Value-added tax is imposed on management expenses received by a market management corporation from a store owner (negative)

If the plaintiff, a non-profit incorporated association established for the management and repair of market facilities, prevention of theft in the market, fire prevention measures, and public health and sanitation projects, actually receives money from the shop tenants in the market and uses it as management expenses for the purpose of the project, the plaintiff shall be deemed to fall under the "person who provides an independent service" under Article 2 of the Value-Added Tax Act. The amount that the plaintiff received as management expenses shall be deemed to be the payment for the plaintiff to provide services for the market management. Even if the store owners in the market are a member of the plaintiff corporation and are established for the market management by proxy for the plaintiff corporation, the above management expenses shall be separate from the members, and the above management expenses shall be attributed to the plaintiff, not the member, so the disposition imposing value-added tax shall not be deemed to violate the principle of substantial taxation.

Article 2 of the Value-Added Tax Act, Article 14 of the Framework Act on National Taxes

Masan Forest Market prosperity, Attorneys Kim Young-young, Counsel for the defendant-appellant

Head of tax office

Daegu High Court Decision 83Gu261 delivered on February 28, 1984

The appeal is dismissed.

The costs of appeal are assessed against the plaintiff.

The grounds of appeal are examined.

As determined by the court below, if the plaintiff is a nonprofit incorporated association established for the management and repair of the facilities in the Msan Forest market, the prevention of theft in the above market, the fire prevention measures, and the public health and sanitation business, and actually receives the money as stated in its reasoning from the store tenants in the above market as management expenses and uses it for the purpose business, the plaintiff is obligated to pay value-added tax as it falls under the "person who independently supplies services for the business" under Article 2 of the Value-Added Tax Act. The plaintiff's original value-added tax that the plaintiff received as management expenses shall be deemed to be the party to the provision of services provided by the plaintiff for the above market management. Even if the owner of the store in the above market is a member of the plaintiff corporation and the plaintiff corporation is established for the market management to act on behalf of the plaintiff corporation, the above management expenses are separate from the members and are attributed to the plaintiff, not the member, and thus, it does not violate the principle of substantial taxation as to the management expenses belonging to the plaintiff. The defendant's disposition of value-added tax is justified and there is no violation of law.

All arguments are groundless.

Therefore, the appeal is dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Jeong Tae-tae (Presiding Justice)