Seoul Administrative Court-2013-Gu Partnership-3887 ( November 14, 2013)

Cho High-2012-Seoul Government-3404 ( November 05, 2012)

Where payments other than down payment are made in installments before the provision of services is completed, the time of supply for services.

Where the payment of any price other than the down payment is made in installments before the supply of the service is completed, and the period from the date when the payment of the down payment is made to the date when the balance is paid is not less than six months, the time of supply for the service shall be "when each

Article 9 (Transaction Time)

2013Nu52386 Revocation of Disposition of Imposition of Value-Added Tax

AA

BB Director of the Tax Office

Seoul Administrative Court Decision 2013Guhap3887 Decided November 14, 2013

July 4, 2014

July 25, 2014

1. Revocation of a judgment of the first instance;

2. The plaintiff's claim is dismissed.

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

1. Purport of claim

The Defendant’s value-added tax of KRW 32,011,200 for the second year of 2010 against the Plaintiff on May 10, 2012 (Additional acid)

The imposition of tax amounting to KRW 8,011,200 shall be revoked.

2. Purport of appeal

The same shall apply to the order.

1. Details of the disposition;

A. The Plaintiff removed a building located in 118,119 in Seoul OO-gu, O3, and newly constructedCCA with 10 floors above the above real estate on December 201 (hereinafter “instant construction”). The Plaintiff is running real estate leasing business in the above building after the construction ofCCA with 10 floors above the third ground level above the above real estate (hereinafter “instant construction”).

B. On November 2010, the Plaintiff entered into a contract with D Construction Co., Ltd. (hereinafter “D Construction Co., Ltd.”) to subcontract the instant construction work to the non-party company (hereinafter “instant contract”) by determining the construction period (from November 1, 2010 to December 30, 201), construction cost of KRW 4,250,000 (the value-added tax separate and the completed payment shall be paid as the monthly payment corresponding to the fairness) and received a refund of value-added tax in relation to the payment of the construction price from the Defendant.

C. As a result of on-site investigation of the refund of value-added tax against the Plaintiff, the Defendant issued a tax invoice of KRW 500,000 for the supply price of KRW 50,000 for the taxable period of value-added tax for the second half of 2010 (hereinafter “instant tax invoice”) and received only KRW 260,000 for progress payment, and received only KRW 260,000 for progress payment, on the ground that the instant tax invoice is a tax invoice different from the fact, on May 10, 2012, the Defendant deducted the Plaintiff from the input tax amount of KRW 240,000 for the second half of 20,000 and imposed KRW 32,01,20 for the second half of 2010 (hereinafter “instant disposition”).

D. The Plaintiff appealed and filed an administrative appeal with the Tax Tribunal on July 27, 2012, but was dismissed on November 5, 2012.

[Ground of recognition] Class A, Nos. 1, 4 through 6, Eul Nos. 1 through 8 (including branch numbers), and the purport of the whole pleadings

2. Whether the instant disposition is lawful

(a) Relevant statutes;

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

B. The plaintiff's assertion

The Plaintiff entered into the instant construction contract with the Nonparty Company, unlike the entry in the construction contract, entered into with the Nonparty Company on December 2010, entered into the instant construction contract, entered into a verbal agreement with the Plaintiff to additionally pay the down payment of KRW 240,000,000,000 for the first time around December 2010. On December 27, 2010, the instant tax invoice was issued by the Nonparty Company with the supply price of KRW 500,000,000. Therefore, the instant tax invoice was not a tax invoice issued excessively, and thus, the instant disposition was unlawful.

