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1. All of the plaintiffs' claims are dismissed.
2. The costs of lawsuit are assessed against the plaintiffs.
Reasons
1. Details of the disposition;
A. On May 1, 2013, the Plaintiffs, jointly engaged in the housing construction and sales business (80% of Plaintiff A’s shares, Plaintiff B’s shares 20%, and closure of business on December 31, 2014), newly constructed and sold 18 households and officetels 30 (hereinafter “instant officetel”).
B. The Plaintiffs deemed the sales of the instant officetel as housing units and reported the value-added tax for the first quarter and the second quarter of 2014, on the instant officetel sales revenue amounting to KRW 2,942,00,000,00 as the object of value-added tax exemption.
In addition, after classifying the total sales revenue amount of KRW 7,278,00,000 by shares of the plaintiffs, in 2013, business income was generated by selling scrap metals acquired while demolishing the existing buildings for the construction of the instant officetels, and on the grounds that the revenue amount falls short of the standard amount, the simplified expense rate was applied to the global income tax return for the year 2014.
C. From April 20, 2017 to May 19, 2017, the director of the Central District Tax Office: (a) conducted a tax investigation with respect to the Plaintiffs; (b) the sales revenue of the instant officetel is not subject to value-added tax exemption under Article 106(1)4 of the Restriction of Special Taxation Act; and (c) the Plaintiffs’ starting date of business was May 7, 2014, which was the date of approval for the use of the instant officetel, and notified the taxation data by deeming that the Plaintiffs was not subject to the application of simple expense rate since the amount of income in 2014
Accordingly, on October 1, 2017, the director of the tax office of North Korea corrected and notified the Plaintiffs of KRW 326,873,910 for the first term of 2014 and KRW 114,017,940 for the second term of 2014 for the second term of 2014.
(hereinafter “Imposition of Value-Added Tax”). In addition, the amount of income calculated pursuant to the simple expense rate on the same day shall be calculated as global income for 2014 by applying the 2.4 multiple rates, and the amount of income for 336,720,610 won to A, and the director of the Silung Tax Office shall be assessed as global income for 336,720,610 won to A and the director of the Silung Tax Office