interest paid pursuant to a payment agreement at the time of the payment of the construction cost shall be deemed damages for delay.

Where any balance of construction services are provided and interest is paid pursuant to a payment agreement under the terms and conditions of installment repayment for seven years with a five-year grace period from the date of completion, such interest shall constitute damages for delay and shall not be deemed interest on the non-business payment.

Article 73 of the Corporate Tax Act

1. On February 5, 2005, the disposition that the head of ○○ Tax Office notified the Plaintiff to pay corporate tax of KRW 42,89,99,90 for the year 2001, and corporate tax of KRW 42,89,99,990 for the year 2002, and the disposition that the head of ○○ Tax Office notified the Plaintiff to pay KRW 34,319,990 for the corporate tax of February 1, 2005, among the corporate tax of KRW 34,319,99,990 for the Plaintiff on February 1, 2005, is revoked.

2. The remaining claims are dismissed.

3. The plaintiff bears 4/5 of the costs of lawsuit between the plaintiff and the defendant ○○ Tax Office, and the remainder shall be borne by the defendant ○○ Tax Office. The costs of lawsuit between the plaintiff and the defendant ○○ Tax Office shall be borne by the defendant ○○ Tax Office.

On February 5, 2005, the disposition in paragraph (1) of this Article and the disposition that the head of ○○ Tax Office corrected and notified the Plaintiff of value-added tax of 167,349,720 won for the first term of February 5, 2001, of value-added tax of 162,154,010 won for the second term of 201, value-added tax of 151,819,920 won for the first term of 202, value-added tax of 146,36,800 won for the second term of 202.

2. Grounds

(2) On August 12, 198, the Plaintiff concluded a contract for construction work with ○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○ KRW 2,00,00 KRW 2,00 KRW 2,000,00 KRW 2,000,00 KRW 2,000,00 KRW 2,000,00 KRW 2,000,000 KRW 2,000,000, KRW 2,000,000, KRW 2,000,000, KRW 1,56,000,00,000, KRW 5,000,000, KRW 2,06,000,00,00,00,00.

2. Accordingly, the Plaintiff alleged that the payment agreement of this case constitutes a service supply contract under long-term installment condition under Article 22 subparagraph 2 of the Enforcement Decree of the Value-Added Tax Act, and the interest rate on the balance paid by the Plaintiff to ○○ Stock Company constitutes the construction cost as the price to be paid under the service supply contract, and that the disposition of this case was unlawful and unjust since the Plaintiff did not recognize the input tax deduction on the tax invoice corresponding to the interest paid, and the relevant provision is as shown in the attached Form. Thus, the interest paid by the Plaintiff to ○ Stock Company from January 31, 2001 to October 31, 202 pursuant to the payment agreement of this case constitutes the damages for delay paid by the Plaintiff while delaying the payment of the balance under the construction contract of this case to the Plaintiff, and it cannot be deemed that the payment of the service under long-term installment condition under Article 22 subparagraph 2 of the Enforcement Decree of the Value-Added Tax Act constitutes the lawful disposition of this case from the point of view of view that the Defendant is lawful.

3. However, as seen earlier, the interest paid by the Plaintiff to ○○ Company pursuant to the instant payment agreement can only be deemed as falling under damages for delay paid by the Plaintiff while delaying the payment of the balance under the instant construction contract to the Plaintiff, and cannot be deemed as falling under interest on non-business loans, i.e., interest on loans. It does not change on the ground that ○○ Company obtained profits similar to financial gains in the relationship of monetary lending and lending. Moreover, there is no evidence to acknowledge that the interest falls under the interest subject to the imposition of interest income tax, and thus, the instant second disposition and third disposition made by the Defendants from another standpoint is unlawful.

4. It is so decided as per Disposition for the above reasons.

Value-Added Tax Act

Article 9 (Transaction Time)

(2) The time when services are supplied shall be the time when services are supplied or goods, facilities or rights are used.

(4) Matters necessary for the time of supply under paragraphs (1) and (2) shall be prescribed by Presidential Decree.

Enforcement Decree of the Value-Added Tax Act

Article 21 (Time of Supply for Goods)

(1) The time of supply for goods under Article 9 (1) of the Act shall be as follows: Provided, That if the time of supply for goods supplied before closure of business arrives after such cessation of business, the time of supply shall be deemed the time of

1. For cash sales, outdoor sales, or installment sales, when goods are delivered or made available;

2. In cases of long-term installment sales, when each part of the price is decided to be received;

(5) Long-term installment sales under paragraph (1) 2 shall be those falling under any of the following subparagraphs among those for which the price for the supply of goods is paid in monthly, yearly, or by other installment payments:

1. The price shall be paid in two or more installments;

2. The period from the day after the delivery date of the goods to the date of payment of the last installment shall be one year or more.

