Officetel is not a national housing subject to value-added tax exemption.

Officetel constitutes a general business facility prescribed by the Building Act, not a house under the Housing Act, and thus is not subject to tax exemption under the Restriction of Special Taxation Act.

Article 106 of the Restriction of Special Taxation Act (Exemption of Value-Added Tax)

2018Guhap20940 Revocation of Disposition rejecting Value-Added Tax Correction

AA Development Corporation

BB Director of the Tax Office

September 12, 2018

oly 12, 2018

1. The plaintiff's claim is dismissed.

2. The costs of lawsuit shall be borne by the Plaintiff.

Cheong-gu Office

The Defendant’s rejection disposition of refund of KRW 239,220,640 against the Plaintiff on August 23, 2016 is revoked.

1. Details of the disposition;

A. The Plaintiff is a company that runs a housing construction business, etc. at the O No. O in BB city. In around the end of 2014, the Plaintiff newly constructed a complex facility of the first underground floor and the tenth floor above the ground (No. 5 neighboring living facilities, No. 56 of officetels) and sold an officetel No. 54 (hereinafter “the instant officetel”) until 2015.

In addition, on January 2016, the Plaintiff reported and paid the value-added tax for the first and second years of 2015 to the Defendant as shown below.

(Omission of List)

B. However, on June 21, 2016, the Plaintiff newly constructed the instant officetel for the purpose of residence from the beginning to the Defendant, and filed a claim for correction by refunding value-added tax amounting to KRW 239,220,642 on the ground that the supply of the instant officetel constitutes the subject of exemption from value-added tax, on the grounds that the instant officetel constitutes the subject of exemption from value-added tax.

C. On August 23, 2016, the Defendant rejected the Plaintiff’s request for correction on the following grounds (hereinafter “instant disposition”).

National housing exempted from value-added tax pursuant to Article 106 (1) 4 of the Restriction of Special Taxation Act refers to housing below the scale of national housing under the Housing Act, and officetels is not a housing under the Housing Act, and the above provisions shall not apply.

D. On November 2, 2016, the Plaintiff filed an objection with the commissioner of the EE Regional Tax Office against the instant disposition, but the application was dismissed on December 15, 2016. The Plaintiff again filed an appeal with the Tax Tribunal on February 21, 2017, but the appeal was dismissed on December 21, 2017.

Facts that there is no dispute over recognition, the purport of the whole pleading.

2. Whether the instant disposition is lawful

A. The Plaintiff’s assertion was newly constructed from the beginning for residence with three dwelling rooms, three dwelling rooms, main and restaurant rooms, beer and multi-use rooms, toilets, etc., and pipes, water supply and drainage systems, etc. are installed as a brick reclamation, and it is impossible to later alter or remodel facilities for other purposes.

In addition, 52 households, 54 households located in the instant officetel, among the 54 households, filed a move-in report on resident registration, and 51 households are subject to property tax, and are used for residential purposes, such as the supply of electricity for housing, and the area is not more than 85§³ per house or household.

Therefore, this case’s officetel constitutes “national housing prescribed by Presidential Decree” under Article 106 of the Restriction of Special Taxation Act, and thus, the supply of goods should be exempted from value-added tax.

Nevertheless, the defendant refused to request correction from the plaintiff on a different premise, so the disposition of this case shall be revoked in an unlawful manner.

B. Relevant statutes

The entries in the attached Table-related statutes are as follows.

C. Determination

1) Organization of issues

The facts that the instant officetels constitute business facilities (offices) in the public account book (construction permission, house building register, and real estate register) do not conflict between the parties concerned.

Therefore, the issue of this case is whether the structure is designed for residential purposes even though the public register of the above officetel falls under business facilities, and if the tenant actually uses it for residential purposes, it shall be deemed as a house below the scale of national housing under the Housing Act under the Restriction of Special Taxation Act, and whether the value-added tax should be exempted for supply.

