2. The Defendant’s refusal to refund value-added tax of KRW 540,373,680 on May 18, 2015 against the Plaintiff on May 18, 2015 is revoked.

3. All costs of the lawsuit shall be borne by the defendant.

The court's explanation on this part is the same as the statement of reasons under Paragraph (1) of the judgment of the court of first instance. Thus, this part of the court's explanation is accepted by Article 8 Paragraph (2) of the Administrative Litigation Act and Article 420

2. Whether the instant disposition is lawful

A. Summary of the plaintiff company's assertion

1) The primary claim

Article 29(2)1 of the former Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 26983, Feb. 17, 2016; hereinafter referred to as the "former Enforcement Decree of the Value-Added Tax Act") provides that the time when the provision of service is completed or when the payment is to be made cannot be deemed the time of supply of the service, the time when the provision of service is completed and the price is determined is determined shall be deemed the time of supply of the service. Accordingly, in the case of the contract of this case, the time when the provision of service is completed and the supply price is determined shall be deemed the time of supply of the service. However, even if the supply price of each of the development facilities of this case is not determined, the defendant's disposition of this case becomes unlawful on the ground that "the total supply price of each of the development facilities of this case" is "the supply price of each of the development facilities of this case."

2) Preliminary Claim

In the case of solar power generation facilities, not only the pre-use inspection pursuant to the Electric Utility Act, but also the facility confirmation that falls under the object of the issuance of supply certificates pursuant to the New and Renewable Energy Act, the guidelines of this case, and the supply certificates, should be deemed to have been completed. Therefore, the Defendant’s disposition of this case based on the premise that the provision of services was completed when a pre-use inspection was conducted on the respective power generation facilities of this case.

(b) Related statutes;

Attachment 'Related Acts and subordinate statutes' shall be as shown.

C. Determination (in relation to a main claim)

1) 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." Article 16 (2) of the Value-Added Tax Act provides that "1. The time when the service is supplied is completed, "2. When the service is used, such as facilities, rights, etc.," and Paragraph (2) of the same Article provides "the time when the service is supplied in installment or on condition," notwithstanding paragraph (1) of the same Article, "the time when the service is supplied" (hereinafter referred to as "the delegation provision of this case"). Meanwhile, Article 29 (hereinafter referred to as "the delegation provision of this case") of the former Enforcement Decree of the Value-Added Tax Act provides that "the time when the service is supplied in installment or on condition upon delegation by the delegation of the delegation provision of this case," and Article 16 (2) provides that "the time when the service is supplied in accordance with the classification of each of the following subparagraphs" and "the time when the service is supplied in each subparagraph 1 through 4".

In light of the structure, language, content, etc. of the delegation provision of this case and the delegation provision of this case, it is difficult to see that the delegation provision of this case is delegated to subordinate statutes only "in the case of supplying services on condition of installment or conditional terms" (in addition to "in the case of supplying services on condition that the delegation provision of this case itself provides services on condition of installment or on condition", there is separate 'in the case of supplying services on condition of the delegation provision of this case'. It is reasonable to see that the delegation provision of this case delegates the time of supply to subordinate Acts and subordinate statutes for services for which it is difficult to determine the time of supply of services on condition that the provision of Article 16 (1) of the Value-Added Tax Act does not provide for the time of supply. Accordingly, the delegation provision of this case separates "in the case of supplying services on condition of installment or conditional terms"

Article 16(1) and (5) of the Value-Added Tax Act, Article 29(1) of the former Enforcement Decree of the Value-Added Tax Act (wholly amended by Presidential Decree No. 11873, Jun. 7, 2013; Presidential Decree No. 24638, Jun. 28, 2013; Presidential Decree No. 20155, Jun. 28, 2013; Presidential Decree No. 22065, Jun. 28, 2015; Presidential Decree No. 2065, Jun. 28, 2013; Presidential Decree No. 20655, Jan. 28, 2013; Presidential Decree No. 20655, Jan. 28, 2013; Presidential Decree No. 20655, Jan. 20, 207; Presidential Decree No. 20100, Jan. 4, 2017>

A) Article 32(1) of the Value-Added Tax Act provides, “Where an entrepreneur supplies goods or services, an invoice stating the following matters shall be issued to the person who receives the supply.” Accordingly, the time of supply for services under the Value-Added Tax Act is an important standard for determining the time of issuance of the tax invoice. In addition, the said tax invoice requires that the value of supply and the value-added tax (Article 1(3) thereof be also entered:

B) With S-E, the Plaintiff Company entered into the instant contract with the construction cost for the entire power generation facilities (excluding KRW 5,674,482,00, value added tax), which is not the construction cost for each of the instant power generation facilities, by setting the construction period for the entire power generation facilities (from August 1, 2014 to February 28, 2015) which is not the construction cost for each of the instant power generation facilities. In addition, although the instant contract (Evidence A 2), although the construction cost (contract amount) is stated as KRW 5,674,482,00, it is difficult to view that the supply price has been determined at the time of the instant contract as the “financial agreement and the schedule for the payment of financial institutions” under Chapter II “Special Terms and Conditions for Contracts”.

