Ulsan District Court 2013Guhap1786 ( December 12, 2013)

Whether actual payment has been made or not does not affect the establishment of the liability for value-added tax payment.

The issue of whether the defendant has actually received the payment of value-added tax in return for the provision of services to another person shall not affect the conclusion of the obligation to pay value-added tax. The disposition of this case made by the defendant to the plaintiff is legitimate.

Article 7 (Supply of Services)

2014Nu20049 Revocation of Disposition of Imposition of Value-Added Tax

GuAA

○ Head of tax office

Ulsan District Court Decision 2013Guhap1786 Decided December 12, 2013

April 11, 2014

May 2, 2014

1. The plaintiff's appeal is dismissed.

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

The judgment of the first instance court is revoked. The defendant's imposition of the value-added tax for the first period of January 7, 2013 against the plaintiff on January 7, 2013 (hereinafter "the disposition of this case") shall be revoked.

1. Details of the disposition;

The court's explanation on this part is the same as the corresponding part of the judgment of the court of first instance. Thus, this part is cited in accordance with Article 8 (2) of the Administrative Litigation Act and the main sentence of Article 420 of the Civil Procedure Act.

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The plaintiff asserts that the disposition of this case should be revoked illegally for the following reasons.

1) The case between the plaintiff and the plaintiff and two others (hereinafter referred to as the "contractor of this case").

Inasmuch as the contract is rescinded and retroactively null and void, the Plaintiff’s division relating to the instant contract.

It can not be deemed that the service subject to the value-added tax was supplied.

2) Even if the instant contract is not rescinded, the time of termination of the contract should be deemed the time of supply for the service if the contract is terminated before the completion of the contract, but the Defendant rendered the instant disposition by deeming February 7, 2012, not February 29, 2012 when the contract was terminated, as the time of supply for the instant construction project was deemed as the time of supply. As such, the instant disposition is procedural defect.

3) The Defendant’s notification of confirmation of the fact of transaction is null and void as it does not comply with the relevant procedures. Accordingly, the instant disposition is null and void.

4) Although the Plaintiff failed to receive value-added tax from the contractor of the instant case, the instant disposition was rendered by deeming that value-added tax was included in the construction cost of the instant case.

5) Although the Plaintiff paid KRW 198 million with material costs, etc. relating to the instant construction project, the Defendant issued the instant disposition against the entire construction cost.

B. Relevant statutes

Attached Form 3 is as listed in the "relevant Acts and subordinate statutes".

C. Determination

1) Whether the instant contract was rescinded and the supply of services under the Value-Added Tax Act was never made

A) According to Articles 1(1) and 7 of the former Value-Added Tax Act (amended by Act No. 11873, Jun. 7, 2013; hereinafter “Value-Added Tax Act”), value-added tax is imposed on the supply of goods, facilities, or services that provide services or allow the use of goods, facilities, or rights on all contractual or legal grounds.

B) Comprehensively taking account of the overall purport of the arguments in Gap evidence Nos. 4 and 5, the plaintiff and the contractor of this case set the contract of this case as February 3, 2012, the date of completion, and February 7, 2012, which is the date of completion of the construction work of this case under the contract of this case. The plaintiff was paid ○○○○00,000 won (hereinafter referred to as "the payment of this case") from the contractor of this case as the contract of this case by November 29, 2011 and suspended construction on the ground of the dispute with the contractor. The contract of this case was executed differently from the design of the construction of this case, and the plaintiff requested additional construction work payment to the contractor of this case, and the plaintiff did not notify the plaintiff of the cancellation of the contract of this case as the contractor of this case's cancellation of construction work of this case on the ground that the contract of this case had been executed on February 7, 2012.

C) According to the above facts, the Plaintiff and the contractor of the instant case agreed on February 29, 2012 to the future and agreed on the instant contract, and the Plaintiff and the contractor of the instant case waiveed their rights and obligations under the instant contract by settling accounts of the rights and obligations under the mutual agreement on the part that the other party did not hold and perform the portion that had been performed by that time. Accordingly, the Plaintiff provided services in accordance with the said contract and received the instant payment in return for the said portion. Therefore, the Plaintiff is liable to pay value-added tax on

Therefore, this part of the plaintiff's assertion is without merit.

