2. The costs of the lawsuit are assessed against the defendant.

A. On February 13, 2001, the Plaintiff is a corporation established for the purpose of storing, storing, transporting, selling, etc. liquid chemical freight oil with ○○○○○-gun 150-12 as its principal office located.

B. On December 13, 2001, the Plaintiff was designated as an executor of an industrial complex development project with the following contents pursuant to Article 16 of the Industrial Sites and Development Act by ○○ Metropolitan City Mayor.

A. L. L. L.I.

- Address, name (trade name and representative) of the project implementer

(a) Address: ○○○○-dong 370-10;

(b) Name: ○○ Stock Company;

- Business name: Construction of ○○ Exclusive Storage Facility

- Location: ○○○○ ○○ ○○ ○○ ○○ ○○ ○○

- Business area: 00 square meters;

- Project outlines: wharf axis (30,000 W.TX 1 10,000 W.TX 1 t.

C. On April 25, 2002, the Plaintiff filed an application for authorization to revise an implementation plan pursuant to Article 17 of the Industrial Sites and Development Act, and completed construction from May 10, 2003 to November 22, 2004 with the authorization from the Commissioner of the ○○○ Maritime Police Agency, and completed construction on May 17, 2002 and completed construction on November 22, 2004, 51,138 square meters of public waters (land) and 405 square meters of a landing facility (one point of 30,00 tons, one point of 10,000 tons) on December 13, 2004. At the time, the Plaintiff at the time settled and acquired a business site of 36,427 square meters and 7,922 square meters, and reverted to the country behind 5,631 square meters and 15,158 square meters of a seaside.

D. On January 25, 2005, the Plaintiff reported and paid KRW 15,242,68,992, including the total construction cost of KRW 15,190,487,000, when filing a final return of value-added tax for the second half-year period in 2004, based on the tax base of KRW 1,232,032,733.

E. On April 20, 2006, the Plaintiff filed a claim for correction with the Defendant for refund of KRW 926,989,585 on the ground that the Plaintiff did not constitute a taxable object of value-added tax due to the Plaintiff’s asset acquisition cost of KRW 1,232,032,73, which was already paid to the Defendant for the reason that the Plaintiff did not constitute a taxable object of value-added tax. However, on June 14, 2006, the Plaintiff filed a claim for correction with the National Tax Service for the refund of KRW 926,989,585, which was the remainder after deducting the tax base of KRW 305,043,140 from the tax base of KRW 5,972,793,140, which was calculated by deducting the tax base of KRW 305,000,000 from the tax base of KRW 1,232,032,733.

(In fact that there is no dispute, entry in Gap evidence 1 through 12, the purport of the whole pleadings.

2. Whether the instant disposition is lawful

A. The parties' assertion

(i)The plaintiff's assertion

The Plaintiff’s reclamation of public waters, which was implemented for the public purpose, acquired ownership of a part of reclaimed land as a consideration for the acquisition of ownership of a part of reclaimed land, and thus constitutes a taxable object of value-added tax on the ground that there exists a quid pro quo relationship between the provision of reclamation services to the State and the acquisition of ownership of a part of reclaimed land. However, the instant disposition rejecting the Plaintiff’s request for correction by deeming that the Plaintiff’s ownership of part of reclaimed land and the instant harbor facility construction is a quid pro quo relationship is illegal, notwithstanding

(2) The defendant's assertion

The main purpose of the Plaintiff’s major purpose of the reclamation project of public waters lies in the acquisition of a bridge facility, i.e., the reclamation project and the reclamation project of public waters, so that the Plaintiff’s major purpose of the reclamation project is to provide construction projects, such as a landing facility and reclamation project for public waters, and thereby acquiring the ownership of a landing facility and reclaimed land, are acquired in accordance with the relevant Acts and subordinate statutes and the agreement between the parties, and thus, the Plaintiff’s reclaimed land is in an economic and substantial quid pro quo relationship with the entire construction project for landing facility and reclamation. Therefore, the total construction cost invested

(b) Related statutes;

It is as shown in the attached Table related statutes.