(c)

C) If a person provided with services actually leads to a situation in which the provision of services would be able to use the output of the provision of services, it constitutes “when the provision of services is completed” (see Supreme Court Decision 2013Du2291, Jun. 11, 2015). The Plaintiff Company entered into a contract with the Korea Electric Power Corporation on December 12, 2014 with respect to the navigational power generation equipment on November 27, 2014; it received a pre-use inspection under Article 63 of the Electric Utility Act on November 27, 2014 with respect to the navigational power generation equipment on which the Plaintiff had been provided with electric power generation equipment on December 4, 2014 (see, e.g., Supreme Court Decision 201Du2291, Dec. 10, 2014).

D) However, even around the time the pre-use inspection by each of the instant power generation facilities was conducted, there was no separate agreement between the Plaintiff Company and the S-E on the construction cost by each of the power generation facilities. Therefore, even if construction was completed on or around December 2014, the Plaintiff Company and the S-E did not specify the value of supply and value-added tax to be entered in the tax invoice.

E) Meanwhile, the Plaintiff Company received a pre-use inspection on January 30, 2015, from the Incheon Power Facilities among the respective power generation facilities of this case, and was issued a purchase tax invoice with the supply value of each of the instant power generation facilities at KRW 5,674,482,00 from S-E on February 17, 2015. As seen earlier, it is difficult to view that the contract of this case was final and conclusive as to the total supply value of each of the instant power generation facilities at the time of the conclusion of the contract, but it can be deemed that there was a final and conclusive determination on the supply value of the instant contract between the Plaintiff Company and S-E until the purchase tax invoice was issued, and it is reasonable to view that the value was written as is on the purchase tax invoice.

3. Conclusion

Therefore, the plaintiff company's primary claim of this case is justified, and therefore, the judgment of the court of first instance is unfair with a different conclusion, so the court of first instance shall accept the appeal of the plaintiff company and the judgment of the court of first instance shall be revoked and the disposition of this case shall be revoked, and it is so decided as per Disposition.

Related Acts and subordinate statutes

▣ 부가가치세법

Article 6 (Place of Tax Payment)

(1) The place where value-added taxes are paid by business operators shall be located.

Article 8 (Registration of Business)

(1) Any business operator shall file an application for business registration with the head of the tax office having jurisdiction over the place of business within 20 days from the commencement date of the business, as prescribed by Presidential Decree: Provided, That any person who intends to commence a new business may file an application for business

Article 9 (Supply of Goods)

(1) The supply of goods shall be a delivery or transfer of goods pursuant to all contractual and legal grounds.

(2) Necessary matters concerning the scope of the supply of goods under paragraph (1) shall be prescribed by Presidential Decree.

Article 16 (Time of Supply for Services)

(1) The time of supply for services shall be the time provided in any of the following subparagraphs:

1. When the offer of labor is completed;

2. The time when facilities, rights, or other goods are used.

(2) Notwithstanding paragraph (1), the time of supply for services supplied in installments or on conditions shall be prescribed by Presidential Decree.

Article 32 (Tax Invoice, etc.)

(1) Where an entrepreneur supplies goods or services (excluding the supply of goods or services exempt from value-added tax), he/she shall issue an invoice stating the following matters (hereinafter referred to as a "tax invoice") to the person who receives the supply:

1. Registration number, name or denomination of the businessman who provides;

2. Registration number of the person who receives: Provided, That where the person is not an entrepreneur or is not an entrepreneur, a unique number or resident registration number prescribed by Presidential Decree;

3. Supply value and value-added tax;

4. Date of preparation;

5. Other matters prescribed by Presidential Decree.

Article 38 (Mutual Aid Purchase Tax Amount)

(1) An input tax amount deducted from the output tax amount means the following amounts:

1. Value-added tax amount on the goods or services supplied by the business operator for the purpose of use or use for his/her own business (including the value-added tax amount paid under Article 52 (4));

2. Value-added tax amount on imports of goods used or imported by the businessman for his own business.

(2) An input tax amount under paragraph (1) 1 shall be deducted from the output tax amount in the taxable period in which the goods or services are supplied.

(3) An input tax amount under paragraph (1) 2 shall be deducted from the output tax amount in the taxable period to which the receipt date of goods belongs.

