[1] A business operator under the Value-Added Tax Act and a taxpayer of value-added tax (=trustee) in handling trust affairs such as development, management, disposal, etc. of trust property under the Trust Act

[2] Whether the claim for refund of value-added tax constitutes trust property (negative)

[1] Value-added tax is an independent supplier of goods or services, i.e., an entrepreneur, who is liable to pay the value-added tax (Article 2(1) of the Value-Added Tax Act), and an entrepreneur is the person liable to pay the value-added tax and the person entitled to claim the refund thereof. Trust under the Trust Act provides that a truster shall manage and dispose of the property rights for the purpose of trust by transferring a specific property right to a trustee or taking other measures (Article 1(2) of the Trust Act). If a trustee supplies or becomes provided goods or services in the course of developing a trust property or in managing and disposing of a trust property, the trustee shall be the party to the trust. However, in light of the fact that the profits or expenses incurred from the development, management, disposal, etc. of the trust property shall be ultimately attributed to the truster, and the trust under the Trust Act shall also belong to the truster and the person liable to pay the value-added tax, as a matter of course, to the difference between the truster and the person liable to pay the value-added tax in its name.

[2] Article 19 of the Trust Act provides that "the property acquired by a trustee due to the management, disposal, destruction, damage, or any other reason of the trust property shall belong to the trust property." The right to claim the refund of value-added tax shall be acknowledged as a right to claim a refund of the amount equivalent to the difference if the input tax amount exceeds the output amount during a certain taxable period. In trust under the Trust Act, the truster is the person liable for the payment of value-added tax and the right to claim the refund of value-added tax on the transaction, such as the development, management, and disposal of the trust property, and even if the trustee paid the amount of the input tax paid to the supplier as the fund belonging to the trust property, the right to claim the refund of value-added tax shall not be deemed as the property acquired by the trustee immediately due to the development, management,

[1] Articles 2(1) and 6(5) of the Value-Added Tax Act, Article 1(2) of the Trust Act, Article 14 of the Framework Act on National Taxes / [2] Article 19 of the Trust Act

Korean Real Estate Trust Co., Ltd. (Law Firm Pacific, Attorneys Kim Man-man et al., Counsel for the defendant-appellant)

Defendant (Law Firm Sejong, Attorneys Kim Sun-moo et al., Counsel for the defendant-appellant)

Seoul High Court Decision 99Na46036 delivered on May 30, 2000

The appeal is dismissed. The costs of appeal are assessed against the plaintiff.

1. As to the grounds of appeal Nos. 2 and 3

Value-added tax is the person who supplies goods or services independently for business, that is, the entrepreneur is liable to pay it (Article 2(1) of the Value-Added Tax Act), and only the entrepreneur is the taxpayer of value-added tax and the right to claim the refund of

On the other hand, a trust under the Trust Act has a trustee manage and dispose of the property right for the purpose of the trust by transferring a specific property right to the trustee or disposing of it (Article 1(2) of the Trust Act). If the trustee supplies goods or services or is supplied in the course of developing the trust property or in managing and disposing of the trust property, the trustee himself/herself becomes a party to the trust, but the profits and expenses incurred by the development, management, disposal, etc. of the trust property shall be ultimately reverted to the truster, and it shall be deemed that the truster's account is practically attributable to the truster.

In this regard, trust under the Trust Act is also a consignment under Article 6 (5) of the Value-Added Tax Act, and the trust business is supplied or supplied with goods or services under the name of another person (trustee). Thus, in dealing with trust business, such as development, management, disposal, etc. of trust property, it is reasonable to deem that the business operator and the person liable to pay the value-added tax are the truster. Therefore, in a case where the input tax amount exceeds the output tax amount, the right to claim the refund of value-added tax equivalent to the difference naturally belongs to the truster who is the person liable to pay the value-added tax. Such interpretation does not contravene the principle of substantial taxation under Article 14 of the Framework

The court below is just in holding that the plaintiff, the trustee of the land development trust of this case, supplied a service on the land of this case and requested a final return and refund of the value-added tax in the name of the non-party company in the name of the non-party company after receiving a tax invoice for purchase with the plaintiff's registration number stated as the truster from among the non-party corporation (hereinafter referred to as "non-party company"), who is the business operator, as the truster, in conducting development activities such as new construction of a building on the land of this case on the trust of this case, the right to claim the refund of the value-added tax of this case is the non-party company, and there is no error in the misapprehension of legal principles as to the ownership of the right to claim

2. Regarding ground of appeal No. 1

Article 19 of the Trust Act provides that "where the input tax amount exceeds the output tax amount during a certain taxable period, the right to claim the refund of value-added tax belongs to the trust property acquired by the trustee due to the management, disposal, destruction or damage of the trust property or other reasons." As seen earlier, the right to claim the refund of value-added tax is recognized as a right to claim the refund of the tax amount equivalent to the difference to the business operator, and in trust under the Trust Act, the truster is the person liable for the payment of value-added tax and the right to claim the refund of value-added tax on the transaction, such as the development, management, and disposal of the trust property, and even if the trustee paid the amount of the input tax amount paid to the supplier as the money belonging to the trust property, the right to claim the refund of value-added tax cannot be deemed as the property

However, if there is an agreement between the truster and the trustee to transfer the right to claim the value-added tax owned by the truster to the trustee and include in the trust property, there may be room to regard the trustee as the trust property the right to claim the refund against the truster. However, even in this case, the right to claim the refund against the State can not be deemed as the trust property until the trustee moves

Although the reasoning of the judgment below is somewhat insufficient, the conclusion that the claim for the refund of the value-added tax in this case does not include the trust property is justifiable, and there is no error in the misapprehension of legal principles as to the trust property, the violation of the rules of evidence

3. Therefore, the appeal is dismissed. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Lee Ji-dam (Presiding Justice)