Cho High Court Decision 2010Da1145 (2010.06.04)

The disposition rejecting a request for correction of input tax deduction on electric charges is legitimate.

Whether there is an electricity charge actually used as a consumer for the purpose of leasing a rental business, if any, the amount cannot be specified at all to the extent, and the fact that the person who has paid the electricity charge is the Plaintiff is insufficient to recognize that the person who has paid the electricity charge is the Plaintiff, so the disposition rejecting the request for correction

2010 Gohap3313 Revocation of the disposition of rejecting a claim for rectification of value-added tax

Dok Park

O Head of tax office

January 14, 2011

February 18, 2011

1. The plaintiff's claim is dismissed.

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

The defendant's rejection disposition against the plaintiff on October 5, 2009 shall be revoked from the first to the first half of 2007 to the plaintiff on October 5, 2009.

1. Details of the disposition;

A. From August 199, the Plaintiff is a personal entrepreneur who has operated a real estate rental business in the 1248-4 and 5 underground floor and the 10th ground-based D building located in Busan BB-GuCC (hereinafter “instant building”).

B. On August 19, 2009, the Plaintiff filed a claim for correction of value-added tax by deducting the electricity charges borne by the Plaintiff in relation to the instant building from the first period of 2007 to the first period of 2009 (hereinafter “instant period”) from the input tax amount during the respective taxable period of value-added tax, as follows (the Plaintiff filed a claim for correction from the second period of 2004 to the first period of 2009, but the Plaintiff excluded the portion before 2006, for which the period for filing the claim for correction had expired while filing the instant lawsuit from the first period of 204 to 2009).

C. On October 5, 2009, the Defendant rendered a decision to dismiss a request for correction on the ground that there is no evidence that the actual user of the electricity supplied to the instant building was the lessee, the Plaintiff did not issue a tax invoice on the electricity rates to the lessee, and that the Plaintiff paid the electricity rates directly, and thus, the Defendant cannot deduct the input tax amount on the electricity charges, and that the Defendant rejected the request for correction for the key period (hereinafter “instant disposition”).

D. The Plaintiff, who was dissatisfied with the instant disposition, filed an objection against the Defendant on January 4, 2010, but the objection was dismissed on January 29, 2010, and on March 23, 2010, filed an appeal with the Tax Tribunal, but the appeal was dismissed on June 4, 2010.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1 through 3, Eul evidence Nos. 1 through 5, 7 and 9, and the purport of the whole pleadings

2. Whether the disposition is lawful;

A. The plaintiff's assertion

The Plaintiff, before and after 2007, proceeded with a life-saving lawsuit against the lessee of the instant building. As a result, Park E, which leased the two floors of the instant building, was removed from the leased building in September 10, 2007, on May 2007, and on May 2007, the rightFF, which operated the non-life-free boat on the third floor, on the fifth floor, from the leased building in 2007, Y, which operated the non-life-free cover on the fifth floor, prior to 2007, operated the non-life-free cover on the 6th floor.

In addition, even though the plaintiff Kim J was registered as a business operator with the trade name of yellow heavy sugar on the 5th floor of the building of this case, he did not operate his business.

Therefore, the instant building, except for K K singing stores of the first floor above the ground level, was in fact and officially used during the key period, and there was no reason for the lessee to pay the electricity fee in good faith during the singular lawsuit. Thus, during the first to the first period of 2007, the Plaintiff paid the electricity fee to the title holder and the person who actually consumes the electricity that was supplied with the power of the instant building, as the title holder and the person who actually consumes the power that was supplied.

In the event that the Plaintiff is an actual consumer of electricity, it is unnecessary to issue a tax invoice to the lessee. Thus, the instant disposition rejecting a claim for rectification on the ground that the Plaintiff did not issue a tax invoice to the lessee

(b) Related statutes;

It is as shown in the attached Form.

(c) Fact of recognition;

1) In the instant building, measuring instruments are installed on the first floor of the ground, and one measuring instrument is installed on the remainder of the floor, and the electric consumption by each floor is confirmed, and electric power is supplied in the name of the Plaintiff, which is the owner of the building.

