Cho-2014-Divisions-1897

If the contractor concludes a labor contract with the contractor and distributes wages, the contractor is the contractor.

If a contract for work and labor is entered into with a contractor, a wage is set and paid to workers, and a worker manages the time and work of the worker, it is a business operator under the Value-Added Tax Act.

Article 2 (Persons Liable for Tax Payment)

2014Guhap5860 Revocation of Disposition of Imposition of Value-Added Tax

Ansan 00

000 director of the tax office

June 11, 2015

July 2, 2015

1. The plaintiff's claim is dismissed.

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

Cheong-gu Office

The Defendant’s imposition of value-added tax of KRW 00,00,000 for the first term portion of January 3, 2010, value-added tax of KRW 00,000 for the second term portion of February 2010, value-added tax of KRW 00,00,000 for the first term portion of January 3, 201, and value-added tax of KRW 00,000 for the second term portion of February 201, shall be revoked.

1. Details of the disposition;

A. The Plaintiff provided shipbuilding-related services in AAtech Co., Ltd. (hereinafter “Nonindicted Company”) that manufactures vessel parts and steel structures, and received 00,000,000 from Nonparty Company for the total period from January 1, 201 to December 31, 201.

B. On January 3, 2014, the Defendant issued a revised notice of KRW 00,00,000 of value-added tax for the first term of January 3, 2010, value-added tax for the second term of 2010, value-added tax for the second term of 200,000, value-added tax for the first term of 201, and KRW 00,000,000 of value-added tax for the second term of 201, and value-added tax for the second term of 20,000,000 for the second term of 201 (hereinafter “instant disposition”).

C. On March 1, 2014, the Plaintiff appealed to the instant disposition and requested an inquiry to the Tax Tribunal, but the said Tribunal dismissed the decision on October 6, 2014.

[Reasons for Recognition] Facts without dispute, Gap evidence 1 to 3, Eul evidence 1 to 3, the purport of the whole pleadings

2. The legality of disposition.

A. The plaintiff's assertion

The plaintiff was merely a worker who provides labor under the direction and supervision of the non-party company. However, since the promotion of convenience only received and divided the wage of the same worker in a lump sum, it is unlawful to regard the plaintiff as a business operator and make the disposition in this case even if the above income falls under other income under the Income Tax Act.

B. Relevant statutes

Attached Form 3 is as listed in the "relevant Acts and subordinate statutes".

C. Facts of recognition

1) The Plaintiff and the non-party company entered into an oral contract to have workers live in accordance with the work volume, and to pay the Plaintiff a sum of KRW 00,000,000 to the Plaintiff from January 1, 201 to December 31, 201.

2) Upon receipt of the above construction cost from the non-party company, the Plaintiff paid the workers who were on his own, with the wage fixed according to the number of working days. In this case, the non-party company did not participate in any way in which the Plaintiff paid the wages to the workers.

3) The Plaintiff and the non-party company have prepared a contract for construction work each time the construction cost is paid to the Plaintiff, and the contract for construction is terminated by paying the construction cost to the Plaintiff, and all of the relationships with the Plaintiff is terminated. The Plaintiff stated that the Plaintiff shall be responsible for labor-management relations, industrial accidents, wages, retirement allowances, welfare benefits, etc. to the employees of the Plaintiff, and in any case shall not transfer its responsibility to the non-party company

4) There is no fact that the Plaintiff and the Nonparty Company have written an employment contract.

[Reasons for Recognition] Facts without dispute, Gap evidence 1 to 4, Eul evidence 1 to 4, the purport of the whole pleadings

D. Determination

(1) Article 2(1)1 of the former Value-Added Tax Act (amended by Act No. 11873, Jun. 7, 2013; hereinafter referred to as the "former Value-Added Tax Act") provides that a person who independently supplies goods or services for business purposes is a person liable to pay value-added tax, regardless of whether it is for profit-making purposes. Here, "a person who independently supplies goods or services for business purposes" means a person who provides goods or services for consecutive and repeated intent by meeting the business form to an extent that added value can be created (see, e.g., Supreme Court Decision 2003Du5754, Jul. 15, 2005).

① The Plaintiff supplied the worker to the non-party company, received a total of KRW 000,000,000 in return for the amount of work related to shipbuilding entrusted by the Plaintiff, and paid the worker a wage according to the number of working days, and brought the remainder to the Plaintiff. The payment that the Plaintiff received from the non-party company seems to be paid for the Plaintiff’s work rather than for the Plaintiff’s work.

② In the process of carrying out work, the non-party company only takes charge of safety management, and the time and attitude of workers are not managed by the non-party company (Evidence A No. 4), so the worker who was living in the plaintiff does not seem to provide labor under the management and control of the non-party company, and rather, it appears that the worker provided labor under the management and control of the plaintiff.

③ Other income under Article 21 (1) 19 (c) of the Income Tax Act appears to be premised on a delegation contract in consideration that a person with professional knowledge or special skill, such as an attorney-at-law, etc. temporarily receives it. Since it is reasonable to view that a contract entered into with a non-party company is a labor contract with the non-party company, the money paid by the Plaintiff from the non-party company cannot

2) Therefore, the Plaintiff’s assertion is without merit.

3. Conclusion

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