Plaintiff 1 and one other (LLC, Kim & Lee LLC, Attorneys Cho Il-young et al., Counsel for the plaintiff-appellant)

Kimhae Tax Office et al.

July 4, 2019

1. The plaintiffs' claims against the defendants are all dismissed.

2. The costs of lawsuit are assessed against the plaintiffs.

Each disposition of imposition listed in the List No. 1 that the Defendants made against the Plaintiffs shall be revoked.

1. Details of the disposition;

(a) Business registration;

1) On June 16, 2014, the Plaintiffs registered the business of the Housing Construction and Sales Business under the trade name “(trade name omitted)” (Plaintiffs 50% equity and 50% equity) and closed on June 1, 2015.

2) On May 19, 2015, Plaintiff 1 and the Nonparty registered the housing construction and sales business under the trade name “(trade name 2 omitted)” (Plaintiff 1 shares 95%, Nonparty 5% shares), and closed on September 27, 2016.

(b) Building permit, approval for use, and sale of a main complex building;

1) On September 18, 2014, the Plaintiffs obtained a building permit to construct “(building name 1 omitted)” (multi-family housing 8 households and 4 households for office-use facilities) (the name of the building), which is a major complex building on the land outside Busan Metropolitan Government’s YY-gu ( Address 1 omitted) on the ground, and sold in lots after obtaining approval for use on October 1, 2014, after obtaining approval for use on January 21, 2015. The details of sales of 4 households of office-use officetels, which is a business-use facility, are as listed below (hereinafter “No. 1 officetel”).

The supply value of business facilities (offices) 601.89 75.26.26.26.200,000 602 75.89 75.89 70.26.05.08.08 16,000,000 70 701 58.79 58.79 (offices) 2015.04.24.24. 98,000,000,000 70 702 58.79 (offices) 58.79 (offices) 2015.23. 12,000,000 total 542,200,000

2) On June 11, 2015, Plaintiff 1 obtained a building permit to build a new building (the name of the building 2 omitted), which is a main complex building of 14th floor size, on the land surface of the Non-Party and the Non-Party ( Address 2 omitted) and the Non-Party (the 26 household units of multi-family housing and the 15 household units of office-use facilities), and sold in lots after obtaining approval for use on June 22, 2015. The sales details of the 15 household units of an officetel, which is a business facility, are as listed in the following table (hereinafter referred to as “No. 2 officetel”), and the 15 household units of the officetel, which is a business facility, are as listed in the following table.

1. 20. 239, 204. 239, 204. 20. 205 20. 14, 205 20. 14, 205 20. 14, 205 20. 14, 205 20. 36. 14, 205 20. 14, 205 20. 14, 205 20. 14, 204, 205 20. 36. 14, 205 20. 14, 204, 205 2. 204, 204, 206. 31, 205, 204, 206. 14, 205, 205. 79, 206, 2016

(c) Reporting and imposition of global income tax;

1) On May 31, 2016, when filing a return of comprehensive income tax for the year 2015, the Plaintiffs calculated estimated income by applying the simple expense rate under Article 143(4)2(b) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 27653, Dec. 5, 2016; hereinafter “former Enforcement Decree of the Income Tax Act”) on the ground that the amount of income (3,50,000 won) falls short of the amount prescribed in Article 143(4)2(b) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 27653, Dec. 5, 2016; hereinafter “former Enforcement Decree of the Income Tax Act”), and accordingly, reported and paid the comprehensive income

2) On May 31, 2017, Plaintiff 1 filed a global income tax return for the year 2016, and calculated estimated income by applying the “simplified expense rate” as stipulated under the above provision on the ground that the amount of income (9,120,000 won) below the amount provided for in Article 143(4)2(b) of the former Enforcement Decree of the Income Tax Act was generated in the year 2015, which was the taxable period immediately preceding the year 2016 where the sales revenue of the building (name 2 omitted) was generated, and accordingly, reported and paid the global income tax.

