[1] Requirements for exempting the value-added tax from the supply of personal services under Article 35 subparagraph 2 (c) and (d) of the Enforcement Decree of the former Enforcement Decree of the Value-Added Tax Act

[2] The case holding that the supply of personal services related to building computer systems is not subject to value-added tax exemption

[3] Requirements for applying the principle of good faith to tax authorities' acts

[4] The legislative intent and standard of determining the denial of wrongful calculation under Article 20 of the former Corporate Tax Act

[5] The case holding that the transfer of business rights to a joint venture company does not constitute a wrongful calculation such as a transfer of low-price under Article 46 (2) 4 of the Enforcement Decree of the Corporate Tax Act or a distribution of other profits under Article 46 (2) 9 of the Enforcement Decree of the Corporate Tax Act since it performed a payment obligation under

[1] Article 35 of the former Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 14863, Dec. 30, 1995) provides that personal services under Article 12 (1) 13 of the Value-Added Tax Act shall be services falling under any of the following subparagraphs, which are supplied to an independent business (including a case where several concurrent businesses independently supply services that are not necessarily incidental to taxable businesses) and provided to an individual, a corporation, an unincorporated association, a foundation, or an unincorporated association, or an unincorporated association, a foundation, or other organization as an independent business, and the personal services that fall under subparagraph 2 of Article 12 of the Value-Added Tax Act, for which the price is paid, are supplied by the person who runs a technical business (technical business), a building business, a ferry business, a design system business, a surveying business, or a similar business, and subparagraph c of the above item provides services with a system analysis and program development business using an electronic computing system, and the personal services must be exempted from value-added tax in case where they are supplied for an independent business.

[2] The case holding that the value-added tax shall not be exempted on the ground that the supply of personal services is incidental to the supply of goods subject to value-added tax in relation to the construction of the computer system for building, on the other hand, if the personal services are supplied as incidental thereto, since the supply of such services is merely incidental to the supply of goods subject to value-added tax in relation to the construction of the computer system for building, it cannot be deemed that the technical business under Article 35 subparagraph 2 (c) of the former Enforcement Decree of the Act (amended by Presidential Decree No. 14863 of Dec. 30, 195) or the program development services under Article 35 subparagraph 2 (d) of

[3] In general, in order to apply the principle of good faith to the acts of a tax authority in a tax law relationship, the tax authority should name a public opinion list subject to trust to taxpayers, and the taxpayer should not be responsible for the taxpayer's reliance on the tax authority's reliance on the tax authority's reliance on the tax authority's reliance on the expression of opinion, what is the taxpayer's reliance on, and what is the taxpayer's reliance on, the tax authority should make a disposition contrary to the above reliance, thereby infringing

[4] "Calculation of wrongful acts" means the calculation of the act of reducing or excluding the tax burden incurred when a taxpayer takes the ordinary rational transaction form by taking the bypassing act, the multi-stage act and other abnormal transaction form without using the normal economic person's rational transaction form. The purport of Article 20 of the former Corporate Tax Act (wholly amended by Act No. 5581 of Dec. 28, 1998) provides for the denial of wrongful act and calculation under Article 46 (2) of the former Corporate Tax Act (wholly amended by Presidential Decree No. 15970 of Dec. 31, 1998) is to determine whether a transaction with a corporation and a person with a special relationship has neglected economic rationality by taking advantage of all the types of transactions listed in each subparagraph of Article 46 (2) of the former Enforcement Decree of the Corporate Tax Act (wholly amended by Presidential Decree No. 15970 of Dec. 31, 198), and thus, to ensure fairness in taxation and prevent tax avoidance by imposing the income objectively deemed reasonable in terms of tax law.

