The meaning and standard of determining whether or not to be unfairly low under Article 13 (1) 3 of the Value-Added Tax Act is unreasonable or significantly low.

According to Articles 52(1) and 50(1) of the Enforcement Decree of the Value-Added Tax Act, a business entity’s payment for an unreasonably low price under Article 13(1)3 of the Value-Added Tax Act means a business entity’s payment for a transaction with a person with a special relationship at a significantly lower price than the market price that is deemed to unreasonably reduce the tax burden, and either unreasonable or remarkably low price should be determined objectively on the basis of normal transaction that does not lose the equity in the tax burden depending on a specific case.

Articles 13(1)3, 50(1) and 52(1) of the Enforcement Decree of the Value-Added Tax Act

Supreme Court Decision 85Nu514 Decided December 10, 1985 86Nu532 Decided March 10, 1987

Plaintiff

The director of the tax office.

Seoul High Court Decision 86Gu1229 delivered on May 29, 1987

The part of the judgment of the court below regarding the disposition of February 15, 1986 shall be reversed, and that part of the case shall be remanded to the Seoul High Court.

The defendant's remaining appeals are dismissed.

The costs of appeal dismissed shall be assessed against the defendant.

1. First of all, in a case where 200 won was found to have been found to have been omitted or erroneous in the tax base and amount of tax before the determination of the tax base and amount of tax, and the first disposition to increase the tax base and amount of tax, the first disposition to increase the tax base and amount of tax shall be subject to dispute only because it was incorporated into the order to increase the tax base and value, and the same shall apply to the disposition to 83Nu539 decided Apr. 10, 1984; 84Nu225 decided Dec. 11, 1984; 85Nu85Nu857 decided Sep. 23, 1986; 201. The first disposition to increase the tax base and amount of tax to the Plaintiff for 30 years, 26, 370 won, 260 won, 2500 won, 2500 won, 26, 1984 won, 196.

Nevertheless, according to the reasoning of the judgment below, the court below affirmed the plaintiff's claim seeking revocation of the above disposition of revocation of the above disposition of revocation of the reorganization or reorganization as of February 15, 1986 against the above imposition disposition of February 15, 1986 and the above imposition disposition of January 1, 1983 from the above imposition disposition of January 1, 1983 to February 1, 1984, and accepted it. This constitutes an unlawful act such as misunderstanding of legal principles as to the subject of litigation in the case of the above disposition of the reorganization or reorganization, misunderstanding of reasoning, and misunderstanding of legal principles as to the subject of litigation in the case of the disposition of the reorganization or reorganization, and misunderstanding of legal reasoning as to the existence of the above disposition of the reorganization of reorganization for the first and second period of February 15, 1986, and thus, it cannot be exempted from reversal

2. Next, the grounds of appeal by Defendant Litigation Performers on the remainder of the judgment below are examined.

According to Articles 52(1) and 50(1) of the Enforcement Decree of the Value-Added Tax Act, a business entity’s payment for an unreasonably low price under Article 13(1)3 of the Value-Added Tax Act means that the business entity receives the price significantly lower than the market price that is deemed to unreasonably reduce the tax burden in the transaction with the person in a special relationship with the person in a special relationship with the business entity, and the fact that it is unreasonable or remarkably low shall be determined objectively on the basis of normal transaction that does not lose the equity in the tax burden depending on the specific case (see, e.g., Supreme Court Decisions 85Nu514, Dec. 10, 1985; 86Nu532, Mar. 10, 197).

According to the reasoning of the judgment below, the court below held that the rent at the time of original adjudication, which the plaintiff leased the land of this case to the non-party company company company with a special relation, was illegal on the ground that the plaintiff was constructed and leased the building on the above land leased by the non-party company and the rent received by the non-party company was lower than the price calculated by multiplying the ratio of the standard market price of the land to the total amount of the standard market price of the building and the standard market price of the land by the ratio of the standard market price of the land to the total amount of the standard market price of the building, and that the defendant's taxation which imposed the value-added tax on the plaintiff based on the above calculation price was not based on the normal market price, and it was just in accordance with the above opinion and there is no violation of law.

3. Therefore, of the judgment of the court below, the part concerning the disposition of imposition of February 15, 1986 among the judgment below is reversed and remanded to the court below. The appeal on the remaining part is dismissed. The costs of appeal to the dismissed judgment are assessed against the losing party. It is so decided as per Disposition by the assent of all participating judges.

Justices Park Jong-dong (Presiding Justice)