3) The director of Busan Regional Tax Office conducted a personal consolidated investigation against the Plaintiffs from February 27, 2018 to March 28, 2018, as a result, ① the amount of revenue (3,500,000 won) reported by the Plaintiffs in 2014 constitutes processed sales, and (3,500,000 won) the amount of revenue from the sale of the building (1 omitted) was generated, and (2) the amount of revenue reported by Plaintiff 1 in 2015 (9,120,000 won) constitutes processed sales, and (2) the amount of revenue from the sale of the building was generated in 2016 (2 omitted) and notified the director of Busan District Tax Office to the head of Busan District Tax Office to the effect that the amount of revenue exceeds the standard amount under Articles 143(4)1 and 208(5)2 of the former Enforcement Decree of the Income Tax Act, and thus, the amount of income should be estimated by applying the standard expense rate rather than the “standard expense” should be applied.

4) On May 4, 2018, the head of the Defendant Kimhae Tax Office corrected and notified Plaintiff 1 of global income tax of KRW 35,390,550 (including additional tax), global income tax of KRW 320,121,270 (including additional tax) for the year 2016, global income tax of KRW 320,121,270 for the year 2016. On May 4, 2018, the head of the Defendant Seosan Tax Office corrected and notified Plaintiff 2 of global income tax of KRW 35,878,560 for the year 2015 (including additional tax) (hereinafter “instant disposition imposing global income tax”).

(d) Reporting and imposition of value-added tax;

1) The Plaintiffs reported that the supply of officetel No. 1 is the supply of national housing under the Restriction of Special Taxation Act and is exempt from value-added tax.

2) The Plaintiff 1 reported the supply of the 2tel as the supply of national housing under the Restriction of Special Taxation Act, deeming it as subject to the exemption of value-added tax.

3) The director of Busan Regional Tax Office, from February 27, 2018 to March 28, 2018, notified the head of Busan Regional Tax Office and the director of Busan District Tax Office of taxation data to the effect that the instant officetel does not constitute national housing under Article 106(1)4 of the Restriction of Special Taxation Act, on the ground that the instant officetel does not constitute national housing under Article 106(1)4 of the Restriction of Special Taxation Act.

4) On May 4, 2018, the head of the competent tax office issued a notice of correction and notification of KRW 61,067,280 of the value-added tax (including the additional tax) for the first year of 2015 to Plaintiff 1 on May 4, 2018. On May 4, 2018, the head of the competent tax office issued a notice of correction and notification of KRW 252,086,280 of the value-added tax (including the additional tax) for the first year of 2016 to Plaintiff 1 on May 4, 2018, and KRW 128,428,760 (including the additional tax) for the second year of value-added tax (hereinafter “each disposition of the instant

(e) Execution of the procedure of the trial;

1) The Plaintiffs were dissatisfied with the imposition of each global income tax in this case and filed an appeal with the Tax Tribunal on July 25, 2018. However, on November 16, 2018, Plaintiff 2’s appeal (Seoul High Court Decision 2018Da3370) was dismissed. On November 20, 2018, Plaintiff 1’s appeal (Seoul High Court Decision 2018Da3373) was dismissed.

2) On July 25, 2018, Plaintiff 1 dissatisfied with the imposition of each value-added tax of the instant case, filed an appeal with the Tax Tribunal on July 25, 2018, but on November 15, 2018, the said appeal (the first instance court Decision 2018Da3371, 3372) was dismissed.

[Ground of recognition] Facts without dispute, Gap 1 through 7, 10, 11, Eul 1 through 4 (including those with serial numbers; hereinafter the same shall apply), the purport of the whole pleadings

2. Whether each of the instant dispositions imposing global income tax is lawful

A. The plaintiffs' assertion

The Plaintiffs, who are engaged in the housing construction and sales business, shall be deemed to be the date of commencement of the business (the date of acquisition of land or the date of commencement of construction works) when they become to be engaged in new construction after completing business registration, not when sale is made

The Plaintiffs registered the business under the trade name of “(trade name 1 omitted)” in 2014 and commenced housing construction and sales business. There was no income from the relationship between the completion and sale of the building (name 1 omitted) in 2014, and there was no income from the relationship between the completion and sale of the building in 2014, and this constitutes a person subject to simple expense rate application in the taxable period of 2015 because it falls under less than 36,00,000 won in total.

In addition, Plaintiff 1 registered his/her business under the trade name of “(mutual name 2 omitted)” in 2015 and started housing construction and sales business. There is no amount of income due to the failure to complete construction and sell (title 2 omitted) in 2015, and this constitutes a person subject to the application of simple expense rate in the taxable period of 2016 because it falls short of KRW 36,00,000 in total of the revenue amount under Article 143(4)2(b) of the former Enforcement Decree of the Income Tax Act.

