Supply of services auxiliary to main transactions and imposition of value-added taxes;

If a company, which developed an island as a tourist amusement park, provides tourists with tourist facilities services, and operates a passenger irregular sea route business incidental to the provision of tourist facilities for attracting tourists from the land and provides tourists with vessel operation services, the above vessel operation services are incidental to the provision of tourist facilities, and the above ancillary services are subject to value-added tax, since Article 1(1) and (3) of the same Act and Article 2(1)5 of the Enforcement Decree of the same Act are incidental to the provision of tourist facilities.

Articles 1(1), 1(3) of the Value-Added Tax Act, Article 2(1)5 of the Enforcement Decree of the Value-Added Tax Act

Attorney Lee Jae-chul, et al., Counsel for defendant-appellee

The Director of Incheon Tax Office

Seoul High Court Decision 85Gu696 delivered on February 5, 1986

The appeal is dismissed.

The costs of appeal are assessed against the plaintiff.

The grounds of appeal by the Plaintiff’s attorney are examined.

According to the reasoning of the judgment below, the court below recognized the fact that the plaintiff company developed a small map as a tourist amusement park and operated a tourist facility business for the provision of tourist facilities to tourists, and operated the company with entrance fees, thereby providing them with navigational services to tourists. Furthermore, the principal transaction of the plaintiff company is the provision of tourist facility services and the provision of navigational services is included in the main transaction, and the provision of navigational services is incidental to the provision of tourist facility services. The main transaction of the plaintiff company is the provision of navigational facilities and the provision of navigational services is included in the main transaction. Since the main tourist facility is subject to taxation stipulated in Article 1 (1) and (3) of the Value-Added Tax Act and Article 2 (1) 5 of the Enforcement Decree of the Value-Added Tax Act, the supply of the vessel transportation services of this case is an incidental service to the above business

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.

Justices Park Jong-soo (Presiding Justice)