Subsidies for mobile devices shall constitute sales discount on mobile communications services.

The substance of the instant subsidy may be deemed to fall under the amount that is directly deducted from the value at the time of supply under certain conditions, such as ① the Plaintiff’s provision of mobile communications services to the customers, ② the fixed period of contract, whether to purchase a new device, etc.

Article 29 (5) of the Value-Added Tax Act

2016Guhap72976 Disposition of revocation of refusal to correct value-added tax

AAA Corporation

BB Director of the Tax Office

April 11, 2017

May 11, 2017

2016Guhap72976 Disposition of revocation of refusal to correct value-added tax

AAA Corporation

BB Director of the Tax Office

May 11, 2017

1. The Defendant’s refusal to rectify value-added tax on September 16, 2014 to the Plaintiff is entirely revoked.

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

Cheong-gu Office

As set forth in the text.

1. Details of the disposition;

A. In reporting value-added tax from January 201 to February 2013, the Plaintiff: (a) purchased a device from the Plaintiff’s agency; and (b) reported and paid the total amount of subsidies that the Plaintiff provides to the customers who receive mobile communications services from the Plaintiff as a corporation operating the mobile communications service business, etc., xxxx (200 won in January 201, 201, 2000, 2000 won in January 201, 201, 2000, 2000 won in February 2012, 2013, and 200 won in February 2013, 2013, hereinafter “instant subsidy”).

B. On July 25, 2014, the Plaintiff filed a request for correction on the ground that the instant subsidy falls under “the amount of direct reduction of a specified amount from the ordinary price in accordance with the quality, quantity, conditions of delivery or supply, or other supply terms and conditions” under Article 13(2)1 of the former Value-Added Tax Act (wholly amended by Act No. 11873, Jun. 7, 2013; hereinafter “former Value-Added Tax Act”) and Article 52 of the former Enforcement Decree of the Value-Added Tax Act (wholly amended by Presidential Decree No. 24638, Jun. 28, 2013; hereinafter the same shall apply), and Article 29(5)1 of the Value-Added Tax Act (wholly amended by Presidential Decree No. 24638, Jun. 28, 2013); thus, the Plaintiff filed a request for correction on the ground that the amount should be deducted from the tax base.

C. However, the Defendant rejected all of the Plaintiff’s claim for correction on September 16, 2014 (hereinafter “instant disposition”) by deeming that the instant subsidy does not fall under “the cumulative interest rate on the mobile communications service provided by the Plaintiff.”

D. The Plaintiff dissatisfied with the instant disposition and filed a request for review with the Board of Audit and Inspection, but the request for review was dismissed on May 26, 2016.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1, 9 through 15 (including each number), the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

Although it is inconsistent with the Plaintiff’s granting the instant subsidy benefits on the pretext of subsidizing the costs of purchasing mobile devices, it is substantially deducted the amount equivalent to the instant subsidy from the mobile communications fee that the Plaintiff receives from its customers as the condition that the Plaintiff uses the Plaintiff’s mobile communications services for a certain period. This is also the same as a basic agreement type, which appropriates the Plaintiff’s payment from the mobile communications fee that the Plaintiff pays to the agency in lump sum after paying the discounted amount on the notice of the mobile communications fee every month. Accordingly, the instant subsidy should be assessed as the discount amount of the mobile communications service provided by the Plaintiff under the Value-Added Tax Act.

The Plaintiff, due to the legal regulation at the time of establishment, was unable to engage in the mobile communications business and the mobile communications service provider, which caused the difference between the latter and other mobile communications service providers that did not receive such legal regulation, but the payment of a contract subsidy to reduce the customer’s burden on the use of the mobile communications service does not have any substantial difference between the Plaintiff and other mobile communications business operators. Furthermore, since the mobile communications service and the mobile communications device are generally combined and sold as an essential supplement, the transaction substance should be considered in determining whether the instant subsidy falls under the accumulated interest rate, and in particular, the overall circumstances should be taken into account from the final customer’s standpoint. In addition, even if the customers who are the final consumers of the mobile communications service provided by the Plaintiff receive a discount equivalent to the instant subsidy, the payment of the instant subsidy would be contrary to the principle of tax credit at all stages and the principle of tax equality because only the Plaintiff among the mobile communications business operators could not be recognized as the accumulated interest rate due to the formal reason that there exists a difference in the mobile communications distribution system.