Therefore, the imposition of each of the global income tax in this case by applying standard expense rate on a different premise is unlawful.

B. Relevant statutes

Attached 2. The entry in the relevant statutes are as follows.

C. Determination

1) Under the principle of no taxation without law, a tax law shall be interpreted in accordance with the text of the law, barring special circumstances, and shall not be extensively interpreted or analogically interpreted without reasonable grounds. However, even if the language and text of the tax law itself, if its meaning is unclear or if it appears that there is a conflict between the laws and regulations, the court must naturally indicate the true meaning of the language and text at issue through harmonious interpretation between the laws and regulations. In such cases, a judge can make a combined interpretation of the laws and regulations that consider legislative intent and purpose to the extent that it does not undermine legal stability and predictability (see, e.g., Supreme Court en banc Decision 2011Du551, Apr. 16, 2015).

2) Article 1-2(1)5 of the former Income Tax Act (amended by Act No. 14389, Dec. 20, 2016; hereinafter “former Income Tax Act”) provides for the definition of “business operator” and Article 19(1) of the same Act provides for whether a business operator constitutes business income. Article 168(3) of the same Act provides that Article 8 of the Value-Added Tax Act shall apply mutatis mutandis to a business operator who makes a business registration under the former Income Tax Act with respect to the method of filing a new application and filing an application for change of his/her business registration. However, Article 6 of the Enforcement Decree of the Value-Added Tax Act does not explicitly provide for the provision on the date of commencement of business of business income, such as Article 6 of the Value-Added Tax Act, or that such provision shall

However, considering the following circumstances that can be known by the language and structure of the relevant laws, such as the former Income Tax Act and the Value-Added Tax Act, the commencement of the business of the business on business income under the former Income Tax Act can be interpreted to be based on the point of time stipulated in each subparagraph of Article 6 of the Enforcement Decree of the Value-Added Tax Act, which provides for the commencement of the

① Considering that Article 19(1) of the former Income Tax Act defines “generating” income from various types of business, such as agriculture, forestry, fishery, mining, manufacturing, construction, etc., as business income, and Article 1-2(1)5 of the same Act defines a resident with such business income as a business operator, it is reasonable to deem that a business under the former Income Tax Act is premised on the actual occurrence of income. Therefore, the commencement of business is not possible until the preparation of business, which is the time of providing goods or services directly causing income, begins.

② As a result, it is difficult to objectively specify the starting point of the preparation act in terms of not only a considerable irregular and broad range, but also a business operator’s subjective intent or necessity. If the preparation of a new construction and sale business is conducted prior to the starting point of the business of the new construction and sale business, which is the starting point of the acquisition of land or the starting point of the construction or completion of the building, the revenue amount of the immediately preceding taxable period, which is the premise for the application of the simple expense rate under Article 143(4)2 of the former Enforcement Decree of the Income Tax Act, depending on the time of the preparation act, may vary, and thus, the business operator may cause interference with the national legitimate exercise of the right to tax collection or cause inequality among the taxpayers by avoiding the tax liability by selecting

③ According to Articles 1-2(1)5 and 19 of the former Income Tax Act, a resident with income arising from activities conducted on his/her own account and on his/her responsibility (in independence) continuously and repeatedly for profit-making purposes is an entrepreneur. According to Article 2(3) of the Value-Added Tax Act, a person who supplies goods or services independently in his/her business regardless of whether it is for profit-making purposes is an entrepreneur and a person liable to pay value-added tax. Here, “a person who supplies goods or services independently in his/her business” is a person who supplies goods or services in the form of business to the extent that the value-added can be created and paid (see Supreme Court Decision 98Du16705 delivered on September 17, 199). Thus, it is necessary to interpret business income related to business income under the former Income Tax Act uniformly from the date of commencing business under the former Value-Added Tax Act. This is also necessary in terms of legal stability between a person liable to pay value-added tax and a person liable to pay value-added tax.

(4) From this point of view, Article 168(1) of the former Income Tax Act imposes an obligation on the head of the competent tax office to make a business registration under the former Income Tax Act, and Article 168(2) of the same Act provides that a business operator who has made a business registration under the Value-Added Tax Act shall be deemed to have made a business registration under the former Income Tax Act. If a business operator supplies goods or services, it may be deemed that Article 32(1) of the Value-Added Tax Act provides for the obligation to issue a tax invoice to the person who has received the goods or services, and imposes an obligation to prepare an invoice or receipt as prescribed by Presidential Decree and to issue the goods or services to the person who has received the goods or services.

