Seoul High Court 2007Nu12448 ( December 06, 2007)

Services auxiliary to the provision of services, such as cash withdrawal, shall not be deemed tax-free.

If a person who mainly engages in the development, manufacture, sale, etc. of a financial automation device installs and manages an automatic payment machine, assists the bank in cash withdrawal, account transfer, and balance inquiry service, and in return, if he/she receives fees from the bank, he/she cannot be deemed to constitute a service identical or similar to the "receiving and payment agency service" subject to value-added tax exemption.

The contents of the decision shall be the same as attached.

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The appeal is dismissed.

The costs of appeal are assessed against the Plaintiff.

쇠鹬 쇠鹬 3000 쇠鹬 3000

The grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed).

Article 12 (1) 10 of the Value-Added Tax Act (hereinafter referred to as the "Act") stipulates that "financial and insurance services are subject to value-added tax exemption, as prescribed by Presidential Decree". Article 33 (1) of the Enforcement Decree of the Value-Added Tax Act provides for "financial and insurance services under the Banking Act" under Article 12 (1) 10 of the Act, and Article 33 (4) 1 proviso (amended by Presidential Decree No. 18175 of Dec. 30, 2003) provides that "receiving and payment agency services" shall be included in the financial and insurance services under paragraph (1), while Article 12 (2) of the Value-Added Tax Act provides that "financial and insurance services that are identical or similar to the financial and insurance services under paragraph (1) shall be included in the financial and insurance services under paragraph (1) of the same Article."

According to the reasoning of the judgment below, the court below determined that the service of this case does not constitute the service identical with or similar to the "collection and payment agency service" subject to value-added tax exemption, on the ground that the Plaintiff, whose main business is to develop, manufacture, and sell the financial automation device, installs and manage the cash automatic payment machine, provides the bank with the cash withdrawal and account transfer provided to its original customer, and receives fees from the bank in return, and thus, received fees from the bank.

Examining in light of the relevant provisions and records of the Value-Added Tax Act and the banking business-related Act, the lower court’s aforementioned determination is justifiable.

The judgment of the court below is not erroneous in the misapprehension of legal principles as to "receiving and payment agency services" subject to value-added tax exemption, and the main judgment of the court below that the service in this case cannot be deemed as identical or similar to "receiving and payment agency services subject to value-added tax exemption" does not affect the conclusion of this case as long as the main judgment of the court below is just.

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