[1] The meaning of "business operator" under Article 2 (1) of the Value-Added Tax Act

[2] The meaning of "supply of goods" under Article 6 (1) of the Value-Added Tax Act

[3] The case holding that where a trade association formed for the purpose of operating a leasing business after building a commercial building and newly building a commercial building under the name of the trade association and lease a large number of stores in the name of the trade association and sell a store to the trade association members in the form of a division of common property, the sale to the trade association members constitutes a supply of goods under the Value

[1] Article 2(1) of the Value-Added Tax Act provides that a person who independently supplies goods or services for a business purpose is the person liable for value-added tax, regardless of whether it is for profit-making purpose. Here, a person who independently supplies goods or services for a business purpose is a person who provides goods or services for a continuous and repeated purpose, meeting the business form to create a value-added.

[2] Where an entrepreneur delivers or transfers goods due to contractual or legal grounds, it is subject to value-added tax unless there is a special provision that the value-added tax shall be exempted or imposed, and if an entrepreneur independently supplies goods for his/her business, the requirements for taxation are satisfied. Even in cases where the entrepreneur supplies goods by chance or temporarily in connection with his/her main business, it is subject to taxation regardless of whether it is intended to maintain and expand the business, or for liquidation and reorganization, and it does not vary depending on who the person receiving the goods

[3] The case holding that the sale to the members constitutes the supply of goods under the Value-Added Tax Act in case where a cooperative formed for the purpose of operating a commercial building by constructing a commercial building and operating a rental business, newly constructing a commercial building under the name of the cooperative, and leases a large number of stores under the name of the cooperative, and selling the stores to the members in the form of division

[1] Article 2 (1) of the Value-Added Tax Act / [2] Article 6 (1) of the Value-Added Tax Act / [3] Articles 2 (1), 6 (1) of the Value-Added Tax Act

[1] [2] [3] Supreme Court Decision 97Nu14453 delivered on April 13, 199 / [1] Supreme Court Decision 88Nu5754 delivered on February 14, 1989 (Gong1989, 437), Supreme Court Decision 92Nu525 delivered on July 24, 1992 (Gong1992, 258), Supreme Court Decision 93Nu1053 delivered on May 11, 1993 (Gong193Ha, 1744) / [2] Supreme Court Decision 91Nu621 delivered on July 28, 1992 (Gong192, 2591), Supreme Court Decision 95Nu82599 delivered on October 13, 1995 (Gong259959,Gong2599595959)

Plaintiff 1 and 18 others (Attorney Yang Jong-hee, Counsel for the plaintiff-appellant)

Head of Sungnam Tax Office

Seoul High Court Decision 96Gu27102 delivered on March 25, 1997

The judgment below is reversed and the case is remanded to Seoul High Court.

The court below determined that: (a) the plaintiffs and 21 persons, including non-party 1 and non-party 2, formed a new comprehensive virtual family association for the purpose of purchasing the land in this case from the Korea Land Development Corporation and constructing a commercial building above; (b) the association became the principal agent on May 194; (c) completed the commercial building in this case on March 23, 1995; (d) upon dividing the building funds from the association members into several stores; and (e) on May 4, 1995, the portion of the tax invoice to be allocated to the association members by lot was determined; and (e) on May 4, 1995, the registration of ownership was made on May 4, 1995 and May 9, 200; and (e) the plaintiffs were not entitled to the tax invoice in this case for the reason of dividing the common property rights of each member's stores; and (e) the plaintiffs were not entitled to the tax invoice in each of the above final return on May 16, 1995.

However, Article 2(1) of the Value-Added Tax Act provides that a person who independently supplies goods or services for a business purpose is a person liable for value-added tax, regardless of whether it is for profit-making purpose or not. Here, a person who independently supplies goods or services for a business purpose refers to a person who provides goods or services for continuous and repeated intent with a business form sufficient to create a value-added (see, e.g., Supreme Court Decisions 88Nu5754, Feb. 14, 1989; 92Nu5225, Jul. 24, 1992). Meanwhile, unless there are special provisions that the delivery or transfer of goods is exempt or exempt from value-added tax, the requirements for taxation are satisfied if the entrepreneur independently supplies the goods or services for a business purpose, regardless of whether it is for maintaining and expanding the business, or not it is intended to liquidate or adjust the goods or services, even if the entrepreneur supplies goods or services for a business purpose or temporarily in connection with the main business.

In this case, the above association is an organization consisting of 21 members, including the plaintiffs, for the purpose of engaging in a leasing business by constructing a commercial building and having a general meeting and a representative. After the Korea Land Development Corporation purchases the land in this case from the Korea Land Development Corporation, it is decided not only to construct a commercial building, but also to run a real estate rental business which is the object of the building as a joint business. On May 1994, the association has registered a joint business with the trade name of "New Daily Complex Cooperative" as a type of real estate rental business and newly constructed the commercial building in this case on a scale of 2,494.7 square meters on the ground of the fiveth floor area above the ground under its own independent calculation. The above association's construction of the commercial building in this case on a scale of 2,494 square meters under the name of the association's own independent calculation, and received rental deposits by leasing a large number of stores in the name of the association from January 1, 191 where it has been actually engaged in an individual business of each member, and it constitutes an individual member's sale of value-added property.

Nevertheless, the lower court determined that there was no input tax amount since the Plaintiffs could not be deemed to have received a supply from the above partnership. In so doing, the lower court erred by misapprehending the legal doctrine on the supply of goods and business operators under the Value-Added Tax Act, thereby adversely affecting the conclusion of the judgment. Therefore, the grounds of appeal assigning this error are

Therefore, without further examining the remaining grounds of appeal, we reverse the judgment below and remand the case to the court below. It is so decided as per Disposition.

Justices Shin Sung-sung (Presiding Justice)