Whether the transfer of a building is subject to the Value-Added Tax Act if a person who has engaged in a real estate rental business for several years by constructing a new building discontinues the real estate rental business and immediately transfers the building (negative)

In case where a person, who was engaged in a real estate leasing business on the land owned by him as a newly constructed building in 1978, entered into a sales contract for a site and building on September 2, 1987 and discontinued the real estate leasing business on October 2 of the same year and transferred the above real estate by being paid a balance on October 18 of the same year, the transfer of the above building is to the extent that the status as a real estate rental business operator is extinguished. Thus, it cannot be deemed as a contingent and temporary supply of goods related to the main business under Article 1(4) of the Value-Added Tax Act and Article 3(3) of the Enforcement Decree of the Value-Added Tax Act, and the sale of the above building cannot be deemed as a real estate dealer. Moreover, the above building immediately after the closure of the real estate leasing business, and it cannot be deemed as a supply of goods remaining after the discontinuance of the business under Article 6(4) of the Value-Added Tax Act, and therefore there is no ground for taxation on the transfer of the above

Articles 1(4) and 6(4) of the Value-Added Tax Act, Article 3(3) of the Enforcement Decree of the same Act, Article 1(1) of the Enforcement Rule of the same Act

Cases of Transitions

The Director of Gangnam District Office

Seoul High Court Decision 89Gu3542 delivered on May 1, 1990

The appeal is dismissed.

The costs of appeal are assessed against the defendant.

As to the ground of appeal by Defendant Litigation Performers

According to the reasoning of the judgment below, the court below determined that the plaintiff and the non-party 1 constructed a new building on August 10, 1978, 651-15 and 651 on the ground of the same ownership owned by the plaintiff Kim Jong-dong, Gangnam-gu, Seoul, and 651, which are owned by the plaintiff, and operated a real estate rental business from around that time, sell the above site and building to 2 billion won on September 2, 1987. The name of the building and the remaining payment date of the real estate shall be 9.30, but the remaining real estate shall be paid to the financial institution under the responsibility of the purchaser, and the seller shall pay the loan to the above real estate by completing the registration of ownership transfer under the name of the purchaser of the above real estate even before the payment date, and the plaintiff and the non-party 1 concluded a sales contract to the seller of all rights to the above real estate until the remainder payment is performed. The plaintiff and the above non-party 1 cannot be viewed as the sale of the above real estate under the above sales contract for convenience 197.

Therefore, the appeal is dismissed and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices.

Justices Kim Sang-won (Presiding Justice)