Article 39 (Non-Deduction of Purchase Tax Amount)

(1) Notwithstanding Article 38, the following input tax amounts shall not be deducted from the output tax amount:

2. Where a tax invoice or import tax invoice is not issued, or where the whole or part of the matters to be entered under Article 32 (1) 1 through 4 (hereinafter referred to as "necessary entry items") on the tax invoice or import tax invoice issued are not entered or entered differently from the fact: Provided, That the input tax amount in such cases as prescribed by Presidential Decree shall be excluded;

Article 60 (Additional Duties)

(7) Where an entrepreneur falls under any of the following subparagraphs, the amount under each subparagraph shall be added to the amount of tax payable or deducted from the amount of tax refundable: Provided, That the same shall not apply to the supply value of the portion, the transaction of which is verified in accordance with the tax invoice or import tax invoice received by an entrepreneur:

3. Where the supply value in entries on a list of total tax invoices by seller submitted under Article 54 (1) and (3) is excessively written differently from the fact, an amount calculated by multiplying by one percent the supply value returned excessively entered differently from the fact in the entries on the list of total tax invoices by seller submitted.

▣ 구 부가가치세법(2013. 6. 7. 법률 제11873호로 전부개정되기 전의 것)

Article 7 (Supply of Services)

(1) The supply of services shall be either the supply of services or having others use the goods, facilities or rights, pursuant to all contractual and legal grounds.

(2) Where an entrepreneur supplies services directly for his/her own business, such services shall be deemed to be provided to him/her, as prescribed by Presidential Decree.

(3) The supply of services to any third person without receiving any consideration shall not be deemed the supply of services: Provided, That the same shall not apply where a business operator provides services prescribed by Presidential Decree, such as leasing real estate for business, to a related person

(4) The supply of labor under an employment relationship shall not be deemed the supply of services.

(5) Matters necessary for supplying services under paragraph (1) shall be prescribed by Presidential Decree.

▣ 구 부가가치세법 시행령(2016. 2. 17. 대통령령 제26983호로 개정되기 전의 것)

Article 29 (Time of Supply for Services Supplied in Installments or on Conditions)

(1) Where any of the following is applicable, the time each payment is determined to be made, shall be deemed the time of supply for services supplied in installments or on conditions under Article 16 (2) of the Act: Provided, That in the case of subparagraphs 2 and 3, with respect to the portion of payment determined to be made after the date the provision of labor is completed, the date the provision of labor is completed shall be deemed the time of supply for the services:

1. The supply of services on a long-term installment plan or other conditional terms and conditions prescribed by Ordinance of the Ministry of Strategy and Finance;

2. The supply of services upon condition precedent payments;

3. The supply of services upon interim payments prescribed by Ordinance of the Ministry of Strategy and Finance;

4. Where services are continuously supplied via an indivisible supply unit.

(2) The time of supply for services under Article 16 (2) of the Act shall be as follows:

1. Where the time the offer of services is completed or payment is determined to be made, cannot be deemed the time of supply: The time the offer of services is completed and the value of supply is determined;

2. Where an entrepreneur provides real estate leasing services and falls under any of the following cases: The date on which the preliminary return period or taxable period ends:

(a) A violation under Article 29 (10) 1 of the Act;

(b) A violation under Article 29 (10) 3 of the Act;

(c) Where an entrepreneur leases real estate and provides rental services again, and the tax base is calculated under Article 65 (2).

3. Where any of the following services is provided over at least two consecutive taxable periods and the price is paid in advance: The date on which the preliminary return period or taxable period ends:

(a) Where an entrepreneur operating a sports center, such as a fitness club, allows its members to use facilities after receiving annual fees in advance;

(b) Where an entrepreneur enters into a contract for use of trademark rights with another entrepreneur, he/she has the trademark right to use the trademark in full by paying the price temporarily;

(c) Where an entrepreneur who establishes and operates a welfare facility for the aged under the Welfare of the Aged Act (limited to charged ones) allows the purchaser of the facility to use the swimming pool, fitness club, etc. in advance after collecting the price from the purchaser of the facility before he/she occupies the facility;

(d) Other services similar to the provisions of items (a) through (c);

4. Where an entrepreneur allows the use of a facility established by applying mutatis mutandis the method prescribed in subparagraph 3 of Article 4 of the Act on Public-Private Partnerships in Infrastructure over at least two consecutive taxable periods and receives the price therefor: The date on which the preliminary return period or taxable period ends.

(3) Notwithstanding paragraphs (1) and (2), where the time of supply for services supplied before closure of business arrives after such closedown, the time of such closedown shall be deemed the time of supply.