Corporation outside the housing complex shall not be eligible for tax exemption.

The instant service cannot be deemed as services essential for housing construction services, as well as the supply of national housing itself or the construction of national housing itself.

Article 106 of the former Restriction of Special Taxation Act

2015Guhap52856 Revocation of Disposition of Imposition of Value-Added Tax

○ Business Corporation

○ Head of tax office

on 21, 2016

December 2, 2016

1. The plaintiff's claim is dismissed.

2. The costs of lawsuit shall be borne by the Plaintiff.

Cheong-gu Office

Defendant on November 1, 2014, value-added tax 212,774,725 won, 2010 against Plaintiff on November 1, 2010

152,673,044 won, value-added tax for the first year of 2011, 87,188,476 won, and year 2011

Each imposition of value-added tax of KRW 195,110,206 shall be revoked.

1. Details of the disposition;

(a) Land creation work for the ○○○ National Rental Housing Complex;

(1) On June 10, 2005, the Minister of Construction and Transportation: (a) designated 263,662 square meters of ○○○○ Rental Housing Complex (hereinafter “○○○○ Rental Housing Complex”); (b) as the project implementer, the Minister of Land, Transport and Maritime Affairs’s public notice No. 000-000 of the Ministry of Construction and Transportation announced on June 10, 2005; and (c) designated EB Corporation (hereinafter “B Corporation”); and (d) the Minister of Land, Transport and Maritime Affairs modified the land use plan under the Ministry of Land, Transport and Maritime Affairs’s public notice No. 000-00 of the Ministry of Land, Transport and Maritime Affairs’s specific details as follows.

[Attachment 1]

Division area (unit area: site size)

Amount of paid supply (=1) + (2) 144,696

National Housing Construction Site (1) 94,323

Other cost supply land (2) =a+b+c) 50,373

(a) 28,749 of the land in excess of national housing

Land for neighborhood living facilities (b) 2,268

Land for Public Facilities (c) 19,232

Land for detached houses (d) 124

Free supply area (3) 119,118

Total (i) + (2) + (3) 263,814

(2) On December 13, 2007, the Plaintiff entered into a construction contract with respect to the land creation work of 263,814 square meters in BB and ○○ District on December 13, 2007, with respect to the construction work of 23,426,00,000 square meters (including value-added tax) and on December 20, 2010 as of the completion date. As to the construction site for national housing construction (1) in the above table, the value-added tax was exempted on the ground that it constitutes national housing construction service exempt from value-added tax pursuant to Article 106(1)4 of the Restriction of Special Taxation Act, and the creation of other oil supply site (2) and free supply area (3) was subject to value-added tax.

(3) On August 3, 2007, ○○○ City performed an audit of the provisional value of the national housing complex construction service business conducted by BB on and around August 3, 2007. At the same time, ○○○ City issued an audit and resolution that the value-added tax is exempt on the portion corresponding to the ratio of the national housing construction site area (1)/total supply area (1) +(2) (1+(2) (hereinafter referred to as “tax exemption ratio”). Accordingly, on September 3, 2007, ○○ City directed BB to calculate the tax exemption amount as the portion corresponding to the tax exemption ratio out of the total supply amount.

(4) Accordingly, on February 20, 2008, the Plaintiff and BB entered into an amendment agreement to reduce the amount equivalent to value-added tax from the existing contract amount to KRW 414,00,000 according to the changed tax exemption rate.

(b) Construction of complex for ○○○ Urban Development Project;

(1) On December 28, 2007, the 000-000 square meters (including 1,2 construction sections) were designated as the 00-00 square meters (including 00-00,000 square meters) from 00-00,000 ○○○○○○○○-dong, and the 3,364,000 square meters (including 1,2 sections) was designated as the ○○ Urban Development Zone (hereinafter referred to as the “○○-dong,” and the ○-si was added to the ○○-si, and the ○○-si was designated as the project district of this case. On December 30, 2008, the ○○-si changed the area of the ○○-si to 3,363,591 square meters from the 00-000 square meters (hereinafter referred to as the 2nd

[Attachment 2]

Amount of paid supply (=1) + (2) 2,038,522

National Housing Construction Site (1) 449,251

Other cost supply land (2) =a+b+d+e) 1,589,271

National Housing Excess Land (a) 210,848

Land for neighborhood living facilities (b) 0

Land for Public Facilities (c) 201,290

Commercial and Business Site (d) 434,691

Industrial facility sites (e) 742,442

Free supply area (3) 1,325,069

Total amount: (1) + (2) + (3),363,591

(2) On January 28, 2010, the Plaintiff and AA Construction Co., Ltd. concluded a construction contract with respect to the land creation work of two sections among BB and ○○ District as of December 31, 2012, with respect to the construction work cost of KRW 61,162,40,000,000, and the completion date of construction work. The said construction contract was concluded after January 15, 2008 on which ○○ City notified BB of the audit results. Accordingly, the construction cost was calculated by deeming that the portion of the original construction cost amount corresponding to the tax-exempt ratio is exempt from value-added tax.

