Seoul Administrative Court 201Guhap12696, 16 September 2016

The date of attribution of the profit, in principle, shall be the time when the amount of the receipt and the right to such receipt is determined, i.e., when the right is legally exercised.

In the case of the supply of services subject to interim payment, in principle, the time of accrual of earnings on the time of supply of services related to value-added tax and corporate tax shall arrive when each of the payments is paid in installments under an agreement between the parties

Article 9 of the former Value-Added Tax Act for the business year of profit and loss

2015Nu112 Revocation of Disposition of Imposing corporate tax, etc.

AAAAAAAAA Office, etc.1

○○ Head of Tax Office et al.

Seoul Administrative Court Decision 2011Guhap12696 decided September 16, 2014

April 8, 2016

May 20, 2016

1. All appeals filed by the plaintiffs are dismissed.

2. The costs of appeal are assessed against the Plaintiffs.

The part against the plaintiffs in the judgment of the court of first instance is revoked (each claim against the head of the Seoul Special Metropolitan City △△ Office of the Plaintiff AAAAA and the head of the Seoul Special Metropolitan City △△ Office was won in the first instance, and the above Defendants did not appeal and became final and conclusive as they did not appeal).

1. The director of the Defendant ○○ Tax Office provided that the office of the Plaintiff, AAAAA, Inc., was an office:

A. Imposition of corporate tax for each business year of 2004 to 2006, and 2008, listed in paragraph (1) of the list of separate taxation disposition as of October 1, 2009, and imposition of corporate tax for the business year of 2007, listed in paragraph (1) of the same list as of February 7, 201;

B. The imposition of each value-added tax stated in paragraph 2 of the list of separate taxation disposition as of October 1, 2009;

2. The director of the tax office’s office on the plaintiff Na○○

A. 'The amount of tax seeking revocation' among the dispositions of imposition of global income tax for the tax years from 2004 to 2007 listed in the separate taxation list No. 4 of December 17, 2009;

B. Of the disposition imposing global income tax for the tax year 2008 listed in the separate taxation list No. 4 of Dec. 16, 2009, the “tax amount for which revocation is sought”;

3. As to the Plaintiff Na○○○ by the head of △△△△△, the following:

A. The imposition of each resident tax for the year 2004 to 2007 listed in the separate taxation list No. 5 of Dec. 17, 2009;

B. Imposition of resident tax for the year 2008, stated in paragraph (5) of the list of attached taxation disposition as of December 16, 2009

All cancellations.

1. Quotation of the reasons for the judgment of the first instance;

The reason for this judgment is as stated in the corresponding part of the reasoning of the judgment of the first instance, except for the dismissal of Chapters 15, 15, and 18 of the judgment of the first instance as follows. Thus, it is accepted in accordance with Article 8(2) of the Administrative Litigation Act and the main sentence of Article 420 of the Civil Procedure Act.

1) Relevant legal principles

Article 22 subparag. 2 of the former Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 20244, Sep. 6, 2007; hereinafter the same) provides that "where services are supplied on interim terms and conditions of payment, "the time of receipt of each portion of the price" shall be deemed "the time of receipt of each portion of the services" under Article 40 of the former Corporate Tax Act (amended by Act No. 8519, Jul. 19, 2007; hereinafter the same shall apply) shall be deemed "the time of receipt of each portion of the price" under Article 9(4) of the former Value-Added Tax Act (amended by Act No. 8142, Dec. 30, 2006; hereinafter the same shall apply). In addition, the time of accrual of earnings of a domestic corporation under Article 40 of the former Corporate Tax Act (amended by Act No. 8519, Jul. 19, 2007; hereinafter the same shall apply) is legally entitled to exercise its rights.

2) Facts of recognition

가) 원고 AAAA은 ▶▶2구역 주택재개발정비사업조합설립추진위원회와 사이에 2005. 12. 9. 설계용역가계약 및 2006. 5. 23. 설계용역본계약을 체결하면서, 용역비의 지불시기 및 금액에 관하여 정비사업의 단계별로 계약금(설계계약시), 구역지정, 조합설립인가, 건축심의완료, 사업시행인가, 착공신고 및 설계도 납품, 사용승인완료 시기에 일정한 금액을 지급하기로 약정하였다. 그리고 원고 AAAA은 2005. 12. 13. 위 약정에 따라 위 추진위원회에 계약금(설계계약시) 116,160,000원(부가가치세 포함)의 지급을 청구하였다.

나) ▲▲1구역 정비사업과 관련하여 원고 AAAA의 대표이사 원고 나○○은 ▲▲1구역 도시환경정비사업조합설립추진위원회로부터 2005. 4. 22. 설계수입금액 명목으로 100,000,000원 및 20,498,400원 합계 120,498,400원(부가가치세 포함)을 지급받았다.

다) ▶▶2구역 정비사업과 관련하여 원고 AAAA의 대표이사 원고 나○○은 ▶▶2구역 주택재개발정비사업조합설립추진위원회로부터 설계수입금액 명목으로 2006. 1. 17. 10,000,000원 및 40,000,000원, 2006. 1. 19. 66,160,000원 합계 116,160,000원(부가가치세 포함)을 지급받았다.

D) The representative director of Plaintiff AA’s representative director of Plaintiff AA was paid the sum of 119,691,300 won on July 7, 2006, 18, 2007, 100,000,000 won and 72,521,750 won on July 18, 2007, and 292,213,050 won (including value-added tax) under the name of design income from the Promotion Committee for the Establishment of Man City Environment 1 Zone.

E) At the time of the tax investigation, Plaintiff Na○ did not issue sales tax invoices on the amount of design income received from each of the above promotion committee and omitted the report on the amount of value-added tax and corporate tax.

[Reasons for Recognition] Evidence No. 12-1, 2, Evidence No. 13, Evidence No. 36-1, 37-1, 56, and the purport of the whole pleadings

3) Determination

According to the above facts in light of the legal principles as seen earlier, the design service contract between the plaintiff AA and each of the above promotion committees constitutes an interim payment conditional service supply contract, and the plaintiff AA received each of the above design revenue in accordance with the agreement with the above promotion committee. Thus, it is reasonable to view that the time when the service related to the value-added tax on each of the above design revenue belongs to the time when the service was supplied and the corporate tax was reverted to the income at least at least at the time of the payment

In addition, the evidence submitted by Plaintiff AA, such as the statement of evidence No. 022, cannot be viewed as having to be deducted from the sales of value-added tax and the corporate tax on the ground that each of the above design revenue amounts, the time of the supply of services related to value-added tax and the time of attribution of corporate tax, has already become due to the completion of each of the above improvement projects or the design service with the above promotion

2. Conclusion

Therefore, the plaintiffs' claims shall be dismissed in its entirety due to the lack of reasonable grounds, and the judgment of the court of first instance is just, and the plaintiffs' appeals are dismissed in its entirety due to the lack of reasonable grounds. It is so decided as per Disposition.