Cho High-2013-Seoul Government-1561 (Law No. 13.24, 2013)

In the case of illegal possession of real estate, it is not subject to value-added tax because it does not constitute the use of goods, such as rights based on contractual or legal grounds.

If no agreement is made with respect to value-added tax or no consideration is made between the use of goods, facilities or rights and the cause of the supply of services, the supply of services subject to value-added tax cannot be said

Article 7 of the Value-Added Tax Act

2013Guhap1976 The revocation of Disposition Rejecting Value-Added Tax;

SiA et al. 1

00. Head of tax office

December 19, 2013

February 20, 2014

1. The Defendant’s refusal to rectify the amount of value-added tax of KRW 7,615,730 on March 25, 2013 and KRW 8,002,337 on December 2012 against the Plaintiffs on March 25, 2013 is revoked.

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

same as the entry.

1. Facts of recognition;

A. The plaintiffs completed on August 19, 1999, No. 0000 received on August 19, 1999, and No. 0000, Seoul 000, and one half of the co-ownership shares of 00-0 and 356.5 square meters (hereinafter "the land in this case"), and real estate rental business is conducted.

B. On November 3, 1993, the five-story neighborhood living facilities (hereinafter “instant building”) were newly built on the ground of the instant land. Around November 3, 1993, the civilB completed the registration of ownership transfer as the receipt of No. 00000 on July 15, 1997 by obtaining a decision to grant a successful bid on June 20, 1997.

C. After completing the registration of ownership transfer with respect to the building of this case, privateB paid rent to ChoCC, who is the landowner of this case. Since August 19, 1999, the plaintiffs paid rent to the plaintiffs. From November 15, 2007, the plaintiffs did not agree with the rent for the land of this case. Accordingly, the plaintiffs filed a lawsuit claiming payment of rent against privateB (Seoul 00 District Court 2007Gahap0000), which was pending in the above lawsuit, with the privateB on January 18, 2008, as the rent of this case was reduced from November 15, 2007 to December 31, 2008, the amount of rent reduction of KRW 80,000 (value added tax, value added tax, hereinafter the same shall apply) or after December 31, 2008 to 100,000,000 won after December 13, 2009.

D. On December 20, 2011, the Plaintiffs filed a lawsuit claiming the payment of rent (Seoul 00 District Court 201Kahap00000) against the privateB on December 20, 2011, which was not agreed that it would be between the privateB after the said reconciliation. Park Don-B purchased the instant building from the privateB and added the ownership transfer registration completion date to the privateB as the Defendant on January 18, 2012, and eventually withdrawn the lawsuit against the privateB and eventually became the Defendant only.

From January 18, 2012, the plaintiffs owned the building of this case from the above court on May 30, 2012 after acquiring the building of this case and completing the registration of ownership transfer, and thereby obtain profits equivalent to the above land usage fees without any legal grounds and thereby causes damages to the plaintiffs, "JD shall pay to the plaintiffs 53,415,584 won and the amount at the rate of 20% per annum from June 1, 2012 to the day of complete payment." From May 18, 2012 to the day of complete delivery of the land of this case, the above judgment was finalized at that time (hereinafter referred to as "the judgment of this case").

E. With respect to the money under the instant judgment, the Plaintiffs reported the tax base and calculated value-added tax for the first term portion in January 2012 and the second term portion in February 2012 as follows, and subsequently filed a claim for rectification for reduction of KRW 7,615,730 and KRW 8,02,337 of the second term value-added tax in 2012 on the grounds that the money under the instant judgment is not subject to value-added tax. However, on March 25, 2013, the tax base for the lease services reported from the Defendant was the fact that the claimant changed the new owner of the building as a party to the adjustment of the rent due to the attempted rent for the rent for the land rent, and that it constitutes the supply of services subject to value-added tax in full view of the fact that the tax invoice was issued for the rent and the fact that the tax return was made and the decision of the court that ordered the rent.