(5) Article 8(1) of the Value-Added Tax Act, which provides for the mutatis mutandis application of Article 168(3) of the former Income Tax Act to the registration of business, uses the term "the starting date of business" in relation to the registration of business, and Article 5(2) of the Value-Added Tax Act provides for the first taxable period for a new business operator, and uses the term "the starting date of business" in relation to the first taxable period for the new business operator. Article 6 of the Enforcement Decree of the Value-Added Tax Act provides for the "the starting date of business" as "the beginning

3) According to the proviso of Article 80(3) of the former Income Tax Act and Article 143(3) of the former Enforcement Decree of the Income Tax Act, when the amount of income is estimated, the amount of income shall be determined or corrected by deducting the purchase cost, rent, personnel expenses, and income from the amount of income by standard expense rate, but with respect to a person subject to the application of simple expense rate, the amount of income shall be determined or corrected by deducting the amount of income from the amount of income multiplied by simple expense rate. The term “person subject to simple expense rate” of the above provision refers to a business operator newly commencing a business in the pertinent taxable period, who has less than KRW 150 million of income in the pertinent taxable period (including the business operator subject to Articles 143(4)1 and 208(5)2(b) of the former Enforcement Decree of the Income Tax Act, or a constructor whose amount of income in the immediately preceding taxable period is less than KRW 36 million (including the business of developing and supplying residential buildings).

However, in full view of the following circumstances revealed by comprehensively taking account of the contents of the relevant laws and regulations, evidence Nos. 7 and the purport of the entire pleadings, the business commencement of the construction and sales business shall be deemed to be the time when the plaintiffs (title 1 omitted) start the sale of the above housing, in the case of the housing construction and sales business that the plaintiffs 1 operated (title 2 omitted) with respect to the (title 2 omitted).

① Article 143(4)1 of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 22580, Dec. 30, 2010); Article 143(4)2 of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 22580, Dec. 30, 2010) provides that “an entrepreneur who newly starts a business in the relevant taxable period shall be subject to simple expense rates to “an entrepreneur whose total amount of income during the immediately preceding taxable period (including an increased amount of income due to determination or revision) falls short of the standard amount.” Article 143(4)1 of the former Enforcement Decree of the Income Tax Act amended by Presidential Decree No. 22580, Dec. 30, 2010; Article 143(4)1 of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 22580, Dec. 1, 201>

In addition, Article 143 (4) of the Enforcement Decree of the Income Tax Act, which applies to the portion of income in the taxable period that begins after January 1, 2019, which was amended by Presidential Decree No. 28637, Feb. 13, 2018, provides that the standard expense rate shall be applied by excluding the person subject to application of simple expense rate if the amount of income in the taxable period concerned falls short of the standard amount of income in the case of a business operator (subparagraph 2) as well as a business operator who starts a business anew in the taxable period concerned in the immediately preceding taxable period,

In light of the history of the amendment of Article 143(4) of the Enforcement Decree of the Income Tax Act, the simple expense rate system is a system to minimize the tax payment costs of small small-scale business operators who lack the capacity to keep records of the principal expenses required by the standard expense rate system, and the legislators seem to have gradually reduced the scope of business operators subject to the application of the simple expense rate. Furthermore, according to the language and text of the Addenda, the legislators seem to have understood the “construction commencement” and the “construction business, real estate development and supply business” as a separate concept.

Therefore, considering these legislative intent, in the case of housing construction and sales business that operates a business for a long period exceeding a certain scale due to its characteristics, it is necessary to grasp the business commencement at an objective and practical time of the supply of housing subject to sale rather than the commencement date that can be determined by the business operator's intent

② The commencement of a business of the Housing Construction and Sales Business shall be substantially determined at the time when the preparation for a business is completed and the preparation for the original business is conducted or is able to be conducted (see Supreme Court Decision 94Nu15905, Dec. 8, 1995). The original housing construction and sales business is included in real estate sales business in its nature (see Supreme Court Decision 2008Du21768, Jul. 22, 2010). The purpose of the business is to sell a house, and it is difficult to view that the fact that a house was completed, alone, does not have commenced sales activities.