[5] The case holding that the transfer of business rights to a joint venture company does not constitute a wrongful calculation such as low-price transfer under Article 46 (2) 4 of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 15970 of Dec. 31, 1998) or other distribution of profits under Article 46 (2) 9 of the former Enforcement Decree of the Corporate Tax Act

[1] Article 12 (1) 13 of the former Value-Added Tax Act (Amended by Act No. 5585, Dec. 28, 1998); Article 35 subparagraph 2 (c) and (d) of the former Enforcement Decree of the Corporate Tax Act (Amended by Presidential Decree No. 14863, Dec. 30, 1995); Article 12 (1) 13 of the former Value-Added Tax Act (Amended by Act No. 5585, Dec. 28, 1998); Article 35 subparagraph 2 (c) of the former Enforcement Decree of the Corporate Tax Act (Amended by Presidential Decree No. 14863, Dec. 30, 1995); Article 15 of the former Enforcement Decree of the Corporate Tax Act (Amended by Act No. 15581, Dec. 28, 199; Presidential Decree No. 1981, Feb. 19, 2005) / [3] Article 15 of the former Corporate Tax Act (Amended by Act No. 198

[1] [2] [3] Supreme Court Decision 98Du2713 delivered on August 18, 200 (Gong200Ha, 2022) / [1] Supreme Court Decision 92Nu9715 delivered on July 27, 1993 (Gong193Ha, 246), Supreme Court Decision 95Nu1071 delivered on November 22, 1996 (Gong1997Sang, 1229) / [3] Supreme Court Decision 94Nu12159 delivered on June 16, 195 (Gong195Ha, 2640), Supreme Court Decision 95Nu1089 delivered on November 14, 1995 (Gong196, 198Nu97989 delivered on June 16, 197)

Sluri Co., Ltd. (Sluri Law Firm, Attorneys Jeon-soo et al., Counsel for the plaintiff-appellant)

Song District Court (Attorney Lee Young-young, Counsel for the defendant-appellant)

Seoul High Court Decision 98Nu5721 delivered on August 19, 1999

All appeals are dismissed. The costs of appeal are assessed against each party.

1. We examine the Plaintiff’s grounds of appeal.

A. Determination as to the grounds of appeal Nos. 1 (a) through (d) and No. 2

Article 35 of the former Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 14863, Dec. 30, 1995; hereinafter the same) provides that personal services under Article 12 (1) 13 of the Value-Added Tax Act shall be services falling under any of the following subparagraphs, which are supplied as an independent business (including where several concurrent businesses independently supply services that are not necessarily incidental to taxable businesses). Subparagraph 2 of Article 35 provides that personal services are supplied as independent services by individuals, corporations, or unincorporated associations, foundations, or other organizations, and are provided with services falling under any of the following subparagraphs, for which the fees are paid, (c) are supplied by the persons engaged in the technical business (technical business), construction business, ferry business, design system business, surveying business, or similar business; (d) provides academic research and technical research services, and system analysis and program development services using electronic computing system; and each of the above items is exempt from value-added tax in cases where the pertinent personal services are not incidental to the taxable business as an independent business.

According to the reasoning of the judgment below, the court below acknowledged that the plaintiff supplied the non-party Posting comprehensive steel company with 11,983,930,368 won goods required for the ground network, information data center system, office automation system, and service system of the Seoul Management Information Center for the establishment of a building computer system of the Seoul Management Information Center. On the other hand, the plaintiff's employees to the above site are dispatched to the above site with total personnel dispatch service, integrated distribution service, consulting service, total amount of 881,486,634 won, and the result of which the non-party Posing comprehensive steel company was provided to the non-party Posing comprehensive steel company without additional development or modification. In light of the legal principles as seen above, the court below did not err in the misapprehension of the legal principles as to the supply of goods subject to value-added tax, which are incidental to the supply of the above building computer system and the supply of the goods, and it did not constitute a violation of Article 35 (c) or (d) of the Enforcement Decree.

B. Determination as to the ground of appeal No. 1 (E)

In general, in order to apply the principle of trust and good faith to the tax authority’s acts in tax law relations, the tax authority should name the public opinion list that is the object of taxpayer’s trust, and the taxpayer’s trust in the name of the tax authority does not cause the taxpayer to be attributable to the taxpayer. The taxpayer must trust the expression of opinion and engage in an act in which the taxpayer trusts the expression of opinion, and make a disposition contrary to the above opinion list, thereby infringing the taxpayer’s interest (see, e.g., Supreme Court Decisions 94Nu12159, Jun. 16, 1995; 98Du2713, Aug. 18, 2000).