(b) Related statutes;

It is as shown in the attached Form.

(c) Fact of recognition;

1) At the time of the Plaintiff’s establishment, there was a legal regulation that prevents mobile communications business operators from engaging in concurrent operation of mobile communications business. Accordingly, the Plaintiff supplied a device and combined the device with the Plaintiff’s affiliate, thereby taking the form of transaction structure that provides mobile communications services. In other words, the user of the mobile communications service provided by the Plaintiff takes the form of purchasing the device from the mobile communications manufacturer to the agent and purchasing it from the agent.

2) The Plaintiff granted the instant subsidy in two forms depending on whether or not the customer purchases the mobile device in installments. First of all, the Plaintiff collected the amount of the mobile device through the process as set forth in the following 3). As such, the Plaintiff granted the Plaintiff the benefit of the instant subsidy in a manner that the amount of the claim is deducted from the claim amount at a certain amount when the Plaintiff files a claim by combining the mobile device charges and the principal and interest on the part of the mobile device with the mobile device. On the other hand, where the customer purchases the mobile device by lump-sum payment, the customer paid the instant subsidy to the mobile agency and paid the instant subsidy to the direct agency instead of the Plaintiff’s payment, and thus, the instant amount of the subsidy was not indicated separately at the time of the Plaintiff’s claim to the customer for the mobile device (basic agreement type). Even if the amount of the subsidy paid by the Plaintiff is the same as the amount of the subsidy, the amount has been determined in a variety of ways as determined by the Plaintiff in consideration of the timing, period of agreement, type of contract, type of contract purchase, etc.

3) The process of collecting the price of a device purchased by a customer at his own discount is as follows. An agency supplied with a device by a non-party company and sold to a customer shall transfer to the credit card company a claim for the payment of the device to the customer, and the credit card company shall again entrust the Plaintiff with the collection business of the above claim. The Plaintiff shall notify the Plaintiff of the amount calculated by integrating the use price of the mobile communications service supplied and the amount of the device to be collected in accordance with the entrustment contract, and shall be paid to the credit card company. The main contents of the contract for transferring the claim for the payment of the device between the agency and the credit card company and the collection business consignment agreement between the card company and the Plaintiff are as follows:

【The acceptance of installment payments claim(pacting contract) contract

The card company (A) and the agency (B) enter into an agreement to regulate mutual rights, obligations, and all necessary matters in case of comprehensive transfer of claims for all installment payments which they currently hold or will hold in the future against the customer in connection with the business of selling the terminal necessary for the Plaintiff’s telecommunications services to the customer, as follows:

Article 1 (Definitions of Terms)

2. The term "subject assets" means all of the claims for installments which are currently held or will be held in the future to customers according to the contract for the installment of a terminal by which Eul is to pay for them;

4. the term “date on which assets are confirmed” means the date on which Party A confirms individual subject assets from Party B, and receives and transmits data on sales contracts for terminals as of the date on which Party B acquires them;

Article 3 (Limits on Transfer of Subject Assets)

1) Pursuant to this Agreement, Eul shall sell its assets to Gap under this Agreement and Eul shall purchase them from Eul.

2) The right to appeal against the subject assets shall be transferred to A on the date of the determination of assets, subject to the payment of the purchase price, as prescribed in Article 4. If there is any money received from the debtor of the subject assets in relation to the subject assets before the date of the determination of assets, the money shall also be transferred to A.

