Whether an ancillary management service in a member is eligible for the exemption of value-added tax

The exemption of value-added tax is not consistent with the equity of taxation and substance over form principle just because the service in the imposed member is conducted within the imposed member although the service is similar to the service performed in the general fee management office and the purpose and the process of the pursuit.

Article 12 of the Value-Added Tax Act

Scope of health service under Article 29 of the Enforcement Decree of the Tax Act

1. The plaintiff's claim is dismissed.

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

The Defendant’s imposition of value-added tax of KRW 3,50 for the first term of 2003, KRW 503,350 for the first term of 203, KRW 5,947,980 for the second term of 203, KRW 4,694,220 for the first term of 204, and KRW 5,474,560 for the second term of 204 shall be revoked, respectively.

1. Details of the disposition;

A. The Plaintiff, as a medical specialist who operates a member of the Council with the trade name of “○○○○○○○○○-○○○ building ○○○○○○○○○○○○○○○○○○○○,” (hereinafter “instant member”) (hereinafter “instant member”), has installed a separate skin control room in the instant member, and then has employed the skin manager holding a beauty artist’s certificate and has the customer skin control.

B. The Commissioner of the National Tax Service of 000 won (No. 52,262,149 won, February 2003, 2003, KRW 55,367,617, and KRW 48,231,30, KRW 204, KRW 566,626, and KRW 212,587,692, which is the amount equivalent to the time during which the secondary manager’s service was rendered, in proportion to the service hours of the Plaintiff and the secondary manager’s service, received by the Plaintiff in relation to having the secondary manager provide the services (aling, management, etc.) at the secondary management office within the affected party within the affected party in this case during the second period of 2003 through 204, and notified the Defendant of the imposition of the value-added tax on medical health services.

C. On June 1, 2006, the Defendant notified the Plaintiff of KRW 3,503,350 for the first term portion in 2003, KRW 5,947,980 for the second term portion in 2003, and KRW 4,694,220 for the second term portion in 2004, KRW 5,560 for the second term portion in 2004.

D. The plaintiff appealed to the National Tax Tribunal on July 28, 2006, but the National Tax Tribunal dismissed the plaintiff's request on November 21, 2006.

[Reasons for Recognition] A1-1-4, B 1-4, B 7, the purport of the entire pleadings

2. Whether the disposition is lawful;

A. The plaintiff's assertion

This case's service is a medical skin management that is distinguished from pure commercial activity, and is a "medical health service" or "services inevitably incidental to medical health service", and thus, it shall be exempted from value-added tax. Therefore, the disposition of this case, which is otherwise reported based on misunderstanding of legal principles and misunderstanding of facts, should be revoked.

(b) Related statutes;

It is as shown in the attached Form.

(c) Fact of recognition;

(1) The Plaintiff is providing the skin management service by installing the skin management office in the instant Council member and employing the skin manager who has a certificate of beauty artist’s qualification.

(2) The instant member is arranging the difference between the patient and the skin management customer, and the customer management program (MEDI-CL) enters and manages the items of treatment and management, but does not distinguish between the tax service and the tax-free service, so that the part of the fee and the part of the skin management are calculated and collected collectively.

(3) (A) The type of management performed by a doctor or nurse in the skin management room of the instant member shall be classified into a type of medical feet recorded without the doctor's or nurse's actual performance of services, such as cathering and taking a cather, etc. before taking a cathering, etc. and taking a treatment, or a type of feet, hather, Ethr, Ethr, Ethr, Ethr, Ethrat, Ethrat, and Ethrat, and a type of feet recorded by a doctor or nurse without the doctor's or nurse's actual performance of services, and the items directly performed by the skin manager.

(B) The assistant manager in the instant member of the Council prepared and managed the “Estebic manager record sheet” containing the date of treatment, the assistant manager in charge, and the details of the treatment, with the Plaintiff’s instructions and the patient’s instructions. However, it is possible to classify the “Estebic manager record sheet” into the subject of treatment.

(4) The Defendant extracted the management items from 2003 to 2004 of the instant Council members and divided the standard price presented by the company from the company based on the time provided by the doctor, nurse, and manager, and calculated the amount of income corresponding to the services provided by the manager, and issued the instant disposition.

(5) The Guideline on Unused Medical Practice provides for the criteria for classification by subject of cosmetic 1 in the annexed Table 1 as follows:

Grade 1:

Medical practice to be performed by a physician within a medical institution permanently stationed in a person subject to imposition;

The actual medical practice which requires high level medical knowledge and learning from among acts using medical appliances (medical equipment, instruments and appliances), medicine, etc. for the purpose of treating them.

The substance of the medical practice, which is an act affecting the structure and function of the respondent, may result in dynamic damage to the skin and a certificate of merger when the improper procedure is conducted.

Grade 2:

Medical practices for which nurses may assist in medical procedures for a part of the whole course under the direction and supervision of a doctor after the diagnosis of a doctor within a medical institution where a person is stationed before the assessment;

The substance of the medical practice is not likely to cause any dynamic change to the skin, but the practice requires medical knowledge and skill.

