The early 2009 Before 3230

Special Cases concerning the calculation of common input tax amount shall be interpreted as "the place of business".

Article 61 (5) of the Enforcement Decree of the former Enforcement Decree of the Act on Special Cases Concerning the Calculation of Common Purchase Tax Amount provides that the Plaintiff may choose the method of calculating the input tax amount in order to calculate the common purchase tax by "the ratio of the tax supply price of the entire workplace and the tax-free supply price" as the language and text

2010Guhap2786 Disposition of revocation of Value-Added Tax Imposition

KoreaAAAA

Daejeon Head of the District Tax Office

July 18, 2011

September 21, 2011

1. On May 21, 2009, value-added tax imposed on the Plaintiff on the Plaintiff on May 21, 2009 was revoked as follows: (a) value-added tax for the first term portion 19, 229, 836, 520; (b) for the second term portion 10, 81, 702, 811, 702, 1706; (c) for the first term portion 17, 458, 551, 950; (d) for the second term portion 10,817, 901, 900; (e) for the second term portion 206; (e) for the second term portion 21,726, 260, 530; (e) for the second term portion 3,976, 205, 830; (e) for the second term portion 16, 116, 848, and 2309.

2. The costs of the lawsuit are assessed against the defendant.

The same shall apply to the order.

1. Details of the disposition;

A. On January 1, 2005, the Plaintiff was a corporation established for the purpose of railroad passenger and cargo transportation services, etc. under the KoreaAA Act, and was organized into 640 railroad stations and 87 offices as of 2008, 17 branches, 3 vehicle management bodies, and 1 human resources development source.

B. Among the projects operated by the Plaintiff, passenger transportation services for high-speed railroads (the section from KTX Seoul to the Dong area and from the west to the west area), freight transportation services for small-speed railroads, high-speed railroads maintenance and repair services for general railroads, entrusted services by the State and local governments such as the State and local governments, and other tax supply services (lease, advertisement, sale, etc.) are value-added tax-added tax-free businesses. General Railroad passenger transportation services (the Saemaulho, Roseho, king-type vehicles), metropolitan railroad services, high-speed passenger transportation services (the section from the west area to Busan metropolitan area and the west area to the west area) are value-added tax-free projects.

C. In imposing and paying value-added tax on the Defendant, the Plaintiff did not distinguish the pertinent business to which the goods or services purchased are actually attributed, and did not distinguish the relevant business under Article 61(5) of the former Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 22043, Feb. 18, 2010; hereinafter referred to as the “former Enforcement Decree of the Value-Added Tax Act”) from the total supply value of all tax-free businesses and taxable businesses for each taxable period, and multiplied by the ratio of the total purchase tax amount

It has been interpreted as 'calculated input tax amount without deduction' as a type of business (hereinafter referred to as 'total business place method'), and according to such a method, value-added tax has been reported and paid by applying the following proportional distribution ratio.

D. However, around February 2009, the Board of Audit and Inspection, with regard to the Plaintiff’s report and payment of value-added tax, requested the Daejeon Regional Tax Office to correct the amount of value-added tax by applying the following proportional distribution ratio to the amount of input tax for goods or services, such as transit, engine car purchase cost, use fee for general railroads, and entrance fee for high-speed trains, and the ratio of the total supply price for the entire business establishment of the tax-free business sector to the tax-free business sector, and the ratio of the total revenue of the tax-free business sector, to the total supply price for the relevant goods or services. However, as a result of the proportional distribution of common purchase tax according to the overall method of business, the Plaintiff filed a demand to correct the amount of value-added tax on the ground that the Plaintiff under-reported and paid the value-added tax for the period from 171 minutes to 2005 to 208.

(e) As pointed out by the Board of Audit and Inspection, the Defendant calculated value-added tax (including household tax) again on May 21, 2009 with respect to the Plaintiff on May 21, 2009, the first period portion of 19, 229, 836, 520, the second period portion of 2005, 10, 811, 702, 170, 1171 17, 458, 551, 1758, 550, 271 minute 10,817, 901, 090, 171 minute 21, 726, 260, 307, 397, 207, 397, 205, 208, 208, 301, 2705, 397, 2081, 397, 2081, 307

F. The Plaintiff dissatisfied with the instant disposition and filed an appeal with the Tax Tribunal on August 19, 2009, but the Tax Tribunal dismissed the appeal on April 2, 2010.

[Ground of recognition] Facts without dispute, Gap 1, 2, 4, 9 evidence, Eul 1 through 3 (including additional numbers) and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The parties' assertion

1) The plaintiff's assertion

The plaintiff asserts that the disposition of this case is unlawful for the following reasons.

