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

Cheong-gu Office

The Defendant’s disposition of imposing value-added tax of KRW 00,00,000 (including additional tax) on the Plaintiff on May 1, 2016 shall be revoked.

A. From June 11, 2010, the Plaintiff engaged in a construction service business, such as architectural design and interior, under the trade name, “Achure. Degr. Roster.” (Ch. 23, 2014). On April 15, 2013, the Plaintiff entered into a new construction contract with ○○○○○-gun, Gyeonggi-do, and ○○○○○-gun, and 609-28, and five lots of detached Housing and B (hereinafter referred to as “each building”; hereinafter referred to as “B-dong building; hereinafter referred to as “the instant building”); 220,000,000, total 440,000,000, and 200,000, 200, 200, 300, 300, 250, 200, 300, 205, 200, 305, 2005, 200.

B. On September 30, 2013, the Plaintiff issued a tax invoice of KRW 535,00,000 (A Dong building 270,000,000, and B Dong building 265,000,000) with respect to the instant new construction contract to Ha○○○ on September 30, 2013, on the ground that the grounds for revision was “cancellation of the contract” and issued the revised tax invoice of KRW 535,00,000 on December 30, 2013.

C. From October 6, 2015 to January 8, 2016, the Defendant conducted an investigation into the part of value-added tax on the instant new construction contract, etc. with the Plaintiff. As a result, the Defendant notified the Plaintiff of the result of the investigation that, in the instant new construction contract, the tax invoice of KRW 535,00,000 for the original supply price was duly issued upon the completion of all the service provision and the construction cost, notwithstanding that the tax invoice of KRW 535,00,000 for the original supply price was a tax invoice issued upon the completion of all the service provision and the construction cost, deeming that the Plaintiff issued the tax invoice and notified the Plaintiff of the result of the tax investigation on January 11, 2016.

D. On February 24, 2016, the Plaintiff requested the Defendant to review the legality of the taxation before taxation, but received a non-adopted decision from the Defendant on April 11, 2016.

E. Accordingly, on May 1, 2016, the Defendant issued a revised and notified the Plaintiff of KRW 00,000,000 (including additional tax) for the value-added tax No. 20,000 on May 1, 2013 (hereinafter “instant disposition”).

F. The Plaintiff, who was dissatisfied with the instant disposition, filed an appeal with the Tax Tribunal on August 3, 2016, but was dismissed on October 26, 2016.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1 through 4, Eul evidence Nos. 1, 2, 4, and 6 (including branch numbers), the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

(a) Time of supply for services;

Ha○○ filed a lawsuit against the Plaintiff regarding the instant new construction contract, etc., and the Plaintiff filed a lawsuit against Ha○○○ by counterclaim against the Plaintiff seeking payment of the unpaid construction cost. Since it was difficult to specify the time of supply for services under the instant new construction contract until August 2, 2016, which became final and conclusive, the time of supply for the services ought to be deemed as the time of supply for the services. Thus, the instant disposition was unlawful on a different premise, despite that the time of supply for the services

2) Additional tax

Even if the instant disposition is lawful, the Plaintiff was not paid the price for the service rendered at the time of the instant disposition, and thus, the penalty tax portion in the instant disposition was unlawful in violation of the substance over form principle.

B. Relevant statutes

It is as shown in the attached Form.

(c) Fact of recognition;

(i)to prepare a contract agreement;

A) On April 15, 2013, the Plaintiff and Ha○○○ entered into the instant new construction project agreement with the same content as the following:

B) On September 15, 2013, the Plaintiff and Ha○○ had formulated the instant new construction contract for the instant construction project retroactively as follows: (a) as to the instant new construction project agreement, Chapter II of the instant building and B building was entered into on April 15, 2013.

(ii) external works;

On the other hand, the Plaintiff, in addition to the instant new construction, also implemented road construction and external construction (hereinafter referred to as “the instant external construction”). On November 1, 2013, the Plaintiff issued a tax invoice of KRW 120,000,000 for the supply value of the instant external construction to Ha○○○ on the basis of the cancellation of the contract, and issued the revised tax invoice of KRW 120,000 for the purpose of correction on December 30, 2013.

3) Details of payment of construction cost

From April 15, 2013 to October 24, 2013, the Plaintiff received KRW 555,000,000 in total as follows, as the construction price from Ha○○○, as the construction price:

4) Relevant civil judgments

A) Around June 2014, Ha○○ filed a lawsuit against the Plaintiff at the Seoul Central District Court seeking reimbursement of KRW 67,473,592 in total due to the spread of false information, reputation and credit damage caused by fraud, and damages caused by damage, and KRW 67,473,592 in total, and KRW 237,527,000 (Seoul District Court) with respect to the external construction work of this case, for which the Plaintiff did not provide documents necessary for the approval of use, and obtained the approval of use on May 8, 2014, to compensate for damages equivalent to the rent that the building of this case was not leased from August 18, 2013 to May 8, 2014; ② supervision costs borne by the Plaintiff on behalf of the Plaintiff; ③ damages equivalent to the cost of defect repair; ③ damages caused by damage to the reputation and credit caused by fraud; and accordingly, the Plaintiff filed a lawsuit against Ha○○○○○ (Seoul District Court).

