early 2014 Heavy2109 (Law No. 15, 2014)

land preparation services within a national housing complex shall not constitute national housing construction services exempt from taxation;

Since Article 106 of the Restriction of Special Taxation Act stipulates the subject of exemption from value-added tax as the "construction services of national housing", it shall be deemed only the construction services of national housing itself, and it shall not be deemed that the whole infrastructure construction of national housing, etc. independently undertaken prior to the construction of national housing is included therein.

Article 12 of the Restriction of Special Taxation Act Article 106 of the Value-Added Tax Act

Revocation of revocation of imposition of value-added tax by the Incheon District Court 2014Guhap32589

O-Owned Corporation

OO Head of the tax office

2016.21

1, 2016.08

1. The plaintiff's claim is dismissed.

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

Cheong-gu Office

The Defendant’s imposition of value-added tax of KRW 349,180,272 against the Plaintiff on January 3, 2014 shall be revoked.

1. Details of the disposition;

A. On December 13, 2007, the Plaintiff entered into a contract with the ○○ Construction Corporation to receive a contract for the construction of a national rental housing complex in AA district (hereinafter “instant construction”). The instant construction project is to create housing sites for the construction of a national rental housing complex by performing soil construction, excellent construction, sewage construction, waterworks construction, packing construction, structure construction, appurtenant construction, etc. with respect to the total supply area of AAA district 263,814 square meters (hereinafter “instant construction”).

B. According to Article 106 of the Restriction of Special Taxation Act, the construction cost of this case was determined on the premise that the amount calculated by multiplying the construction cost by the ratio of the area of national housing to the site of national housing in the total construction area is exempted from value-added tax as the supply price of national housing construction services, and the remainder is subject to value-added tax only. However, as a result of the review of the current status of payment of value-added tax on national housing construction projects implemented by ○○ Corporation including the instant construction project in △△ City, it was concluded that the national housing construction services exempt from value-added tax should be exempted from value-added tax as the construction services for the appurtenant facilities to national housing, and that the portion corresponding to the ratio of the area of the site of national housing construction to the total area of the site of national housing among the services falling under the free supply area, such as roads, parks, green areas, etc. provided outside the national housing complex, should also be exempted from value-added tax.

C. From January 15, 2008, ○○○ Corporation urged the Plaintiff to enter into a modified contract in accordance with the above review result at ○○○ City. On February 20, 2008, the Plaintiff entered into a modified contract with ○○ Corporation on the condition that the amount of the existing contract should be reduced (reduction of KRW 414,00,000 among value-added tax) by applying the standard according to the above review result (Evidence 10), and accordingly, the tax invoice was issued for the taxable portion, and the value-added tax was reported and paid for each tax exemption portion in 208.

D. After conducting a tax investigation on ○○ Corporation, the director of ○○ Regional Tax Office: (a) deemed that the instant construction project supplied by the Plaintiff to ○○ Corporation was performed separately from ○○ Corporation for the creation of housing sites, not for apartment construction services; and (b) did not directly have any direct connection with the creation of national housing complex; (c) notified the Defendant of relevant taxation data by deeming that it does not constitute a national housing construction project exempt from value-added tax pursuant to Article 106(1)4 of the former Restriction of Special Taxation Act (amended by Act No. 9272, Dec. 26, 2008; hereinafter the same shall apply); and (d) on January 3, 2014, the Defendant considered the amount of invoice delivered by the Plaintiff to ○○ Corporation as the value-added tax for the second half-year period of time in 2008, and notified the Plaintiff of the correction of KRW 720,594,950 (including additional tax,329,158,694).

E. On April 2, 2014, the Plaintiff filed an appeal with the Tax Tribunal on April 2, 2014, but was dismissed on July 15, 2014.

F. After filing the instant lawsuit, the Defendant deducted the input tax amount which was not deducted from the output tax amount as the input tax amount when the Plaintiff initially declared and paid the input tax amount at the time of filing the instant lawsuit, and subsequently corrected the input tax amount of KRW 42,255,984 from the output tax amount, and revoked the additional tax amount ex officio (hereinafter “instant disposition”).