2) According to the contents of the relevant provisions pursuant to Article 106(1)4 of the Restriction of Special Taxation Act, Articles 51-2(3) and 106(4)1 of the Enforcement Decree thereof, and Article 2 subparag. 5 of the Housing Act, (1) of the supply of national housing and the housing construction services (including remodeling services prescribed by Presidential Decree) prescribed by Presidential Decree shall be exempted from value-added tax; and (2) “national housing and the housing construction services prescribed by Presidential Decree” refers to housing below the scale of national housing under the Housing Act (referring to the area based on the area for exclusive use by a household in cases of multi-family houses prescribed by Ordinance of the Ministry of Strategy and Finance), and (3) The term “scale of the national housing” refers to housing (referring to housing with the exclusive use by a household in cases of multi-family houses prescribed by Ordinance of the Ministry of Strategy and Finance) whose area used exclusively for residential purposes is not more than 85 square meters per house or household (referring to housing with the exclusive use area not exceeding

Meanwhile, pursuant to Article 2 subparags. 1 through 4 of the Housing Act and Articles 2, 3 (1) and 4 of the Enforcement Decree thereof, “house” means all or part of a building with a structure wherein members of a household can carry on an independent residential life for a long time as well as land attached thereto; “house” means a detached house and multi-family housing; “multi-family housing” means multi-family housing under subparagraph 1 (a) and (b) of attached Table 1 of the Enforcement Decree of the Building Act among housing with a structure wherein a household can carry on an independent residential life within one building; and “multi-family housing” means multi-family housing under subparagraph 1 (a) and (c) of the same Table; and “multi-family housing” means multi-family housing under subparagraph 2 (a) of attached Table 1, multi-family housing under subparagraph 2 (b) of the Enforcement Decree of the Building Act among housing with a structure where each household jointly uses all or part of the walls, hallways, stairss, and other facilities within one building.

In addition, Article 2 of the Enforcement Decree of the Building Act [Attachment 1] subparagraph 14 (b) of the Enforcement Decree of the Building Act and Article 2 of the "Building Standards for Officetels" shall meet the standards publicly notified by the Minister of Land, Infrastructure and Transport, such as ① Officetels shall be a kind of general business facility; ② Officetels shall be a building which enables accommodation in a part of a division among the buildings sold or leased; ② Officetels shall not be installed for each office section; ② an office building shall not be installed for each office section; and where a building is constructed in combination with other purposes, an office building shall be installed separately; and where the exclusive area for each office section exceeds 85 square meters, an office building shall not be installed with a floor heating unit using a hot, hot,

3) Determination on issues

A) Under the relevant legal principles and the principle of tax law, or the principle of non-taxation or tax exemption, and the interpretation of tax laws and regulations shall not be extensively interpreted or analogically interpreted without any reasonable grounds to taxpayers, barring any special circumstances. In particular, it conforms to the principle of tax equity to strictly interpret the provisions that may be clearly considered as preferential provisions among the requirements for tax reduction and exemption accords with the principle of tax equity (see, e.g., Supreme Court Decisions 2003Du7392, May 28, 2004; 2007Du21242, Feb. 14, 2008).

In addition, a national housing exempt from value-added tax under Article 106 (1) 4 of the Restriction of Special Taxation Act is a national housing exempt from value-added tax under the above provision even if its area constitutes national housing scale, in light of its purpose, etc., if it falls under at least a building constructed for a housing purpose by obtaining a building permit lawfully, and the building is altered into a housing without obtaining a permit for alteration of use after obtaining the building permit and obtaining the approval for use. (See Supreme Court Decision 96Nu8758 delivered on October 11, 196).

B) Whether the instant officetel supply is subject to value-added tax exemption

Considering the contents of the relevant provisions and the above legal principles and the following circumstances, the instant officetel cannot be deemed as falling under the “national housing” under Article 106(1)4 of the Restriction of Special Taxation Act.

Therefore, it is legitimate for the Defendant to refuse the Plaintiff’s request for correction on the ground that the instant officetel supply is not subject to value-added tax exemption.

