Daegu District Court 2014Guhap198 ( October 17, 2015)

Cho High 2014Gu 1198 (2015.09)

Since the type of business of transferor and transferee are different, it cannot be viewed as a comprehensive acquisition of business.

In view of the difference between the type of business and the type of business of the claimant who is the transferor of the building at issue and the category of business who is the transferee of the building at issue, it is difficult to regard the transfer limit of the building at issue as the supply of goods under the Value-Added Tax Act

Article 23 of the Enforcement Decree of the Value-Added Tax Act

2015Nu5703 Revocation of Disposition of Imposition of Value-Added Tax

AA

O Head of tax office

Daegu District Court Decision 2014Guhap21891 Decided June 17, 2015

November 27, 2015

December 18, 2015

1. The plaintiff's appeal is dismissed.

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

The judgment of the first instance is revoked. The defendant's imposition of value-added tax of KRW 185,19,660 for the first term of December 2, 2011 against the plaintiff on December 2, 2013 is revoked (the date of the disposition stated in the purport of the appeal and the purport of the appeal by the complaint seems to be erroneous in writing on December 10, 2013).

1. Quotation of judgment of the first instance;

The reasoning for this Court’s explanation is as follows: “A” Nos. 5 and 6 (including each number) which are insufficient to recognize the Plaintiff’s assertion; “The Plaintiff’s assertion in the trial is identical to the reasoning of the judgment of the first instance, except for addition of the judgment as stated in the following paragraph (2) to the pertinent part; thus, this Court shall accept it as it is in accordance with Article 8(2) of the Administrative Litigation Act and Article 420 of the Civil Procedure Act

2. Additional determination

A. The plaintiff's assertion

In light of the strict interpretation of the concept of business transfer, thereby causing damage to the Plaintiff, and allowing the State to gain corresponding profits is contrary to the tax justice, and the issue of whether a business operator simply transfers real estate or transfers the business is the choice of the parties concerned. In addition, in the case where the parties choose the method of business transfer, whether to transfer the business to any extent is belong to the private autonomy area, and it does not necessarily belong to the succession of employment. In this case where it is evident that the Plaintiff had made a transaction by selecting the method of business transfer, the tax authority cannot impose value-added tax on the Plaintiff by deeming it as the supply of goods. Thus, the Defendant’s disposition of this case is unlawful.

B. Determination

In full view of the provisions of Article 1(1), (2), and (3) of the Value-Added Tax Act, the supply of all goods or services shall be subject to value-added tax, unless otherwise provided for in the Act. The principle of no taxation without the law, which preventss the requirements for taxation, non-taxation, or tax reduction or exemption, and the interpretation of tax laws and regulations shall be strictly interpreted according to the text of the law, and it shall not be allowed to expand or analogically interpret without reasonable grounds (see, e.g., Supreme Court en banc Decision 200Du7131, Mar. 15, 2001)

Therefore, a final and conclusive interpretation or analogical interpretation without a strict interpretation of the meaning of transfer of business, which is a requirement for non-taxation of value-added tax, without a reasonable reason, should be determined according to whether a specific person benefits from non-taxation, which is contrary to tax justice, and whether a business that does not fall under the supply of goods is not arbitrarily determined according to the intention of the party, including the taxpayer, and whether the requirements derived from the strict interpretation of the statutes are satisfied.

Therefore, recognizing that the transfer of the building of this case constitutes the transfer of the business.

Without evidence in this case, the plaintiff's above assertion is without merit.

3. Conclusion

If so, the plaintiff's claim shall be dismissed as it is without merit, and the judgment of the court of first instance shall conclude this conclusion.

Inasmuch as the Plaintiff’s appeal is justifiable, it is dismissed as it is so decided as per Disposition.