Grade 3:

Medical care-related licenses and qualification holders employed by a medical institution under the direction and supervision of a doctor after the diagnosis of a doctor within a medical institution where a medical specialist subject to imposition is permanently stationed, may assist in medical procedures for part of the whole process.

The actual contents of the medical practice, which is unlikely to cause serious changes in skin or side effects, may assist a person with basic medical care or knowledge related to skin.

outer grade:

pure beauty service

The actual contents of the services shall be observed and analyzed, other than diseases, and services provided using cosmetics materials, cosmetics equipment, appliances, etc.

[Reasons for Recognition] The determination is based on the absence of dispute, Gap 2, Eul 5-1-4, Eul 6,7, Eul 8-1, Eul 2, and the purport of the whole pleadings

(1) The term "medical practice" refers to not only the act of preventing and treating diseases, but also the act of causing harm to human life, body, or public health unless performed by a medical person with medical expertise. In principle, medical practice can be performed only by a medical person. However, medical practice should be permitted by a person holding a license for a nurse, assistant nurse, and medical technician under the Act on the Medical Technicians, Etc., who is engaged in a medical examination or medical examination under the direction of a medical doctor, dentist, or dentist. However, other persons are prohibited from performing medical practice under the direction of a medical doctor or dentist. Furthermore, even if a part of the whole procedure of medical practice is performed by a medical doctor, a non-medical person is prohibited from performing medical practice only as long as the act falls under the medical practice, and as long as the actor is not entitled to obtain a license or qualification to perform the medical practice, the same applies to the case where the person actually has expertise or ability to perform the medical practice at the same level as that of a medical person (see, e.g., Supreme Court Decision 2003Do2903).

In addition, Article 12 (1) 4 of the Value-Added Tax Act provides that the value-added tax shall be exempted for medical and health services prescribed by the Presidential Decree. Article 12 (3) of the Value-Added Tax Act provides that the supply of goods or services inevitably incidental to the supply of goods or services exempt under paragraph (1) of the same Article shall be included in the supply of goods or services, and Article 29 of the Enforcement Decree of the same Act (amended by the Presidential Decree No. 1930 of Feb. 9, 2006; hereinafter the same shall apply) provides that the scope of medical and health services shall be limited to the supply of goods or services, and medical doctors and dentists provided by the Medical Service Act.

(2) However, even if the instant service was performed under the instruction and supervision of the person subject to imposition, it cannot be deemed that it constitutes a medical health service provided by a medical person, such as a doctor, etc. under the Medical Service Act, rather than treating or preventing a disease. Thus, the instant service cannot be deemed as a medical health service provided by a medical person, such as a doctor, etc. under the Medical Service Act. Furthermore, the instant service cannot be deemed as a service that must be attached to the medical health service as an item generally performed or that can be performed in the general management room (only if the secondary manager, who belongs to the person subject to imposition, provided the medical care service rather than the skin management service, or the services that are necessarily incidental thereto, constitutes a medical health service provided by a disqualified person’s medical practice, and thus, the instant medical health service constitutes a lawful medical health care service and health care service through lawful medical practice, and thus, the instant service is not subject to tax exemption).

In addition, even though the services performed in the general management office, which is the value-added tax taxable business, are almost similar to the services undertaken in the general management office, the exemption of value-added tax on the grounds that it is the secondary management services performed within the imposed source, such as the instant member, is not in line with the taxation equity and substance over form principle, and it also does not fit the legislative intent of allowing the exemption of value-added tax on the medical services provided by medical personnel under the Medical Service Act for the purpose of promoting national health

Therefore, it is difficult to view that the instant service falls under the medical health services or the services inevitably incidental to the medical health services, which are stipulated as value-added tax-free services under Article 12(1) or (3) of the Value-Added Tax Act.

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.

Relevant statutes

Value-Added Tax Act

Article 12 (Tax Exemption)

(1) The supply of goods or services falling under any of the following subparagraphs shall be exempted from value-added taxes:

4. Medical and health services (including veterinary services) as prescribed by the Presidential Decree, and blood;

(3) The supply of goods or services essential for the supply of goods or services exempted under paragraph (1) shall be deemed to be included in such supply of goods or services exempted from taxes.

Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 1930 of February 9, 2006)

Article 29 (Scope of Medical and Health Services) The medical and health services as prescribed in Article 12 (1) 4 of the Act shall be as follows (including those provided by a person who has opened a medical institution or a veterinary hospital under the Medical Service Act or Veterinarians Act):

1. Services provided by a doctor, dentist, herb doctor, midwife or nurse as prescribed by the Medical Service Act;

2. Alleys, beds, and bed as prescribed by the Medical Service Act;

3. Services provided by clinical pathology as prescribed by the Medical Technicians, etc. Act, radiation specialists, physical therapy specialists, occupational therapy specialists, dental technicians or dental technicians;

Medical Service Act (amended by Act No. 8366 of Apr. 11, 2007)

Article 2 (Medical Persons)

(1) The term “medical person” as used in this Act means a medical doctor, dentist, herb doctor, midwife and nurse licensed by the Minister of Health and Welfare.