Article 4 (Payment of Price of Transfer Price)

1) 대상자산의 양수도대금은 단말기 할부매매 계약상 "할부원금"과 "할부스케쥴 상의 이자발생예상금액"을 11로 나눈 금액을 합산하여 지급한다.

Article 6 (Recovery of Proceeds of Transfer Pursuant to Withdrawal of Installment Sales Contract)

1) Where there occurs a withdrawal/return of the installment sales contract for the assets for which the transfer price has been already paid, the transfer price already paid shall be returned to Party A. However, the method of return shall be the method of deducting and paying the transfer price to Party B from the transfer price to be returned to Party B pursuant to Article 4(2) in a continuous transaction relationship.

m. Business entrustment contract

In order to manage the assets acquired by A in accordance with the contract on the takeover of terminal installment claims concluded by A with the Plaintiff’s telecommunications service sales agency, the card company (A) and the Plaintiff (B) shall enter into a contract on entrustment of business affairs as follows:

Article 2 (Definitions)

(2) The term "contract for the installment sale of a device" means the contract under which an agency sells a device necessary for the use of communications services in B to the "customer".

(3) The term “terminal claim” means all installment claims arising from a contract for the installment of a terminal in accordance with the terms and conditions of the contract for the installment of a terminal.

Article 3 (Scope of Entrustment of Duties)

The duties entrusted by A to B refers to the following duties necessary for the management of terminal installment claims:

(1) Business of claiming and receiving on behalf of a customer the principal and interest on a part of a contract for the installment sale of a device by means of a consolidated claim for communications charges sent to such customer.

Article 4 (Procedure for Request and Collection Agency)

(1) An agency shall sell a device to a customer in accordance with a contract for the installment sale of a device, and deliver to B the image file of the documents related to the contract for installment sale of the device received along with the documents for the customer's subscription to telecommunications services.

(2) B shall provide Party A with the information on the main and the number of months of the occurrence of the terminal installment claims every day.

(3) A shall confirm the part of the terminal installment claim that A will take over from each agency in the factoring contract, based on the data, etc. referred to in paragraph (2) of this Article, and shall provide the agency with the purchase price for such part of the terminal installment claim which A and the agency conclude.

(4) B shall calculate the monthly claim (including interest on a discount) of the part of the terminal installment claim against individual customers on the basis of the data referred to in paragraph (3) of this Article, and shall request customers to consolidate the monthly claim amount of the part of the terminal installment claim with the charges for telecommunications services of B.

(5) If a customer pays to B the amount of a claim claimed for integration by agreed payment at the time of a contract for the use of telecommunications services, subparagraph B shall pay to B the amount of claims received by the terminal installment, out of the amount of claims claimed for integration, as follows:

6. Where Eul receives the telecommunications service charges and monthly claim amount (excluding subsidies) from the customers eligible for the subsidy for installation of a device (referring to the amount subsidized as part of the cost of installment of a device to an individual customer, regardless of the name of an agreed installment subsidy, subsidy, or any other name; hereinafter referred to as "subsidies") from the customers eligible for the subsidy, Eul shall, instead of paying to the individual customer the amount of the subsidy to be paid to the individual customer for business convenience, pay to Gap (or, however, the transferee where A transfers the claim for installment of a device) an amount equivalent to the subsidy to be paid to the individual customer for business convenience.

Article 9 (Agency Fees)

1. A shall pay 1.5% (including value-added tax) of the amount of terminal deposits that A takes over from an agency each month in return for the performance of entrusted duties under this contract to B as agency fees on the 15th of the following month (Provided, That where the payment date falls on a holiday, it shall be paid on the first banking day after the first banking day) of the relevant month.

4) According to what item the instant subsidy was indicated, the Plaintiff’s request for a fee that was sent to a customer who uses an agreed installment support type during the taxable period subject to the instant disposition was indicated as ① a discount on the lower part of the instant subsidy, and was indicated as a discount on the purchase cost of the device (type 1, categories 1, January 5, 2012), ② a discount on the condition that it was indicated as a subsidy for the purchase of a mobile phone with the details of discount (type 2, April 12, 201) (type 3, April 3, 2011), ③ an item of “the installment installment for the device,” which was a separate item from the telecommunications fare, was identified as a “the installment payment for the device,” and the reasons for the change in the form of the service charge were as follows.