③ Whether a business income under the Income Tax Act constitutes business income shall be determined according to social norms, taking into account whether business activities are continuously and repeatedly conducted in light of the existence of profit-making purposes of the business, the scale, frequency, mode, etc. of the business (see, e.g., Supreme Court Decision 91Nu6559, Nov. 26, 1991). However, there is no evidence suggesting that the Plaintiffs had objectively expressed their intent to engage in the housing construction and sales business for the purpose of profit prior to commencing the sale of a building (name 1 omitted) and (name 2 omitted), and the fact that the Plaintiffs commenced or completed the said housing alone is insufficient to deem that the activities continuously and repeatedly conducted for profit-making purposes constitute an objective entity as a housing construction and sales business entity.

4) Furthermore, according to the evidence evidence Nos. 5 and 6, it is recognized that the amount of income of the plaintiffs related to the (name 1 omitted) 2015 was 2,069,90,000, and that of Plaintiff 1-related plaintiff 2016 was 8,424,750,000, and that of Plaintiff 1-related plaintiff 1's revenue of 2016 was 8,424,750,000. According to this, the plaintiffs (name 1 omitted) newly commenced a business at 2015, which is the starting point of sale of (name 1 omitted), and the amount of income of the pertinent taxable period exceeds 150,00,000,000 as the business operator newly started a business at 2016, which is the starting point of sale at the (name 2 omitted) of the building. Accordingly, the plaintiffs do not fall under the simplified expense subject to Article 143 (

5) Therefore, the plaintiffs' assertion on this cannot be accepted.

3. Whether each disposition of value-added tax in this case is legitimate

A. The plaintiff 1's assertion

1) According to Article 106(1)4, etc. of the Restriction of Special Taxation Act, the supply of housing below national housing scale constitutes value-added tax exemption. Since the scope delegated by Article 106(4)1 of the Enforcement Decree of the Restriction of Special Taxation Act is limited to “scale” of housing, the meaning of “housing” should be determined on the basis of substantial usage in accordance with the Value-Added Tax Act and subordinate statutes.

However, the instant officetel is classified as business facilities only, and there is no substantial difference with the multi-household as it was designed and constructed for residential purposes from the beginning to the beginning, and is used for residential purposes until now after completion, so it constitutes “house exempt from value-added tax” under the Restriction of Special Taxation Act.

Therefore, the imposition of each value-added tax of this case on different premise is illegal.

2) Even if the supply of the instant officetel does not fall under value-added tax exemption, in light of the fact that the Tax Tribunal rendered several decisions that the supply of a residential officetel constitutes the subject of the exemption of value-added tax, etc., Plaintiff 1’s failure to pay value-added tax on the supply of the instant officetel is recognized as justifiable grounds for not being negligent in neglecting his/her duty. Therefore, the penalty tax of each of the instant disposition imposing value-added tax is unlawful.

3) In addition, Plaintiff 1 supplied the instant officetel, which is a residential building, to consumers who are not business operators, as business operators engaged in the construction and sales business that newly constructs and sells residential buildings. Since the duty to issue a tax invoice cannot be deemed to exist, the part on additional tax to issue a tax invoice at least is unlawful in the disposition imposing the

B. Relevant statutes

Attached 2. The entry in the relevant statutes are as follows.

C. Determination

1) Determination on the first argument

A) Contents of the relevant provisions

According to Article 106 (1) 4 of the Restriction of Special Taxation Act, Articles 51-2 (3) and 106 (4) 1 of the Enforcement Decree of the same Act, and Article 2 subparagraph 6 of the Housing Act, ① The supply of national housing and construction services for such housing prescribed by Presidential Decree is exempted from value-added tax; ② The term “national housing and construction services for such housing prescribed by Presidential Decree” refers to housing below the scale of national housing under the Housing Act; ③ The term “scale of national housing” refers to housing the area of which used exclusively for residential purposes does not exceed 85 square meters per house or household (the housing the exclusive residing area of which does not exceed 100 square meters per house or household in Eup/Myeon area other than the Seoul Metropolitan area under subparagraph 1 of Article 2 of the Seoul Metropolitan Area Readjustment Planning Act).