According to the reasoning of the judgment below, the court below held that the Commissioner of the National Tax Service's reply to the plaintiff's question on April 30, 1996 merely expressed the general interpretation of the laws and regulations on the exemption of value-added tax on technology business services and cannot be viewed as an expression of public opinion that the service in this case is exempted from value-added tax, and therefore, the disposition of value-added tax in this case cannot be deemed to violate the principle of good faith. In light of records and the legal principles as seen earlier, the above recognition and determination of the court below is just, and there

2. We examine the defendant's grounds of appeal.

Wrongful calculation means the calculation of an act that reduces or excludes the tax burden incurred when a taxpayer takes the ordinary rational transaction form by taking advantage of the round-up, multi-stage and other abnormal transaction form without a reasonable transaction form of an economic person. The purport of Article 20 of the former Corporate Tax Act (wholly amended by Act No. 5581, Dec. 28, 1998) which provides for the denial of wrongful calculation provision is that a transaction with a corporation and a person with a special relationship is made by taking advantage of all the forms of transactions listed in the subparagraphs of Article 46(2) of the former Enforcement Decree of the Corporate Tax Act (wholly amended by Presidential Decree No. 15970, Dec. 31, 1998; hereinafter referred to as the "Enforcement Decree"), and it is deemed that the taxpayer neglected the economic rationality by taking advantage of the various forms of transactions enumerated in the subparagraphs of Article 46(2) of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 15970, Dec. 31, 1998).

According to the reasoning of the judgment of the court below, on October 26, 193, the plaintiff transferred 20 billion won to 30 billion won or more, 196 trillion won to 20 billion won or more, 51 percent of the total number of shares issued (10,000 won per share) to 30 billion won or 9. The court below determined that 9 percent of the value of shares issued by 90 billion won or more was 1.6 billion won to be transferred to 30 billion won, and that 9 percent of the value of shares issued by 30 billion won or more was 1.6 billion won or more, and that 9 percent of the value of shares issued by 9 billion won or more was 1.6 billion won or more to be transferred to 19 billion won or more, and that the plaintiff paid 9 percent of the value of shares issued by 19 billion won or more to 19 billion won or more to 20 billion won, based on the telecommunications records or instruments of this case, 19.

In light of the records, the above fact-finding by the court below is just, and there is no error of law by mistake of facts against the rules of evidence as alleged in the grounds of appeal.

Furthermore, according to the above legal principles and the above facts, the plaintiff entered into a joint investment agreement with the telecom to establish the telecom with 51% investment rate of 49% and to transfer all of the telecommunications businesses other than the plaintiff's RSC business to the telecom book value. The plaintiff recognizes that the plaintiff actually invests in the telecom, which is not reflected in the book value, and agreed that the telecomcom shall additionally pay 2 billion won with the amount exceeding 49% of his share of 49%. Thus, the plaintiff's above business right is not transferred to the telecom, but with the amount of 2 billion won exceeding 51% of the plaintiff's share of 2,081,632,653, and it cannot be deemed that the transfer of the above business right constitutes 2,000,000 won for the above 6,000 won exceeding 51% of shares of the plaintiff's share of 2,000,0000 won, since it cannot be deemed that the plaintiff's transfer of the above business right under the above 2, 36,06.

Although the reasoning of the judgment of the court below is somewhat inappropriate, the conclusion that the plaintiff's calculation of the act following the transfer of the above goodwill does not constitute a wrongful calculation under Article 46 (2) 4 or 9 of the Enforcement Decree is just, and there is no error of law such as misunderstanding of legal principles as to the object of denial of wrongful calculation under Article 46 (2) 4 or 9 of the Enforcement Decree, inconsistent reasoning or incomplete deliberation, etc. (as long as it is judged that the plaintiff performed the duty of payment pursuant to the investment ratio under the above joint venture agreement by transferring the above goodwill to a telecome in lieu of payment of 2,081, 632,653 won in excess of 51% of shares issued by the plaintiff's investment shares, the ground of appeal on the existence of the above goodwill and the market price of the goodwill should be deemed as 2,081, 632,653 won, as alleged in the ground of appeal).

The argument in the other grounds of appeal is merely pointing out any clerical error in the judgment of the court below, and it cannot be a legitimate ground of appeal.

All of the Defendant’s grounds of appeal are rejected.

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

Justices Seo-sung (Presiding Justice)