A) Article 61(5) of the former Enforcement Decree of the Value-Added Tax Act (amended by the Act on Telecommunications Business and the Korea AAAAAA (Plaintiff) applies only to telecommunications business operators under the Korea Telecommunications Business Act and the Korea AAAAAA (Plaintiff) under the Korea AAAAAA, which are difficult to accurately calculate the input tax amount due to the nature of the business, along with the purchase assets, etc., from among business operators concurrently operating a taxable business and a tax-free business. If the purpose of calculating the common input tax amount is to divide the input tax amount by business sector and to divide the input tax amount, as alleged by the Defendant, only the input tax amount, the ownership of which is unclear, is the same as the common input tax amount (Article 61(1) of the Enforcement Decree of the same

B) Since the interpretation of tax laws should be strictly interpreted in accordance with the statutory text, it is reasonable to interpret that the meaning of the "previous place of business" under Article 61 (5) of the former Enforcement Decree of the Value-Added Tax Act, which provides for the method of calculating common purchase tax amount, is a variety of business places operated by the plaintiff. As alleged by the defendant, interpreting it as a whole place of business by business sector related to common purchase tax amount is contrary to the principle of no taxation without law

C) Even if the Defendant’s statutory interpretation regarding the instant disposition is lawful, the Defendant’s major purchase goods and services (i.e., transit, engine car purchase cost, fees for general railways, etc., and expenses for purchasing high-speed trains) are related to the Defendant’s business activities other than the business that the Defendant judged as the actual reversion business sector, and thus, the Defendant’s common purchase tax calculation method for the above goods and services was erroneous (e.g., the purchase cost for transit and engine car is related to the general railroad passenger transportation business, commercial passenger transportation business, commercial cargo transportation business, general railroad and freight transportation business, and maintenance and repair consignment business, which is a taxable business that is generated through general railroads and freight vehicles, which is generated through a taxable business that is generated through a tax-free business, a commercial business, an advertising business, and a commercial business that is used as a shop for the operation of a full-time and full-time exhibition engine). However, in light of the language and intent of Article 61(5) of the former Enforcement Decree of the Value-Added Tax Act and Article 18-2(4) of the Enforcement Rule of the Value-Added Tax Act.

2) The defendant's assertion

The Defendant asserts that the instant disposition is lawful for the following reasons.

A) Article 61(1) of the Enforcement Decree of the Value-Added Tax Act provides that when an entrepreneur concurrently operates a taxable business and a tax-free business based on the principle of substantial taxation and the method of deducting input tax amounts, and the basic principle of value-added tax, Article 61(1) of the Enforcement Decree of the Value-Added Tax Act provides that the calculation of input tax amounts related to the tax-free business shall first be based on the actual reversion, and that the proportion of the total supply value to the total supply value shall be calculated by multiplying the common purchase tax amount only when the actual reversion is unclear. Thus, even if the ownership of the goods or services that are commonly used for the taxable business and the tax-free business cannot be separated, it is consistent with the purport of the Value-Added Tax Act to divide the common purchase tax amounts only for the relevant business place where the relevant goods or services are actually used. Therefore, Article 61(5) of the former Enforcement Decree of the Value-Added Tax Act is interpreted to conform to the aforementioned principle of proportional distribution, it is reasonable to interpret it as the "all business sector related to the common purchase tax amount."

B) If the former place of business under Article 61(5) of the former Enforcement Decree of the Value-Added Tax Act is interpreted as the Plaintiff’s whole place of business, it is not permissible as it goes against the purport of Article 17(2) Subparag. 4 of the former Value-Added Tax Act (amended by Act No. 8826, Dec. 31, 2007; hereinafter “former Value-Added Tax Act”).

B. Relevant statutes

The entries in the attached Table-related statutes are as follows.

C. Determination

1) Review of relevant legislation

A) Each provision of Article 17(1) and (2)4 of the former Value-Added Tax Act provides that the value-added tax to be paid by an entrepreneur shall be the amount calculated by deducting the input tax amount from the output tax amount, but the input tax amount related to the business of supplying goods or services exempt from the value-added tax shall not be deducted from the output tax amount. Article 61(1) of the Enforcement Decree of the Value-Added Tax Act delegated under Article 61(7) of the same Act provides that where an entrepreneur concurrently runs a taxable business and a tax-free business, the calculation of the input tax amount related to the tax-free business shall be based on the actual ownership, but the input tax amount that is commonly used for the taxable business and the tax-free business and is not distinguishable from the actual ownership (hereinafter referred to as the "common input

