Whether the payment of consideration for services under the Value-Added Tax Act is established or whether the time of supply for services is determined (negative)

According to the Value-Added Tax Act, a person who supplies goods or services independently on a business basis is liable to pay value-added tax, and the time when the services are supplied is provided or provided at the time of the use of goods, facilities or rights, so long as the services are supplied to another person upon receiving the price, the actual payment of the price may not affect the determination of whether the liability for the payment of value-added tax is established or

Articles 2 (1) and 9 (2) of the Value-Added Tax Act

Supreme Court Decision 86Nu110 Delivered on August 19, 1986

Plaintiff

Head of Guro Tax Office

Seoul High Court Decision 85Gu303 delivered on July 24, 1987

All appeals are dismissed.

The costs of appeal shall be assessed against each party.

1. Judgment on the Plaintiff’s grounds of appeal

According to the relevant provisions of the Value-Added Tax Act, a person who independently supplies goods or services on a business basis is liable to pay value-added taxes under the Value-Added Tax Act (Article 2(1)); and the time when the services are supplied is the time when the services are supplied or the goods, facilities, or rights are used (Article 9(2)). Thus, the issue of whether the person has actually received the payment of the services provided to another person after receiving the payment for the services cannot affect the conclusion of the liability for value-added tax payment or the decision of the time of supply for the services (see Supreme Court Decision 86Nu110, Aug. 19, 1986).

In this view, the lower court’s determination that the Plaintiff, a lessor of real estate, was liable to pay value-added taxes as long as the Plaintiff had the lessee use and make profits from the leased property, is justifiable, and the lower court did not err by misapprehending the legal doctrine on the timing of establishment of the liability for value-added tax payment or the principle of substantial taxation. In so doing, it cannot be accepted as it criticizes the lower judgment on the premise that the lessor of real estate is liable to pay value-added taxes when he was paid the rent in fact.

2. Determination on the grounds of appeal by Defendant Litigation Performers

The issue is that the defendant's tax disposition on February 1, 1984, which the plaintiff claimed the cancellation of the lawsuit in this case, was absorbed into the defendant's disposition on April 2, 1984 to lose its independent existence value. Thus, the court below should dismiss the lawsuit in this case, but the court below accepted part of the plaintiff's claim after reviewing the propriety of the tax disposition in this case, which is unlawful in this regard.

However, the defendant litigation performer did not clearly assert that the defendant made a disposition of increase and correction as of April 2, 1984 without asserting that the defendant made a disposition of increase and correction as of March 1, 1984, and submitted a letter of evidence Nos. 11 and Nos. 12 through 16-1, and No. 1, and No. 16 (Resolution, etc.) which appears as the internal establishment of the resolution of increase and correction as of February 1, 1984, but stated that there is no further evidence to prove that he made a disposition of correction as of March 3, 1984 as of the date of the 24th pleading, and further, it is apparent that the argument regarding the corrective disposition of March 1, 1984 (Evidence No. 12 through No. 16) has been withdrawn from the date of the 25th pleading, and therefore, there is no error in the misapprehension of legal principles as to the administrative disposition that did not exercise the right of explanation in the judgment below.

3. Therefore, all of the plaintiff's appeal and the defendant's appeal are dismissed, and the costs of appeal are assessed against each party. It is so decided as per Disposition by the assent of all participating Justices.

Justices Lee Jae-sung (Presiding Justice)