(1) Article 2 of the Housing Act separately defines quasi-housing that includes a house and its subordinate concept, a detached house, an apartment house, and an officetel. The Enforcement Decree of the Building Act (attached Table 1) provides different definition of housing and an officetel which is a business facility, and the ‘housing' and ‘quasi-housing' differ in the relevant construction requirements and standards (housing: Housing Act Article 35, etc., and Officetel construction standards: Building Act and officetel construction standards).

Therefore, as long as the Enforcement Decree of the Restriction of Special Taxation is clearly defined as a "house below the scale of national housing under the Housing Act" as an object of value-added tax exemption, it is not allowed to expand or analogically interpret it as a "quasi-housing" in the above "house."

Sheb and officetels are the buildings that can board and lodging in the first place in accordance with the construction laws and regulations, and they cannot be said to constitute the "housing" under the Housing Act only on the ground that the buildings were constructed for the purpose of residence or are currently being used for the purpose of residence.

In addition, according to Article 2 of the construction standard of officetels, officetels is prohibited from being installed by each office partition. Thus, the instant officetel cannot be deemed to have been installed in the same structure as the Plaintiff’s assertion.

Article 4 of the Value-Added Tax Act provides that "The supply of goods" is subject to taxation (Article 4 of Value-Added Tax Act).

Therefore, whether the supply of goods is subject to tax exemption or is subject to tax exemption should be determined by the objective type or use of the building at the time of the supply, and especially the entry in the public register at the time of the supply.

Although the occupants of the instant officetel make a move-in report on resident registration and use it for residential purposes, it is merely an incidental circumstance that occurred after the supply of the instant officetel.

Rather, the owners and occupants of the instant officetel may use it as a general business facility at any time according to its original purpose. According to the entry of the instant officetel No. 9, some occupants designated the instant officetel as their address and registered business such as cargo transportation business, food, and miscellaneous retail business.

Therefore, it is unreasonable to interpret that the taxation of value-added tax, which is subject to the supply of goods, differs from each other depending on the circumstances after the supply, would seriously undermine the legal stability of the tax law relationship.

And the introduction of the concept of quasi-housing into the Housing Act amended by Act No. 10237, Apr. 5, 2010 is to activate the supply of facilities that can be utilized for residential purposes without being classified as a house in response to the changed housing demand conditions, and it does not aim to include officetels as the concept of a house, thereby supporting the stability of ordinary people and tax benefits.

In particular, quasi-housing stipulated in Article 4 of the Enforcement Decree of the Housing Act includes dormitories and communal living facilities, which is related to housing supply for residential stability of ordinary people, which is the legislative purpose of Article 106 (1) 4 of the Restriction of Special Taxation Act.

(v) above all, if the Plaintiff intended to use the instant officetel for the purpose of residence, it newly constructed and supplied the instant officetel at the free will of the Plaintiff and self-responsibility while recognizing that the instant officetel constitutes subject to taxation, even though it could have been subject to the application of special cases of VAT exemption from the value-added tax at the same place from the beginning.

⑹ 결국 조세특례제한법령에서 정한 면세요건인 '주택법에 따른 국민주택 규모이하의 주택의 공급'에 해당하는지 여부는 다른 특별한 사정이 없는 한 건축허가, 사용승인, 건축물관리대장, 부동산등기부 등 공부상 용도에 따라 객관적으로 판단하여야 한다.

Therefore, "Housing below the scale of national housing under the Housing Act" is only a building constructed for the purpose of housing after obtaining a building permit legally.

Unlike this, even though a building permit and approval for use for business facilities, such as officetels, are stated in the building management ledger and real estate register for the same purpose, only the subjective circumstance where a large number of occupants are actually used for residential purposes as the current status is suitable for the purpose of residence, does not constitute a “house below the scale of national housing under the Housing Act” (see Supreme Court Decision 2007Du21242, Feb. 14, 2008).

3. Conclusion

Therefore, the plaintiff's claim is without merit, and it is so decided as per Disposition.