B) Meanwhile, in applying Article 61(5) of the former Enforcement Decree of the Value-Added Tax Act, in the case of telecommunications business operators under the Telecommunications Business Act and the Korea AA (Plaintiff) under the Korea AAA Act, the input tax amount related to the tax-free business = Common purchase tax amount ¡¿ common purchase tax amount 】 total tax amount of tax-free business place / total tax amount of tax-free business place / total tax amount of tax-free business place / can be calculated according to the formula of "the former Enforcement Decree of the Value-Added Tax Act". In addition, when amended by Presidential Decree No. 22043, Feb. 18, 2010, Article 61(1) of the former Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 22043, Feb. 18, 2010), the telecommunications business operator and the Plaintiff related to the tax-free business refers to the total tax-free business place's supply amount of tax-free business under the former Enforcement Rule of the Value-Added Tax Act.

2) Legislative intent and details of Article 61(5) of the former Enforcement Decree of the Value-Added Tax Act

A) Article 61(5) of the former Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 15563, Dec. 31, 1997; Presidential Decree No. 1563; Presidential Decree No. 61(1) of the same Enforcement Decree is newly established. The purport of the provision is that in the case of telecommunications business, due to the characteristics of telecommunications business, the purchase of assets is related to various places of business, and most facilities are jointly used for taxable business and tax-free business, and it is difficult to accurately calculate the amount of the input tax for each place of business and the amount of the input tax used for tax-free business separately from the one for each place of business. Considering the fact that it is difficult to calculate the amount of the common purchase tax according to the ratio of the amount of the tax-free supply to the amount of the entire place of business and the amount of the tax-free supply price, the value-added tax, which is a principle for the amendment and the amount of the tax-free supply charge for each place of business, taking into account the characteristics of telecommunications business operator’s claim for convenience.

B) Since then, Article 61(5) of the former Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 15563, Dec. 31, 1997; Presidential Decree No. 18175, Dec. 30, 2003; Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 18175, Dec. 10, 2003; Presidential Decree No. 18175, Apr. 10, 200) applied to telecommunications business operators under the Telecommunications Business Act in order to enable them to calculate the input tax amount based on the entire place of business because most facilities are jointly used for taxable business and tax-free business due to the characteristics of the high-speed rail operator. In addition, Article 4(1)10 of the Enforcement Decree of the above Act provides that the place where overall control over the business of the high-speed rail operator under the High-speed Railroad Construction Promotion Act

3) Determination

A) As to how to interpret the meaning of the “former place of business” under Article 61(5) of the former Enforcement Decree of the Value-Added Tax Act, each of the language and text of Article 61(5) of the former Enforcement Decree of the Value-Added Tax Act and Article 18-2(4) of the Enforcement Rule of the Value-Added Tax Act (i.e., "the total value of the pre-existing place of business" and "the total value of the pre-existing place of business" are "all places of business in the relevant taxable period". However, in the case of telecommunications business under the Telecommunications Business Act in general, the meaning of the above "former place of business" is based on the premise that the Plaintiff can calculate the total value of the pre-existing place of business without distinguishing between the total value of the pre-existing place of business and the total value of the pre-existing place of business, considering the characteristics of the pre-existing place of business, it is difficult to view that the above provision itself is related to the calculation of the total value of the pre-existing place of business as well-existing place of business.

B) Judgment on the defendant's assertion

In light of the various characteristics of the Plaintiff’s business, Article 61(5) of the former Enforcement Decree of the Value-Added Tax Act provides technical matters concerning the calculation of the non-deductible rate of the common input tax in order to calculate the input tax amount related to the tax-free business with respect to the scope of the input tax amount not deducted pursuant to delegation under Article 17(7) of the Value-Added Tax Act, and does not deviate from the principle that only the remainder of the input tax amount excluding the input tax amount related to the tax-free business. Thus, it is difficult to view that the interpretation of the tax law goes against the principle of substantial taxation under Article 17(1) and (2)4 of the former Enforcement Decree of the Value-Added Tax Act and Article 17(5) of the former Enforcement Decree of the Value-Added Tax Act, which provides for the deduction of the input tax amount at the pre-stage stage and the non-deductible rate of the input tax amount related to the tax-free business, and it is not permitted to expand or analogical interpretation without reasonable grounds (see, e.g., Supreme Court Decision 2003Du7392).

c)Indivate

Therefore, by interpreting the meaning of the pre-sale business place under Article 61(5) of the former Enforcement Decree of the Value-Added Tax Act as the pre-sale business place, the instant disposition against the Plaintiff should be revoked as it is unlawful without further review.

3. Conclusion

Therefore, the plaintiff's claim of this case is reasonable, and it is decided as per Disposition by the assent of all participating Justices.