Seoul Administrative Court-2016-Gu Partnership-70833 ( November 09, 2018)

The price received for the service of mediating the conclusion of the contract shall be the transaction subject to value-added tax.

Since the supply of services based on all contractual or legal grounds conducted by an entrepreneur is subject to value-added tax, the services supplied to the non-party company by the entrepreneur regardless of whether the actual goods were transferred to the transaction between investors and the non-party company constitutes value-added

Article 4 (Taxable Objects)

2018Nu76356 Revocation of Disposition Rejecting Value-Added Tax Correction

OO Other than

O Head of the tax office

Seoul Administrative Court Decision 2016Guhap70833 decided November 9, 2018

June 26, 2019

August 14, 2019

1. Part of the instant lawsuit extended by this Court: (i) the first term portion of PlaintiffO in 2014 through 2015; (ii) the second term portion of PlaintiffO in 2014; (iii) the first term portion in 2014; (iv) the first term portion in 2015; (iv) PlaintiffO’s first term portion in 2015; (iv) the first term portion in 2014; (v) the first term portion in 2014; (iv) the first term portion in 2015; (v) PlaintiffO’s first term portion in 2014; (v) the second term portion in 2014; (v) PlaintiffO’s first term portion in 2014; (v) the second term portion in 2014; (v) PlaintiffO’s second term portion in 2014; (v) Plaintiff’s first term portion in 2014; (v) the second term portion in 2014; (v) Plaintiff’s for 2010 for 25 years.

2. All appeals filed by the plaintiffs are dismissed.

3. After filing an appeal, the costs of the lawsuit are assessed against the Plaintiffs.

1. Purport of claim

The phrase "amount of claim for refund after amendment of the claim(s) stated in the separate sheet 2 list filed by the Defendants against the Plaintiffs is revoked (this court extended the amount of claim for correction as to each taxable period described in the separate sheet 1 above. Some of the Plaintiffs were reduced).

2. Purport of appeal

The judgment of the court of first instance is revoked. The "amount of claim before amendment of the claim for refund" stated in the separate sheet 2 that the Defendants made to the Plaintiffs shall be revoked (the purport of appeal shall also be deemed to have been reduced with respect to the Plaintiffs who reduced their purport of appeal).

1. Details of the disposition;

The reasoning for this part of the judgment by the court is as stated in the corresponding part of the judgment of the court of first instance except for the parts added or written by adding below. Thus, this is cited in accordance with Article 8(2) of the Administrative Litigation Act and the main sentence of Article 420 of the Civil Procedure Act.

5 pages 2 of the judgment of the first instance court, "as stated in the column of "the amount of the claim previously amended" in attached Table 2, shall be added.

The part of the judgment of the first instance court 5 to 9-10 "............... the defendants' claims for refund after the amendment of the plaintiffs' claims in the separate sheet 2 in which the plaintiffs dispute in this court is ".........................., the correction refusal disposition of value-added tax as stated in the separate sheet 2 in the separate sheet 2 that the plaintiffs dispute in this court

2. Related statutes;

Attached Table 3 shall be as stated in the relevant statutes.

3. Determination as to the legitimacy of the part of the claim extended by the court among the lawsuit of this case

In a lawsuit seeking revocation of a rejection disposition against a claim for correction, it is an objective existence of the tax base and tax amount entered in the tax base return as well as in the lawsuit seeking revocation of a tax disposition (see Supreme Court Decision 2010Du13425, Jun. 28, 2012). Thus, even if a taxpayer only contests part of the tax amount initially declared and paid at the time a request for correction or a tax appeal is filed, the tax authority shall not be tangled therewith, and shall examine and determine whether the tax base and tax amount entered in the tax base return exceed the legitimate tax amount as a whole, and the taxpayer may contest the whole of the tax amount reported and paid at the time of filing a lawsuit seeking revocation of the request for correction. However, in such a case, the Plaintiff’s claim for revocation is merely the Defendant’s rejection disposition against the first claim for correction against the tax base and tax amount already filed and paid by him/her exceeding the tax amount requested for correction, and thus, the purport of imposing a correction disposition against the whole tax amount declared and paid by the Plaintiff’s request for correction cannot be changed by the administrative authority under the current Administrative Litigation Act.