C. Determination

(1) Judgment on the assertion of an agreement on the payment of down payment

First of all, we examine whether there was an agreement between the Plaintiff and the Nonparty Company on the payment of the down payment of the Plaintiff’s assertion. The testimony of the witness EE is difficult to believe it in light of the following circumstances, and it is insufficient to acknowledge the above facts only with the entries of evidence Nos. 2 and 3 (including the number of each party, if any; hereinafter the same shall apply). Rather, there is no other evidence to acknowledge it. (1) The Plaintiff paid KRW 400,000,00 to the Nonparty Company as follows: (1) on December 30, 2010, the Plaintiff deposited KRW 400,000 to the Nonparty Company’s account; (2) on January 3, 201, the Plaintiff deposited KRW 260,000 to the Plaintiff’s account; and (3) on the deposit of KRW 400,000 to the Plaintiff’s account again, Nonparty Company deposited KRW 400,000 to the Plaintiff’s account; and (4) on the deposit of KRW 0000,00000.

Therefore, the plaintiff asserts that the above 140,000,000 won was paid as the down payment, but in light of the above facts, it does not seem that the plaintiff paid the above 140,000,000 won as the down payment under the contract to pay the down payment (if the above 140,000,000 won was paid under the contract to pay the down payment, the non-party company stated the outstanding amount as 100,000,000 won, and it cannot be ruled out that there was no possibility of payment under any other pretext) and there is no agreement to pay the down payment between the plaintiff and the non-party company. This part of the plaintiff'

(2) Determination on the assertion that the contract deposit is due

Furthermore, based on the premise that an agreement on the payment of down payment is recognized, the period during which the service is supplied shall be deemed to be the time of supply. Article 9(2) of the former Value-Added Tax Act (wholly amended by Act No. 11873, Jun. 7, 2013) provides that the time when the service is supplied shall be the time when the service is supplied or the goods, facilities, or rights are used. Article 22 subparag. 2 of the former Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 24359, Feb. 15, 2013) provides that where the service is supplied on the basis of the standard payment, interim payment, long-term payment, or other conditional terms, or the service is continuously supplied on the basis of the unit of the supply, the time each portion of the price is received shall be the time of supply for the service, and Article 9(1)1 of the former Enforcement Rule of the Value-Added Tax Act (amended by Ordinance of the Ministry of Strategy and Finance, Mar. 23, 2013) provides the remainder payment.

The instant construction project constitutes a case where the period from the date when the down payment is made to the date when the down payment is made to the date when the down payment is made, to the date when the remainder is paid, and the service is supplied upon interim payment under Article 9(1)1 of the Enforcement Rule of the Act, and the time when the service is supplied is “the time when the service is supplied.” In light of the foregoing legal doctrine, even if the contract for the down payment was made, the amount equivalent to the down payment may be included in the supply value only when the due date of the down payment is within the value-added tax period of 2

However, it is insufficient to recognize that the period during which the down payment was due within the second taxable period of value added tax in 2010 only with the testimony of Gap evidence 2 and 3 and witness EE is insufficient. Rather, there is no other evidence to acknowledge this. Rather, with respect to the reasons why the plaintiff issued the tax invoice of KRW 500,000,000 for the first time payment by the non-party company even though the non-party company demanded the first time payment, the non-party company did not pay the down payment amount of KRW 260,000,000 for the first time, the non-party company’s return of the purchase tax invoice is deemed necessary for the second time and at the time the claim was made by the construction cost purchase, and it cannot be deemed that the non-party company paid the down payment under the pretext of the plaintiff’s claim for the down payment as well as the down payment of KRW 500,000,000 for the first time after consultation with the plaintiff.

Therefore, it is reasonable to view that the contract deposit of the Plaintiff’s assertion is not to be paid together with the progress payment (within the 2010 taxable period of the value-added tax) once, and that the time for the payment of the contract deposit is not fixed. This part of the Plaintiff’s assertion is without merit.

3. Conclusion

Therefore, the plaintiff's claim of this case shall be dismissed as it is without merit, and since the judgment of the court of first instance is unfair with different conclusions, the judgment of the court of first instance shall be revoked and the plaintiff's claim shall be dismissed. It is so decided as per Disposition.