2) Whether the instant disposition, which was taken by deeming February 7, 2012 as the time of supply, as the time of supply, is unlawful

A) According to Article 9(2) of the Value-Added Tax Act, the time when the service is supplied is the time when the service is supplied or the goods, facilities, or rights are used. According to Article 13(1) of the Value-Added Tax Act, where the tax base of value-added tax on the supply of goods or services is paid in money, the total amount of the price paid (hereinafter referred to as “value of supply”). Article 22 of the Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 24638, Jun. 28, 2013; hereinafter referred to as “Enforcement Decree of the Value-Added Tax Act”) stipulates that the time when the service is supplied is supplied: (1) in the case of ordinary supply, when the provision of the service is completed; (2) in the case where the service is supplied on completion basis, interim, long-term, or other terms or conditions; and (3) in the case where the provision of subparagraphs 1 and 2 is not applicable, the supply price is determined at

B) If the construction is suspended before completion of the construction project as in the instant case and the contract is terminated, it is reasonable to deem the date when the construction is determined at the time of the termination of the agreement and the payment of the corresponding amount of the construction project is made to be made (see, e.g., Supreme Court Decision 96Nu16193, Jun. 27, 1997). As the Plaintiff and the contractor agreed on the instant contract, while the Plaintiff and the contractor agreed on the instant contract, they constitute the time of supply for the instant contract, under which February 29, 2012 agreed to deliver the building under construction after settling the instant payment as the construction cost to the contractor.

C) On the other hand, the following circumstances acknowledged pursuant to the statement No. 2 of the instant contract document and the statement No. 2, namely, the instant contract was determined as February 3, 2012, which is the date of completion of the instant construction, and as February 7, 2012, the Plaintiff demanded the payment of additional construction cost and the suspension of construction work on February 7, 2012 without completion of the construction work even if the Plaintiff received the down payment and the intermediate payment of KRW 137 million. The instant contractor notified the Plaintiff of the cancellation of the instant contract on February 20, 2012, and on February 20, 2012, the Plaintiff requested that the head of the tax office having jurisdiction over February 20, 2012 to verify the transaction of the instant contract under the instant contract, and the Plaintiff was obligated to pay for the construction work on March 14, 2012, and the Plaintiff did not receive the down payment within the scope of KRW 15,000,00.

Therefore, this part of the plaintiff's assertion is without merit.

3) Whether the instant disposition is null and void because the Defendant’s notification of confirmation of the fact of transactions does not comply with the relevant procedures

According to Article 126-4 of the former Restriction of Special Taxation Act (amended by Act No. 11873, Jun. 7, 2013; hereinafter “the Restriction of Special Taxation Act”) and Article 121-4 of the former Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 24638, Jun. 28, 2013); where an entrepreneur liable to issue a tax invoice under Article 16 of the Value-Added Tax Act supplies goods or services, but fails to issue a tax invoice at the time of issuance of the tax invoice under Article 16 of the Value-Added Tax Act, an applicant who intends to obtain an input tax deduction from a purchaser-issued tax invoice under the Value-Added Tax Act shall file an application for confirmation of the fact of transaction with the applicant, etc. within three months from the date of issuance of the tax invoice, along with documents proving the fact of transaction, and the head of the tax office having received the application shall examine the applicant’

The defendant recognized the fact that the contract of this case submitted by the contractor in the course of applying for the confirmation of the fact of transaction under the provisions of the Restriction of Special Taxation Act, the contents of the contract of this case, the certificate of the contractor's delivery to the plaintiff, the plaintiff's waiver of construction work, the statement of remittance, and the confirmation submitted by the plaintiff, etc., and the fact that the transaction of this case was confirmed in accordance with the contract of this case, and it does not seem

