Seoul Administrative Court-2014-Gu Partnership-625 ( October 20, 2015)

The amount of service provided is the supply of goods included in the value-added tax base.

The amount of service provided is the supply of goods included in the value-added tax base.

Article 6 (3) of the former Value-Added Tax Act

2015Nu39035 Value-Added Tax, etc. and revocation thereof.

UnionA

Head of Gangnam District Tax Office et al.

A litigation performer Park Jae-ju

August 26, 2015

September 23, 2015

1. All of the Plaintiff’s appeal is dismissed. 2. Costs of appeal are assessed against the Plaintiff.

The judgment of the first instance shall be revoked. For the plaintiff, the attached Form issued by the director of the Gangnam-gu Tax Office on June 1, 2011 shall be revoked.

Each disposition listed in paragraph (1) of the tax disposition table and paragraph (2) of the same Table made on June 1, 201 by the director of the tax office of the regional tax office.

Each disposition described shall be revoked.

1. Quotation of judgment of the first instance;

The reasoning for this Court’s explanation is as follows: (a) part of the judgment of the first instance is dismissed as stipulated in paragraph (2) below; and (b) under Paragraph (3) below, the reasoning for the judgment of the first instance is as stated in the part of the reasoning of the judgment, except for the addition of the judgment of the Plaintiff’s new argument in the trial; and (c) thus, it is acceptable in accordance with Article 8(2) of

2. Parts in height:

○ The 3rd party's 20th party's 'the 20th party' raises the 'the 20th party' as ‘the 'the 'the

○○ Heading 19’s Evidence 10’s Evidence 10 and Evidence 15’s Evidence 15’s Evidence 8, 11, 13, and 14’s Evidence 8, 11, 13, and 14’s Evidence 8, 11, 13, and 14’s Evidence 1, 2, 4, 5, 6, and 7’s Evidence 15’s Evidence 8, 11, 13, and 14.

3. Additional parts

A. The plaintiff's assertion

The amount of services provided included in the sales recorded in the daily statement on the settlement of accounts of the first day is about alcoholic beverages, etc. that are supplied free of charge bywe to customers more than a certain amount of sales for the purpose of sales promotion, which constitutes "the supply of incidental goods including the price thereof" or "the increase of goods for the promotion of sales" to the price of the supply of goods, which is the main transaction not considered as the supply of goods under the Value-Added Tax Act.

Therefore, it is illegal that the Defendants calculated the value-added tax, income tax, and individual consumption tax by including the amount of service provided.

B. Determination

Article 6 (3) of the former Value-Added Tax Act provides that "the cases where an entrepreneur uses or consumes goods produced or acquired in connection with his/her own business for personal or other purposes, or donates them to his/her customers or many and unspecified persons, which are prescribed by the Presidential Decree, shall be deemed the supply of goods." Article 16 (2) of the former Enforcement Decree of the Value-Added Tax Act provides that "the case where an entrepreneur donates goods to his/her customers or many and unspecified persons under Article 6 (3) of the Act, the supply of goods subject to a taxation shall not be deemed the price of goods being the main transaction: Provided, That the donated goods shall not be deemed the supply of goods subject to a taxation, unless the input tax amount is deducted under Article 17 (2) of the Act."

However, even if the daily amount of sales on the settlement of accounts includes the amount of services provided to customers free of charge, as alleged by the Plaintiff, this falls under the category of "taxable goods subject to value-added tax" and "the supply of goods" under the above provisions, and the circumstances alleged by the Plaintiff alone are insufficient to recognize that the cost of such services is included in the price of the supply of goods, which is the main transaction, or that falls under the proviso of Article 16 (2) of the former Enforcement Decree of the Value-Added Tax Act, and there is no other evidence to recognize otherwise. This is the same as income tax and individual consumption tax (see Articles 24 and 26 of the Income Tax Act, Article 51 (3) of the Enforcement Decree of the Income Tax Act, Article 7 of the Individual Consumption Tax Act, and Article 14-2 (1) of the Enforcement Decree of the same Act). The defendants - 4 - the amount of services provided without deducting the

Therefore, the plaintiff's above assertion is without merit.

4. Conclusion

Therefore, the judgment of the first instance court is legitimate, and the plaintiff's appeal is dismissed as it is without merit. It is so decided as per Disposition.