5) The main contents on the payment of fees, subsidization, etc. included in the terms and conditions of mobile telephone services (W-SMA) between the Plaintiff and the customer are as follows.

Article 1 (Purpose)

The purpose of this Clause is to provide for the terms and conditions of use and procedures of the WMA services between the Plaintiff and the World Trade Service Users.

Article 8 (Installment Sales)

① The Plaintiff may provide monthly subsidies to customers who purchase a device in installments in accordance with the criteria set by the Plaintiff, and the detailed conditions, such as installment period, are at the risk of complying with individual contracts between the Plaintiff and the customers.

Article 22 (Kinds of Charges, etc.)

1. The charges to be paid by customers are as follows:

1. The user fee: The following expenses paid in return for the use of basic services:

(a) Basic fees, monthly fixed amounts;

5. International programming fees, 6. International automatic programming fees, 7. Other charges;

Article 26 (Payment Date and Claim for Payment of Charges, etc.)

① The Plaintiff claims that the Plaintiff pay the fees, etc. on the date determined by the Plaintiff.

Article 38 (Establishment of Agreed Period)

1. The Plaintiff may set the mandatory use period (hereinafter referred to as “agreement period”) for not more than 24 months on condition that the customer supports the work of purchasing the device (hereinafter referred to as “subsidies”) when he/she opens a new subscription (including number transfer) or changes the terminal.

Article 39 (Payment of Subsidies)

1. The Plaintiff may provide differential subsidies according to the terms of the agreement established pursuant to Article 38 and the degree of contribution of customers.

② A subsidy shall be paid only to a new terminal that does not have the ability to sell it at the place of business that entered into an entrustment contract with the Plaintiff.

(3) Matters concerning the setting of a contract period, the amount of the subsidy, the method of calculating the amount of the subsidy (hereinafter referred to as the "amount of penalty"), etc. shall be at the risk of complying with individual contracts between customers

4. The plaintiff may change the amount of subsidy according to the needs for business policies.

Article 40 (Those Excluded from Subsidy Payments)

(1) Notwithstanding the provisions of Article 39, no subsidy shall be paid to the following cases:

3. Customer whose date of payment of fees has expired as of the date of payment of subsidies, but has not paid usage fees: Provided, That in cases of full payment of usage fees, subsidies shall be granted.

4. Customers whose penalty remains due to the lapse of the existing contract period as of the date of payment of subsidies: Provided, That if penalty is paid in full, subsidies shall be paid;

6. Customers using programs which are agreed upon among the subscribers to the agreed discount fees (Provided, That if the existing customer terminates the agreed discount program, subsidies shall be granted and in such cases no penalty shall be imposed upon the termination of the agreed discount program);

Article 41 (Duty to Pay Penalty)

(1) If a contract is terminated (including termination due to the unpaid payment of a fee or the loss of a device or any damage, etc.) before the contract period expires, the customer who has received the subsidy by setting a contract period shall pay the penalty, as prescribed separately by the plaintiff, and if the contract conditions are modified (including the terms and conditions of the charge system), he/she may settle the difference (return or additional support) as separately determined by the

(2) The penalty for breach of contract under paragraph (1) shall be calculated in accordance with the methods under subparagraphs 1 through 4.

1. The formula for calculating penalty: Penalty: Amount of penalty = agreed amount (the period of agreement - the period of use after agreement) / the period of agreement);

2. Determination formula of the difference settlement amount (when the conditions of an agreement are changed): The settlement amount = (amount agreed before change - the agreed amount after change) 】 [(the period of agreement - the period of use after the agreement) / the period of agreement];

3. The terms and conditions of the agreement shall mean the amount and conditions indicated by the customer on the mobile telephone contract in writing and signed and sealed by him/her.