In this case, the first term portion for the first term of 2014 through 2015; the second term portion for the second term of 2014; the first term portion for the second term of 2014; the second term portion for the plaintiff'sO; the first term portion for the first term of 2015; the first term portion for the plaintiff'sO; the first term of 2015; the first term portion for the second term of 2014; the first term for the second term of 2015; the first term for the second term of 2014; the first term for the second term of 2014; the first term for the second term of 2014; the second term portion for the second term of 2014; the second term portion for the second term of 2014; the first term portion for the second term of 200; the first term portion for the second term of 200, the second term portion for the second term of 15; the first term portion for the second term of 20

However, even at the time of filing a request for correction with the Defendants, the above Plaintiffs only dispute the amount stated in the “Attachment 2 List” column, and the Defendants refused to file the above request for correction as seen earlier. Ultimately, there is no rejection disposition by the Defendants with respect to the part that exceeds the tax amount originally filed by the above Plaintiffs. Accordingly, among the instant lawsuit, there is no part of the claim extended by the said Plaintiffs, the Plaintiff’s rejection disposition by the Defendants is unlawful since it seeks for the revocation of the disposition that does not exist.

4. Whether the instant disposition is lawful

A. Summary of the plaintiffs' assertion

The plaintiffs' fees, such as sales commission, monthly performance, agency fee, sales allowance, etc. received from the non-party company are not subject to value-added tax for the following reasons.

(1) The transaction between the non-party company and the investors is an act of receiving goods without any movement. The fees that the Plaintiffs received are merely the same as the above fees, and it cannot be said that there was the supply of goods or services subject to value-added tax.

(2) The transaction between the non-party company and investors is null and void as it violates Article 3 of the Act on the Regulation of Conducting Fund-Raising Business without Permission. The fees that the Plaintiffs received from the non-party company are the same as the fees that the investors received by dividing the investment amount paid to the non-party company into the part of the non-party company. Accordingly, the services that the plaintiffs provided to the non-party company or the company in the total board shall not be deemed as being subject to value-added tax.

B. Determination

The Plaintiffs’ fees paid by Nonparty Company should be deemed taxable subject to value-added tax. The reasons are as follows. The instant disposition made on the same premise is justifiable.

(1) The tax office which received a request for reduction or correction shall have the tax base and amount recorded in the tax base return.

In principle, the tax authority is obliged to investigate and confirm whether the tax base and the amount of tax to be reported under tax-related Acts exceed objectively justifiable (see Supreme Court Decision 2006Du13497, Dec. 24, 2008). The legality of the refusal disposition of a request for correction of reduction is to be proved by the tax authority in principle. However, in cases where the tax authority requests the tax authority to correct the reported tax base and the amount of tax by alleging that the reported tax base and the amount of tax were erroneously reported, the taxpayer requesting for correction of reduction is liable to submit materials supporting that the initial tax base and the amount of tax are wrong

According to the aforementioned "the circumstances of dispositions", it is reasonable to view that the Plaintiffs did not themselves engage in the transactions recognized by the final judgment of this case with the non-party company, but received compensation from the non-party company for the provision of services mediating the conclusion of the contracts. The entries in the evidence No. 11 alone are insufficient to reverse this, and there is no other data supporting the Plaintiffs' claims. Article 2 of the Value-Added Tax Act provides that "services" refers to all services and other acts having property value other than goods, and Articles 4 subparagraph 1 and 11 (1) provide that the supply of services under the contract or legal grounds conducted by the business operator is subject to value-added tax. Accordingly, regardless of whether the actual transfer of goods was made between investors and the non-party company, the services provided by the plaintiffs to the non-party company constitutes the transaction subject to value-added tax

(2) In light of the economic aspect, taxable income is deemed to have a taxable capacity to control and manage the profit in reality, and thus, it is sufficient to deem that there is a taxable capacity to pay the income, and the legal assessment of the underlying relationship to which the income was derived does not necessarily necessarily have to be lawful and effective. Therefore, even if the transaction between the non-party company and the investors is deemed null and void as a matter of course, even if the transaction between the non-party company and the investors is deemed null and void under the private law, if the Plaintiffs were to receive the service of mediating the conclusion of the contract and receive the payment for the transaction and thereby,

5. Conclusion

Of the instant lawsuits, the part of the claims extended by the Plaintiff’s OO, OO, OO, OO, O,O, O, O,O, O,O,O,O, O,O, O,O,O,O,O,O,O,O,O,O,O,O,O,O,O, orO in the instant lawsuit is unlawful and thus all of them are dismissed.

The plaintiffs' claims except the extended part in this court shall be dismissed in its entirety due to the lack of reasons. The judgment of the court of first instance is just in conclusion, and the plaintiffs' appeals are dismissed in its entirety due to the lack of reasons.