Whether completion is a conditional construction

It is separate from whether the parties to the construction contract agree on the method of payment of the construction price, to the effect that the supply of conditional services is paid in several installments according to the progress of the construction project.

Article 9 of the Value-Added Tax Act

Article 22 of the Enforcement Decree of the Value-Added Tax Act

1. The plaintiff's claim is dismissed.

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

The Defendant’s imposition of value-added tax of KRW 7.2 million against the Plaintiff on September 1, 2006 is revoked.

1. Details of disposition;

A. On May 27, 2001, the Plaintiff was awarded a contract for multi-household housing (hereinafter referred to as the “construction work”) under the name of “multi-household housing (hereinafter referred to as “construction work”) consisting of four households on the ground of ○○○-dong, Seoul, ○○-dong, 1-○○○.

B. ○○○ was approved to use the above multi-household housing on August 22, 2003, but the Plaintiff continued to complete the instant construction even after the Plaintiff continued to do so on May 31, 2004.

C. In relation to the instant construction project, the Plaintiff issued four tax invoices to beneficiaries as follows, and reported and paid the value-added tax for each taxable period.

D. The Seoul Regional Tax Office, at the audit, pointed out that the time of supply for the instant construction work is the date of approval for the use thereof, and that, if so, a tax invoice issued by the Plaintiff constitutes a tax invoice issued after the entire time of supply.

E. Accordingly, by applying Article 22(2)1 of the Value-Added Tax Act on September 1, 2006, the Defendant imposed the value-added tax of KRW 30 million as the value-added tax for the second period of 2003 and KRW 8 million as the value-added tax for the first period of 2004, as stated in each item of the above Table.

F. On December 27, 2007, the National Tax Tribunal revoked a tax overlap other than additional tax on a tax invoice issued on February 29, 2004 (hereinafter referred to as the "tax invoice of this case") for the following reasons (the imposition of additional tax on the tax invoice of this case remaining revoked by the decision of national tax assessment).

(1) Even after the date of approval for use of multi-household houses, the instant construction project continued with indoor interior interior interior interior interior interior works and additional finishing works, and completed the construction project around May 31, 2004. Thus, the time of supply for construction services is around May 31, 2004.

(2) Therefore, a tax invoice issued on May 31, 2004, which was issued on the second half of 2003, is a tax invoice issued and issued on the basis of the "tax invoice issued before the arrival of the service under Article 9 (3) of the Value-Added Tax Act (amended by Act No. 7007 of Dec. 30, 2003), which is a legitimate tax invoice, as the "tax invoice issued and issued upon the completion of the service provision";

(3) However, it is reasonable to view the instant tax invoice as a false tax invoice according to Article 9(3) of the Value-Added Tax Act (amended by Act No. 7007 of Dec. 30, 2003) at the time, as the “tax invoice issued and issued without receiving any consideration for the service,” prior to the arrival of the service provision.

[Ground of recognition] The Evidence Nos. 1, 16, and No. 1, 2, and 8 of Evidence No. 1-1, 2, and 1-2

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The instant construction contract was concluded under the condition that the construction cost should be paid as a basis for completion. Since the instant construction project is a multi-household building that is only four households, such as large-scale multi-unit housing, which makes it impossible for the instant construction project to sell it in advance, it is decided to complete the remaining process while paying the construction project to the extent necessary for obtaining approval for use. The instant tax invoice is unlawful since the instant tax invoice is a legitimate tax invoice issued at the time of supply as provided in Article 22 subparag. 2 of the Enforcement Decree of the Value-Added Tax Act, by approving the expiration rate of 2.2% of the total construction cost, equivalent to 96.52% of the total construction cost, which is 2.2 billion won, less the total construction cost of KRW 1.5 billion, and is issued at the time of supply as stipulated in Article 22 subparag. 2 of the Enforcement Decree of the Value-Added Tax Act.