Article 22 (Time of Supply for Services) The time of supply for services under Article 9 (2) of the Act shall be as follows: Provided, That if the time of supply for services supplied before closure of business arrives after such closure of business, the time of supply for such services shall be deemed

1. In the case of ordinary supply, when the offer of the service is completed;

2. Where services are supplied on the basis of the standard payment, interim payment, long-term installment or other terms, or services are continuously supplied on the basis of which the unit of supply cannot be partitioned, when each part of the price is received;

3. Where the provision of services is completed and the value of supply is determined, in case where the provisions of subparagraphs 1 and 2 are not applicable.

Article 48 (Calculation of Tax Base)

(1) The tax base under the provisions of Article 13 (1) of the Act shall include payments, commissions, fees, and all other monetary values in a relationship of consideration regardless of the pretext or pretext received from a trader.

(2) For outdoor sales and installment sales, the total value of the goods supplied shall be the tax base.

(3) For long-term installment sale, each part of the price received according to a contract shall be the tax base.

(4) Where goods or services are supplied on condition of completion, standard payment and interim payment, or goods or services are continuously supplied, each part of the price determined to be received under a contract shall be the tax base.

Corporate Tax Act (amended by Act No. 7838 of Dec. 31, 2005)

Article 71 (Collection and Refund)

(3) If a withholding agent as prescribed in Article 73 fails to collect the tax amount to be collected or to pay the collected tax amount within the time limit, the superintendent of the competent district tax office having jurisdiction over the place of tax payment shall, without delay, collect from the withholding agent the amount equivalent to the tax amount to be withheld and paid, an additional tax amount as prescribed in Article 76 (2): Provided, That if the withholding agent fails to withhold the tax and the taxpayer has already paid the corporate

Article 73 (Withholding)

(1) Where a person who pays interest income under Article 127 (1) 1 of the Income Tax Act (including revenue amount under the Financial Insurance Act as prescribed by the Presidential Decree) and distributed dividend of investment trust proceeds to a domestic corporation under Article 17 (1) 5 of the same Act (hereinafter referred to as a “tax withholding agent”) pays the amount, he shall collect the corporate tax equivalent to the amount calculated by applying the tax rate under the following subparagraphs to the amount paid (hereinafter referred to as “collection”) and pay it to the competent tax office having jurisdiction over the place of

1. 14/100 in cases of income from profit (25/100 in cases of profits from non-business loans under Article 16 (1) 12 of the Income Tax Act);

Article 76 (Additional Tax)

(2) In case where the withholding agent under the provisions of Article 73 fails to pay the tax amount withheld or to be withheld within the time limit for payment, or pays it insufficiently, he shall pay the larger of the amounts falling under the following subparagraphs as additional taxes: Provided, That if the withholding agent is the State or a local government

1. The interest rate prescribed by the Presidential Decree in consideration of the interest rate applied by X financial institutions to overdue loans during the period from the day following the payment deadline of X to the date of voluntary payment or the date of payment notice, and in this case, the amount concerned shall be limited to 10/100 of the unpaid tax amount (underpaid tax amount); and

2. 5/100 of the unpaid tax amount (shortage of tax where tax was paid less).

(7) Where a domestic corporation which is liable to submit a written payment statement under the provisions of Articles 120 and 120-2 of this Act or Articles 164 and 164-2 of the Income Tax Act fails to do so within the time limit under the provisions of paragraphs (1) and (3) of the same Article, or where the written payment statement submitted under the provisions of the same Article falls under a case of unclearness as prescribed by the Presidential Decree, the chief of the district tax office having jurisdiction over the place of tax payment shall collect as corporate tax the amount calculated by adding an amount equivalent to 2/100 of

Income Tax Act (amended by Act No. 7528 of May 31, 2005)

Article 16 (Interest Income)

(1) Interest income shall be the following income, generated in the relevant year:

12. Profits accruing from a non-business loan;

Article 127 (Liability for Withholding)

(1) Any person who pays the following income or revenue amount to a resident or nonresident in Korea, shall collect the income tax on such resident or nonresident through withholding under the provisions of this Section:

1. The interest income amount end;