C. Determination

In full view of the following circumstances, the Plaintiff’s ownership of reclaimed land in relation to the ownership of reclaimed land acquired by the Plaintiff and the ownership of the Port Facility Corporation in relation to economic and material prices, and the Plaintiff’s ownership of reclaimed land in relation to the supply of services subject to value-added tax, it is acknowledged that there is an economic and substantial price relationship with the reclamation of public waters and the construction of the Port Facility in relation to the supply of services subject to value-added tax. However, it

① According to Article 21 subparag. 19 of the Industrial Sites and Development Act, the Plaintiff’s permission to implement harbor works under Article 9(2) of the Harbor Act, the approval of the implementation plan under Article 10(2) of the same Act, the reclamation license under Article 9 of the Public Waters Reclamation Act, the public notice under Article 13 of the same Act, the authorization and public notice of the implementation plan under Article 15 of the same Act, and the consultation or approval under Article 38 of the same Act shall be deemed to have been obtained. According to Article 12 of the Harbor Act, where the management agency announces matters concerning the implementation of harbor works or matters concerning the permission under Article 9(3) of the same Act, it shall be deemed that the reclamation license and the permission under Article 38(1) of the same Act shall be deemed to have been obtained through consultation or approval from the Minister of Oceans and Fisheries under Article 9(2) of the Public Waters Reclamation Act, but the Public Waters Reclamation Act does not have any provision regarding the permission to implement harbor works under Article 9(2) of the same Act.

(2) Where the Harbor Act and the Public Waters Reclamation Act provide reclamation services under a separate Act different from the purpose of legislation and subject matters thereof, the total project cost required for such reclamation works computed under the Public Waters Reclamation Act shall be the tax base, and Article 48 (6) of the Enforcement Decree of the Value-Added Tax Act shall not apply to harbor facilities under the Harbor Act.

(3) Even if reclamation works under the Public Waters Reclamation Act and the harbor facilities construction works under the Harbor Act have been carried out simultaneously, this is conceptually distinguishable, and there is no reasonable ground to evaluate the Plaintiff’s reclamation works and the harbor facilities construction as a whole, so it is necessary to determine whether to impose taxes

④ Under Article 26 of the Public Waters Reclamation Act, a reclamation license holder shall acquire reclaimed land equivalent to the total construction cost (the total amount of research cost, design cost, net construction cost, compensation cost and other expenses) required for the reclamation work. Thus, it cannot be interpreted that reclaimed land acquired by the Plaintiff is included in the construction cost for the instant harbor facility construction.

(5) Article 18 of the Enforcement Decree of the Harbor Act provides that the amount of tax payable pursuant to Article 17 of the Value-Added Tax Act shall be included in the concept of total project cost for calculating the duration of the right to use harbor facilities where land and harbor facilities revert to the State or a local government pursuant to subparagraph 7 of Article 17 (1) of the Act, but there is no provision regarding the cases where the land and harbor facilities revert to

6) In cases where the Defendant vests harbor facilities in the State or a local government, it shall be deemed that the right to use the harbor facilities has been acquired in return for the construction of the harbor facilities and impose taxation on the Defendant, and the non-management authority should not impose taxation if it vests in the non-management authority. However, this is based on the nature of the Value-Added Tax Act that imposes a tax on the supply of goods or services, and under such circumstances, it cannot be deemed that the Plaintiff’s construction of harbor facilities without any transaction between the State and the Plaintiff is a supply of

Therefore, since the construction of the plaintiff at his own expense and the construction of the harbor facilities of this case, the ownership of which is acquired pursuant to the relevant Acts and subordinate statutes, cannot be evaluated as the provision of services to the State, etc., because there is no transaction relation between the state, etc. and the plaintiff, the expenses required for the construction of the plaintiff's harbor facilities shall also be deemed to exist, and the defendant's disposition rejecting the plaintiff's claim for the

Furthermore, for the reasons that it is difficult for the defendant to strictly distinguish the scope of revocation of the rejection disposition of the request for correction of value-added tax of this case, it is unfair to calculate the market price of the average construction cost calculated by the two appraisal agencies for the reclaimed land acquired by the plaintiff (such as the plaintiff's assertion) on the ground that it is difficult for the plaintiff to strictly distinguish the expenses for reclamation work and the cost for port facilities. It is also unfair to calculate the construction cost at the market price calculated by the two appraisal agencies for the reclaimed land acquired by the plaintiff. The defendant's response to the request for confirmation of the statement of settlement of total project cost (Evidence A No. 5) is calculated only by a notarized act.

