Early High Court Decision 2008Du1866 ( November 03, 2008)

The meaning of the time when the goods are made available, if they are leased real estate;

Where a business operator concludes a contract to sell a building, if he/she transfers possession to a de facto owner in order to exclusively use and dispose of the building even before the purchase price is liquidated or registration below, it constitutes the supply of goods.

The contents of the decision shall be the same as attached.

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 32,405,290 on March 1, 2008 against the Plaintiff on March 1, 2008 is revoked.

1. Details of the disposition;

A. On August 17, 2007, the registration of ownership transfer was completed on August 14, 2007 with respect to the real estate listed in the separate sheet (hereinafter referred to as the "real estate of this case", and the part of the land of this case and the building of this case) by the Suwon District Court registry office of Suwon District on August 17, 2007 (Provided, That the building listed in the separate sheet No. 19, Nov. 12, 2007; No. 47441, Nov. 12, 2007; No. 47441, Aug. 14, 2007).

B. On August 14, 2007, the Plaintiff received one copy of the supply value of the building of this case 950,000,000, and the issue date of the purchase tax invoice on August 14, 2007 (hereinafter referred to as the “tax invoice of this case”) with respect to the sale of the building of this case, and filed a return of value-added tax for 2 years in 2007 by deducting the input tax amount.

C. As a result of the on-site verification investigation conducted by the Plaintiff on the details of the Plaintiff’s above value-added tax return, the Defendant concluded a sales contract with the YellowA on February 22, 2007 for the instant real estate (hereinafter “the instant first sales contract”) and paid the Plaintiff the down payment amount of KRW 450 million on the day, KRW 350 million on April 6, 2007, KRW 350 million on intermediate payment, and KRW 1.3 million on May 14, 2007, respectively, to pay the full purchase price, and determined that the business place on April 25, 2007 was relocated to the instant building.

D. Accordingly, the Defendant: (a) deemed that the supply of the building of this case was made on May 14, 2007, which was the date of the settlement of the price; and (b) on August 14, 2007, the tax invoice of this case issued on August 14, 2007 was not deducted from the input tax amount on the ground that it constitutes a tax invoice written differently from the fact; and (c) on March 1, 2008, imposed the Plaintiff a value-added tax amount of KRW 32,405,290 for the second period of 207 (hereinafter “instant disposition”).

E. The Plaintiff dissatisfied with the instant disposition and filed an appeal with the Tax Tribunal on May 19, 2008, but was dismissed on November 2, 2008.

[Ground of recognition] Facts without dispute, Gap evidence 2 through 7, Eul evidence 8-1, 2, Eul evidence 3-1 to 4, Eul evidence 5-1 and 2, and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The parties' assertion

(1) The defendant's assertion

The Plaintiff entered into the instant first sale contract with the Yellow City on February 22, 2007, and received the instant real estate on April 25, 2007, and paid the remainder on May 14, 2007 to the Yellow City. As such, the Plaintiff received the instant real estate supply within the taxation period of value-added tax for the first term portion ( January 1, 2007 - June 30, 2007).

(2) The plaintiff's assertion

(A) The Plaintiff entered into the instant first sales contract with the Yellow A, and decided to invalidate the sales contract if it is not permitted by the competent authority to enter into the instant first sales contract, and there was no special problem in obtaining permission to enter into the sales contract as a result of inquiry by the competent authority. As such, the Plaintiff entered into the sales contract on the same day after obtaining permission to enter into the sales contract on the same day.

Accordingly, after obtaining permission for a land transaction contract for the instant land, the Plaintiff entered into a sale contract for the instant real estate (hereinafter “the instant secondary sale contract”) with Yellow on August 14, 2007, and completed the registration of ownership transfer on the instant building on August 17, 200. In light of such circumstances, the time of supply for the instant building should be deemed August 17, 2007, the time of supply for the instant building at the time of the transfer of ownership transfer. Therefore, even if the Plaintiff paid all the purchase money before the instant secondary sale contract, it does not constitute the supply of the instant building as of the date of settlement, and further, even if the Plaintiff received the instant real estate from Yellow A before it, it is merely a lease and does not constitute the supply of goods. Therefore, the instant tax invoice is not written differently from the fact.

(B) Article 21(1)3 of the Enforcement Decree of the Value-Added Tax Act provides that the time the condition is fulfilled in the case of conditional transactions shall be deemed the time of supply. Of the instant sales contract, the part concerning the instant building is a provisional contract concluded on the condition that the Plaintiff and YellowA obtain permission from the competent authority for a land transaction contract for the instant land from the Ansan market on July 24, 2007. Accordingly, the Plaintiff and YellowA fulfilled the condition upon obtaining permission for a land transaction contract for the instant land from the competent authority. Accordingly, the instant secondary sales contract was concluded based on the instant first sales contract, and thus, the instant tax invoice is not written differently from the fact.

(b) Related statutes;

It is as shown in the attached Table related statutes.

C. Determination

(1) Determination on the first argument

(A) Article 6(1) of the Value-Added Tax Act provides that the supply of goods shall be a delivery or transfer of goods on all contractual or legal grounds, and Article 9(1)2 of the same Act provides that where the transfer of goods is not required for the time when the goods are supplied, the time when the goods are made available. The delivery or transfer of goods is premised on the act of transferring the ownership so that the goods can be used and consumed in light of the nature of the value-added tax. The time when the goods are made available means the time when the goods are made available for the actual use of the goods are made available for the real estate. Thus, where the supplied goods are real estate, in principle, the time when the goods are ordered to be ordered to be sold under the name of the other party to the transaction, even before the sales contract was concluded for the sale of the building and the transfer of the goods under the name of the other party to the transaction is liquidated, it constitutes the supply of the goods under the Value-Added Tax Act (see, e.g., Supreme Court Decisions 200Nu360581, Mar. 28, 2960198.

(B) Comprehensively taking into account the purport of the Plaintiff’s argument as to the instant provisional attachment No. 9, and No. 3, No. 1 to No. 4, respectively, the first sale contract of this case was concluded by the Plaintiff on February 22, 2007 with regard to “The seller of the building No. 12 and No. 70, No. 1,994 (No. 200),” and the Plaintiff’s representative director, who is the Plaintiff’s representative director, paid the remainder of KRW 1,70,000 (no. 40,000,000,000,000 won for the remainder of KRW 50,000,000,000,000,000,000,000 won for the remainder of KRW 1,70,000,000,000,000,000,000,000 won.

(2) Judgment on the second argument

As seen earlier, it cannot be deemed that the instant primary sales contract is merely a provisional sales contract, and there is no evidence to acknowledge that a sales contract was concluded on the condition that the instant building would obtain permission for a land transaction contract as alleged by the Plaintiff. Therefore, this part of the Plaintiff’s assertion is without merit.

(3) Sub-decisions

Therefore, the taxable period to which the time of supply of the real estate of this case belongs is 1, 2007. The tax invoice of this case is prepared on August 14, 2007, which belongs to the second taxable period of 2007, and is not the same as the time of supply. The date of preparation of the tax invoice is different from the actual time of transaction, and if the transaction is confirmed according to the entries of the tax invoice, the input tax amount on the fact of transaction should be deducted. However, in light of the legal principles, the tax invoice of this case constitutes a case where the taxable period to which the date of preparation of the tax invoice belongs belongs belongs and the actual time of transaction is unified (see Supreme Court Decision 95Nu634, Aug. 11, 1995). Thus, the disposition of this case constitutes a case where part of the requisite entry items under the main sentence of Article 17 (2) 2 of the Value-Added Tax Act is not legitimate from the output tax amount of this case.

3. Conclusion

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