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1 through 11, Gap evidence No. 15 through 17, Gap evidence No. 20, Gap evidence No. 27, Eul evidence No. 1, 2, Eul evidence No. 8 and 9 (including cases with additional numbers; hereinafter the same shall apply), the purport of the whole pleadings

2. Whether the disposition is lawful;

A. Summary of the plaintiff's assertion

The construction services of this case are divided into national housing construction sites, free supply sites, and other oil supply sites. Among them, the construction services of national housing construction sites are indispensable construction services for national housing itself or construction services for national housing, which are subject to value-added tax exemption under Article 106 (1) 4 of the former Restriction of Special Taxation Act.

In addition, in light of the fact that the facilities constructed and constructed in the free supply site fall under the incidental facilities for the residents who reside in the housing as infrastructure and that when the national rental housing complex is developed, the construction of public site and the construction of social infrastructure are enforced by the relevant laws and regulations, the portion corresponding to the ratio of the "national housing construction site area/total cost supply area" among the above free supply area formation services (hereinafter referred to as the "part corresponding to the major ratio among the above free supply area formation services") belongs to the essential construction services for the construction of national housing, and even if not, the value-added tax should be exempted pursuant to Article 106 (1) 4 of the former Restriction of Special Taxation Act.

(b) Related statutes;

It is as shown in the attached Form.

C. Determination

1) Whether it constitutes a national housing construction service

A) Article 106 (1) 4 of the former Restriction of Special Taxation Act provides that the value-added tax shall be exempted for the national housing prescribed by Presidential Decree and the construction services of the housing. Articles 106 (4) and 51-2 of the Enforcement Decree of the same Act (amended by Presidential Decree No. 21307, Feb. 4, 2009) provide that "national housing and the construction services of the housing prescribed by Presidential Decree" means "housing below the scale of national housing under the Housing Act", "Framework Act on the Construction Industry, the Electrical Construction Business Act, the Fire-Fighting Business Act, the Housing Act, the Sewerage Act, the Sewerage Act, the Sewerage Act, and the Act on the Management and Use of Livestock Excreta," and thus, the exemption of value-added tax pursuant to the above provision refers to the supply of national housing itself and the construction services, such as construction services, electrical construction services, and fire-fighting services, which are essential for the supply of national housing and the construction of national housing (see, e.g., Supreme Court Decision 91Nu7040, Feb.

B) Based on the foregoing legal doctrine, in light of the following circumstances acknowledged by comprehensively taking into account the purpose of the entire arguments as to the instant case’s health class and the entire purport of the arguments, the instant construction project (including both the construction site for national housing and the construction project for free supply area) cannot be deemed to constitute a national housing construction project exempt from value-added tax pursuant to Article 106(1)4 of the former Restriction of Special Taxation Act.

① The instant construction project is a housing rental housing complex construction project implemented pursuant to the Act on Special Measures for the Construction, etc. of National Rental Housing, and includes soil construction, excellent construction, sewage construction, waterworks construction, packing construction, structure construction, appurtenant construction, etc., of the total supplied area of AAA district. According to the Seoul Special Metropolitan City’s implementation plan, the said AA district consists of housing construction sites (multi-unit housing sites) and public facilities sites (roads, parking lots, parks, green areas, schools, social welfare facilities, public buildings, religious facilities, public offices, detention rooms, rainwater pumps, rivers, etc.). However, at the same stage of the construction of a complex as the instant construction project, it is difficult to distinguish between the inside and outside of a national housing complex from the construction project at the same time as the instant construction project. Thus, if it is deemed that the construction is included in the national housing construction project from the stage of the construction project to the outside of the housing construction site, there is a risk that the scope of tax exemption may be expanded, including the construction of public facilities outside

② The interpretation of tax laws and regulations shall be interpreted in accordance with the text of the law, and shall not be interpreted extensively or analogically without any reasonable reason, and in particular, it shall be in line with the principle of fair taxation to strictly interpret the provisions that are clearly considered as preferential provisions in the requirements for reduction and exemption (see, e.g., Supreme Court Decisions 97Nu20090, Mar. 27, 1998; 201Du14524, Mar. 15, 2012); so long as Article 106(1)4 of the former Restriction of Special Taxation Act provides that the term “services subject to the exemption of value-added tax” as “construction services for national housing” or “construction services for national housing” other than “services related to construction of national housing”, it shall be deemed that only the construction services of national housing itself are “construction services for national housing”, and it shall not be deemed that the construction works are included in the entire infrastructure independently undertaken prior to the construction of national housing, etc. like the instant construction works.

