early 2009 Mine3575 (22. 2010.06)

Whether the transfer of real estate leased buildings constitutes a comprehensive business transfer

The fact that there is no succession of the obligation to the security deposit, but the transferred building is a studio used by students, the reason for the transfer and acquisition is stated in the report when reporting the closure of the business, and the transfer and acquisition constitutes a comprehensive transfer and acquisition.

The contents of the decision shall be the same as attached.

1. The imposition of value-added tax of 38,769,720 won imposed by the Defendant on the Plaintiff on August 6, 2009 shall be revoked.

2. The litigation costs shall be borne by the defendant.

The same shall apply to the order.

1. Circumstances of dispositions;

A. The Plaintiff newly constructed a building on the ground of ○○○○, ○○, ○○, ○○-5, in Jeonnam-gun, ○○○○○○, 311-5, and engaged in real estate rental business, and transferred the instant building and the relevant land to ParkA on December 26, 2006, where some of the lessees of the first floor of the instant building were the tenants of the instant building.

B. On August 6, 2009, the Defendant considered the transfer of the building of this case as a mere supply of goods, not a comprehensive transfer of business, and imposed an imposition of value-added tax of KRW 38,769,720 (including additional tax) on the Plaintiff on August 6, 2009 on KRW 310,000,000 of the transfer price of the building of this case (hereinafter “instant disposition”).

C. The Plaintiff dissatisfied with the instant disposition and filed an appeal with the Tax Tribunal on September 24, 2009, but the decision of dismissal was rendered on June 22, 2010.

[Ground of recognition] Facts without any dispute, Gap's 1 and 2, Gap's 4-1, Gap's 14-2, and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

Since the transfer of the instant building constitutes a comprehensive transfer of business as prescribed by Article 6(6)2 of the former Value-Added Tax Act (amended by Presidential Decree No. 8142 of Dec. 30, 2006) and Article 17(2) of the Enforcement Decree of the same Act (amended by Presidential Decree No. 19892 of Jul. 28, 2007), it is not subject to value-added tax imposed on supply of goods. Nevertheless, the Defendant’s disposition imposing value-added tax on deeming the transfer of the instant building as the supply of goods is unlawful.

B. Relevant statutes

The entries in the attached statutes are as follows.

(c) Fact of recognition;

(1) The 1st floor of the instant building consists of one store of 79.5 square meters, one store of 60 square meters and one room of 30 square meters and one room of 30 square meters, two floors and ten rooms of 30 square meters and ten rooms of 30 square meters, respectively (hereinafter “each room”).

(2) On December 6, 2002, the Plaintiff registered a real estate rental business (general taxable person) from March 1, 2003 at the location of the instant building, and leased 25 square meters of each of the instant units to the students of △ University, etc., without attaching the signboard "Seoul Special Metropolitan City Officetel" on the outer wall of the instant building. Among the 1st floor of the instant building, a store of 79.5 square meters of 70 square meters of the instant building was leased to Ga, and Park Jong-A, a store of 60 square meters of 20 square meters of 60 square meters of 1st to YB, with the trade name "△△△," and the YB, a restaurant business.

(3) After transferring the instant building to Gamba on December 26, 2006, the Plaintiff made a report on discontinuance of real estate rental business to the Defendant on January 25, 2007 with the cessation date as of December 31, 2006.

[Ground of recognition] Facts without any dispute, Gap's evidence 10, Gap's evidence 11-2, Gap's evidence 13-1, Gap's evidence 15-1 to 10, the purport of the whole pleadings, and the purport of the whole pleadings

D. Determination

(1) The key issue of this case is whether the Plaintiff’s transfer of the instant building to ParkA constitutes a comprehensive transfer of business or a simple supply of goods.

The following circumstances, i.e., (i) the Plaintiff transferred not only the instant building but also the books, bedrooms, air conditioners, laundry machines, etc. installed in each room of this case, and (ii) the Ga continues to engage in the existing restaurant business after the Plaintiff acquired the instant building from the Plaintiff, and the Ga runs the real estate rental business without changing the structure, area, and purpose of each room of this case, and (iii) the Plaintiff did not prove that the Ga received the instant building from the Plaintiff and received the instant building from the Plaintiff to the 15th to the 10th of the 10th of the 15th of the 15th of the 15th of the 15th of the 10th of the 20th of the 20th of the 20th of the 20th of the 20th of the 20th of the 20th of the 20th of the 2nd of the 2nd of the 2nd of the 2nd of the 2nd of the Ga.

(2) In this regard, the Defendant asserted that the Plaintiff was a general taxable person at the time of transferring the instant building to ParkA, and ParkA was a simplified taxable person, and that the Plaintiff cannot be deemed a transfer of business to ParkA because the type of taxation is different. Thus, Article 17(2) of the former Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 1930 of Feb. 9, 2006) provides that the transfer of business for which no value-added tax is levied shall be excluded from cases where a general taxable person transfers the business to a simplified taxable person. However, on February 9, 2006, Article 17(2) of the Enforcement Decree of the Value-Added Tax Act was amended by Presidential Decree No. 1930 of Feb. 9, 2006, and there was no such restriction. Rather, since the transferee added a new type of business or changed the type of business other than the succeeded business, the above argument by the Defendant is without merit.

(3) In addition, the defendant asserts that the transfer of the building of this case cannot be deemed a business transfer since the plaintiff submitted a report on business transfer under Article 65 (1) 2 of the Enforcement Decree of the Value-Added Tax Act to the defendant. Thus, even if the plaintiff did not submit a business transfer report to the defendant, it can be considered as a single factor in determining whether the transfer of the building of this case is a business transfer or the supply of goods. The defendant's assertion cannot be accepted since the above administrative defect alone does not affect the legal nature of the transfer of the building of this case, since it does not affect the legal nature of the transfer of the building of this case.

(4)The defendant's disposition of this case against which value-added tax is imposed shall be deemed to be unlawful by judging that the transfer of the building in this case is not the comprehensive transfer of the business, but the supply of goods.

3.In conclusion

Therefore, the plaintiff's claim of this case is reasonable, and it is so decided as per Disposition.