Furthermore, even if there was a fact that a supplier of goods or services did not comply with the procedure in the process of confirming the fact of the instant transaction, the special provision on purchaser-issued tax invoice allows the supplier to directly issue a tax invoice after obtaining confirmation of the fact of transaction from the tax office where the supplier did not deliver the tax invoice to the purchaser. This provision provides for the special provision on the Value-Added Tax Act so that the purchaser may obtain input tax deduction even without the purchaser’s assistance. Therefore, the Plaintiff’s burden of paying value-added tax on the instant construction is attributable to the Plaintiff’s actual supply of services under the instant contract and the fact that the Plaintiff received the instant payment in return for the supply of services is attributable to the fact that the Plaintiff received the instant payment in return for the supply of the services, not because the contractor issued a purchaser-issued tax after obtaining confirmation of the fact

Therefore, this part of the plaintiff's assertion is without merit.

4) Whether the disposition of this case is unlawful, which deemed that the value-added tax was included in the construction cost of this case even though the Plaintiff failed to receive value-added tax from the contractor of this case

The Plaintiff and the contractor of this case agreed to pay the value-added tax separately from the contract price under the contract of this case, and as seen earlier, the Plaintiff received the payment of KRW 000,000 from the contractor of this case, and on the other hand, as long as the Plaintiff provided services to others upon receiving the payment, whether the Plaintiff actually received the payment does not affect the conclusion of the liability to pay the value-added tax (see, e.g., Supreme Court Decision 2002Du8534, Nov. 28, 2003). Thus, even if the Plaintiff did not collect the value-added tax from the contractor of this case, the Plaintiff still bears the liability to pay the value-added tax.

In addition, in full view of the purport of the argument in the statement in Eul evidence No. 1, the defendant deemed that the value-added tax was included in the calculation of ○○○○○○○○○○○○, which is equivalent to the value-added tax, and thus, it is recognized that the contractor of this case remains liable to pay the value-added tax separately to the plaintiff in light of the details and contents of the construction waiver statement and its contents. Even if the contractor of this case remains liable to pay the value-added tax separately from the payment in this case, the defendant calculated the tax base for only ○○○○○○○, which is not the cost of the instant case, as a result, favorable disposition for the plaintiff in calculating the value-added tax, and the calculation result is within the scope of the value-added tax amount properly calculated on the basis of the entire payment in this case, the defendant's tax base of value-added tax is not unlawful (see, e.g., Supreme Court Decision 200Nu1658, Jul. 28, 192).

Therefore, the plaintiff's assertion on this part is without merit.

5) As to the Plaintiff’s assertion that ○○0,000 won was paid with material cost, etc. regarding the instant construction project

According to Article 17 of the Value-Added Tax Act, the value-added tax amount payable by an entrepreneur shall be the amount computed by deducting the input tax amount for the goods or services supplied for the purpose of using or using his/her own business from the output tax amount for the goods or services supplied by him/her, but the input tax amount for the portion entered differently from the fact where the list of total tax invoices by seller is not submitted under Article 20(1) and (2) of the Value-Added Tax Act, and for the portion where a tax invoice under Article 16(1), 2, 4, and (5) is not issued,

In this case, even if the Plaintiff’s claim for payment, such as materials and expenses, is based on the Plaintiff’s claim for deduction of input tax amount, the Plaintiff did not report value-added tax related to the instant construction when filing a quarterly value-added tax return for the first quarter of 2012, and did not submit a list of total tax invoices by seller corresponding thereto and the list of total tax invoices by seller corresponding thereto. As such, each entry in the evidence No. 15 through No. 26 submitted by the Plaintiff at the time of the trial does not constitute a case where the Plaintiff may

Therefore, this part of the plaintiff's assertion is without merit.

3. Conclusion

Therefore, the plaintiff's claim shall be dismissed as it is without merit. The judgment of the court of first instance is just in conclusion, and the plaintiff's appeal is dismissed. It is so decided as per Disposition.