③ In the former Act on Special Measures for the Construction, etc. of Rental Housing (amended by Act No. 8014, Sep. 27, 2006) which is the basis of the instant construction, the purpose and main body of the project are clearly divided into the national rental housing construction project and the national rental housing complex development project (Articles 2 and 4, etc.), and the procedures, standards, methods, etc. to be complied with for the promotion of each project are separately prescribed. In light of the language, structure, contents, etc. of the said relevant provision, it is difficult to view that the instant construction falls under the “national rental housing complex development project” and it does not fall under the “construction service of national housing exempt from value-added tax”.

④ Even if the legislative intent of Article 106(1)4 of the former Restriction of Special Taxation Act provides support for the ordinary people who are the consumers of national housing to be supplied with housing at a lower price, this may be considerably achieved through a method of exempting the value-added tax on the construction services of national housing itself, and the legislative intent of the legislators to exempt all services related to the construction of national housing from value-added tax by expanding the scope of its application without any condition, shall not be deemed to have legislated the above provision.

⑤ In addition, once the facts requiring the statutory requirements are met, the statute should be applied uniformly. In a specific case, it is not possible to determine whether to apply the statute by taking into account whether the legislative purpose is inconsistent with that (see, e.g., Supreme Court Decisions 2005Du13162, Aug. 23, 2007; 98Du1673, Mar. 26, 199). The construction cost of this case was reflected in the calculation of housing sales price by including the housing development cost in the construction cost of the housing site in the project district of this case in the total construction cost of the housing site, and accordingly, it cannot be said that value-added tax should be exempted by including the construction work of this case in the national housing construction service solely on the ground that the housing construction cost of this case, including the national housing purchaser, was paid by

2) Whether services incidental to national housing construction services constitute subject to value-added tax exemption

A) Article 1(4) of the former Value-Added Tax Act (amended by Act No. 915, Jan. 1, 2010; hereinafter the same) provides that the supply of goods or services, which is a main transaction, is included in the supply of goods or services, and Article 12(3) of the same Act provides that “the supply of goods or services essential for the supply of goods or services exempt from value-added tax, shall be deemed to be included in the supply of goods or services.” Article 3 subparag. 1 and 2 of the Enforcement Decree of the same Act (amended by Presidential Decree No. 24638, Jun. 28, 2013; hereinafter the same) provides that “the supply of goods or services, which are considered to be included in the supply of goods or services, shall be deemed to be included in the supply of goods or services that are the main transaction, and “the price shall be deemed to be ordinarily included in the supply price of goods or services,” and “the supply of goods or services, which is the main transaction practice.”

The scope of deeming that the supply of goods or services, which are inevitably annexed to the supply of goods or services exempt from the value-added tax pursuant to Article 12(3) of the former Value-Added Tax Act, is included in the supply of goods or services exempt from the value-added tax, under the principle of no taxation without the law, or through blocking the requirements for tax exemption or tax exemption, and the interpretation of tax laws and regulations shall be interpreted in accordance with the law, barring any special circumstance. Thus, the scope of deeming that the supply of goods or services is included in the supply of the goods or services exempt from the value-added tax under Article 12(3) of the former Value-Added Tax Act shall be limited to only the supply of the goods or services that are naturally annexed to the supplier’s personal transaction (see, e.g., Supreme Court en banc Decision 200Du7131, Mar. 15, 201; Supreme Court Decision 2001Du4849, Nov. 8, 200

B) In addition to the aforementioned evidence and evidence Nos. 3, 6, and 7, the Plaintiff merely performed the instant construction work that is not included in the national housing construction service in the AA district, and the construction work of national housing was conducted by other construction companies (BB construction companies, Co., Ltd.) than the Plaintiff. Even if the instant construction work is naturally incidental to the construction of national housing, it cannot be deemed that the instant construction work provided to ○○○ independently by the Plaintiff rather than the supplier of the main service called national housing construction work is an incidental service exempt from value-added tax pursuant to Article 106(1)4 of the former Restriction of Special Taxation Act.

3) Sub-determination

Therefore, since the construction work of this case cannot be deemed to be subject to the full exemption of value-added tax, the disposition of this case is legitimate, and the plaintiff's assertion on this is without merit.

3. Conclusion

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