국고보조금 및 출연금의 부가가치세 과세에 대한 개선방안

There remains debate regarding how output tax amount and input tax amount are affected when an entrepreneur receives national subsidies or contributions. This article reviews 5 specific types in which an entrepreneur might receive national subsidies and analyzes the VAT implications and potential improvements. Types of national subsidies are as follows： Type 1：The state provides subsidies to support the operations of an entrepreneur’s institution. Type 2：An entrepreneur, who is a recipient of the subsidy, supplies goods or services to a third party and receives national subsidies directly from the state. Type 3：An entrepreneur supplies goods or services to a third party(a beneficiary of the subsidy) and receives national subsidies from a third party in return. Type 4：An entrepreneur supplies goods or services to a third party(a beneficiary of the subsidy) and receives national subsidies from the state. Type 5：An entrepreneur supplies goods or services to the state and receives national subsidies from the state. Regarding output tax amount, Korean precedents and taxation practices generally include national subsidies in the VAT tax base for type 3, 4 and 5, while excluding them for type 2, but I argued that even in Type 2, it is necessary to include national subsidies in the VAT tax base if they can be considered to constitute the supply price of goods or services provided by the business operator to the counterparty through the European Court of Justice's Pseudo-Subsidies precedent. Also regarding input tax amount, I argued that it is logical to align the VAT tax base with the pro rata of common input tax amount by including only those national subsidies that are part of the tax base in the taxable supply value and excluding those not included in the tax base from both the total supply value and the exempted supply value.