Taxation Year

For the first term, 2012

For the second period, 2012

Reporting

Claim for Rectification

Reporting

Claim for Rectification

Amount of tax base (won)

73,002,813

6,233,33

80,123,376

0

calculated tax amount (won)

7,300,281

623,33

8,012,337

0

Additional Tax

1,094,614

155,832

0

0

Deduction and Tax Abatement or Exemption

303,700

303,700

10,000

0

Amount of payable tax (won)

8,091,195

475,465

8,002,337

0

F. The Plaintiffs appealed and filed an appeal, and received a decision of dismissal on July 24, 2013.

G. Around August 15, 2012, Park DoD (her husband’s agent) requested that the Plaintiffs pay the amount of money and value-added tax according to the instant judgment be issued, and the Plaintiffs issued tax invoices, but Park DoD was only entitled to deduct the input tax amount of value-added tax without paying the money and value-added tax according to the instant judgment.

On August 2012, Plaintiffs filed a claim for correction after paying the first term portion in 2012 and the second term value-added tax in 2012.

H. The Plaintiffs filed an application for provisional disposition (Seoul District Court Decision 2012Kadan0000) against ParkD as the preserved right, and completed a provisional disposition registration on August 21, 2012 after receiving a provisional disposition order from the above court, and filed an application for property specification (Seoul0 District Court Decision 2012Kadan0000), but did not receive money from ParkD as there was no property.

I. As to the instant building, the Plaintiffs completed the registration of ownership transfer of 1/2 of each of the instant shares, which was received on November 19, 2013 from the 000 registry office, as 0000, November 8, 2013.

[Reasons for Recognition] Each entry of Gap evidence Nos. 1 through 6 (including branch numbers), and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiffs' assertion

Park Do-D’s refusal to purchase the instant building and enter into a lease agreement during the process of filing a claim for rent, and thus constitutes an illegal possession of the instant land by owning the instant building in the absence of a lease agreement from the beginning. Therefore, such illegal possession does not constitute an act of using goods, such as rights under a contract or legal cause under Article 7 of the Value-Added Tax Act. Accordingly, the instant refusal disposition ought to be revoked.

B. Relevant statutes

Attached Form. The entry in the relevant statutes is as follows.

C. Determination

1) Article 7(1) of the former Value-Added Tax Act (amended by Act No. 11129, Dec. 31, 201; hereinafter referred to as the “Act”) provides that the supply of a service is either providing a service or allowing a business entity to use goods, facilities, or rights on all contractual or legal grounds. Article 7(3) of the Act provides that the supply of a service to another person without receiving any consideration shall not be deemed the supply of a service. Article 2(1)6 of the former Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 24359, Feb. 15, 2013; hereinafter referred to as the “Enforcement Decree”) provides that all services and other acts falling under real estate business and rental business shall be deemed a service under the law.

Meanwhile, Article 6(1) of the Act provides that the supply of goods shall be a delivery or transfer of goods by all contractual and legal grounds, and Article 14(1)4 of the Enforcement Decree provides that the delivery or transfer of goods by auction, expropriation, investment in kind, or other contractual or legal grounds shall be a supply of goods provided for in Article 6(1) of the Act, notwithstanding the above provision, the delivery or transfer of goods by public sale under Article 61 of the National Tax Collection Act and auction under the Civil Execution Act shall be deemed the supply of goods, and Article 14(3) of the Enforcement Decree provides that the delivery or transfer of goods shall not be deemed the supply of goods under Article 14(4) of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents and Dwelling Conditions for Residents and the Act on the Acquisition of Land, etc. for Public Works and the Compensation Therefor.

In full view of the aforementioned relevant provisions, the supply of goods under the Value-Added Tax Act is not subject to value-added tax in cases where (i) the cause for the supply of goods, facilities, or rights is (i) a juristic act, such as a declaration of intention between the supplier and the supplier; or (ii) the same effect as the supply of goods takes place according to the provisions of laws, such as public collection, judgment, auction, regardless of the expression of intention between the parties (see Article 187 of the Civil Act). In other words, in cases where the basis for the use of goods, facilities, or rights cannot be deemed a legal cause, such as theft, neglect, loss, etc., if the use of goods, facilities, or rights is not related to the cause for the supply of goods, facilities, or rights, the supply of services cannot be subject to value-added tax. Considering the above, Article 1-0-2(1) of the General Rule of the Act is compensation for delay received by the owner due to the delay of the date under the contract, construction, and supply contract, and compensation received by the supplier without the cancellation without the supply of goods or services, from various taxable causes.

