Whether the input tax amount related to the land violates the taxation requirement requirement and the right to equality of property is infringed.

The input tax amount on the cost invested for the creation of golf course land is not deducted from the capital expenditure related to the cost required for changing the form and quality of the land or increasing the value of the land.

Article 12 of the Value-Added Tax Act

Article 17 of the Value-Added Tax Act

1. The plaintiff's appeal is dismissed.

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

The judgment of the first instance shall be revoked. The defendant's decision to dismiss the claim for correction of value-added tax filed against the plaintiff on April 13, 2006 shall be revoked.

1. Details of the disposition;

A. The Plaintiff started to build a golf course from around 2005, as a business operator running a golf course business at 300-○○○○○○○○○○-gun, Chungcheongbuk-gun. The Plaintiff reported and paid the value-added tax for one-year period of 2005, and the Plaintiff did not deduct the input tax amount of 59,682,55 won (hereinafter referred to as “the instant input tax amount”) for the expenses incurred in relation to the construction of a golf course from the output tax amount as stipulated in the latter part of Article 17(2)4 of the Value-Added Tax Act (hereinafter referred to as the “instant provision”) and Article 60(6) of the Enforcement Decree of the Act (hereinafter referred to as the “Enforcement Decree”).

B. On February 14, 2006, the Plaintiff filed a claim for correction on the premise that it is possible to deduct the input tax amount of the instant case, but the Defendant rejected the claim on April 13, 2006.

[Ground of recognition] Unsatisfy, Gap evidence 2 to Gap evidence 3, Eul evidence 1, and Eul evidence 2-1 to 3

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

(1) Claim concerning the interpretation of the latter part of the provision of this case and the Enforcement Decree provision

The golf club business is against the basic principle of Korean value-added tax, under which the former phase of tax credit is revoked, to not deduct the input tax amount even if it constitutes the input tax amount to run a taxable business. The latter part of the instant provision, which is the basis of the instant disposition, is not simply a tax deduction for land-related input tax amount, but a tax exemption tax amount for the golf club business, should be interpreted as a Daejeon tax item. The instant provision of the Enforcement Decree, which is so interpreted, is null and void against the principle of no taxation without law, such as contrary to the specification

(2) The assertion that the latter part of the provision of this case and the enforcement decree of this case are unlawful against the principle of clarity

The latter part of the provision of this case provides that input tax amount shall not be deducted as prescribed by the Presidential Decree from input tax amount. The provision of this case provides that input tax amount related to the capital expenditure for the creation, etc. of land: ① acquisition and alteration of the form and quality of land, ② input tax amount related to the creation, etc. of a factory site and a housing site; ② input tax amount related to the acquisition and removal cost of the removed building in the case of the removal of the building after acquiring the land on which the building is located; ③ input tax amount related to the expenses that constitute the acquisition cost of the land by increasing the real value of the land; ③ in the case of the civil works that alter the form and quality of the land, the construction of civil and engineering facilities and structures (such as walls, gardens, facilities, packaging, fences, etc.) are comprehensively implemented in addition to civil construction works that alter the form and quality of the land, and there is no way to specify the value of the land in the case of the land, and ③ there is no specific provision on the expenses that actually increases the value of the land. As a result, the determination fully at the tax authority’s discretion is unlawful.

(3) The assertion that the latter part of the provision of this case violates the Constitution

The input tax amount of a taxable entrepreneur shall be deducted in accordance with the purport of Article 17(1) of the Value-Added Tax Act. Nevertheless, the latter part of Article 17(1) of the Value-Added Tax Act, which practically deducts input tax amount related to land related to taxable businesses, is unconstitutional, since it is a taxation on the acquisition of assets, and it is a double taxation exceeding the limit of the value-added tax, and it goes beyond the limit of the legislative discretion to the extent that it is not acceptable under the fundamental principles of value-added tax, thereby infringing on the rights of equality

(b) Related statutes;

Article 12 of the Value-Added Tax Act

Article 17 of the Value-Added Tax Act

Article 60 of the Enforcement Decree of the Value Added Tax Act

C. Determination

(1) Determination on the assertion regarding the interpretation of the latter part of the provision of this case