3. Conclusion

If so, the plaintiff's claim of this case is justified and it is so decided as per Disposition.

Related Acts and subordinate statutes

Value-Added Tax Act

Article 1 (Taxable Objects)

(1) Value-added tax shall be imposed on the following transactions:

1. Supply of goods and services; and

Enforcement Decree of the Value-Added Tax Act

Article 48 (Calculation of Tax Base)

(6) Where reclamation services are offered under the Public Waters Reclamation Act, the total project cost required for the relevant reclamation works computed under the same Act shall be the tax base.

Industrial Sites and Development Act;

Article 16 (Operators of Industrial Complex Development Projects)

(1) An industrial complex development project shall be implemented by a person determined in a development plan by designation as the authority designating industrial complexes from among the following persons:

1. The State, local governments, government-invested institutions, local public enterprises, or persons who may perform industrial complex development projects under other Acts;

2. The Small and Medium Business Corporation or the Korea Industrial Complex Corporation established under Article 45-3 of the Industrial Cluster Development and Factory Establishment Act with rare amount of the Promotion of Small and Medium Enterprises and Encouragement of Purchase of Their Products Act;

3. A person who intends to install facilities suitable for the development plan and move in, or who is deemed capable of developing the industrial complex suitable for the development plan, and who satisfies the requirements as prescribed by the Presidential Decree.

4. A corporation established by a person falling under any of subparagraphs 1 through 3 by making investments for the development of an industrial complex, which meets the requirements prescribed by Presidential Decree.

5. A real estate trust company which concludes a trust contract for an industrial complex development under a project operator falling under subparagraph 3 and Article 20-2.

6. Owners of land in the industrial complex, or the association established by them for the development of industrial complex.

Article 21 (Legal Fiction, etc. of Authorization or Permission under Other Acts and Subordinate Statutes)

(1) In granting approval of an implementation plan pursuant to Articles 17 through 19, the authority designating industrial complexes or the Minister of Oceans and Fisheries (hereinafter referred to as the "person approving implementation plans") shall be deemed to have already consulted with or obtained approval from the head of the relevant administrative agency pursuant to paragraph (2) with respect to the following permission, decision, authorization, license, consultation, consent, approval, cancellation, disposition, etc. (hereinafter referred to as "authorization, permission, etc.") in advance, and when the approval of an implementation plan is publicly notified pursuant to Article 19-2, the authorization, permission, etc. under the following relevant Acts shall be deemed publicly notified or announced:

5. Permission for execution of harbor work under Article 9 (2) of the Harbor Act, and approval for implementation plan under Article 10 (2) of the same Act;

19. License for reclamation under Article 9 of the Public Waters Reclamation Act, the publication under Article 13 of the same Act, authorization for and the publication of the implementation plan under Article 15 of the same Act, and consultation or approval under Article 38 of the same Act;

Harbor Act

Article 9 (Executor, etc. of Harbor Works)

(1) The Minister of Oceans and Fisheries shall implement harbor works concerning designated harbors, among construction works concerning construction, remodelling, maintenance, repair, dredging, etc. of harbor facilities (hereinafter referred to as "harbor construction works u300"), and the Mayor/Do Governor shall implement the harbor works concerning local harbors: Provided, That where special provisions exist in this Act or other Acts concerning harbor works, such provisions shall apply.

(2) If a person who is not a managing authority (hereinafter referred to as "non-managing authority") intends to implement a harbor project, he/she shall prepare a plan for the harbor project and obtain permission from the managing authority, as prescribed by Presidential Decree: Provided, That the same shall not apply to works for the maintenance and repair of harbor facilities which are not subject to belonging to the State

(3) Where a managing authority executes a harbor project directly or grants permission to a non-managing authority, it shall give public notice thereof.

