Whether a general taxable person is subject to comprehensive transfer of business for a simplified taxable person

Moel transferee is a simplified taxable person, and the transferor is a general taxable person, which does not constitute a comprehensive transfer of business subject to non-taxation because the general taxable person is a transfer of business to a simplified taxable person.

Article 6 (Supply of Goods)

1. Details of the disposition;

The following facts are not disputed between the parties:

A. On August 5, 1999, the Plaintiff acquired a building with 352.9 square meters located in ○○○○○-dong, ○○○○○○○○-dong, ○○○○○○○-dong, and its 8th floor (hereinafter referred to as “the above real estate”) and registered as a general taxable person, and the 2,3th and upper floors shall be bath (hereinafter referred to as “Bathing part”), and the 4 to 7th and upper floors shall run a bath (hereinafter referred to as “Moel part”) and shall sell bath and the above real estate to the ○○○○ and ○○○○ (hereinafter referred to as “the assignee”) and completed the registration of ownership transfer for each share of the above real estate to the transferee on October 26, 201, after reporting the closure of business to the Defendant on October 10, 2001.

B. Around October 15, 2001, ○○○, among the subcontractors, registered the Defendant as a general taxable person with respect to the bath part, and ○○○ was a simplified taxable person with respect to the motel portion, and the her business was converted into a general taxable person on July 1, 2003, when the her business was registered as a simplified taxable person.

C. As to the transfer of the above real estate, the Defendant: (a) had the same type of business between the transferor and the transferee at the time of transfer; (b) did not constitute a comprehensive transfer of business (as prescribed by the Presidential Decree, which is the transfer of business) under Article 6(6) of the Value-Added Tax Act due to the difference in the type of taxation as ○○○ was registered as a simplified taxable person; (c) on January 12, 2004, imposed the Plaintiff on the Plaintiff as of January 12, 2004 value-added tax for the second period of 201, value-added tax 75,141,830 for the entire real estate (hereinafter “the disposition of this case”). However, according to the decision of national tax adjudication, the amount of tax to be imposed was reduced to 49,759,010 won only for the part where the taxable property was collected (hereinafter

2. Whether the disposition is lawful;

A. The plaintiff's assertion

The instant disposition is unlawful for the following reasons.

(1) Even if the Plaintiff transferred the entire real estate and business facilities to the transferee, it is unreasonable to deem that only one of the transferee later registered as a simplified taxable person and does not constitute a comprehensive transfer of business, since it would inflict losses on the Plaintiff due to one’s unilateral intention after transferring the entire real estate and business facilities.

(2) The meaning of "those as prescribed by the Presidential Decree" under Article 6 (6) 2 of the Value-Added Tax Act (hereinafter referred to as the "Act") is the provision for tax reduction or exemption, and such provision for tax reduction or exemption is not prescribed in this Act, but delegated to the enforcement decree, which is a subordinate law, violates the principle of prohibition of comprehensive delegation or the principle of no taxation without law under the Constitution. In addition, Article 17 (2) of the Enforcement Decree of the Act does not regard the comprehensive transfer of business as the supply of goods, and it is excluded from the comprehensive transfer of business where the type of taxation is changed from a general taxable person to a simplified taxable person. This is because the determination of the transferor's tax burden upon the transferee'

On the other hand, Article 17 (2) of the Enforcement Decree of the above Act was amended not to consider the type of taxation of transaction parties by including the case of changing the type of business in the comprehensive transfer when determining whether to transfer the business on February 9, 2006. This was derived from reflective consideration of the tax authorities' unconstitutional legislation.