C. The Plaintiff’s return and payment of value-added tax and the Defendant’s disposition

(1) The Plaintiff provided BB with construction services in each of the instant project districts (hereinafter “each of the instant construction services”) during the period of No. 1 to No. 2011, and reported and paid value-added tax exemption.

(2) However, on November 1, 2014, the Defendant issued a revised notice of value-added tax (including additional tax) on the ground that each of the instant construction services was performed separately by BB for the creation of housing sites, not for apartment construction services, and that it does not constitute national housing construction services exempt from value-added tax pursuant to Article 106(1)4 of the Restriction of Special Taxation Act, since it is not directly related to the creation of national housing complexes.

D. The procedure of the previous trial and the defendant's ex officio correction

(1) On February 17, 2015, the Plaintiff filed a tax appeal with the Tax Tribunal on the said disposition, but filed a tax appeal:

The Tax Tribunal dismissed the above tax appeal on June 16, 2015.

(2) On July 15, 2016, the Plaintiff filed the instant lawsuit. On July 15, 2016, the Plaintiff deducted the input tax amount, which was not deducted from the output tax amount at the time of filing the return and payment of value-added tax, from the output tax amount at the time of filing the return and rectification, and revoked the entire tax amount ex officio (hereinafter “instant disposition”).

[Grounds for Recognition] Facts without dispute, Gap 1-16, Gap 18, Gap 19, Eul 5-6, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. Summary of the plaintiff's assertion

Each construction work of this case is divided into national housing construction sites, free supply sites, and other oil supply sites. Among them, the construction work of national housing construction sites is a construction work that is essential for building construction works in national housing itself or national housing construction works, and is subject to value-added tax exemption under Article 106 (1) 4 of the former Restriction of Special Taxation Act.

In addition, in light of the fact that the facilities constructed and constructed in the free supply site fall under the incidental facilities for the residents of housing as infrastructure and that the creation of a public site and the construction of social infrastructure are enforced by the relevant laws and regulations, the part corresponding to the tax exemption ratio among the above free supply area development services belongs to the "construction services essential for the construction of national housing", and even if not, the value-added tax should be exempted pursuant to Article 106 (1) 4 of the former Restriction of Special Taxation Act as the "construction services essential for the construction services of national housing".

(b) Related statutes;

It is as shown in the attached Form.

C. Determination

(1) Whether it constitutes a national housing construction service

㈎ 관련 법리

Article 106 (1) 4 of the former Restriction of Special Taxation Act provides that the value-added tax shall be exempted for the national housing prescribed by Presidential Decree and the construction services of such housing. Articles 106 (4) and 51-2 of the Enforcement Decree of the same Act (amended by Presidential Decree No. 23590, Feb. 2, 2012; hereinafter the same shall apply) provide that "national housing and the construction services of such housing prescribed by Presidential Decree" means "housing below the scale of national housing under the Housing Act", "Framework Act on the Construction Industry, the Electrical Construction Business Act, the Fire Services Act, the Fire Services Act, the Housing Act, the Housing Act, the Sewerage Act, the Sewerage Act, the Act on the Management and Use of Livestock Excreta, the Certified Architects, the Electric Technology Installation Business Act, the Professional Engineers Act, the Engineering Industry Promotion Act, and the Engineering Industry Promotion Act", and thus, the exemption from the aforementioned provisions refers to "design services of housing below the scale of national housing supplied by a person registered or reported under the National Housing Act."

㈏ 판단

In light of the following circumstances that can be recognized based on the above facts in light of the above legal principles, Eul 3-1 to 5, the fact-finding response results with respect to BB of this court, and the purport of the entire pleadings, each of the instant construction services (including both the construction site for national housing and the construction area for free supply area) cannot be deemed to constitute a national housing construction service exempt from value-added tax pursuant to Article 106(1)4 of the former Restriction of Special Taxation Act.

(1) Construction services for the ○○ District consisting of housing construction sites (multi-unit housing sites and residential facilities sites), public facilities sites (road parking lots, parks, green areas, green areas, schools, social welfare facilities, public offices, religious facilities, reservoirs, rainwater pumps, rivers, etc.). However, in the construction stage of the complex construction project of this case, it is difficult to separate between the national housing complex and the outside of the national housing complex at the construction stage of the complex construction project of this case, and if it is deemed that both construction services are included in national housing construction services from the construction stage of the complex construction project, on the ground that the construction is necessary and accompanied by the construction project of this case.

Furthermore, construction work on the ○○ District includes removal and removal of obstacles, such as existing buildings, etc. to the entire ○ District, and construction work on the housing construction complex outside the housing construction complex as a complex construction work for the urban development project implemented under the Urban Development Act. In other words, after completion of construction work such as removal and removal of obstacles to the housing construction complex by the Plaintiff, etc., it seems that the apartment construction company, etc. performed soil construction work such as site suspension for the housing construction complex. However, it is difficult to view that construction work outside the housing complex in the ○○ District is included in the concept of construction work itself, although construction work is necessary for the construction of national housing, it is not included in the concept of construction work itself.

