Seocho 209west 2180 (Law No. 9.10, 2009)

Taxation, such as special consumption tax, etc. on illegal casino gambling places

Casino business which is subject to special consumption tax shall not be limited to the case of permission, and where money exchange is received from users of gambling games and commission fees, it shall be deemed the fee for casino facilities and shall be subject to value-added tax.

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

1. All of the plaintiff's claims are dismissed.

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

The imposition of special consumption tax, education tax, and value-added tax on June 2, 2008 by the defendant against the plaintiff on June 2, 2008 shall be revoked.

1. Circumstances of the disposition;

A. On October 17, 2005, from around September 30, 2006 to around September 30, 2006, the Plaintiff, in collaboration with KimCC, set up an organization capable of carrying out 'the five floors of the above building from February 11, 2006, in the name of 'the five floors' in the above Dadong 365-6 Ground EE Building 202 (hereinafter referred to as the "the above 'place of business'), and prepared six types of casino chips from around 500 to 1,00,000.

B. The Defendant determined that the Plaintiff received 6,853,090,490 won in cash from 594 persons who intend to use the said casino during the said period from the bank account in the name of JA and KimB for a total of 1,909 times, and had the said users enter the said casino and engage in gambling in an amount equal to 5% of the cash deposited to them at the time of entering the casino, and then received 27,858,705 won (=6,554,550 won + KRW 50 won + KRW 51,032,155 won + KRW 226,826,506,50) equivalent to 5% of the total amount of money deposited in cash after the end of gambling.

C. The Defendant: (1) on June 2, 2008, the Plaintiff did not report and pay the special consumption tax and education tax on the Plaintiff’s act of entering the said casino 1,909 times for the said period; (2) on the ground that the Plaintiff received the money for exchange of KRW 51,032,155, and KRW 226,826,50 during the said period in the first half of 2006, and KRW 226,826,50 in the second half of 2006, but filed a false report on the amount of income without including the said money as the revenue amount; (3) Item 5 of Article 1 of the former Special Consumption Tax Act (amended by Act No. 8138 of Dec. 30, 206); and (1) Item 1 of Article 30 of the Education Tax Act (amended by Act No. 8138 of Dec. 30, 2006); and (3) Item 13 of Article 130 of the Value-Added Tax Act (amended by Act No. 2130137).

[Reasons for Recognition] The entry of evidence Nos. 1 through 5 and the purport of the whole pleading

2. Referral and Determination

A. The plaintiff's assertion

Each taxation of this case is wholly or partly unlawful for the following reasons.

(1) The Plaintiff established and operated the instant place of business without obtaining permission under the Tourism Promotion Act, and the instant place of business is not a place where the special consumption tax is levied.

(2) Money exchange fees that the Plaintiff received while operating the instant place of business does not constitute supply of goods or services subject to value-added tax.

(3) ① 원고는 2006. 5.경 이@@에게 이 사건 사업장의 지분을 70,000,000원에 양도 한 후 이 사건 사업장을 운영하지 않았고, ② 진AA의 계좌에 입금된 돈 1,434,090,490원은 이 사건 사업장의 운영과 관련이 없는 돈이므로, 이 사건 각 과세처분 중 2006. 5. 이후 과세기간에 대한 부분 및 위 1,434,090,490원을 이 사건 사업장에서 도박자금 으로 사용된 돈으로 보고 한 부분은 각 위법하다.

(4) The Defendant calculated the amount of income of the instant business establishment based on a simple presumption without any unclear standard and objective data, and issued each of the instant taxation dispositions based on this.

(c) Fact of recognition;

(1) On October 17, 2005, the Plaintiff registered the Plaintiff and KimCC as having a share of 50% in the instant business establishment by falsely registering its business to engage in food service at the instant business establishment.

(2) On May 24, 2006, the Plaintiff employed KimB as an employee of the instant place of business, opened an account in the name of KimB at the FF Bank GG Dong branch of the FF Bank GG branch of the instant place of business, and received KRW 5,419,00,000 from 594 users of the instant place of business to the said bank account.