Article 12 (Relation with Other Acts)

(1) Where a managing authority publicly announces matters concerning or permission for the implementation of a harbor project pursuant to Article 9 (3), it shall be deemed that any of the following permission, authorization, license, approval, consultation, consent, etc. (hereinafter referred to as "authorization, permission, etc.") has been obtained, and authorization, permission, etc. prescribed by the following relevant Acts shall be deemed publicly notified or publicly notified:

5. A reclamation license under Article 9 of the Public Waters Reclamation Act and consultation with or approval from the Minister of Oceans and Fisheries under Article 38 (1) of the aforesaid Act;

Article 18 (Reversion, etc. of Harbor Facilities)

(1) Land and harbor facilities developed or installed by a non-management authority for a harbor project under Article 9 (2) shall revert to the State or a local government upon completion thereof: Provided, That the same shall not apply to land and harbor facilities specified by Presidential Decree.

(2) Notwithstanding the main sentence of paragraph (1), the Korea Container Terminal Authority established pursuant to the Korea Container Terminal Authority Act may acquire the ownership of the remaining land excluding the harbor facilities from among the land or facilities developed or installed by the harbor works. In such cases, the scope of the ownership acquired shall not exceed the total project cost prescribed by Presidential Decree.

(3) A non-management authority may gratuitously use harbor facilities that have vested in the State or a local government pursuant to paragraph (1), as prescribed by Presidential Decree.

Enforcement Decree of the Harbor Act

Article 17 (Harbor Facilities, etc. Other Than Reversions)

(1) Harbor facilities not reverted to the State or a local government pursuant to the proviso to Article 17 (1) of the Act shall be as follows:

1. Loading and unloading facilities (excluding loading and unloading facilities), transportation facilities for cargo, piping facilities and mooring facilities;

2. Hashes (excluding the case where a non-management authority extends a silo owned by the State), oil storage facilities and auction houses;

3. Facilities installed for the building, etc. of ships or water structures;

4. A mooring facility, navigational aid facility, distribution and sales facility of cargo, ship distribution facilities, and control, publicity and security facilities of harbors determined by Ordinance of the Ministry of Oceans and Fisheries, which are established by a non-management authority for exclusive purposes;

5. Mobile-type and expendable facilities from among facilities for preventing pollution;

6. Support facilities: Provided, That this shall exclude public service business facilities from among harbor-related business facilities; and

7. Infrastructure facilities for marine leisure among water-friendly harbor facilities, and facilities for marine culture and education;

8. Other facilities which the management agency deems not necessary to revert to the State or local governments.

(2) Land which is not reverted to the State or a local government under the proviso to Article 17 (1) of the Act means land satisfying the following requirements:

1. It shall not fall under the scope of land under the provisions of the attached Table 3;

2. The land value shall be within the scope of the total project cost under Article 18.

Article 18 (Scope of Total Project Costs)

The total project cost under Article 17 (2) and (3) of the Act shall be the total amount of various costs calculated according to the following standards related to the relevant harbor project on the basis of the date of confirmation of completion of the relevant harbor project:

7. Value-added tax: The tax amount paid pursuant to Article 17 of the Value-Added Tax Act where land and harbor facilities revert to the State or a local government under Article 17 (1) of the Act.

Public Waters Reclamation Act

Article 26 (Acquisition, etc. of Reclaimed Land's Ownership)

(1) The State

A local government or a reclamation licensee shall acquire the ownership of reclaimed land according to the following classification on the date authorization on completion referred to in Article 25 is received:

1. Reclaimed land necessary for public or public use as determined by the Presidential Decree is the State or a local government;

2. Reclaimed land partitioned by putting together an area (excluding beachess included in site for facilities for public use or public facilities newly installed due to the execution of the reclamation work from among reclaimed seashores) equivalent to reclaimed seashores to the State. In this case, the location of reclaimed land the ownership of which the State acquires shall be a place other than reclaimed land as determined by the reclamation licensee pursuant to Article 25;

3. Reclaimed land equivalent to the total fishing expenses (referring to the total amount of investigation, design, net construction compensation expenses or other expenses) incurred for such reclamation works as determined by the Presidential Decree from among reclaimed land except reclaimed land, the ownership of which the State or a local government acquired pursuant to subparagraphs 1 and 2 is determined by the reclamation licensee;

4. Remaining reclaimed land except reclaimed land whose ownership the State, a local government, or a reclamation licensee acquired pursuant to subparagraph 1 through 3 (hereinafter referred to as "unclaimed reclaimed land") shall be the State.

