Seoul Administrative Court 2008Guhap26145 ( November 11, 2008)

It is required to issue a tax invoice for donated facilities and report the zero-rate tax base.

Even though there is no value-added tax payable due to the zero tax rate applied to value-added tax for the donation of parking lot facilities, such circumstance alone does not exempt the supplier from the duty to issue a tax invoice or from the duty to report zero

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

Article 22 of the Value-Added Tax Act

Article 64 of the Enforcement Decree of the Value-Added Tax Act

1. The plaintiff's appeal shall be dismissed.

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

The judgment of the first instance shall be revoked.

The Defendant’s imposition of KRW 57,716,00 on May 8, 2007 and additional tax on negligent tax returns on the zero-rate tax base shall be revoked.

1. Attached to a judgment in the first instance;

The reason why the court's explanation in the instant case is as follows: "1,757 square meters" in the second place of the judgment of the court of first instance shall be "1,757.4 square meters"; "7 July 17, 2007" in the second place of the judgment of the court of second instance shall be revised to " July 16, 2007"; and "(i)" in the first place of the judgment of the court of first instance shall be the same as that after the judgment of the court of first instance, except for adding "(ii)" in the first place of the 26th judgment of the court of first instance. Thus, it shall be accepted in accordance with Article 8(2) of the Administrative Litigation Act and Article 420

2. Conclusion

Therefore, the judgment of the court of first instance is just, and the plaintiff's appeal is dismissed as it is without merit.

this decision is delivered with the judgment of the court below.

[Seoul Administrative Court 2008Guhap26145, Nov. 11, 2008]

1. The plaintiff's claim is dismissed.

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

The Defendant’s imposition of KRW 57,716,00 for non-delivery of the tax invoice against the Plaintiff on May 8, 2007 and KRW 28,858,00 for additional tax assessment of the zero-rate tax base shall be revoked.

1. Details of the disposition;

The following facts may be acknowledged either as a dispute between the parties or as a whole by taking into account the respective descriptions of Gap evidence 1, Gap evidence 4, 5, 9, and 11 and the whole purport of pleadings:

A. The Plaintiff, a corporation operating a parking lot business, etc., entered into an agreement with the Seoul Special Metropolitan City and the Plaintiff to newly construct a parking lot and related facilities on the ○○○-dong 230-○○ 1,757 square meters and to contribute them to Seoul Special Metropolitan City and to use them for 20 years. Accordingly, on the above land, the Plaintiff newly constructed a parking lot and related facilities of the 1st, 6th, and the total floor area of 6,565.36 square meters (hereinafter the instant parking lot facilities) on October 13, 2003 (the instant parking lot facilities were registered in its name on January 7, 2004) and did not file a value-added tax return with the tax authority, and did not issue a tax invoice to Seoul Special Metropolitan City.

B. On May 8, 2007, the Defendant issued to the Plaintiff a notice of imposition of KRW 86,574,00,00 for the aggregate of the additional tax on the second period of 2003, including the additional tax on the non-delivery of the tax invoice (hereinafter “instant disposition”).

C. On July 17, 2007, the Plaintiff appealed to the Board of Audit and Inspection, but was dismissed on March 27, 2008.

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

In the event of the supply of a building, such as the instant parking lot facilities, the tax authority legally secured a room to grasp and manage the transaction details by receiving transaction data from the registration office or the inspection office under the Registration of Real Estate Act or the Act on Special Measures for the Registration of Real Estate, and the supply of the instant parking lot facilities is a transaction subject to zero tax rates in the value-added tax. In light of the fact that the instant disposition is unlawful as it violates the excessive

(b) Related statutes;

Article 22 of the former Value-Added Tax Act

Article 64 of the former Enforcement Decree of the Value-Added Tax Act

2. Determination

1) As to the portion of additional tax on non-delivery of the tax invoice

Article 22(2)1 of the former Value-Added Tax Act (amended by Act No. 7007 of Dec. 30, 2003) provides that where an entrepreneur who is a juristic person fails to supply goods or services and to issue a tax invoice, an amount equivalent to 2/100 of the value of the supply shall be added to the payable tax amount or deducted from the refundable tax amount. Even if there is no value-added tax applied to the value-added tax, such as the supply of facilities in the instant parking lot, there is no special circumstance to interpret that the obligation to provide a tax invoice is exempted, notwithstanding the express provision. Under the current value-added tax system under the former Value-Added Tax Act, the basis for its operation is to realize the function of the tax invoice as input tax deduction and taxation data, thereby establishing a basis for transaction normalization and tax base through this, the legislative purpose thereof is to be added, and the Plaintiff’s assertion that the imposition of additional tax as a sanction on the failure to issue a tax invoice is significantly unfavorable compared to the public interest, or that it is extremely harshly contrary to the substance of breach of duty.

Meanwhile, in light of the fact that the instant parking lot facility was registered for preservation of ownership in the name of the Plaintiff and the registration for preservation of ownership was completed in the name of the Seoul Special Metropolitan City, not in the name of the Seoul Special Metropolitan City, the tax authority cannot be deemed to have known or easily understood the details of the transaction, as alleged by the Plaintiff, and the Supreme Court Decision 200312820 Decided the grounds for the Plaintiff’s assertion concerning the issue of imposing additional tax on non-delivery of invoice under the Corporate Tax Act while supplying real estate, such as land and building, and thus, the additional tax on non-delivery of invoice under the Value-Added Tax Act that differs from the legislative purpose of the Corporate Tax Act

2) As to additional tax returns on zero tax base

Article 22 (6) of the former Value-Added Tax Act (amended by Act No. 8142 of Dec. 30, 2006) provides that "the tax base to which the zero-rate tax is applied as the object of the imposition of the incomplete return of the zero-rate tax base shall be the object of the penalty tax." The supply of the instant parking lot facilities is subject to zero-rate tax rate in accordance with Article 105 (1) 3-2 of the former Restriction of Special Taxation Act (amended by Act No. 7845 of Jan. 2, 2006) and thus, the Plaintiff's failure to file a return on the supply of the instant parking facility is subject to zero-rate tax rate in accordance with Article 105 (1) 3-2 of the former Restriction of Special Taxation Act.

The Plaintiff’s additional tax is not allowed due to the same reason as the case of the additional tax on the issuance of the tax invoice as seen earlier. However, this part of the additional tax is not in violation of the excessive prohibition principle.

The plaintiff's assertion on this part is without merit.

3. Conclusion

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