§ 43. Replacement of terminals prior to the expiration of the agreement

1. From six months after the end of this Agreement provided for in Article 39 of this Agreement, the customer may replace this Agreement with a device that can be used in the event of the renewal of the existing Agreement without termination of the existing Agreement on the condition of receiving subsidies by setting the period of the re-contract after the termination of the Agreement.

[Provided, That it shall be limited to the customers with the existing 24-month arrangements and it shall not be possible for them to continue (two or more times)];

(2) Subject to the provisions of the preceding paragraph, if a customer who has used the device for an indemnity under Article 42 first of all, occurs during the period of the existing agreement and the renewal agreement, he/she shall file a claim aggregating penalty under the existing agreement and penalty under the renewal agreement.

6) The Plaintiff received the total amount of the mobile communications charges and the installment payments for the device from the subsidiary customer under an agreement, and paid the total amount of the installment payments equivalent to the original amount of the subsidy for which the instant subsidy was not reduced to the card company. Since the agent and the non-party company received all the amount of the subsidy for which the instant subsidy was not reduced, the agent and the non-party company reported and paid value-added tax on the initial amount of the device supply. In the case of a device sold to the customer using the basic agreement type, the agent and the non-party company received the full amount of the device, including the instant subsidy, and thus, reported and paid value-added tax thereon.

[Grounds for Recognition] Facts without dispute, Gap evidence 1 through 8, 16 through 19 (including each number), the purport of the whole pleadings

D. Determination

(1) Article 13(2) of the former Value-Added Tax Act provides that "the amount falling under any of the following subparagraphs shall not be included in the tax base of value-added tax", and Article 52(2) of the former Enforcement Decree of the Value-Added Tax Act provides that "the amount of overcharge under Article 13(2)1 of the Act shall be the amount of direct deduction of a certain amount from the ordinary supply value at the time of supply of the goods or services in accordance with the quality, quantity, and payment of the cost of delivery and supply, and other terms and conditions of supply." In addition, Article 29(5) of the Value-Added Tax Act amended by Act No. 11873 on June 7, 2013 provides that "the amount under each of the following subparagraphs shall not be included in the value-added tax base." Article 52(2) of the former Enforcement Decree of the Value-Added Tax Act provides that "the amount of overcharge to be reduced directly from the ordinary price in accordance with such terms and conditions of supply." Meanwhile, Article 14(20(3) of taxation principle should be reasonably interpreted.

In relation to the supply of goods or services, if a condition for the supply, such as quality, quantity, and settlement of the cost of delivery and supply, is the cause, and the usual price of supply is directly deducted and reduced from the usual price of supply, and there is no need to place special restrictions in the method of deduction and reduction, not only where the time of occurrence is limited to the time of the supply of the goods or services, but also where a supplier receives the remainder after deducting and deducting a specified amount from the ordinary price of supply at the time of the supply of the goods or services, and where a supplier receives the total amount of supply after returning a specified amount or paying a specified amount first after receiving the total value of supply, if the substance is deemed to be the result of deducting a specified amount from the ordinary price of supply, the specified amount shall be deemed to constitute a sales discount (see Supreme Court Decision 2013Du19615, Dec. 23, 201

2) In full view of the following circumstances revealed in light of the purport of the entire pleadings, the substance of the instant subsidy may be deemed to fall under the amount directly deducted from the value at the time of supply under certain conditions, such as ① the Plaintiff’s provision of mobile communications services to the customers, ② the establishment of a contract period and whether to purchase a new device, etc., which constitutes the amount directly deducted from the value at the time of supply. Accordingly, the instant disposition made on a different premise is unlawful.

