All appeals are dismissed.

The costs of appeal are assessed against the plaintiffs.

The grounds of appeal are examined (to the extent of supplement in case of supplement in case of supplemental appellate briefs not timely filed).

1. Case summary

A. (1) The Plaintiffs registered a new housing sales business operator with the trade name “C” in 2014, and the Plaintiff newly constructed and sold “G”, which is a multi-family housing 8 households and an officetel 4 households on the ground of the Plaintiff’s main building, on the land outside the F of the Busan Metropolitan Government, after obtaining a construction permit from the competent administrative agency, and obtaining approval for use for the new construction and sale in the year of 2015.

Of them, the sales of 4 households of officetel, which are business facilities entered in the public account, was conducted in the first taxable period of value added tax in 2015.

(2) On May 26, 2015, Plaintiff A, along with D, registered a new housing sales business operator with the name of “E”, and subsequently, after obtaining a construction permit from the competent authority, newly constructed “M”, a complex building consisting of 26 households and 15 households, which consists of multi-family housing (26 households and 15 households) and sold it in the year 2016.

Of them, sales by 15 households of officetel 15 units on public account were conducted in the taxable period of 1st and 2nd in 2016.

B. (1) The instant disposition imposing value added tax: (a) the supply of the instant officetel 4 households of “G” and the instant officetel 15 households of “M” (hereinafter collectively referred to as “the instant officetel”) is deemed to be subject to the exemption of value added tax under Article 106(1)4 of the Act on Special Cases concerning Taxation (hereinafter “instant tax exemption provision”); and (b) the Plaintiff and the Plaintiff filed a declaration of value added tax exemption.

(2) The Commissioner of the Busan District Tax Service notified the head of the Defendant Dong-dong Tax Office and the head of the Defendant Busan District Tax Office on the ground that the instant officetel’s supply is not subject to the exemption of value-added tax pursuant to the instant tax exemption provision.

The head of the Defendant Dong-dong Tax Office on May 4, 2018 (additional tax) KRW 61,067,280, value-added tax for the first time in 2015 to Plaintiff A.