Early High Court Decision 2013J 019 ( October 22, 2013)

It is reasonable to impose value-added tax on an independent business entity, other than the Director of the Site.

It is reasonable to regard the claimant as an independent business entity in view of the fact that there is no objective evidence that the claimant has received benefits from the owner while working as the site manager in the field office.

Article 2 of the Value-Added Tax Act

2013Guhap4317 Disposition to revoke the imposition of value-added tax

IsaA

Head of the tax office

October 17, 2013

November 7, 2013

1. Of the instant lawsuits, the part that seeks revocation of the imposition of value-added tax exceeding the amount of OOO for the second term portion in 2006, OO for the first term portion in 207, OO for the first term portion in 2008, OO for the second term portion in 2008, and OO for the second term portion in 2008 shall be dismissed.

2. The plaintiff's remaining claims are dismissed.

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

Cheong-gu Office

The Defendant’s disposition of imposing value-added tax on the Plaintiff on May 21, 2012 is revoked, respectively, for the second term portion of 2006, for the first term portion of 2007, for the second term portion of 2007, for the second term portion of 2008, for the first term portion of 2008, for the second term portion of 2008, for the first term portion of 2009, for the first term portion of 2009, for the first term portion of 2009, and for the second term portion of 209.

1. Details of the disposition;

A. On May 21, 2012, the Defendant deemed that the Plaintiff omitted sales of BB construction during the taxable period from February 2, 2006 to February 2, 2009, and imposed on the Plaintiff the total value-added tax amount of KRW OO for the second period of 2006, 007, OO for the second period of 2007, OO for the second period of 2007, OO for the first period of 2008, OO for the second period of 2008, OO for the second period of 2008, OO for the first period of 209, and OO for the second period of 209.

B. On February 22, 2013, the Plaintiff filed an appeal with the Tax Tribunal. On February 22, 2013, the Tax Tribunal reviewed the Plaintiff’s actual reversion of the amount of construction price returned to the Plaintiff, and made a decision that the tax base and tax amount in the pertinent taxable period should be corrected and the remainder of the claim is dismissed.

C. On April 11, 2013, the Defendant adjusted the amount of value-added tax to KRW 206 for the second term of value-added tax on April 11, 2013; KRW OO for the first term of 2007; KRW OO for the first term of 2008; KRW OO for the second term of 2008; and KRW OO for the second term of 2008 (hereinafter “instant disposition”), respectively, by reducing the amount of KRW OO for the second term of 2007, imposed on May 21, 2007; KRW 1009; each value-added tax for the second term of 2009; and each other imposed tax on the same day.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1, 2, 4, Eul evidence Nos. 1, 2, and 8 (including branch numbers; hereinafter the same shall apply) and the purport of the whole pleadings

2. Whether the part seeking cancellation of the reduced tax amount in the lawsuit of this case is legitimate

As seen earlier, the Defendant’s correction of the amount of tax imposed as stated in the judgment of the Tax Tribunal as stated in Paragraph (c) is unlawful, since there is no tax disposition to revoke the amount of tax already reduced among the instant lawsuit, there is no legal interest to seek revocation thereof. Therefore, among the instant lawsuit, the part seeking revocation of the imposition of value-added tax exceeding the amount of tax imposed exceeding the amount of tax imposed as stated in the judgment of the Tax Tribunal, and exceeding the amount of tax imposed as stated in the instant lawsuit, the part seeking revocation of the imposition of value-added tax exceeding the amount of tax to be revoked.

3. Whether the instant disposition is lawful

A. The plaintiff's assertion

The plaintiff was employed as the head of the field office of BB construction on the condition that he was paid monthly OOO won from the representative DamageCC of BB construction, and was not paid construction cost as an independent business operator. However, the defendant's disposition imposing value-added tax by evaluating the plaintiff as an independent business operator is unlawful.

(b) Related statutes;

/ Value-Added Tax Act (Amended by Act No. 9915, Jan. 1, 2010)

Article 2 (Taxpayer)

(1) Any of the following persons shall be liable to pay value-added taxes under this Act:

1. A person who independently supplies goods (referring to the goods under Article 1; hereinafter the same shall apply) or services (referring to the services under Article 1; hereinafter the same shall apply) on a business basis, regardless of whether it is for profit-making purposes (hereinafter referred to as a "business operator");

C. Determination

Article 2(1)1 of the former Value-Added Tax Act (amended by Act No. 9915, Jan. 1, 2010) provides that a person who supplies goods or services independently for business regardless of whether it is for profit-making purposes is a person liable for value-added tax. Here, “a person who supplies goods or services independently for business purposes” refers to a person who supplies goods or services in the form of business to the extent that he/she can create value-added tax and who continues to engage in business and with continuous and repeated intent (see Supreme Court Decision 2003Du5754, Jul. 15, 2005). Furthermore, in determining whether it is a type of business to the extent that the value-added tax can be created, the object, scale, collection, and the amount of the transaction should be considered.

In the instant case, each statement in Eul evidence Nos. 5, 6, 9, and 10 included the purpose of the entire pleading in addition to the following circumstances, i.e., (i) the Plaintiff received total OOO from the DamageCC, the representative of BB construction, in the taxable period from January 2, 2006 to February 2, 2009, the Plaintiff received total amount from the Plaintiff’s Nonghyup Bank account in the name of the Plaintiff. There is no circumstance to deem that the period of payment or the amount of payment or the amount of remittance falls short of the prescribed amount, and the amount of monthly payments was paid in the form of monthly salary (part 10,00 won), and there is no circumstance to deem that the Plaintiff was regularly paid a certain amount of money in the form of monthly salary; (ii) the Plaintiff remitted necessary expenses such as personnel expenses, material costs, equipment costs, etc. related to the construction of BB houses to the Plaintiff’s account in the name of the Plaintiff; (iii) the Plaintiff paid the above expenses directly to the relevant customer, etc. for the taxable period from the comprehensive computer network.

Therefore, the defendant's disposition of this case imposing value-added tax on the plaintiff as an independent business operator.

Since the plaintiff's assertion is legitimate, it is without merit.

4. Conclusion

Therefore, the part of the lawsuit of this case that seeks revocation of the imposition of value-added tax exceeding the OOO on February 2, 2006, OOO on January 2007, OOO on January 2008, OOO on January 2008, and OOO on February 2008 shall be dismissed as it is unlawful, and the remaining claims of the plaintiff shall be dismissed as it is without merit. It is so decided as per Disposition.