Meanwhile, pursuant to subparagraphs 1 and 4 of Article 2 of the Housing Act and Articles 3 and 4 of the Enforcement Decree of the Housing Act, “house” means all or part of a building with a structure wherein members of a household can live an independent residential life for a long time as well as land attached thereto; and (2) The term “quasi-housing” means a building, other than a house, and an apartment house, and a multi-household house under subparagraph 2 (d) of attached Table 1 of the Enforcement Decree of the Building Act among dormitories under subparagraph 2 (d), 4 (o) and 15 (c), multi-living facilities under subparagraph 11 (b), an apartment house under subparagraph 3 of Article 32 (1) of the Welfare of the Aged Act, and an officetel under subparagraph 14 (b) (ii) of the Enforcement Decree of the Building Act among the welfare land for the aged under subparagraph 11 (b), and (c) the term “multi-family housing” means a house which each household jointly uses all or some of the walls, hallways, stairss, and other facilities within one building, respectively.

In addition, according to Article 2 of the Enforcement Decree of the Building Act [Attachment 1] No. 14 (b) (ii) and Article 1 of the construction standards for officetels, officetels refers to a building that allows accommodation in a part of a division of general business facilities, and meets the standards as publicly notified by the Minister of Land, Infrastructure and Transport, and an officetel shall not be installed for each office section, and where an office building is constructed in combination with other purposes, exclusive entrance exit for officetels shall be installed separately in principle, and where the exclusive area for each office section exceeds 85 square meters, floor heating using hot-water, hot-water, electric heat, etc. shall not be installed.

B) Relevant legal principles

In light of the principle of no taxation without law, or the requirements for tax exemption or tax exemption, the interpretation of tax laws is to be interpreted in accordance with the text of the law, barring special circumstances, and it is not allowed to expand or analogically interpret without reasonable grounds. In particular, it accords with the principle of fair taxation to strictly interpret that the provision is clearly preferential in terms of the requirements for tax exemption or exemption (see Supreme Court Decision 2003Du7392, May 28, 2004, etc.).

In addition, a national housing exempt from value-added tax under Article 106 (1) 4 of the Restriction of Special Taxation Act shall not be deemed a national housing exempt from value-added tax under the above provision even if its area constitutes a national housing scale even if it falls under a national housing scale, in light of its purpose, etc., if it falls under at least a building constructed for a housing purpose by obtaining a building permit lawfully, and it is remodeled into a housing without obtaining a permit for alteration of use after completing the completion inspection after obtaining a building permit for neighborhood living facilities (see Supreme Court Decision 96Nu8758 delivered on October 11, 196).

C) Whether the instant officetel’s supply is subject to VAT exemption

In full view of the following circumstances revealed by the contents and legal principles of the relevant provisions as seen earlier and the purport of the entire pleadings, given that the instant officetel obtained a building permit and approval for use as “business facilities”, it cannot be deemed that it constitutes “national housing” as prescribed by Article 106(1)4 of the Restriction of Special Taxation Act.

① Article 2 of the Housing Act separately defines quasi-housing that includes a house and a detached house, an apartment house, or an officetel, which is its subordinate concept. The Enforcement Decree of the Building Act (attached Table 1) prescribes housing and an officetel which is its business facilities differently. “Housing” and “quasi-housing” differ in the relevant construction requirements and standards (housing: Housing Act, Article 35 of the Housing Act, etc., and officetel construction standards: Officetel construction standards).

Therefore, insofar as the Enforcement Decree of the Restriction of Special Taxation clearly provides for “house smaller than the scale of national housing under the Housing Act” as the object of value-added tax exemption, it is not allowed to expand or analogically interpret the said “house” without permission in violation of the principle of no taxation without law and the principle of no taxation

(2) In addition, an officetel is a building that can board and lodging in a part of the subdivisions in sale or rent pursuant to the Building Act and subordinate statutes, and thus, it cannot be deemed a “house under the Housing Act” solely on the ground that it was simply constructed for the purpose of residence or is currently being used for the purpose of residence. Moreover, under Article 2 of the Building Standards for Officetels, an officetel is prohibited from building a balcony for each office subdivision, and thus, it cannot be deemed that an officetel is installed in the same structure as a multi-unit house.

(3) On the other hand, value-added tax is a taxable object for the supply of goods (Article 4 of the Value-Added Tax Act). Whether the supply of goods is a taxable object or a tax-free object is ultimately determined based on the objective type or use of the building at the time of the supply, and in particular on the public record.