(A) The provision of this case and the Enforcement Decree provision

The instant provision provides that the input tax amount related to the tax-free business and the input tax amount related to the land as prescribed by the Presidential Decree are the input tax amount related to the capital expenditure for the creation, etc. of the land. The instant provision provides that the input tax amount related to the capital expenditure for the creation, etc. of the land is the input tax amount related to the capital expenditure for the creation, etc. of the land. In the case of the land related to the capital expenditure for the creation, etc. of the land, regardless of whether it is related to the tax-free business or related to the taxable business, it is clear in the language

(B) Opinion conflict and legislative resolution relating to non-deduction of land-related input tax amount

Meanwhile, Article 17(2)4 of the former Value-Added Tax Act (amended by Act No. 4663, Dec. 31, 1993; hereinafter “former Act”) only stipulates that the input tax amount related to the tax-free business is not deducted, but also stipulates that Article 60(6) of the former Enforcement Decree of the Act (hereinafter “former Enforcement Decree”) does not include the input tax amount related to the tax-free business. The former Enforcement Decree of the Act provides that the tax-free business shall include the input tax amount related to the capital expenditure for the creation of the land, regardless of whether the input tax amount related to the tax-free business is not deducted, or not, if the tax-related tax-related tax-related tax-related tax-related tax-related tax-related tax-related tax-related tax-related tax-related tax-related tax-related tax-related tax-related tax-related tax-related tax-related tax-related tax-related tax-related tax-related tax-related tax-related tax-related tax-related tax-related tax-related tax-related tax-related tax-related tax-related tax-related tax-related tax-related tax-related tax-related tax-related tax-related tax-related tax-related tax-related tax-related tax-related tax-related tax-related tax-related tax-related tax-related tax-related tax.

(C) Therefore, the Plaintiff’s assertion on the premise that the latter part of the instant provision should be interpreted to the effect that only the tax exemption business and the input tax amount related to land should be deducted is not allowed.

(2) As to the assertion that the latter part of the provision of this case and the enforcement decree of this case are unlawful against the principle of clarity

On the other hand, whether it is contrary to the principle of clarity of taxation requirements or not shall be determined by comprehensively examining what act from the taxpayer's standpoint is expected to be subject to taxation because it falls under the pertinent phrase, which is a taxation requirement, whether it accords the possibility of arbitrary and discriminatory application of the law from the viewpoint of an administrative agency, and whether it can expect to select more conclusive phrases technically, and should be determined by comprehensively examining whether it is possible to choose more conclusive phrases from the perspective of an administrative agency.

Article 31(2) of the Enforcement Decree of the Corporate Tax Act provides that the input tax amount related to capital expenditures for the creation, etc. of land shall not be deducted as input tax amount. In addition, Article 31(2) of the Enforcement Decree of the Corporate Tax Act provides that the term "capital expenditures for the creation, etc. of land" shall be defined in corporate accounting standards and the Corporate Tax Act, and the scope of input tax amount subject to non-deduction under corporate accounting standards and the provisions related to the Corporate Tax Act. However, the term "capital expenditures" refers to expenditures for the extension of the lifespan of the depreciable assets owned by a corporation or the enhancement of the real value of the relevant assets. The term "capital expenditures" refers to repairs for the alteration of the original purpose (1), the installation of elevators or cooling equipment (2) and escape equipment (3) and the installation, etc. of escape facilities (4) of the Enforcement Decree of the Corporate Tax Act) provides that the tax base of the relevant fixed assets shall be determined in a way that actually increases the useful life of the damaged building or the improvement, expansion, etc. of the existing assets shall be determined in the future business accounting standards.

