Whether real estate transactions subject to value-added tax are subject to value-added tax

Since the Plaintiff did not purchase or transfer the commercial building of this case for the purpose of gaining profit margin, but disposed of due to unavoidable circumstances, it cannot be deemed that the Plaintiff’s transfer of the commercial building of this case constitutes real estate sales business which is subject to value-added tax, and thus, the disposition

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

Busan District Court Decision 98Gu2348 delivered on October 21, 1998

1. The defendant's appeal is dismissed. 2. The costs of appeal are assessed against the defendant.

1. Details of the disposition;

The following facts are acknowledged, either in dispute between the parties or in full view of the whole purport of the pleadings, as follows: Gap evidence 4, Gap evidence 5, Eul evidence 1-1, 2, Eul evidence 2-1, 2-5.

가. 원고는 슈퍼마켓을 경영할 목적으로 1991. 5. 29. ㅇㅇ주택공사 ㅇㅇ지사로부터 ㅇㅇ ㅇ구 ㅇㅇ동 ㅇㅇ의 ㅇ 소재 ㅇㅇ주공아파트 단지내의 상가 ㅇ동 지상 2층 지하 1층 건물 중 지하 1층 1호 404.65㎡(이하 이 사건 상가라 한다)를 대금 407,000,000원에 분양받아 같은 해 11. 19. 잔금을 지급하고 1992. 7. 31. 자신의 명의로 소유권이전등기를 경료하였다.

B. The Plaintiff divided the instant commercial building into 11 stores and sold it to others 6 times from August 24, 1992 to November 28, 1992, and 5 times from January 15, 1993 to May 21, 1993.

C. The Defendant: (a) deemed that the Plaintiff’s act of selling the instant commercial building falls under real estate sales business; (b) first, imposed value-added tax on the sales portion in the year 192 (the Plaintiff did not object thereto); and (c) again, imposed value-added tax on five sales made in the year 193 as of January 16, 1997, KRW 21,481,818 and penalty tax 4,296,362 and KRW 25,778,180 (hereinafter “instant taxation”).

2. Whether the instant taxation disposition is legitimate

(a) Whether it falls under real estate trading business subject to value-added tax;

(1) The plaintiff's assertion

The plaintiff argued that the transfer of the commercial building of this case does not constitute a real estate sales business subject to value-added tax because it was sold in installments for the convenience of disposition because it did not appear due to a large scale of the tenant, although it was prepared to open the commercial building after the purchase of the commercial building of this case with the intention to conduct the business registration, etc., but judged that there was no business feasibility in the first place by the large-scale selection company in the vicinity, and tried to dispose of it on the other hand.

(2) Facts of recognition

앞서 든 각 증거 및 갑6, 7호증, 갑8호증의 1, 2, 3, 갑9호증의 1 내지 13, 갑 10호증, 갑12호증의 1, 2, 갑13, 14, 15호증의 각 기재와 원심증인 정ㅇㅇ의 증언에 변론의 전취지를 종합하면 다음 사실이 인정된다.

(가) 원고는 이건 지하상가를 분양받은 후 슈퍼마켓을 경영하기 위하여 1992. 8. 10. ㅇㅇ슈퍼마켓이라는 상호로 사업자등록을 하고 금 37,500,000원의 공사비를 들여 인테리어공사까지 마쳤으나 바로 맞은 편에 200여평 규모의 ㅇㅇ슈퍼마켓이 먼저 개점함으로써 그보다 규모도 작고 인지도도 떨어지는 원고의 슈퍼마켓으로는 경쟁상대가 될 수 없을 것 같아 사업을 포기하고 같은 달 16. 폐업신고를 하였다.

(B) After the Plaintiff’s abandonment of the business, the Plaintiff intended to dispose of the instant commercial building, but the Plaintiff did not appear as a whole due to a large scale and sold it for the convenience of disposition over about nine months after dividing it into 11 stores. The entire proceeds were merely KRW 394,800,000 and did not reach the acquisition value of KRW 407,00,000.

(C) In addition to the acquisition and sale of the instant commercial building, the Plaintiff only purchased a house residing around March 1982 and did not have transacted other real estate so far.

(3) Determination

Whether the transaction of real estate constitutes a real estate trading subject to value-added tax or not shall be determined in light of ordinary social norms, considering whether the transaction is for profit-making purposes, and whether the transaction has continuity and repetition to the extent deemed business activities in light of its size, frequency, mode, etc. In making a decision, not only about the real estate for the purpose of transfer, but also about the entire real estate owned by the transferor throughout the entire real estate before and after the time when the transfer took place. According to the above recognition, even if the Plaintiff’s transfer of the commercial building of this case 11 times over about 9 months, it could have been sufficiently transferred if the Plaintiff wishes to purchase the entire commercial building of this case, and its substance is not different from that of the commercial building of this case, and it is difficult to view that the Plaintiff’s transfer of the commercial building of this case constitutes the real estate trading business of this case, since the Plaintiff did not purchase and transfer the commercial building for the purpose of profit-making, but also caused the Plaintiff to dispose of it under inevitable circumstances.

Therefore, the instant taxation that imposed value-added tax, etc. on the Plaintiff should be deemed to constitute real estate sales business is illegal.

B. Whether the transfer of business assets constitutes the transfer of business assets

(1) The defendant's assertion

Although the Plaintiff’s act of transferring the instant commercial building does not constitute real estate sales, the Plaintiff asserts that the Plaintiff was a person who registered his business for the purpose of running the marketing and transferred the instant commercial building for the purpose of discontinuance of his business, and thus constitutes an independent supplier of goods (hereinafter “business”) and is obligated to pay the value-added tax pursuant to Article 2(1) of the Value-Added Tax Act.

(2) Determination

According to the above facts, at the time of the transfer of the commercial building of this case, the plaintiff had already waived his business and discontinued his business related to the supermarket and has lost his status as a business operator because he had been placed in the state of closing the business report, and therefore, the plaintiff cannot be deemed to have transferred the commercial building of this case to the status of the business operator. Therefore, the above argument is groundless

3. Conclusion

Therefore, the plaintiff's claim is justified, and the judgment of the court below is just in its conclusion, and the defendant's appeal is dismissed as it is without merit. It is so decided as per Disposition.

April 23, 199