(2) The interpretation of the tax law shall be interpreted in accordance with the text of the law unless there is a special circumstance, and it shall not be interpreted extensively or analogically without any reasonable reason. In particular, it shall be interpreted strictly as a provision that is clearly preferential in terms of the requirements for reduction or exemption in accordance with the principle of tax equity (see, e.g., Supreme Court Decisions 97Nu20090, Mar. 27, 1998; 201Du14524, Mar. 15, 2012). Since Article 106(1)4 of the former Restriction of Special Taxation Act provides that "services eligible for the exemption of value-added tax" as "construction services for national housing" or "construction services for national housing" other than "construction services related to national housing", such interpretation shall be deemed to mean only construction services for national housing itself, and it shall not be deemed to include only construction services for national housing construction or construction projects for the entire infrastructure or housing construction projects for national housing, etc. conducted prior to the construction of national housing, such as each construction services in this case.

(3) Even in the former Act on the Measures for the Construction, etc. of National Rental Housing (amended by Act No. 8014 of September 27, 2006), the purpose of the national rental housing construction project and the national rental housing complex development project are clearly distinguished from the purpose of the project and the main body of the implementation thereof (Articles 2 and 4, etc.), and the procedures, standards, methods, etc. that must be complied with for the promotion of each project are separately provided. In light of the language, structure, contents, etc. of the aforementioned relevant provision, it is difficult to view that the ○○ District Corporation only belongs to the national rental housing complex development project and does not constitute the "national rental housing construction service" exempt from value-added tax, since it does not constitute the "national rental housing construction service

(4) Even if the legislative intent of Article 106 (1) 4 of the former Restriction of Special Taxation Act provides support for the ordinary people who are the consumers of national housing to be supplied with housing at a lower price, it may be substantially achieved through a method of exempting the value-added tax on the construction services of national housing itself, and it shall not be deemed that the legislators enacted the above provision in the intention to exempt the value-added tax on all services related to the construction of national housing by expanding its scope of application without any condition.

⑤ On the other hand, once the requirements under the laws and regulations are met, the relevant laws and regulations should be applied uniformly. In a specific case, it is not possible to determine whether to apply the said laws and regulations based on whether they are inconsistent with the legislative purpose (see, e.g., Supreme Court Decisions 2005Du13162, Aug. 23, 2007; 98Du1673, Mar. 26, 199). Each of the construction costs of this case included the housing cost in each of the project districts of this case in the construction district of this case in the construction cost of housing in the total construction cost of housing site, and accordingly, it cannot be deemed that value-added tax should be exempted by including each of the construction works of this case in national housing construction services solely on the ground that a housing purchaser, including a national housing purchaser, has paid the relevant expenses.

(2) Whether services incidental to national housing construction services constitute subject to value-added tax exemption

㈎ 관련 법리 등

Article 1(4) of the former Value-Added Tax Act (wholly amended by Act No. 11873, Jun. 7, 2013; hereinafter the same) provides that the supply of goods or services, which are essential for the supply of services, shall be included in the supply of services, which is the main transaction. Article 12(3) of the same Act provides that “The supply of goods or services, which is essential for the supply of goods or services exempt from value-added tax, shall be deemed to be included in the supply of goods or services exempt from value-added tax.” Article 3 subparag. 1 and 2 of the Enforcement Decree of the same Act (amended by Presidential Decree No. 24638, Jun. 28, 2013; hereinafter the same) provides that “the price is deemed to be included in the supply of goods or services, which is the main transaction.”

The scope of deeming that the supply of goods or services, which are inevitably annexed to the supply of goods or services exempt from the value-added tax pursuant to Article 12(3) of the former Value-Added Tax Act, is included in the supply of goods or services subject to the said tax exemption, based on the principle of no taxation without the law, or the requirements for tax exemption or tax exemption, and the interpretation of tax laws and regulations should be interpreted in accordance with the law, barring special circumstances, barring any reasonable grounds. Thus, the scope of deeming that the supply of goods or services, which are essential for the supply of goods or services exempt from the value-added tax pursuant to Article 12(3) of the former Value-Added Tax Act, is limited to only the supply of goods or services that are essential for the supply of such goods or services, and is limited to those of the supplier’s own transaction (see, e.g., Supreme Court en banc Decision 200Du7131, Mar. 15, 2001; Supreme Court Decision 2

㈏ 판단

Based on the above legal principles, the Plaintiff performed only each of the instant construction services not included in national housing construction services in each of the instant business districts, and the construction of national housing was conducted by other construction companies than the Plaintiff. Even if each of the instant construction services is considered as services essential for the construction of national housing, it cannot be deemed as incidental services exempt from value-added tax pursuant to Article 106(1)4 of the former Restriction of Special Taxation Act.

(3) Sub-determination

Therefore, since each of the instant construction services cannot be deemed to be subject to the full exemption of value-added tax, the instant disposition is legitimate, and the Plaintiff’s assertion on this is without merit.

3. Conclusion

Therefore, the plaintiff's claim is dismissed as it is without merit. It is so decided as per Disposition.