B) On November 19, 2015, the Seoul Central District Court recognized that “the Plaintiff completed the instant new construction work on the instant building until August 2013, 201,” but that it failed to complete the instant external construction work,” with respect to the principal lawsuit, the Seoul Central District Court dismissed the claim for damages on rent of 202,829,860 and 2050, 205, 200, 205, 205, 200, 205, 50, 200, 205, 305, 200, 200, 205, 205, 200, 205, 200, 205, 205, 205, 200, 205, 300, 205, 300, 205, 200, 205, 200, 2005, 2005, 2005, 2, 200.

[Ground of recognition] Facts without dispute, Gap evidence 2, 4 through 7, Eul evidence 2, 3, 5 through 7 (including each number), the purport of the whole pleadings

D. Determination

1) Time of supply for the service of this case

A) Relevant legal principles

Article 16 (1) of the Value-Added Tax Act provides that "the time when the service is supplied shall be the time falling under any of the following subparagraphs", and subparagraph 1 provides that "the time when the provision of service is completed", subparagraph 2 provides that "the time when the goods such as facilities and rights are used", and paragraph (2) of the same Article provides that "the time when the services are supplied in installments or on a conditional basis shall be determined by Presidential Decree", notwithstanding paragraph (1) of the same Article. Article 29 (1) of the Enforcement Decree of the Value-Added Tax Act provides that "the time when the service is supplied in any of the following cases shall be determined by Presidential Decree."

However, in the case of subparagraphs 2 and 3, with regard to the portion of the price that the service is to be paid after the date on which the provision of the service is completed, the date on which the provision of the service is completed shall be deemed the time of supply for the service. Subparagraph 2 of subparagraph 3 provides that "the case of the supply of the service under the condition of the completion limit" and subparagraph 3 provides that "the case of the supply of the service under the condition of interim payment as provided by Ordinance of the Ministry of Strategy and Finance" and Article 20 of the Enforcement Rule of the Value-Added Tax Act provides that "the case of the supply of the service under the condition of interim payment as provided by Ordinance of the Ministry of Strategy and Finance in Article 29 (1) 3 of the Enforcement Rule of the Value-Added Tax Act refers to the case falling under any of the following subparagraphs", and subparagraph

In addition, in the ordinary supply under Article 16 (1) 1 of the Value-Added Tax Act, "the time when the provision of service, which is the time of supply for the service, is completed" means the time when the person provided with service, who actually provides the service, can use the output of the service, taking into account the scope of the provision of service under a contract between the transaction parties, terms and conditions of the contract, etc. (see, e.g., Supreme Court Decisions 2008Du5117, Aug. 21, 2008; 2013Du2291, Jun. 11, 2015).

Meanwhile, barring any special circumstance, the facts acknowledged in the final judgment of a civil case related to this in a tax judgment shall constitute a flexible evidence (see, e.g., Supreme Court Decision 95Nu3398, Oct. 13, 1995).

B) Determination

(1) Nature of the instant service

First of all, the service in this case refers to the transaction form in which the service is supplied over a long-term period of time, or the supply of the standard payment conditional service means the transaction form in which the degree of progress or completion is confirmed. As seen earlier, the contract form and the modified contract form concerning the new construction project contract in this case only include the payment of the construction cost at a specified period of time, but does not include the content that the completion of the construction is verified and the payment of the price is made at a certain rate of time. Thus, the service in this case cannot be deemed as the condition of completion payment.

Then, under Article 20 subparagraph 1 of the Enforcement Rule of the Value-Added Tax Act, in order to view the instant services as the case of supplying services upon interim payment condition, it shall fall under the case of receiving the down payment in installments within six months from the day following the day when the service is scheduled to receive the down payment, and the day when the contract is to receive the down payment in addition to the down payment within the said period, and the time when the contract is to be completed is April 15, 2012, and the time when the contract is to receive the down payment in relation to the instant newly constructed construction contract is about 10 days (on the spot, 10 days), and even in the case of the newly constructed construction contract of this case finalized construction contract of this case which is finalized through the modified contract, it is difficult to view that the service contract of this case was completed at least six months from the day after the date when the contract was received the down payment in relation to the instant newly constructed construction contract of this case or the date when the contract was completed by 6 months or more from the date of completion of the construction contract of this case.