(3) Even if not, since the assignee acquired the above real estate by one-half share, one-half of the initial amount of tax imposed should be revoked on the basis of the entrepreneur.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

(1) Determination as to the assertion of the above A. (1)

(A) Article 6(1) of the Act provides that the delivery or transfer of goods shall be deemed as the supply of goods and shall be subject to value-added tax, while Article 6(6)2 of the Act and Article 17 of the Enforcement Decree thereof provide that the transfer of goods or services subject to value-added tax shall not be deemed as the supply of goods and services. The purport of the provision is that, even if the supply of goods or services subject to value-added tax is an act of supplying value-added tax, where the goods or services subject to supply cannot be deemed as goods or services due to the nature of value-added tax, or where the contents of supply are inappropriate, it shall be non-taxation. In addition, the transfer of a business does not correspond to the intrinsic nature of the supply of value-added tax that provides for the supply of specific goods as a requirement for taxation, but rather, it is anticipated that the transferee would be entitled to the deduction of the input tax amount without any exception, and thus, it shall be deemed that the transfer of the goods and its related value-added tax amount should be replaced by a comprehensive business owner or a business owner (see Article 203).

(B) Examining the above facts in light of the above legal principles, since ○○ is a simplified taxable person among the assignees, the Plaintiff’s transfer of the above real estate to ○○○○ constitutes a case where a general taxable person under Article 17(2) of the Enforcement Decree of the Act transfers the business to a simplified taxable person, and thus does not constitute a comprehensive transfer of the business subject to non-taxation.

(C) Although ○○○○○ (hereinafter “○○”) is not within the scope of the Plaintiff’s control to choose the type of taxation as in the case of a simplified taxable person after the transfer of the business, the Plaintiff, at the time of the transfer of the business, may have ○○○ (hereinafter “○○”) registered the business as a general taxable person and then transfer the business, or have ○○ (hereinafter “○○”) registered the business as a general taxable person after the transfer of the business, but in fact, may avoid the economic burden due to the above taxation by adding the matters under a contract, which would have the burden on the value-added tax to be attributed to the Plaintiff, separately.

(2) Determination as to the assertion of the above A. (2)

(A) Article 6(6)2 of the Act provides that the transfer of a business that can determine its concept is exempt from taxation and delegates specific scope and limits to the Presidential Decree. It can be sufficiently predicted from the above provision to the majority of the contents to be prescribed by the Presidential Decree. Article 17(2) of the Act delegated by the former Enforcement Decree provides that the content of the transfer of the business corresponding to it shall not be deemed as a comprehensive delegation (see Constitutional Court Order 2005Hun-Ba69, Apr. 27, 2006).

(B) In addition, in cases where a general taxable person intends to transfer a business to a general taxable person, the transferee does not have the benefits of taxation by getting the deduction of the input tax amount, and the transferee is in accordance with the purport of the system to prevent the increased burden of financial pressure, etc. due to the burden of return after having borne the value-added tax, but in cases where the other party to the transaction is a simplified taxable person, the amount of the input tax deduction from the general taxable person (X10% of the supply price), which is less than the output tax amount (X10% of the supply price), which is generated by the simplified taxable person, cannot be said to have no benefits of taxation, and in such cases, the tax authority does not fulfill the legislative purpose of making the comprehensive transfer of business non-taxation. In light of the above, Article 17(2) of the Enforcement Decree, which provides that if the other party to the transaction is a simplified taxable person with a different type of taxation, it does not constitute a violation of the principle of no taxation without the law by impairing the legal stability of the taxpayer.

(3) Determination as to the assertion of the above A. (3)

Article 1(1) of the Act provides that value-added tax shall be the tax base for the price for the supply of goods. As such, in cases where only the part among the above real estate is subject to taxation, the price for such part shall be calculated and the tax base shall be the price for such part, and such price shall not be calculated by applying the share ratio of ownership of real estate.

(4) Therefore, the Plaintiff’s assertion is without merit, and the instant disposition is lawful.

3. Conclusion

Therefore, the plaintiff's claim is dismissed due to the lack of reason, and the judgment of the court of first instance is just, and the plaintiff's appeal is without merit, and it is so decided as per Disposition.