Although the occupants of the instant officetel make a move-in report on resident registration and use it for the purpose of residence, and paid property tax on housing or received electricity and gas for residential purposes, it is merely a situation that occurred after the supply of the said officetel. Rather, the owners and occupants of the said officetel may use it at any time as a general business facility depending on its original purpose. Therefore, construing that the taxation of value-added tax, which is subject to the supply of goods, differs from each other depending on the circumstances after the supply, would seriously undermine the legal stability of tax law.

④ The introduction of the concept of quasi-housing into the Housing Act amended by Act No. 10237, Apr. 5, 2010 is to activate the supply of facilities available for residential purposes without being classified as a house in response to the changed demand conditions for housing, and it does not aim at facilitating the supply of facilities available for residential purposes. In particular, housing stipulated in Article 4 of the Enforcement Decree of the Housing Act includes dormitories, multiple living facilities, etc. In particular, housing units defined in Article 106(1)4 of the Restriction of Special Taxation Act include dormitories, multiple living facilities, etc., and such buildings are not relevant to the supply of housing for residential stability of ordinary people, which is the legislative purport of Article 106(1)4 of the Restriction of Special Taxation Act.

⑤ Ultimately, barring any other special circumstance, whether the supply of a house below the scale of national housing under the Housing Act, which is a tax-exempt requirement under the Restriction of Special Taxation Act, ought to be objectively determined according to the purpose of public register, such as a building permit, approval for use, building management ledger, and real estate register. Therefore, “house below the scale of national housing under the Housing Act” should be deemed to fall under only the building constructed according to the purpose of use of a house after obtaining a building permit lawfully for the purpose of use of a house. On the contrary, even though a certain building was stated in the building management ledger for the same purpose, it cannot be deemed to fall under “house below the scale of national housing under the Housing Act” merely because the current status is suitable for the purpose of residence and is actually used by many

D) Therefore, Plaintiff 1’s assertion on this issue cannot be accepted.

2) Determination on the second argument

A) Penalty taxes under tax law are administrative sanctions imposed, as prescribed by individual tax law, in cases where a taxpayer violates various obligations, such as a return and tax payment, without justifiable grounds, in order to facilitate the exercise of the right to impose taxes and the realization of a tax claim. The taxpayer’s intention or negligence does not constitute a justifiable ground that does not constitute a breach of duty, such as taxpayer’s intention or negligence (see Supreme Court Decision 2016Du44391, Oct. 27, 2016, etc.).

B) In light of the fact that it is difficult to view that there was a variety of opinions as to whether the instant officetel supply constitutes an object of value-added tax exemption under Article 106(1)4 of the Restriction of Special Taxation Act, and that there was a decision that the instant officetel supply is not subject to value-added tax exemption in the above Supreme Court Decision 96Nu8758 Decided October 11, 1996, etc., it is difficult to view that there was a justifiable reason that Plaintiff 1 could not be attributable to the failure of Plaintiff 1 to perform his liability to pay value-added tax on the instant officetel supply solely on the grounds that there was a partial decision of the Tax Tribunal corresponding to the above argument.

C) Therefore, Plaintiff 1’s assertion on this cannot be accepted.

3) Judgment on the third argument

A) According to Article 32(1) of the Value-Added Tax Act, where an entrepreneur supplies goods or services (excluding the supply of goods or services exempt from value-added tax), a tax invoice shall be issued to the person who receives the supply. According to Article 60(2)2 of the Value-Added Tax Act, where a tax invoice is not issued by the final return deadline for the taxable period in which the relevant goods or services are supplied after the lapse of the time for issuing the tax invoice, an additional tax shall be imposed by adding 2% to the amount of tax payable.

However, as seen earlier, insofar as the supply of the instant officetel does not fall under the scope of VAT exemption, Plaintiff 1 is obligated to issue a tax invoice to the person who receives the instant officetel at the time of sale (if it is not a business entity), and the mere fact that some of the occupants actually use the instant officetel for residential purposes cannot be viewed otherwise.

B) Therefore, Plaintiff 1’s assertion on this cannot be accepted.

4. Conclusion

Therefore, each of the instant global income tax and value added tax are lawful, and the Plaintiffs’ claims against the Defendants are dismissed as it is without merit. It is so decided as per Disposition.

(attached Form omitted)

Judges Park Jong-soo (Presiding Judge)