Whether an input tax amount related to the creation of a golf course is deductible;

Since the cost related to the creation of a golf course is a cost that is used to increase the form and quality of land and the value of land, it constitutes an input tax amount related to capital expenditure and is subject to non-

Article 60 of the Value-Added Tax Act Scope of Purchasing Tax Amount

1. The plaintiff's appeal is dismissed.

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

The decision of the first instance shall be revoked. The decision of dismissal by the defendant against the plaintiff on April 17, 206 shall be revoked.

The reason why the court's explanation concerning this case is the same as the entry of the first instance court's reasoning, except that the court added 2004du13844 delivered on July 28, 2006 '204du13844 delivered on July 28, 2006' and '204du17460 delivered on December 30, 201 '6' from the amendment of the Enforcement Decree of the 6th '6th '6th 6th '200' as '20 from the amendment of the Enforcement Decree of the 17460 delivered on December 31, 201', so it is identical to the entry of the reasons for the first instance court' in accordance with Article 8 (2) of the Administrative Litigation Act and Article 420 of the Civil Procedure Act.

Therefore, the judgment of the first instance court is just and the plaintiff's appeal is dismissed, and it is so decided as per Disposition.

[Seoul Administrative Court 2007Guhap2135, Nov. 06, 2007]

1. The plaintiff's claim is dismissed.

2. Litigation costs shall be borne by the Plaintiff

The defendant's decision to dismiss the plaintiff's claim for correction on April 17, 2006 shall be revoked.

1. Circumstances of dispositions;

A. The Plaintiff started to build a golf course from 203 to 300-1 as a businessman operating cement manufacturing business, etc. under ○○○○○-dong 1424-2, 2003, and the Plaintiff reported the value-added tax from 2003 to 2004. At the time of payment, the Plaintiff did not deduct the input tax amount under the latter part of Article 17(2)4 of the Enforcement Decree of the Value-Added Tax Act (hereinafter referred to as “the input tax amount” in the latter part of Article 6(6) of the Enforcement Decree of the Act from 208,987,144 won (hereinafter referred to as “the latter part of Article 6(2)4 of the Enforcement Decree of the Act”) on the aggregate of the input tax amount for the expenses incurred in relation to the construction of a golf course from 203 to 204.

B. On February 15, 2006, the Plaintiff filed a claim for correction on the premise that the input tax amount can be deducted, but the Defendant rejected the claim on April 17, 2006.

C. The plaintiff, who was dissatisfied with the disposition of this case, filed an appeal with the National Tax Tribunal on July 11, 2006, but was dismissed on October 23, 2006.

[Ground of recognition] 1 to 6 evidence Nos. 1 to 3

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

(1) The golf course business is a taxable business and not subject to deduction even though it constitutes the input tax amount to run a taxable business. The latter part of the instant provision, which is the basis of the instant disposition, goes against the basic principle of value-added tax in Korea, under the former phase tax credit Act, should be interpreted to include the input tax amount for the tax-free business as a tax-free business rather than simply deducting the input tax amount. The instant provision of the Enforcement Decree, which so interpreted, is invalid contrary to the principle of no taxation without law,

(2) The latter part of the instant provision, which practically provides for the purchase of land-related input tax, is a tax imposed upon the acquisition of assets, which goes beyond the limit as a consumption-type value-added tax, and is unconstitutional provision that infringes on the right to equality guaranteed by the Constitution as a prior provision beyond the permissible limit under the basic principles of value-added tax. Therefore, the instant disposition based thereon is unlawful.

2. Related statutes;

○ Tax amount under Article 17 of the Act

(1) The amount of value-added taxes payable by an entrepreneur (hereinafter referred to as the “paid tax amount”) shall be the amount computed by deducting the tax amount under the following subparagraphs (hereinafter referred to as the “purchase tax amount”) from the tax amount on the goods and services supplied by him (hereinafter referred to as the “sales tax amount”): Provided, That where an input tax amount exceeds the output tax amount, it shall be a refundable tax amount (hereinafter

1. The tax amount for the supply of goods or services used or to be used for his own business;

2. The tax amount for the import of goods used or to be used for his own business; and

(2) The following input tax amounts shall not be deducted from the output tax amount:

4. The input tax amount related to the business of supplying goods or services exempted from the value-added tax (including the input tax amount related to investments) and the land-related purchase tax amount as prescribed by

Article 60 (Scope of Purchase Tax Amount) of the Enforcement Decree of the Act

(6) The term “the land-related input tax amount as prescribed by the Presidential Decree” in Article 17 (2) 4 of the Act means the input tax amount falling under any of the following subparagraphs, which is the input tax amount related to capital expenditures

1. An input tax amount related to the acquisition and alteration of the form and quality of land, the development of factory sites and housing sites;

2. Where a parcel of land on which a building is located is acquired, and the building is removed and only land is used, the input tax amount on the cost of acquisition and removal of the removed

3. An input tax amount related to the expenses forming the acquisition cost of land by practically increasing the value of land.