A) According to the terms and conditions of mobile telephone service use between the Plaintiff and the customer, the Plaintiff may provide a certain amount of subsidy in installments to the customer who purchases the device in installments in accordance with the standards set by the Plaintiff (Article 8), and set a contract period of not more than 24 months on condition that part of the purchase cost of the device is subsidized (Article 38), and may provide differential subsidies depending on the contract period and the customer’s contribution at the time of purchase of the new device (Article 39), and the customer who did not pay the user fee to the Plaintiff or the customer with the remaining penalty or with the remaining customer, customer who will use the program, etc. who will be agreed upon (Article 40). In addition, the customer may replace the device with a device that can be used at the time of re-contracting under the conditions that he/she would receive the subsidy after the termination of the contract at least six months prior to the end of the contract period

In accordance with the contents of the above terms and conditions, subsidies are provided under the pretext of partially subsidizing expenses incurred in purchasing a device to the customer who purchases the device, but such subsidies are not necessarily reduced from the price of the device or are related to the transaction of the device. Rather, the subsidies in this case are entirely offered to the customer according to the contract period, etc. for the purpose of securing the customer of the mobile communications service provided by the Plaintiff and the customer, and the non-party company or the agent of the mobile device sales chain is in a position unrelated to the above subsidies and the customer who remains in a position not related to the above subsidies, and the program which is subject to the agreement with the Plaintiff is applied only to the subsidy, and the program which is subject to the agreement with the Plaintiff is selected as the object of the subsidy, even if the use period of the mobile communications service is renewed at the early stage. In light of the above terms and conditions, it is reasonable to view that the subsidies in this case is granted not to grant the benefits of the previous contract, but to the Plaintiff directly provide the customer with the mobile communications service.

In addition, even if the Plaintiff granted the benefits of the instant subsidy only to the customer who purchased a new device, such a method of business is derived from the provisions of the former Telecommunications Business Act that exceptionally allowed the payment of subsidies to the user for the cost of purchasing a device for 18 months or longer to the user, and it can be deemed that the purchase of a new device is a condition for the provision of a mobile device because the support for the user of a mobile device associated with the purchase of a device is more favorable to the Plaintiff in that it enhances the possibility of a new customer's inflow. Since the Defendant strictly regulates the mobile device usage fee in accordance with the relevant Acts and subordinate statutes, it is argued that the Plaintiff is unable to freely discount the Plaintiff, but one of the reasons for the amendment of the Telecommunications Business Act, which was wholly amended by Act No. 10166, Mar. 22, 2010, one of the reasons for the amendment of the Telecommunications Business Act, which is amended by Act No. 10166, supra, does not seem to be unlawful in the form of the Plaintiff's voluntary discount of the mobile device fee.

B) In that the Plaintiff does not concurrently hold the position of a mobile communications business operator, there is an essential difference with other mobile communications business operators holding the position of a mobile communications business operator. In other words, since a mobile communications business operator holding the position of a mobile communications business operator concurrently holds the position of a mobile communications business operator, it is natural to regard the mobile communications subsidy as an overcharge amount on the sales price of the mobile communications business in accordance with the party’s intent or transaction structure. However, since the Plaintiff is not a mobile communications business operator, and there is no authority to adjust the sales price of the mobile communications business, and only the cost of the mobile communications service provided by the Plaintiff is entitled to adjust the mobile communications business, even if a certain amount is discounted to the customer using the mobile communications service provided by the Plaintiff as a subsidy, it is not borne by the mobile communications business operator, but connected with the mobile communications service provided by the Plaintiff, and thus, it is reasonable and consistent with the substance of the transaction. Accordingly, it seems that the Plaintiff’s notice of charge issued to the customer has not been thoroughly divided or consistently stated on what amount of the subsidy in this case.

