The early trial 2013 middle 2669 ( August 12, 2013)

It does not constitute a comprehensive transfer of business

In light of the fact that the Plaintiff, a new real estate sales business entity, temporarily transferred part of the key real estate to the purchaser, and reported the income from the transfer of key real estate as business income, etc., the transfer of inventory assets for sale purpose is not a comprehensive transfer

Article 6 of the Value-Added Tax Act/ Article 17 (2) of the Enforcement Decree of the Value-Added Tax

2013Guhap3607 Disposition to revoke the imposition of value-added tax

KimA

○ Head of tax office

April 24, 2014

May 15, 2014

1. The plaintiff's claim is dismissed.

2. Litigation costs are borne by the Plaintiff.

Cheong-gu Office

The Defendant’s imposition of value-added tax of KRW 000 on March 6, 2013 against the Plaintiff on March 6, 2011 shall be revoked.

1. Circumstances of dispositions;

A. On January 24, 2011, the Plaintiff acquired 247.2 square meters of land 918-11, 00 ○○dong (hereinafter “instant land”) and completed registration of new construction and sale business on March 28, 2011 by making the said land the location of the business place, and completed registration of the new construction and sale business of a building. After constructing the 4th floor commercial building 501.86 square meters on the said land (hereinafter “instant building”) on the said land and completing registration of the ownership transfer on October 4, 201, by obtaining approval for use on September 22, 201, after obtaining approval for use on September 22, 2011.

B. On May 10, 201, the Plaintiff entered into an exclusive brokerage agreement on the lease of the instant building and a lease agreement on subparagraph 102 of the first floor of the instant building. On August 8, 2011, the Plaintiff entered into a sales agreement on the instant real estate with the GangwonCC, and on August 9, 2011, added the type of real estate leasing business to the said business registration that was made the location of the instant real estate as the place of business. On September 19, 2011 and on October 13, 2011, the Plaintiff entered into a lease agreement on the part on the upper floor of the instant building.

C. The Plaintiff filed a report on business transfer on October 12, 201, and filed a report on business closure with the real estate of this case to the location of the business place, and the strongCC registered the real estate rental business at the location of the real estate of this case on the same day.

D. The Plaintiff did not report value-added tax by deeming the transfer of the instant building to Gangnam as the comprehensive transfer or acquisition of the business subject to non-taxation of value-added tax. However, on March 6, 2013, the Defendant deemed that the transfer of the instant building was not a comprehensive transfer of business, and accordingly, the Plaintiff corrected KRW 000 in value-added tax for the second period of 201.

E. The Plaintiff appealed and filed an appeal with the Tax Tribunal on May 16, 2013, but was dismissed on August 12, 2013.

[Ground of recognition] Facts without dispute, Gap's 1 to 8, 10 to 14, Eul's 1 to 5 evidence, the purport of the whole pleadings

2. Whether the disposition of this case is legitimate

A. The plaintiff's assertion

The Plaintiff, while running the real estate leasing business in the instant real estate, comprehensively transferred all rights and obligations on the instant real estate leasing business while transferring the instant real estate to the GangwonCC, which constitutes a transfer of business not deemed the supply of goods under the Value-Added Tax Act, but it is unlawful for the Defendant to take the instant disposition by deeming the transfer of inventory assets for real estate leasing business.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

1) Article 6(6) of the former Value-Added Tax Act (wholly amended by Act No. 11873, Jun. 7, 2013) and Article 17(2) of the former Enforcement Decree of the Value-Added Tax Act (wholly amended by Presidential Decree No. 24638, Jun. 28, 2013) mean that the transfer of a business that does not constitute the supply of goods refers to the comprehensive transfer of physical, human, and rights and obligations, etc., including business property, to replace only a business owner while maintaining the consistency of the business. Thus, the business should be a organic combination of human and physical facilities so that the business can be separated from the business owner and can be recognized as social independence (see, e.g., Supreme Court Decision 2004Du8422, Apr. 28, 2006).

Therefore, in order to view the transfer of the instant real estate as a transfer of business not considered as the supply of goods, it should be deemed that the Plaintiff, at the time of the transfer of the said real estate, engaged in a real estate leasing business, comprehensively transferred the said business to Gangnam, which is the transferee of the said business, and otherwise, if it is merely a transfer of a real estate leasing business after completing the registration of the real estate leasing business and constructing the new building, it shall be deemed that it constitutes business activities of a real estate sales broker (see Supreme Court Decision 93Nu524, Apr. 27, 1993).

2) As seen earlier, the Plaintiff: (a) sold part of the building before the transfer of the instant real estate, and filed a report on business transfer while transferring the said real estate; (b) on the other hand, in full view of the evidence and the purport of the entire pleadings, the Plaintiff had engaged in the said business by repeatedly closing the business at several different locations from around 2002 to around 201, and continuously closing the business within a short period (a real estate rental business is deemed to have been operated for about 1 year from August 1, 2002 to August 5, 2003; (c) the Plaintiff’s act of purchasing and selling the instant real estate as a sale contract with the seller of the instant building after the date of transfer of the said real estate is deemed to have entered into an exclusive brokerage contract with the seller for new construction of the instant building; (d) the Plaintiff’s act of purchasing and selling the instant real estate is not deemed to have entered into a new construction contract with the seller of the instant building after the date of sale and purchase agreement with the seller of the instant real estate at least 10 years after its temporary completion inspection.

Therefore, it is legitimate for the Defendant to take the instant disposition by deeming that the transfer of the instant real estate does not constitute a comprehensive transfer of real estate leasing business. The Plaintiff’s assertion is without merit.

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and it is so decided as per Disposition.

4. The former Value-Added Tax Act (wholly amended by Act No. 11873 on June 7, 2013)

Article 6 (Supply of Goods)

(1) The supply of goods shall be a delivery or transfer of goods pursuant to all contractual and legal grounds.

(6) Any of the following subparagraphs shall not be deemed the supply of goods:

2. Transfer of business, as prescribed by Presidential Decree.

(1) The former Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 24638, Jun. 28, 2013)

Article 17 (Transfer of Security, and Payment of Taxes in Kind)

Article 64 (Final Tax Return and Payment)

4. The former Enforcement Rule of the Value-Added Tax Act (amended by Presidential Decree No. 355 on June 28, 2013)

Article 8-4 (Scope of Land, Buildings, etc. Not directly Related to Business)