In full view of the above relevant regulations and accounting practices, the scope of the input tax amount to be deducted from the input tax amount under the latter part of the provision of this case and the provisions of the Enforcement Decree of the Value-Added Tax Act can be reasonably predicted, and the possibility of arbitrary application by the tax authorities seems not to be significant. Of course, there are cases where it is difficult to strictly distinguish capital expenditures and beneficial expenditures depending on the case, or where it is difficult to secure predictability through practical practices and accumulation of precedents. Furthermore, even if there are cases where capital expenditures for the creation, etc. of the actual land, and there are cases where transactions are conducted in combination with the portion of beneficial expenditures without specifying the portion of the capital expenditures, and as a result, there is a difficulty in specifying the expenses corresponding to capital expenditures, such transaction practices cannot be concluded to be general and total. Moreover, it is difficult to determine that specific costs are ordinarily existing in the tax practice, and it is a matter to be resolved through the creation of trade practices meeting the corporate accounting principles, specialization of tax administration, and reasonable legal application efforts, etc. Finally, the legislative ethics seems to be more difficult.

Therefore, the latter part of the provision of this case and the enforcement decree of this case shall not be deemed to be a creamble, contrary to the principle of clarity of taxation requirements.

(3) Determination as to the assertion that the latter part of the provision of this case and the enforcement decree of this case are invalid by infringing the equality rights guaranteed under the Constitution as double taxation and the right of re-determination

(A) Article 17(1) of the Value-Added Tax Act provides that an entrepreneur’s input tax amount shall, in principle, be deducted as an input tax amount for the supply of goods or services related to his/her own business, under the premise that the output tax amount accrues with respect to the entrepreneur’s business. In the event that the entrepreneur’s supply of goods or services related to his/her own business is exempted from the output tax due to the said exemption, the amount of tax for

(B) Capital expenditures for the creation, etc. of land should be included in the cost for acquisition of land under the tax accounting. Since land is exempted from the tax-free goods supplied by an entrepreneur while using them for a tax-free business, as well as from the supply of them for a taxable business, the amount of output tax for capital expenditures for the creation, etc. of land to be included in the cost of acquisition is also exempted. Therefore, insofar as the output tax amount for capital expenditures for the creation, etc. of land is exempted, even if capital expenditures are for a taxable business, the relevant input tax amount cannot be deducted as the input

(C) As a matter of principle, whether the supply of land is exempt from value-added tax, and whether the related input tax amount should be deducted from the output tax amount, it belongs to the legislative discretion as a matter of the tax policy. Unlike the tax rate system that deducts the input tax amount, the tax exemption system under Article 12 of the Act provides for the exemption of the input tax amount as a result of the exemption of the output tax amount, so long as the tax exemption system provides for the exemption of the input tax amount for capital expenditures for the creation, etc. of land, regardless of whether the tax exemption system is a tax-free business or a taxable business, and the related input tax amount should not be deducted in accordance with the basic principle of the tax exemption system, and thus,

(D) Capital expenditures for the creation, etc. of land were included in the cost for acquisition of the relevant land, and can be recovered by including the gains from the transfer when the relevant land is transferred (see, e.g., Article 97(1)2 of the Income Tax Act and Article 163(3), etc. of the Enforcement Decree of the same Act), and it is recovered by including necessary expenses or deductible expenses in calculating the business income (Article 5(1)2 of the Enforcement Decree of the Income Tax Act, Article 19 subparag. 2

(D) Therefore, it cannot be deemed that the latter part of the instant provision, which deducts the input tax amount related to land, is a double taxation exceeding the limit of the consumption-type value-added tax, and thus, violates the constitutional right to equality and property rights guaranteed by the Constitution beyond the limit of the legislative discretion acceptable under the fundamental principles of value-added

(4) Sub-determination

Therefore, the defendant's disposition of this case based on the premise that the input tax amount for the expenses invested by the plaintiff for the creation of golf course constitutes the input tax amount related to capital expenditures for the alteration of the form and quality of the land or the increase of the value of the land, based on the latter part of the provisions of this case and the provisions of the Enforcement Decree of this case, is not deducted.

3. Conclusion

Therefore, the plaintiff's claim shall be dismissed as it is without merit, and the judgment of the court of first instance shall be just and the plaintiff's appeal shall be dismissed as it is without merit. It is so decided as per Disposition.