The case holding that even if a business operator who runs a driving range has given a loan to himself/herself the total amount equivalent to the service fees received from his/her customers, income from the service fees shall be included in the value-added tax base of the business operator.

If a business operator who runs a driving range determines the amount of service fees through consultation among its partners and received the total amount of service fees by adding a fixed amount of service fees to a monthly or cukphone, and did not receive a separate payment from the user of the driving range, the case held that even if a business operator pays the total amount of service fees to his/her people for the purpose of facilitating the use of the training facilities, which is ordinarily incidental to the services provided by the user of the driving range, even though he/she pays to his/her customers the total amount of service fees to his/her people for the purpose of facilitating the use of the facilities, the case held that the value-added tax should be included in the tax base of the value-added tax on the grounds that he/she receives the service fees for the use of the facilities and the service fees for the use of the training facilities, which is the main service provided by the user of the driving range.

Article 13 of the Value-Added Tax Act, Article 48 of the Enforcement Decree thereof

Plaintiff

Director of the District Office

Seoul High Court Decision 91Gu2696 delivered on July 11, 1991

The judgment below is reversed and the case is remanded to Seoul High Court.

The grounds of appeal by the defendant litigant are examined.

1. According to the reasoning of the judgment below, the court below acknowledged the following facts: (a) since the plaintiff opened a golf practice range with the non-party 1 and the non-party 2 on May 20, 1983, the plaintiff posted them by dividing them into facility usage fees and loan service fees; (b) the plaintiff received only facility usage fees from visitors, issued a cash register, appropriated them with their own income; and (c) the plaintiff received on behalf of them for convenience; (d) the above golf practice range does not receive any kind of wages from the plaintiff, nor does it be in an employment relationship with the plaintiff; (b) the above golf practice range does not receive any kind of wages from the plaintiff; (c) the plaintiff received service charges from the plaintiff for the above golf practice range; and (d) the plaintiff received the above service charges from the plaintiff, and (d) the plaintiff received the service charges from the plaintiff, instead of the plaintiff, only received the service charges from the plaintiff, who received the above service charges from the plaintiff, and (e) the plaintiff received the service charges from the plaintiff, who received the above service charges.

2. However, the supply of goods or services essential to the supply of goods or services, which are the main transaction under the Value-Added Tax Act, is included in the supply of goods or services (Article 1(4) of the same Act and Article 3 of the Enforcement Decree of the same Act), and the tax base of value-added tax includes any monetary value in a quid pro quo relationship, regardless of the pretext, such as the price, charge, fee, or any other charge that an entrepreneur receives from a trader. However, if the service charge of an employee (including a free-income earner) who receives the price for the supply of food or accommodation services or personal services, along with the price, is written separately from the tax invoice, etc., the service charge shall not be included in the tax base unless the entrepreneur appropriates the amount of his income (Article 13(1) and (5) of the same Act and Article 48(1) and (8)

However, examining the evidence employed by the court below in this case (in particular, evidence No. 11 - No. 11 - witness testimony of Nonparty 3), the plaintiff determined the amount of service fees through consultation among its partners, added a monthly or cukphone to the membership fee, and received the total amount of service fees to the golf range user, and did not receive the payment of the service fees and the service fees separately from the facility use fees. The plaintiff's management company issued a receipt after receiving the above service fees and the service fees from its user. In light of the above recognized facts and the contents of the service provided by glars within the golf range, it is difficult to view that the plaintiff received the above service fees from its customer for the purpose of using the service, which is ordinarily incidental to the practice facilities provided by the plaintiff to the golf range user, and it is difficult to view that the plaintiff received the above service fees from its user for the purpose of using the facilities. This is not merely a payment of the service fees for the use fees of the golf range as seen above.

On the contrary, the court below held that the service fee in this case does not constitute the price received by the plaintiff within the golf practice range, and held that there was an error of law by misunderstanding the judgment of the value of evidence or misunderstanding it against the rule of experience in deciding the value of evidence in the case of adding the service provider and the price for the service provider, which affected the conclusion of the judgment, and thus cannot be exempted from reversal. The argument pointing this out has

3. Therefore, we reverse and remand the judgment of the court below. It is so decided as per Disposition by the assent of all participating Justices.

Justices Song Man-man (Presiding Justice)