[1] The meaning of "transfer of business" not deemed the supply of goods under the Value-Added Tax Act

[2] The case holding that a transaction related to the sale and purchase of a building which is the object of the real estate leasing business does not constitute a "transfer of business" which is not deemed to be a supply of goods under the

[1] The transfer of a business not considered as the supply of goods under Article 6(6) of the Value-Added Tax Act and Article 17(2) of the Enforcement Decree thereof refers to the comprehensive transfer of physical and human facilities, rights, and duties, etc. including business property, to replace only the management body while maintaining the identity of the business. Thus, the business must be deemed as an organic combination of human and physical facilities, which can be separated from the management body and recognized social independence.

[2] The case holding that the above transaction does not constitute a "transfer of business" which is not deemed a supply of goods under the Value-Added Tax Act, on the grounds that the transactional relation to the sale of a building which is the object of real estate leasing business by the seller should be deemed that the rights and obligations of the real estate leasing business operated by the seller should be regarded as the object of transfer by specifying only the building offered for the business rather than that of comprehensive transfer to

[1] Article 6 (6) of the Value-Added Tax Act, Article 17 (2) of the Enforcement Decree of the Value-Added Tax Act / [2] Article 6 (6) of the Value-Added Tax Act, Article 17 (2) of the

[1] Supreme Court Decision 92Nu15420 delivered on January 19, 1993 (Gong1993Sang, 767), Supreme Court Decision 97Nu3224 delivered on March 27, 1998 (Gong1998Sang, 1242), Supreme Court Decision 97Nu1278 delivered on July 10, 1998 (Gong1998Ha, 2158), Supreme Court Decision 97Nu12082 delivered on May 14, 199 (Gong199Sang, 1194), Supreme Court Decision 200Du7520 delivered on October 26, 201 (Gong201Ha, 2594), Supreme Court Decision 200Du80404 delivered on October 26, 2005)

Plaintiff 1 and one other (Law Firm Namsan, Attorneys Don-woon et al., Counsel for the plaintiff-appellant)

Head of Seodaemun Tax Office

Daejeon High Court Decision 2003Nu2210 delivered on July 8, 2004

The judgment of the court below is reversed, and the case is remanded to Daejeon High Court.

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

1. The judgment of the court below

According to the reasoning of the judgment below, the court below found the facts as a whole based on the following facts. The plaintiffs recognized most of the terms of the lease agreement entered into by the king-Mama Industry Development Co., Ltd. (hereinafter "Sama Industry Development Co., Ltd.") while purchasing the building of this case and succeeded to lessor status comprehensively, the plaintiffs succeeded to the debts of the non-party company related to the lease business of this case, such as accepting the non-party company's collateral security debts borne by the non-party company, etc., and the non-party company operated real estate rental business in the building of this case. The plaintiffs also acquired the building of this case and operated the real estate rental business, and the plaintiffs cannot be an important factor for determining the transfer of business because the employment of employees is not essential due to the nature of the real estate rental business, and whether the business is transferred should be determined on the basis of the lease business of this case. Thus, the plaintiffs should have determined that the plaintiffs paid the specific amount of value-added tax to the non-party company's right to purchase and sale of the building of this case and its value-added tax.

2. The judgment of this Court

However, it is difficult to accept the above recognition and judgment of the court below.

The transfer of business not deemed the supply of goods under Article 6(6) of the Value-Added Tax Act and Article 17(2) of the Enforcement Decree thereof means the comprehensive transfer of physical and human facilities, rights, and duties, etc. including business property, to replace only the main body of business while maintaining the identity of the business. Thus, the business must be deemed as an organic combination of human and material facilities so that social independence can be recognized by being separated from the main body of business (see Supreme Court Decisions 97Nu12778 delivered on July 10, 1998; 2002Du8800 delivered on January 10, 200, etc.).

The court below rejected the plaintiffs' non-party company's non-party company's non-party company's non-party company's non-party company's non-party company's non-party company's non-party company's non-party company's non-party company's non-party company's non-party company's non-party company's non-party company's non-party company's non-party company's non-party company's non-party company's non-party company's non-party company's non-party company's non-party company's non-party company's non-party company's non-party company's non-party company's non-party company's non-party company's non-party company's non-party company's non-party company's non-party company's non-party company's non-party company's non-party company's non-party company's non-party company's non-party company's non-party company's non-party company's non-party company's non-party company's non-party company's non-party company's non-party company's non-party company'.

Nevertheless, the court below erred by misapprehending the facts against the rules of evidence or by misapprehending the legal principles on the transfer of business, which affected the conclusion of the judgment. The plaintiffs' grounds for appeal pointing this out are with merit.

3. Conclusion

Therefore, without examining the remaining grounds of appeal premised on the premise that the sale of this case constitutes business transfer, the judgment of the court below is reversed, and the case is remanded to the court below for a new trial and determination. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Kim Young-ran (Presiding Justice)