Whether the preservation of ownership of leased real estate by unit is the return of the investment shares in kind.

Where it is recognized that the real estate rental business has been operated as a joint project, and each person's registration of preservation of ownership has been made by dividing the buildings thereafter, correcting the previous joint business operator's registration as a sole project, and at the same time, the joint property is divided and returned

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

Article 1 (Taxable Objects)

Article 6 (Supply of Goods)

1. The plaintiff's claim is dismissed.

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

The Defendant’s imposition of value-added tax of KRW 222,305,510 on December 3, 2007 against the Plaintiff on December 3, 2007 shall be revoked.

1. Details of the disposition;

A. On December 2, 1996, the Plaintiff acquired and owned ○○○○○○-1 438.4 square meters (hereinafter “instant land”) jointly with a ship owner, who is the wife on December 2, 1996, and on September 26, 2005, the Plaintiff donated 1/2 of each share to the Plaintiff, the ship owner, the Kim○-dong, Busan, ○○○-1 438.4 square meters (hereinafter “instant land”). On September 26, 2005, the Plaintiff donated 1/2 of each share to the Plaintiff, the ship owner, the Kim○-dong, the Kim○-do, and the Kim○-do (hereinafter “Plaintiff, etc.”) owned 1/4 shares of each instant land.

B. On June 15, 2006, the Plaintiff et al. completed joint business registration to run a real estate rental business, and on August 23, 2007, the Plaintiff et al. newly built the 2nd underground floor of reinforced concrete structure, 10th ground, and 2nd neighborhood living facilities building (hereinafter “instant building”) on the ground of the instant land and obtained approval for use.

C. On September 3, 2007, the Plaintiff et al. completed the registration of initial ownership on the instant building as listed below, and on September 10, 2007, the previous business registration, which became joint business operators of the Plaintiff et al., corrected the previous business registration as the Plaintiff’s sole business operator, and at the same time, the ship ○, Kim ○, and Kim Kim ○, respectively, registered a new real estate rental business.

D. As a result of the on-site verification of refund of value-added tax against the Plaintiff, the Defendant determined that the registration of preservation of ownership of the instant building by the Plaintiff et al. for each individual as shown in the above table constitutes the subject of value-added tax because the joint business operator returned equity shares in kind and thus constitutes the subject of value-added tax. On December 3, 2007, the Defendant issued the Plaintiff a notice of correction and notification of KRW 222,305,510 (including additional tax) of value-added tax for the second period of value-added tax

[Based on Recognition] A without dispute, Gap evidence 1 through 4, Gap evidence 5-1, 2, Gap evidence 6, Gap evidence 7-1 through 17, Gap evidence 8, Gap evidence 9-1 through 16, Gap evidence 10, Eul evidence 11-1 through 4, Eul evidence 11-2, Eul evidence 2-1, Eul evidence 3-1 through 11, the purport of the whole pleadings, and the purport of the whole pleadings

2. Whether the disposition is lawful;

A. The plaintiff's assertion

(1) The defendant judged that the plaintiff et al. registered the preservation of ownership of the building of this case by individual shall be deemed to have returned the contribution shares in kind, and thus, it shall be subject to value-added tax. However, the plaintiff et al. agreed from the beginning to newly construct the building of this case and to have divided ownership. After completion of the building, the plaintiff et al. registered the preservation of ownership as to the sectional ownership of each party's sectional ownership pursuant to the above agreement. This cannot be subject to value-added tax because it is the original acquisition of the building by the construction of the building of this case and it does not constitute the supply of goods. In addition, since the plaintiff et al. completed the building of this case and completed the registration of the preservation of ownership of the building of this case to the commencement of real estate rental business, the act of the plaintiff et al.

(2) Even if the Plaintiff et al. is a joint business proprietor, the Plaintiff et al.’s individual separation of business registration and carrying on real estate rental business for the original purpose constitutes a comprehensive transfer of business that only replaces a business proprietor while maintaining the identity of the business, and thus, is not subject to value-added tax, but illegal.

B. Relevant statutes

Article 1 (Taxable Objects)

Article 6 (Supply of Goods)

Article 9 (Transaction Time of Value-Added Tax Act)

Article 14 (Scope of Supply of Goods)

C. Facts of recognition

(1) On December 2, 1996, the Plaintiff acquired the instant land jointly with ○○○ on December 2, 1996, and jointly owned it (each of 1/2 shares), and donated 1/2 of each share to ○○○○, and Kim○, on September 26, 2005, the Plaintiff et al. owned 1/4 shares of each of the instant land.

(2) On November 7, 2005, the Plaintiff et al. jointly applied for a construction permit for the construction of the instant building, and obtained a construction permit under the joint name on August 23, 2007, and obtained approval for use under the joint name on August 23, 2007. On September 3, 2007, the registration of preservation of ownership on the instant building was completed on September 3, 2007, under the joint name of the Plaintiff et al., and each of the remaining parts under each individual’s name.

