The meaning of "goods or services supplied to non-residents or foreign corporations having no domestic place of business in Korea" under Article 26 (1) 1 of the former Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 10981 of Dec. 31, 1982) which is subject to the application of the zero

Article 26 (1) 1 of the former Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 10981 of Dec. 31, 1982), "goods or services supplied to non-residents or foreign corporations having no domestic place of business in the Republic of Korea" means goods or services supplied in the Republic of Korea without being affected by a direct contract with non-residents or foreign corporations, so even for non-residents or foreign corporations having a domestic place of business, any goods or services supplied without a domestic place of business under a direct contract with them which make foreign exchange earnings shall be deemed to be subject to the zero-rate tax rate under the above Enforcement Decree, and Article 26 (1) 1-2 of the Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 11285 of Dec. 29, 1983) is not merely a clear interpretation of the preceding provision, and it is difficult to view it as a newly established provision with a different purport from the previous legislative purpose.

Article 11(1) of the Value-Added Tax Act, Article 26(1) of the Enforcement Decree of the Value-Added Tax Act, Article 26(1) of the former Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 10981 of December 31, 1982

Supreme Court Decisions 84Nu517 Decided February 26, 1985; 84Nu529 Decided March 26, 1985; 84Nu529 Decided June 11, 1985; 85Nu133 Decided September 24, 1985; 85Nu248 Decided November 26, 1985; 85Nu453 Decided November 26, 1985; 85Nu465 Decided November 26, 1985; 85Nu5465 Decided November 26, 1985; 85Nu511 (dong) Decided November 26, 1985; 85Nu541 (dong) Decided 505Nu565 (dong) Decided 26, 1985; 1985Nu56565 (dong) Decided 565 (dong)

Plaintiff-Appellee et al., Counsel for the plaintiff-appellant

The director of the tax office.

Seoul High Court Decision 83Gu1027 delivered on April 24, 1985

The appeal is dismissed.

The costs of appeal shall be borne by the defendant.

The grounds of appeal are examined.

As to ground of appeal No. 2

According to the reasoning of the judgment below, the court below confirmed the fact that the plaintiff provided services for the issuance of a letter of commitment to sell goods directly with the head office of a foreign corporation having a domestic place of business and acquired the price from the foreign exchange bank concerned through the foreign exchange bank. According to the records, the above measures of the court below are justified, and there is no merit in the misapprehension of the rules of evidence, such as the theory of lawsuit, or the incomplete

As to ground of appeal No. 1:

Article 11(1)4 of the Value-Added Tax Act provides that goods or services for acquiring foreign currencies other than those provided for in subparagraphs 1 through 3, as prescribed by the Presidential Decree, shall be subject to the zero-rate tax rate, and accordingly inclusion in the supply of goods or services traded in Korea under Article 26 (amended by the Presidential Decree No. 10981 of December 31, 1982) of the Enforcement Decree of the same Act in the supply of zero-rate tax rate is recognized as an exception to the principle of consumer taxation for the purpose of policy purpose of encouraging foreign exchange earnings. Thus, Article 26(1)1 of the Enforcement Decree of the same Act provides that "goods or services supplied to non-residents or foreign corporations having no domestic place of business in Korea" means goods or services supplied in Korean by a direct contract with non-residents or foreign corporations and thus, it is difficult to view that the above provision is subject to the zero-rate tax rate of Article 26(1)5 of the same Decree as the above provision of the Enforcement Decree of the Value-Added Tax Act or the above provision of a foreign corporation with no domestic place of business in Korea.

Article 26 (1) 1 of the Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 10981 of Dec. 31, 1982) interpreted the same purport to determine that direct transaction in the plaintiffs' holding in Korea is subject to zero-rate tax, and there is no error of law by misunderstanding the legal principles or applying the interpretation of the Enforcement Decree of the Value-Added Tax Act, such as the theory of lawsuit, and there

Therefore, the appeal is dismissed, and the costs of the appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating judges.

Justices Jeon Soo-soo (Presiding Justice)