Enforcement Decree of the Public Waters Reclamation

Article 20 (Acquisition of Reclaimed Land's Ownership and Total Construction Costs)

(1) For the purpose of Article 26 (1) 1 of the Act, the term “ reclaimed land necessary for public or public use as determined by the Presidential Decree” means reclaimed land necessary for roads, bank protection, draft walls, water wharf, breakwater, breakwater, drainage facilities, parks, or other Acts and subordinate statutes. In this case, reclaimed land necessary for the State’s facilities shall revert to the State, and to the local government’s facilities which are necessary reclaimed land.

(2) When a reclamation licensee acquires the ownership of reclaimed land equivalent to the total project cost pursuant to Article 26 (1) 3 of the Act, the price calculation of such reclaimed land shall be calculated at a reasonable price taking into account the transaction price of neighboring similar land, and it shall be based on the arithmetic value of the appraised value appraised by not less than two appraisal business operators (referring to appraisal business operators under subparagraph 9 of Article 2 of the Public Notice of Values and Appraisal of Real Estate Act; hereinafter the same shall apply) designated by the licensing

(4) The term “total project cost required for such reclamation works as determined by the Presidential Decree” in Article 26 (1) 3 of the Act means the total amount of the following expenses related to such reclamation works on the basis of the date of application for the authorization of completion of such reclamation works

1. Survey costs: Costs for survey and other expenses for survey for the implementation of the relevant filled-in project, which are not included in the net construction cost. In this case, the pricing shall be calculated based on the pricing standards for engineering projects under Article 10 of the Engineering Technology Promotion Act;

2. Design cost: The cost required for the design of the reclamation project in question. In this case, the price calculation shall be based on the price criteria for engineering projects under Article 10 of the Engineering Technology Promotion Act.

3. Net construction cost: Sum of material cost, labor cost, and expenses for the execution of reclamation works. In such cases, the calculation of net construction cost shall be based on the criteria for determining estimated price and the standard pum and unit price (referring to the price publicly notified by the Government, if any) under Article 9 of the Enforcement Decree of the Act on Contracts to which the State is a Party

4. Compensation cost: Installation cost of the actual compensation cost and prevention cost of losses incurred in the execution of the reclamation work in question.

5. Other expenses: The aggregate of the following expenses:

(a) Costs for the execution supervision according to the standards for the prices of engineering projects under Article 10 of the Engineering Technology Promotion Act;

(b) Insurance premiums under Article 3-2 of the Industrial Accident Compensation Insurance Act;

(c) General management expenses in the management activity sector, which is calculated by applying the criteria for determination of projected price under Article 9 of the Enforcement Decree of the Act on Contracts to which the State is a Party. In such cases, general management expenses shall be based on net construction costs under subparagraph

(d) Amount of damage caused by a natural disaster;

(e) The inflation amount computed by applying mutatis mutandis the provisions of Article 64 of the Enforcement Decree of the Act on Contracts to which the State is a Party. In this case, the inflation amount shall be based on the execution period (referring to the period from the commencement date of reclamation works to the date of application for authorization of completion; hereafter in this Article the same shall apply) of the relevant reclamation works publicly notified pursuant to the provisions of Article 16 (3), but the period other than the period for extension of completion recognized as not having any cause attributable to the

(f) Taxes, public imposts and charges under Acts and subordinate statutes;

(g) Expenses for environmental impact assessment, expenses for impact assessment on damage, reclamation license fees, expenses for appraisal of reclaimed land and expenses for performance by the deputy authority for reclamation license referred to in paragraphs (2) and (3); and

6. Construction interest by work progress: Construction interest calculated under the conditions as determined by the licensing authority on the aggregate of the expenses under subparagraphs 1 through 5 (the interest rate shall be the arithmetic mean of the interest rates on time deposits with a maturity of one year in six commercial banks occupying the upper nationwide rankings on the basis of deposit amounts). In this case, interest rates on construction shall be based on the execution period of the relevant reclamation works publicly notified pursuant to Article 16 (3), but it shall not be included in the period other than the extended period for construction completion recognized by the licensing authority as not causes attributable to the reclamation licensee, such

7. Profits: The amount equivalent to 10/100 of the total expenses of subparagraphs 1 through 5. The end.