2. The costs of lawsuit shall be borne by the Plaintiff.

Cheong-gu Office

The Defendant’s imposition of KRW 8,380,91 of corporate tax in 2013, KRW 3,029,544 of value-added tax in 2013, KRW 6,431,381 of value-added tax in 2013, and KRW 6,431,381 of value-added tax in 2013 is revoked.

A. The Plaintiff was established on August 14, 1997 and operated on ○○○○○○○○○○○○○○○○-ro 000, a company that runs geothermal engineering works, the development of groundwater, the impact assessment and follow-up management, and the water supply, sewerage, and machinery and equipment construction works.

B. On January 7, 2015, the Defendant issued a revised and notified the Plaintiff of KRW 11,620,117 of corporate tax in 2013, KRW 6,431,653 of value-added tax in 2013, and KRW 6,431,381 of value-added tax in 2013 (hereinafter “the first disposition”).

C. On February 27, 2015, the Plaintiff dissatisfied with the above disposition filed a request for examination with the National Tax Service on February 27, 2015. The National Tax Service, after deliberation by the National Tax Examination Committee on May 20, 2015, rendered a decision on the Plaintiff’s request for examination that the total amount of KRW 14,100,000 for the development and utilization of groundwater related to ○○○○○ and○○○○○, and KRW 24,000,000 for the supply proceeds of KRW 9,90,000 for the development and utilization of groundwater related to ○○○○, and KRW 24,000 for the supply proceeds of KRW 9,90,000 from January 1, 203 to December 31, 2013, and the remaining claims are dismissed.

D. On May 20, 2015, according to the National Tax Service’s decision, the Defendant notified the Plaintiff of the re-determination to reduce the amount of KRW 8,380,91, and value-added tax of KRW 3,029,544 in 2013 (hereinafter “instant disposition”).

[Reasons for Recognition] Facts without dispute, Gap evidence Nos. 1 through 3 (including various numbers, hereinafter the same shall apply), Eul evidence Nos. 1 through 3, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

Under the premise that the Plaintiff received construction cost of KRW 23,00,000,000 from CCC in accordance with the development and construction contract between the Plaintiff and CCC in 2013, the Defendant deemed the receipt time of KRW 23,00,000 as 203 and disposed of the instant disposition.

However, the Plaintiff entered into a construction contract for the development of groundwater with the CCC in 2013 and the construction cost of KRW 23,000,000, and completed the construction after obtaining only labor cost of KRW 4,000,000, and filed a tax invoice on March 31, 2014. Furthermore, the Plaintiff was paid KRW 19,00,000 from the CCC’s spouse EE, but the Plaintiff received KRW 19,00,00 from the Plaintiff as the passbook. However, the said KRW 19,00,000, separately from the above contract with the CCC, was used as materials purchase cost for DD and EE, and was not appropriated as the Plaintiff’s profits and expenses.

Therefore, the Plaintiff did not have income from KRW 23,00,000 as the price for the development and utilization of groundwater from the CCC in 2013, and the Defendant’s disposition based on this premise is unlawful.

B. Relevant statutes

It is as shown in the attached Form.

(c) Fact of recognition;

The following facts can be acknowledged in full view of the evidence adopted above and the statements in the evidence Nos. 4 through 10.

① The Plaintiff entered into a construction contract for the development and utilization of groundwater carried out at ○○○○○○○○○○○ (hereinafter referred to as “instant construction work for the development and utilization of groundwater”) with CCC and construction cost of KRW 23,00,000.

② The sum of the construction cost of KRW 23,000,000 was deposited in the Plaintiff’s bank account from May 6, 2013 to December 10, 2013.

③ From May 6, 2013 to August 22, 2013, the Plaintiff accounted for the total amount of KRW 21,000,000, which was deposited from May 6, 2013 to August 22, 2013 as “amount of advance payment for construction.”

④ On August 20, 2013, CCC undergoes water quality testing for the instant groundwater, and on October 11, 2013, it received a confirmation certificate from the ○○ market upon reporting completion of the development and utilization of groundwater.

⑤ The report on the development and utilization of groundwater and the report on the completion of construction of the groundwater of this case are written as the reporter CCC and the Plaintiff of the construction company.

6. The CCC stated that the groundwater was used after the completion of the instant construction work for the development of groundwater in October 2013 in currency with a public official in charge of investigation belonging to the Defendant.

7) The Plaintiff was supplied with the oil required for the instant groundwater development project at the F station adjacent to the F station, and was issued a tax invoice of KRW 16,546,716 from May 30, 2013 to August 22, 2013. The Plaintiff reflected the said amount as deductible expenses in the course of calculating the value-added tax and the corporate tax for the year 2013 by the Plaintiff.

④ On March 31, 2014, the Plaintiff issued a tax invoice of KRW 4,000,000 to DD (hereinafter “instant tax invoice”).

D. Determination

1) According to Article 16 of the Value-Added Tax Act, “the time when the provision of service is completed in the ordinary case of supply” is the time of supply of the service. Therefore, in the ordinary case of supply, the time when it is possible to confirm the fact of provision of service by taking into account the scope of provision of service under a contract between traders, namely, the time when a person provided with service actually leads to the situation in which a person provided with service can use the computation of service,” and the time when the provision of service comes to the arrival of the time of supply of service (see Supreme Court Decision 2013Du2291, Jun. 11, 2015). Furthermore, according to Articles 14 and 40 of the Corporate Tax Act and Article 69 of the Enforcement Decree of the Corporate Tax Act, gains and losses from the provision of service shall be included in the calculation of earnings and losses for the pertinent business year, calculated based on the degree of the completion of the provision of service (in cases of the provision of service, referring to the date the provision is completed) from the commencement date of the service.

2) Comprehensively taking account of the facts acknowledged earlier, it appears that the construction work of the instant groundwater is completed as it was completed on October 2013 and the supply of the service is completed as it was in the condition that CCC can use the groundwater. ② The Plaintiff was paid the total amount of KRW 23,00,000 for the construction work of the instant groundwater development in 2013; ③ the Plaintiff was paid KRW 19,000,000 from DD, etc., on behalf of another party for purchase of the materials, and did not include the said money as profits or expenses. However, unlike the allegations alleged above, the Plaintiff separately processed the cost of purchase of the materials related to the instant groundwater construction; ④ the tax invoice of the instant groundwater was issued on March 31, 201, which was issued on March 31, 2014 after the completion of the construction work of the instant groundwater development project, and there is no evidence proving that it was issued on March 31, 200 for the development of the groundwater of this case.

3) Therefore, the Plaintiff’s assertion is without merit, and the Defendant’s instant disposition is lawful.

3. Conclusion

Therefore, the plaintiff's claim is dismissed as it is without merit. It is so decided as per Disposition.