C) With respect to the installment support subsidy under an agreement with the customer who purchases the device in installments, an agency receives value-added tax on the total amount of principal and interest accrued from the installment transaction contract with the customer while transferring the claim for installment payment of the device to the card company, i.e., value-added tax on the total amount of the supply value of the device that did not consider the instant subsidy, and the non-party company also receives value-added tax from the agency after receiving the full amount of the supply value of the device from the agency. Furthermore, even under the agreement on the collection of the claim for installment payment concluded by the card company and the Plaintiff, the Plaintiff shall pay the same amount of collection amount equivalent to the total amount of the device to the card company, regardless of whether the Plaintiff

After all, the non-party company, the agent, and the credit card company received all the originally determined amounts without reducing the transfer or acquisition amount of the device, and accordingly, the value-added tax is also imposed on the full amount of the device that did not deduct the subsidy of this case. In this regard, it is inappropriate to view that the subsidy of this case granted by the plaintiff was directly reduced from the value of the supply of the device.

In the case of a basic agreement-type subsidy for a customer who purchases a device in a lump sum, there is difference between the subsidies to be agreed in that the discounted amount is not explicitly indicated on the written claim for the fee requested by the Plaintiff to the customer every month. However, in this case, the agent and the non-party company received the total sum of the subsidies and the remainder of the mobile devices paid by the customer and received value-added tax on the total amount in lump sum, so it cannot be deemed that the instant subsidies were reduced from the mobile devices. In addition, even from the Plaintiff’s standpoint, the instant subsidies cannot be deemed to have been reduced from the mobile devices because the Plaintiff directly paid the agent the instant subsidies in advance for the customer instead of paying the discounted amount from the mobile devices each month, and then, they are appropriated from the mobile devices paid by the customer each month, and thus there is no substantial difference between the subsidies to be agreed upon. Accordingly, even in the case of the basic agreement-type, it can be deemed

D) Value-added tax is a consumption tax and an indirect tax imposed on the consumption amount of goods or services, and the tax base is the price actually paid by the consumer of the goods or services to the relevant supplier. The tax base is the customer of the mobile communications service in this case, who is the final customer of the mobile communications service, is subject to value-added tax on the total value of the supply amount of the devices not deducted from the instant subsidy in the agency, and thus, in terms of value-added tax, the Plaintiff’s granting the benefits of the instant subsidy from the perspective of value-added tax can be deemed not related to the purchase price of the mobile communications service, but to the cost of the mobile communications service provided by the Plaintiff. Therefore, it is reasonable to view that the Plaintiff, the supplier of the mobile communications service, who is the supplier of the said subsidy, should be subject to the transaction collection of the tax amount calculated based on the actual payment basis. On the contrary, interpreting that the Plaintiff should be subject to value-added tax on the subsidy portion in this case, considering the overall provision of the device and the mobile communications service, as a result of the transaction collection of value-added tax on the same tax base.

E) However, the Plaintiff appears to have collected and paid value-added tax on the full amount of the mobile communications fee without excluding the amount of the subsidy from the tax base when the Plaintiff claimed for the mobile communications fee. However, in light of the fact that the Plaintiff was scheduled to pay the mobile communications fee according to the deducted amount from the time when the Plaintiff entered into a contract to use the mobile communications service with the customer entitled to the instant subsidy, this can be deemed an inevitable measure taking into account the taxation administration at the time that the instant subsidy was not considered as the discount amount on the mobile communications fee, and that the nature of the instant subsidy does not vary accordingly, it cannot be deemed an essential standard to determine the legitimacy of the instant disposition. Rather, if the instant subsidy is not recognized as the discount amount on the mobile communications fee on the ground of formal transaction structure or transaction practice, all the Plaintiff and other mobile communications business operators grant the instant subsidy to increase the user’s use of the mobile communications service, and even though the substance of the transaction is the same, it can not be recognized as the amount of the instant subsidy, and the Plaintiff’s burden on the customer’s supply from the mobile communications service can be increased compared to other customers.

Therefore, the subsidy of this case, notwithstanding the name of the formal transaction structure or subsidy, shall be recognized as the accumulated amount of the mobile communication fee.

E. Sub-committee

Ultimately, the Plaintiff’s assertion is reasonable, and the instant disposition is unlawful.

3. Conclusion

Therefore, the plaintiff's claim shall be accepted for the reasons and it is so decided as per Disposition.