2) Meanwhile, even if a lessee’s occupation is illegally occupied as a result of the termination of a lessor’s lease contract, if the lessee continues to use the building without ordering it, and the lessor is also in a relationship between the deposit and holding the lease deposit without returning the lease deposit and deducting the amount equivalent to the monthly rent from the deposit, this constitutes the supply of services subject to value-added tax, and as long as the lessee provided services to others upon receiving the deposit, it does not affect the conclusion of the liability for value-added tax (see, e.g., Supreme Court Decision 2002Du8534, Nov. 28, 2003). According to the purport of the precedents, where the proprietor operating a real estate rental business has filed a lawsuit due to a failure to refund the leased real estate from the lessee until the expiry of the lawsuit, the amount equivalent to the value-added tax or rent should be imposed on the lessee as the amount equivalent to the amount equivalent to the value-added tax (see, e.g., Supreme Court Decision 2002Du8280, supra).

3) We examine whether the funds received by the Plaintiffs are the same as the funds received in cases where the supply of services is actually continued despite the expiration of the lease agreement according to the above precedents and the basic rules.

(1) ParkD has no right to occupy the instant land (proviso of Article 213 of the Civil Act). ParkD merely purchased the instant building from the privateB and possessed the instant land, but did not enter into a contract with the Plaintiffs regarding the possession of the instant land, or did not possess the instant land pursuant to the legal provisions, and thus, it cannot be said that the Plaintiffs used the instant land.

[Along where it is unclear whether to acquire legal superficies of ParkD, even though ParkD has the right to possess the land of this case by acquiring legal superficies, the legal superficies holder also has the obligation to pay rent to the owner of the land and there is no right to use the land free of charge, and thus the gain accrued from occupying and using the land is obligated to return the gain from the possession and use of the land to the owner of the land as unjust enrichment (see Supreme Court Decision 96Da34665, Dec. 26, 1997). It cannot be deemed that the amount received as consideration from the person who acquired the legal superficies to receive the money based on the right to claim the return of unjust enrichment from

② ParkD did not have the right to use the instant land free of charge, without any legal cause, obtains profits equivalent to the usage fees of the instant land, and thereby causes damages to the Plaintiffs. In other words, the Plaintiffs received money according to the instant judgment based on the right to claim a return of unjust enrichment based on Article 741 of the Civil Act. In other words, the amount based on the instant judgment is not the consideration received from the Plaintiffs for the supply of services, but the amount received based on the right to claim a return of unjust enrichment to correct the illegality that the goods do not belong to the legitimate right holder.

③ In light of the precedents and general rules, the existence of a contractual relationship, which is the title of possession, was determined based on the contractual relationship, and based on the determination of rent, etc., it is exceptionally acknowledged that the legal relationship is not completely settled based on the existing contractual relationship, such as where the possession of the lessee is continued after the contractual relationship is terminated and the return of unjust enrichment is determined based on the amount equivalent to the rent under the contract, etc. of the lessee. This does not extend to cases where there is no contractual or legal cause related to the occupation, as the Plaintiffs

④ In a case where deeming the supply of services even after the termination of the contractual relationship as above, a lessor may file a claim for value-added tax on the basis of a lease agreement with the lessee. However, in the absence of any agreement with the Plaintiffs on value-added tax, such as the Plaintiffs, the Plaintiffs have no right to collect the amount equivalent to the value-added tax from the person who receives the supply (see Supreme Court Decision 2002Da38838, Nov. 22, 2002). The Plaintiffs’ burden of value-added tax, which is contrary to the nature of value-added tax that is characterized

3. Conclusion

Therefore, the plaintiffs' claims are reasonable, and it is decided as per Disposition by admitting them.