(3) On September 29, 2005, JinA opened a deposit account at a FF Bank GG Dong branch, and used the said account until October 10, 2006. Of the instant users of the instant business, 56 persons, who deposited gambling funds into the account under the name of KimB, deposited KRW 1,434,090,490 over 242 times among the users of the instant business.

(4) After receiving gambling money from the instant business operator to a bank account, the Plaintiff received the money from the said business operator, and caused the said user to gambling in an amount equal to that of the cash deposited at the instant business establishment, and then received an amount equivalent to 5% of the total amount of money exchange commission by exchanging the remaining chips in cash after the end of gambling.

(5) On February 2006, the Plaintiff had the police control over the instant workplace and had Gangwon H work as the head of the instant workplace. On June 30, 2006, the Plaintiff entered the instant workplace for more than five days a week after entering the instant workplace and notified the Defendant of the measures of response to the occurrence of a loss from money to a customer who resisted to receive money from the instant workplace, return part of the money to the police under the name of rent, prevented the Defendant from reporting it to the police, or regulating the police. On September 30, 2006, the Plaintiff did not report the change of the partner’s share until the closure of the instant workplace.

(6) The Plaintiff did not report and pay the special consumption tax and education tax on the act of entering the instant place of business in the instant place of business while running casino business at the instant place of business.

(7) In 2005, the Plaintiff reported and paid value-added tax based on the Plaintiff’s input tax amount of KRW 607,50,000, the input tax amount of KRW 428,005, and the input tax amount of KRW 8,926,90,90, and the input tax amount of KRW 6,323,813, which included the following: (a) the Plaintiff engaged in casino business in the instant place of business but engaged in food and beverage sales; and (b) the account books stating the details of entry into the instant place of business, details of sales, etc. were entirely discarded.

(8) On the basis of the foregoing, the Defendant: (a) deemed that a person who deposited money into the FF Bank Account in the name of JA and KimB entered the instant workplace as much as the person deposited money in the said account into the instant workplace; and (b) accordingly, imposed the special consumption tax and education tax of this case.

(9) The Defendant deemed KRW 6,853,09,00, total of KRW 1,434,090,490 and KRW 5,419,000 deposited in the F Bank account under the name of JB as the money used for gambling in the instant business establishment; applying KRW 853,090,490, and KRW 5,57,174,107 out of the said money to be refunded to users for KRW 27,85,858,858,705 (= KRW 206,50,500, KRW 206, KRW 2965, KRW 206, KRW 2965, KRW 206, KRW 205, KRW 206, KRW 2565, KRW 2965, KRW 205, KRW 206, KRW 205, KRW 205, KRW 265,500, KRW 265,26565,26565,26565.

(10) Meanwhile, the Defendant calculated the input tax amount to be deducted from the said output tax amount by applying Article 61 of the Enforcement Decree of the Value-Added Tax Act mutatis mutandis, on the grounds that the instant business place in relation to the input tax amount reported by the Plaintiff as referred to in paragraph (7) (2) above, 428,05 won for the second term of February, 2005, and 6,323,813 won for the first term of January, 2006, and the said input tax amount also constitutes common input tax amount by applying mutatis mutandis Article 61 of the Enforcement Decree of the Value-Added Tax Act, on the grounds that the said input tax amount constitutes a common input tax amount.

(11) The Defendant revised the Plaintiff’s value-added tax between February 2, 2005 and February 2006 on the basis of the output tax amount and the input tax amount calculated under the above paragraphs (9) and (10).

