added tax on the money in the name of the insurance premium of this case or that the defendant did not let the plaintiff believe that it is non-taxation.

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.

Justices Kim Jong-chul (Presiding Justice)