Cho High Court Decision 2011J 0140 (O3.02)

the cost of facility construction shall be the remaining goods when the business is deemed to be supplied by the private supplier.

Where a business operator who has received facilities construction services, such as electrical construction, wooden construction, and cooking construction closes his/her business, the cost of the facilities construction shall constitute remaining goods when the business is deemed to be supplied by himself/herself and thus value-added tax

Article 6 of the Value-Added Tax Act

201. Revocation of revocation of the imposition of value-added tax 2205

Cityide Mools

Head of the High Tax Office

October 4, 2011

November 8, 2011

1. The plaintiff's claim is dismissed.

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

The Defendant’s disposition of imposition of KRW 22,891,600 against the Plaintiff on October 1, 2010 shall be revoked.

1. Details of the disposition;

A. On October 19, 2007, the Plaintiff, a corporation that operated a wholesale and retail business of imported automobiles (hereinafter referred to as the “instant place of business”) in Yongsan-gu, Yongsan-gu, Yongsan-gu, Busan-si, 000, and closed the business on April 20, 2009. During the First Value-Added Tax period of the Value-Added Tax in 2008, the Plaintiff, a corporation, who operated the instant place of business, was subjected to the construction of interior facilities (the instant interior facilities consisting of the passenger voting time construction, electrical construction, wooden construction, and other works; hereinafter referred to as the “instant facilities”), and was entitled to the deduction of the input tax amount from the output tax amount by receiving a tax invoice of KRW 360,000,000 for the supply value.

B. On October 1, 2010, the Defendant: (a) deemed the residual value of the instant facility as KRW 18,428,00; and (b) deemed it as self-supply; and (c) imposed KRW 22,891,600 on the Plaintiff in 209 (hereinafter “instant disposition”).

C. On December 20, 2010, the Plaintiff appealed to the Tax Tribunal, but was dismissed on March 2, 2011.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1, 2, Eul evidence No. 1, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

Even though the instant facilities consisting of the wind voting, electrical construction, wooden works, and sundry works, etc. and are not goods that can be reusable as artificial facilities or goods having property value that can be sold as used assets, the Defendant imposed the instant disposition by deeming the instant facilities as having remaining value solely on the ground that they are depreciable assets. This is unlawful and thus should be revoked.

B. Determination

Article 6 (4) of the Value-Added Tax Act (amended by Act No. 21565 of Jun. 26, 2009; hereinafter the same shall apply) provides that the remaining goods shall be deemed to be supplied to a business operator when the business operator discontinues his/her business, and Article 49 (1) of the Enforcement Decree of the same Act (amended by Presidential Decree No. 21565 of Jun. 26, 2009; hereinafter the same shall apply) provides that where the goods used for taxable business fall under depreciable assets under Article 62 of the Enforcement Decree of the Income Tax Act or Article 24 of the Enforcement Decree of the Corporate Tax Act, the amount calculated by the following formula shall be deemed to be the market price of the relevant goods. In this case, the number of the taxable periods elapsed shall be calculated by the taxable period under Article 3 of the Act; where the number of buildings or structures elapsed exceeds 20, the number of other depreciable assets shall be calculated by 20; where the acquisition price of the relevant goods exceeds 4/100).

In this case, according to the purport of Gap evidence Nos. 2 and Eul evidence Nos. 1 and evidence Nos. 1, the construction business operator of the facility of this case and issued a tax invoice of KRW 360 million to the plaintiff. A written estimate submitted by literatureA to the plaintiff is the main contents of the facility construction of this case, which include the total voting cost of KRW 194 million, KRW 34 million, KRW 38480,000, KRW 34930,000, and KRW 34930,000,000, which are the closing date of the business of this case. As such, the defendant cannot be viewed as having any reason for the remaining supply of goods to the plaintiff for the purpose of calculating the residual value of the facility of this case by considering the remaining value of the facility of this case as the supply price of the facility of this case, which is 360,000,000 won for the purpose of calculating the remaining value of the facility of this case without any reason for the plaintiff's tax exemption.

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.