[Reasons for Recognition] The aforementioned evidence, Eul evidence Nos. 6 and 7, and the purport of the whole pleadings

D. Determination

(1) Determination of the plaintiff's assertion of entry in paragraph (1)

Article 1(3)5 of the former Special Consumption Tax Act provides for a casino where special consumption tax is imposed on admission and the casino is not limited to those permitted pursuant to the relevant Acts and subordinate statutes, such as the Tourism Promotion Act. However, in the case of a casino permitted pursuant to Article 11 of the Special Act on the Assistance to the Development of Abandoned Mine Areas, the "casino business which is subject to special consumption tax" cannot be deemed to be limited to those permitted pursuant to the relevant Acts and subordinate statutes, such as the Tourism Promotion Act, and such interpretation does not constitute an administrative convenient interpretation or analogical interpretation that is not permitted pursuant to the principle

Therefore, this part of the Plaintiff’s assertion is without merit. (2) According to Articles 1(1)1, 1(2), and 7(1) of the Value-Added Tax Act, offering all services or other acts having property value due to all contractual or legal grounds or allowing the use of goods, facilities, or rights constitutes a supply of services subject to value-added tax.

Comprehensively taking account of the above facts, the Plaintiff’s changing the money used for gambling from the place of the instant business into the chips and collecting money equivalent to 5% of the exchange amount by exchanging the remaining chips after the completion of the game with cash is deemed to have received the proceeds from the supply of goods or services, which are the fees for casino facilities. Therefore, the exchange fees received by the Plaintiff constitutes the subject of value-added tax under the relevant provisions.

Therefore, the plaintiff's assertion on this part is without merit.

(3) Determination as to the Plaintiff’s assertion as stated in paragraph (1)(3)

Comprehensively taking account of the above facts acknowledged and the following circumstances admitted from the above evidence, it is difficult to view that the Plaintiff transferred the shares of the instant workplace to KR around May 2006, and that the amount KRW 1,434,090,490 deposited in the account of JA is the money used for gambling in the instant workplace. Accordingly, the Plaintiff’s assertion on this part is without merit.

① 원고가 2006. 4. 20.경 이@@ 계좌로부터 액면 합계 70,000,000원의 수표를 입금받았으나, 당시 이 사건 사업장의 하루 매출은 300,000,000원 이상이었고 또한 위 입금일이 지분양도일이라고 주장하는 날과 상당한 차이가 나 위 입금액이 원고의 지분 양도의 대가라고 보기 어렵다.

② On March 2, 2007, the Plaintiff was convicted of having run a casino business without permission at the instant business establishment, and the judgment became final and conclusive on July 2, 2007. The Plaintiff’s assertion on the transfer of shares was not accepted in the said judgment.

③ The FF Bank Account in the name of JA is close to the opening date and the closing date of the instant business establishment, and the FF Bank Account in the name of KimB was opened on May 24, 2006 after the lapse of one month from the opening date of the instant business establishment. The said two Bank Account was opened on the same date as the opening date of the instant business establishment, and the said two Bank Accounts were deposited in the name of KimB to the KK Bank Account in the name of JB, and the amount of money was transferred from the KimB account to the said account in the name of JB. In addition, a person who deposited in the said account in the name of KimB deposited money in the said account in the name of JB.A.

(4) Determination as to the Plaintiff’s assertion as stated in paragraph (1)(4)

In general, the burden of proving the facts of taxation requirement in a lawsuit seeking revocation of disposition imposing tax shall be borne by the person who has the authority to impose tax, but if it is revealed that the facts of taxation requirement are presumed in light of the empirical rule in the specific litigation process, the other party cannot be readily determined as illegal disposition that lacks the requirement of taxation unless it proves that the pertinent facts are not eligible for application of the empirical rule (see, e.g., Supreme Court Decision 2002Du6392, Nov. 13, 2002).

In addition to the above facts, the Plaintiff is unable to submit all relevant data regarding the fact that the Defendant’s estimated taxation requirements differ from the actual number of visitors to the instant workplace and the Plaintiff’s actual money exchange fees, etc., and can be sufficiently presumed in light of the empirical rule that the taxation requirements, which form the basis of each of the instant dispositions, are objectively calculated.

Therefore, the plaintiff's assertion on this part is without merit.

3. Conclusion

Thus, the plaintiff's claim of this case seeking revocation on the ground that each disposition of this case is illegal is dismissed as all of the grounds for appeal.