"Saved Residents' Taxes"... Nowon District Receives 1.76 Billion Won VAT Refund Through Correction Request

Nowon District in Seoul announced on the 16th that it has received a refund of 1.76 billion won in value-added tax (VAT) from the National Tax Service through a request for VAT correction related to new building construction expenses.

According to the current Value-Added Tax Act, goods and services provided by local governments are generally exempt from VAT. However, certain businesses, such as real estate leasing, wholesale and retail, restaurants, lodging, golf courses, ski resorts, and other sports facility operations, are subject to taxation.

Seungrok Oh, Mayor of Nowon District.

In response, the district conducted a comprehensive review of the VAT included in construction and facility investment costs for buildings used in taxable businesses to identify refundable items. This proactive administrative effort was aimed at contributing to the district's finances.

In particular, some land-related acquisition costs involved complex and challenging legal interpretations regarding their taxability. However, the district's tax officials independently reviewed the cases without external expert assistance and submitted multiple explanatory documents, leading to a successful refund decision through active engagement.

Meanwhile, last year, the district discovered that VAT had been imposed on administrative costs incurred during the relocation and installation of utility poles and telecommunication poles as part of a public interest project. Through approximately four years of continuous legal efforts, the district succeeded in recovering a total of about 400 million won. As a result, it received a Minister of the Interior and Safety Award and secured 50 million won in local allocation tax.

Additionally, after confirming that similar cases were occurring in housing development zones, the district has been proactively informing housing cooperatives about VAT refunds, taking the lead in protecting residents' property rights.

Seungrok Oh, Mayor of Nowon District, stated, "This refund achievement is the result of proactive efforts based on expertise," and added, "We will do our utmost to ensure that residents' valuable tax money is used properly through transparent and efficient fiscal management."