(3) On June 15, 2006, the Plaintiff et al. completed the registration of real estate rental business.

Details of business registration.

Name: Plaintiff et al.

Date of opening: June 15, 2006

Place of business: Busan ○○○-dong ○○○-1

Type of business: Type of business - Real estate business, category of business - Lease

Reasons for delivery: New reasons for delivery

Joint businessman: Ma○, Kim ○ and Kim ○

(4) During the period from the first half of 2006 to the second half of 2007, the Plaintiff et al. deducted the input tax amount generated in the process of constructing the instant building from the output tax amount, and was refunded KRW 252,529,436 in 2006 to the second half of 2006.40,436,362, and 92,731,800 in 2007.

(5) On September 10, 2007, the Plaintiff et al. corrected the previous business registration, which had been a joint business of the Plaintiff et al., as the Plaintiff’s sole business, and filed a return and payment of respective value-added tax on the real estate rental income, from among the instant buildings in which the registration of initial ownership was made (103: 103, 104, 101: 104, 101): the location of the business; the type of the business; the real estate rental business; and the opening date of the business as of August 23, 2007, which was the date of approval for use of the instant building; and each of the real estate rental income was reported and paid.

(6) Meanwhile, at the time of new construction of the building of this case, the plaintiff et al. opened a bank account with four persons including the plaintiff et al. to deposit their respective construction costs into the above account, or deposited the security deposit received prior to the completion of new construction in the above account and paid them as construction costs by withdrawing it. The current status of each construction costs payment is as follows.

[Based on the recognition] The evidence Nos. 2, 3, 4, 5-1, 2, 6, 1 through 17, 7-1 through 17, 8, 9-1 through 16, 10, 11-1 through 4, 12-1 through 6, 13-1, 14-2, 2-1 through 3, 3-1 through 11 of evidence Nos. 3, and 3-1 through 11 of evidence Nos. 14, and the purport of the whole pleadings

D. Determination

(1) Determination as to the assertion of the above A. (1)

In the event that an entrepreneur, who is liable to pay value-added tax, delivers or transfers goods due to contractual or legal grounds, is subject to value-added tax unless there is a special legal provision that the value-added tax shall be exempted or imposed, so if the entrepreneur independently supplies goods for business, the taxation requirement is satisfied. Therefore, in the event that the entrepreneur conducts a joint business and returns the shares in kind to each entrepreneur of the joint business after dividing the joint property into two parts, the entrepreneur is subject to value-added tax

In light of the above legal principles, since the plaintiff et al. completed a real estate rental business registration as a joint business proprietor, the plaintiff et al. applied for a construction permit and approval for use of the newly constructed building of this case jointly with the plaintiff et al. at the time of application for the construction permit and approval for use of the newly constructed building of this case, the construction contract of this case was entered into under the joint name, and the construction cost was paid collectively from the account opened under the joint name of the plaintiff et al. with respect to the first floor and tenth floor above the building of this case, the ownership preservation registration of the plaintiff et al. was completed with respect to the first floor above the building of this case and the construction of the new building is not impossible because the act at the pre-construction of the building of this case can not be seen as a preparatory act of the plaintiff et al., and in fact, the plaintiff et al. operated a real estate rental business as part of the newly constructed building of this case before the construction of the new building of this case, and it cannot be accepted as the plaintiff et al.'s co-ownership of the building of this case.

(2) Determination as to the assertion of the above A. (2)

The term "transfer of business" generally refers to the transfer of ownership or control over the fixed assets for business or part of business, not simply simply but to the transfer of ownership or control over all physical and human facilities, rights, and duties, etc. for each place of business, including business property, to replace only the main body of business while maintaining the identity of the business. As such, the business should be deemed as an organic combination of human and material facilities that can be separated from the main body of business and can be recognized as social independence (see, e.g., Supreme Court Decision 2004Du8422, Apr. 28, 2006).

With respect to the instant case, it is reasonable to view that the Plaintiff, etc., engaged in a real estate rental business by newly building the instant building and maintaining the identity of each of the instant building and completing registration of joint business operators, and individually completing registration of real estate rental business as the Plaintiff’s sole business, etc., is merely a joint business operator and returning the shares of the joint property to each joint business operator in kind. As seen above, it is difficult to deem that there was an agreement to comprehensively transfer the business between the Plaintiff, etc. in the process of dividing the joint property as above, and the individual business operator, etc. of the Plaintiff, etc. is merely a part of the previous joint business object (On the other hand, the first and upper floors of the instant building, which are part of the instant building, still remains the joint business object of the Plaintiff, etc.) objectively independent of the previous joint business unit, and thus, it cannot be deemed that the registration of preservation of ownership by the Plaintiff, etc., separately from the instant building, cannot be deemed as a case where only the main owner is changed.

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

3. Conclusion

Therefore, the plaintiff's claim is dismissed as it is without merit. It is so decided as per Disposition.