(b) Related statutes;

Article 9 of the Value-Added Tax Act

Article 22 of the Enforcement Decree of the Value-Added Tax Act

(c) Fact of recognition;

(1) On May 27, 2001, the Plaintiff and Na○○ had entered into the first contract for the instant construction project and changed the said contract over three occasions. The content of each contract is as follows:

Table Omission of the Table

(2) The Plaintiff and ○○○○ agreed that “the time and method of the advance payment shall not be made” under Articles 5 and 6 at the time of the initial contract, and that “the time and method of the partial payment” shall be appropriated from the sale price (the payment for the construction cost shall be made through the bank loan after the completion of the construction work when the sale is known). Article 19 of the Construction Work Standard Contract attached to the above contract stipulates that “the construction cost shall be covered by the construction cost, the contractor may request an inspection of the completed portion, and in this case the owner shall, without delay, pay the completed payment calculated based on the unit price of the detailed statement of the results of the inspection and the construction price.”

(3) The modified contract, which has more than three times thereafter, states that the terms and conditions of all the contracts prior to the modification shall be part of the agreement with respect to matters not stipulated in the contract modification agreement, in addition to the modification of the content of the construction, the period, and the amount as stated in the above table.

(4) A tax invoice issued and delivered in connection with the instant construction project and the details of payment are as follows.

Table Omission of the Table

(5) On August 22, 2003, ○○○ was approved to use the above multi-household house, and completed registration of preservation of ownership on the whole of the 4 households on September 18, 2003, and thereafter, Na○○ was established several collateral mortgages between October 24, 2003 and May 19, 2004, and paid the Plaintiff money as the construction price of this case.

[Based on the basis of recognition] Gap evidence Nos. 10-12, 13-4, Eul evidence Nos. 3 and 4-1, 2, 5, 6-1, 2, and 9-1, 7-1, 2, and 9, respectively, and the purport of the whole pleadings

D. Determination

In light of the facts acknowledged earlier and the overall circumstances indicated in the argument of this case, it is reasonable to deem that the instant construction contract is a normal construction service supply contract, not a standard payment condition. The entries in the evidence Nos. 3, 4, 5, and 6, respectively, 1, 2, 7-9 are insufficient to reverse the recognition, and there is no other counter-proof. Thus, the instant tax invoice constitutes “tax invoice different from the facts delivered because it was not paid prior to the arrival of the time of supply.” Thus, the instant disposition is lawful.

(1) “Supply of conditional services on the basis of original level of payment” refers to the form of transaction in which a service is supplied over a long-term period after confirming the progress or completion level. The timing and method of payment of the construction cost stipulated by the instant construction contract is merely the content that a loan is received and paid after completion and the sale is not possible, and it cannot be deemed that the completion of the meaning that a loan is paid in several order according to the progress level of construction work is determined.

(2) The Plaintiff alleged that the term portion of the instant construction was paid as the sales price or loan after approval for use. However, as seen earlier, the construction price paid twice on November 11, 2003 and December 16 of the same year after approval for use of multi-household housing was granted on August 22, 2003, regardless of the progress of the construction. Each tax invoice of October 31, 2003 and each of the tax invoices of November 30 of the same year as of October 31, 2003 are not issued by inspection or approval of completed portion, and it is entirely inconsistent with the actual payment period or amount of the construction price.

(3) Even though the construction of this case was conducted over three years from May 27, 2001 to May 31, 2004, it is difficult to believe that the tax invoice of this case was issued after the new construction was inspected at the point of time before the completion of the construction for three months, in light of the fact that the beneficiary, the owner of this case, did not pay the construction cost until November 11, 2003, and received the loan of the newly constructed building as security after obtaining approval for use, and paid the construction cost without its superior.

(4) Ultimately, the instant construction project appears to fall under the ordinary supply of construction services, under which ○○-beneficiary, who is incapable of raising the construction cost, is not paying the construction cost between the Plaintiff and the Plaintiff, whose representative director is, and is entitled to receive the sale price or the loan, to pay the construction cost under the circumstances.

(5) The Plaintiff’s proof Nos. 3, 4, 5, and 6 included the cost of the instant construction project for the three-year period, and increased the flag altitude. As such, the Plaintiff asserted to the effect that the instant construction project is a conditional construction project for which the instant construction project is completed, but it is different from the issue of whether there was any agreement between the parties on the method of payment of the construction price, as it is naturally increased, and it is insufficient to recognize the instant construction project as a conditional construction project for which the completion level is completed.

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and it is so decided as per Disposition.