2) From March 1, 2001 to July 20, 207, lessees of the instant building registered their business under the name of management of occupants in the instant building (hereinafter referred to as the “occupant management association”) and selected lessee ParkE as a general manager. The lessee pays to the Lessee the electricity fee plus the amount calculated by dividing the respective rent used by the lessee by the common area and the number of lessees of the 10th floor, and the tenant management association manages the electricity fee of the instant building in the form of paying the electricity fee to the Korea Electric Power Corporation by adding the electricity fee collected by the Lessee to the common area and the 10th floor. The said tenant management association used the deposit passbook in the name of Dol LL in the name of son who leased the 1st underground floor at the time.

3) The Plaintiff’s KimJ repaired several months to operate a bath on the fifth floor of the instant building, and sublet the said five-story to NN on September 10, 2009.

4) The business registration status of the instant building (other than the first floor) during the key issue period is as follows:

5) The details of the material from which the subject of the payment of electric charges can be identified are submitted are as follows:

6) While the Plaintiff reported the value-added tax to the Defendant on the sales of the deposit and rent, the Plaintiff did not include the management fee including the electricity tax and the electricity tax in the sales amount. However, the Plaintiff did not issue a tax invoice to the lessee in relation to the electricity fee, and the lessee did not receive an input tax deduction for the electricity fee.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 4, 5, 9, Eul evidence Nos. 2, 6, 8 through 16, part of the witness Kim J's testimony, the purport of the whole pleadings

D. Determination

(i)the portion used by the lessee;

According to Article 18(1) of the former Enforcement Rule of the Value-Added Tax Act (amended by Ordinance of the Ministry of Strategy and Finance No. 62 of March 26, 2009), when the nominal owner who is supplied with electricity issues a tax invoice to the person who actually consumes electricity within the scope of the supply value of the tax invoice delivered by the relevant operator of the electric utility business, the said operator shall be deemed to have issued the tax invoice to the person who actually consumes electricity. Thus, when the nominal owner who is supplied with electricity issues the tax invoice to the actual consumer of the power, if the output tax amount is external due to the issuance of the tax invoice to the actual consumer of the power, there is no loss in the amount of the input tax deduction, and the actual consumer of the power as the actual consumer of the business operator is entitled to the

In addition, if a lessee was unable to recover the electricity fee that the lessee actually used as a consumer on behalf of the lessee, a certain amount of the electricity fee that was not recovered under the provisions of Article 17-2 of the Value-Added Tax Act can be deducted from the output tax amount. However, there is no basis provision that deducts the amount of the electricity fee as the input tax amount.

According to the above facts, from the first to the first half of the year 2007 of the building of this case, at the first half of the year 2007, KK-based stores were normally engaged in the business, and even according to the plaintiff's assertion, the first half of the year 2007, and the yellow-type compound (HH) was engaged in the business. Thus, since the power used by the tenants in the business is not actually consumed by the plaintiff, the tenant is not the actual consumption, and the above tenant is entitled to the input tax deduction at the same time by issuing a tax invoice, and the plaintiff did not issue the tax invoice for the electricity fee to the tenant, so the plaintiff's assertion that the tenant is obliged to pay the input tax deduction for the electricity fee.

ii)the part on paper use;

The remainder of the electricity charges shall be first specified, and (2) the actual consumer of the relevant part of electricity, and (3) the Plaintiff may be entitled to a tax deduction as an input tax amount only when it is proved that the Plaintiff was directly responsible for the electricity charge.

However, the witness KimJ’s testimony to the effect that the Plaintiff paid all electricity rates from January 2, 2007, except for the portion of February 2007 and February 2007, cannot be trusted in light of the relationship between the Plaintiff and KimJ and the former lessee, the Park E-H, and the current lessee, H and Park PP’s statement. The sole evidence of the facts recognized as above is that the Plaintiff used the electricity rates as a actual consumer for the purpose of engaging in the leasing business in the instant building during the key period, and if there is any electricity rates used by the Plaintiff during the key period, the amount should not be specified to any extent, and there is insufficient evidence to acknowledge that the person who paid the electricity rates is the Plaintiff, and there is no other evidence to support this.

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

3. Conclusion

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