C. Determination

(1) The instant provision and the purport of the Enforcement Decree of the instant case

(A) The Republic of Korea adopts the pre-stage tax deduction law as a method of imposing value-added tax and calculates the amount of tax payable by deducting the input tax amount from the output tax amount. Article 17(1) of the Act provides that the input tax amount to be deducted is ① the tax amount for the supply of goods or services used or to be used for one’s own business, and ② the tax amount for the import of goods used or to be used for one’s own business. However, the input tax amount is not the whole input tax amount but the input

(B) The type of non-taxation of value-added tax under the former part of Article 17(2) of the Act can be divided into two categories. The first type is the type of non-deduction of the input tax amount under the basic principle of value-added tax, such as the pertinent provision (detailed business related input tax amount). The second type is the type of non-deduction of the input tax amount under the basic principle of value-added tax, such as the input tax amount or entertainment cost-related input tax amount (Article 17(2)1-2 of the Act). The instant provision provides that input tax amount related to the former part of Article 17(2)1-2 of the Act provides that the latter part of the input tax amount shall be the input tax amount related to the supply of the goods and services, which falls under any of the following subparagraphs, and the latter part of the Enforcement Decree of the Act provides that input tax amount related to the supply of the goods and services shall be deducted under the basic principle of the former part of the aforementioned Article, regardless of whether the output tax amount is deemed a final consumer under the Value-Added Tax Act, and thus, the latter part of the basic principle of the supply of the goods and services.

(C) However, with respect to the input tax amount related to the land under the latter part of Article 17(2)4 of the former Act (hereinafter “former Act”) prior to the amendment on December 31, 1993, Article 60(6) of the former Enforcement Decree (hereinafter “former Enforcement Decree”) provides that the input tax amount related to the tax-free business shall not be deducted, without a delegation clause, shall be newly established on December 31, 1991, and that the tax amount related to the capital expenditure for the creation, etc. of land shall be included in the input tax amount under Article 17(2)4 of the former Enforcement Decree (see, e.g., Supreme Court en banc Decision 90Da19499, supra). Since the former Enforcement Decree of the Act provides that the pertinent provision on the tax-free business shall be construed as “the tax-free business-related tax-related tax-related tax-related tax-related tax-related tax-related tax-related tax-related tax-related tax-related tax-related tax-related tax-related tax-related tax-related tax-related tax-related tax-related tax-related tax-related tax-related tax-related tax-related tax-related tax-related tax-related provisions.”

(2) Whether the latter part of the provision of this case violates the Constitution or is null and void against the principle of no taxation without law

④ Under the premise that the latter part of this case’s provision and the former Enforcement Decree of this case’s provision are contrary to the basic principles of tax credit under the former Enforcement Decree of the Income Tax Act, which do not deduct input tax amounts for capital expenditures for the creation of land, etc., the Plaintiff asserts that the instant provision violates the Constitution or the former Enforcement Decree’s provision is invalid against the principle of no taxation without law, i.e., (i) an input tax amount related to capital expenditures for the creation, etc. of land can be deducted from the output tax amount, regardless of whether the pertinent provision is operating a taxable business for value-added tax, and thus, the input tax amount should be deducted from the output tax amount under the former Enforcement Decree and the former Enforcement Decree’s provision on tax exemption for the development of a golf club for the creation, etc. of land, which is not contrary to the basic principles of no taxation without law, and thus, it is unreasonable to view that the tax exemption provision does not go against the basic principles of no taxation without law, including input tax amounts for the development of a taxable business for the acquisition cost of land.

(iii)In the case of a suit

Therefore, in the instant case, the input tax amount, when the Plaintiff inputs for the formation of a golf course, is the cost spent to increase the actual form and quality of the land or the value of the land. As such, the Defendant’s disposition based on the premise that the input tax amount is not deducted is lawful, since it constitutes the input tax amount related to capital expenditure for the formation, etc. of the land under the latter part of the instant provision

3. Conclusion

Therefore, the plaintiff's claim of this case is rejected without any justifiable reason, and it is so decided as per Disposition.