(2) Time of supply for the instant service

According to Article 16 (1) 1 of the Value-Added Tax Act, since the time when the service is supplied is "the time when the service is supplied is completed" in the case of the service of this case, it is reasonable to view that the time when the service of this case is supplied is the time when the service is completed and that the time when the service of this case is supplied is August 2013 as the completion date in the civil judgment of this case, even if the service of this case is not provided, if the entrepreneur issues a tax invoice and issues it to a third party, it shall be deemed that the service of this case was supplied the same goods or service as the contents in the tax invoice unless there are special reasons such as the issuance of the tax invoice by falsity (see Supreme Court Decision 86Nu663, Jun. 23, 1987). Accordingly, the time of supply of this case is the same as the time of supply of the service of this case on September 23, 2013, which is the date of issuance of the tax invoice.

① In the civil judgment of this case, the Plaintiff completed the new construction work of this case by August 2013.

In regard to the building of this case for which ○○○ initially contracted to the Plaintiff, around August 13, 2013, the new construction of this case was completed and the internal cleaning was conducted, and around that time, ○○○ was allowed accommodation at the time of the completion of the household placement, and the fact that the security service company was conducting security services from August 28, 2013 in the Subcom Co., Ltd. was recognized, and the fact that the judgment of the civil court of this case became final and conclusive is as seen earlier, barring any special circumstance, the determination of the facts of the civil judgment of this case constitutes valuable evidence in this case.

② However, the contract to change the construction of the instant new building is written in the construction period from April 18, 2013 to August 17, 2013. The expiration date of the construction period is coincided with the lapse of August 2013 as seen in the civil judgment of the instant case on the completion date of the new construction, and the data submitted by the Plaintiff alone is insufficient to adopt a factual judgment of the instant civil judgment that “the Plaintiff completed the new construction of the instant case by August 8, 2013” ( even if the approval date of use of the instant building was May 8, 2014), it is difficult to deem that there is a special circumstance where it is difficult to adopt a factual judgment of the instant civil judgment that “the Plaintiff completed the new construction of the instant case by August 2013” (the reasons for delay are attributable to the Plaintiff’s failure to provide the documents necessary for the remaining completion construction or the approval procedure

③ In addition, from April 15, 2013 to October 24, 2013, the Plaintiff received KRW 555,000,000,000 from Ha○○○○ from total supply price of the instant new construction project. On September 30, 2013, Ha○○ issued a tax invoice of KRW 535,00,000 in total for the supply price of the instant new construction project. Since there is no assertion or proof as to the special reasons, such as the issuance of the said tax invoice by falsity, it is reasonable to deem that there was a supply of goods or services, such as the entries in the said tax invoice.

④ The Plaintiff alleged that the instant disposition was unlawful since it was unaware of the time of supply for the instant service until the final judgment became final and conclusive. However, the Plaintiff and ○○○○ concluded a contract for the instant new construction works only at the time of the initial contract, and the Plaintiff stated in the contract that it was separate from ○○○○○○○ at the time of the conclusion of the modified contract. The Plaintiff, on September 30, 2013, issued a tax invoice of KRW 535,000 with respect to the instant new construction works at KRW 120,000 respectively on November 1, 2013 (the tax invoice for the instant new construction works was issued at KRW 120,000,000 as the supply price for the instant construction works at KRW 40,00,000, respectively, and the Plaintiff did not conclude the new construction contract at KRW 20,000,000 for the instant construction works at KRW 20,000,000,000.

2) As to additional tax

A person who supplies goods or services independently on a business basis is liable to pay value-added taxes. According to Article 16(1) of the Value-Added Tax Act, the time when the services are supplied is the time when the services are completed or facilities, rights, and other goods are used. As long as the services are supplied to another person upon receiving a price, whether the actual payment of the price has been made may not affect the determination of whether the liability to pay value-added tax has been established (see, e.g., Supreme Court Decision 94Nu1446, Nov. 28, 1995).

In full view of the evidence and the overall purport of the pleadings as seen earlier, value-added tax is a tax imposed on the external appearance of transaction by a supplier, and as long as a supplier receives a price and provides services to another person, whether it has received an economic price from the provision of the above services is not considered to be established. As such, in the instant case, even if the Plaintiff was not paid a part of the price for the new construction of the instant case from Ha○○○○, it seems that it does not affect the establishment of the Plaintiff’s liability to pay value-added tax, and it does not go against the principle of substantial taxation. Therefore, it is difficult to view the part of the penalty tax in the instant disposition as illegal, and therefore, this part of the Plaintiff’s claim is without merit.

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and it is so decided as per Disposition.