Cho Jae-2016-west-3183 (2017.05)

Where the construction cost is returned pursuant to the agreement, the relevant refund shall not be a loan, but shall be a sales claim.

Where the construction cost received under the initial agreement pursuant to the construction contract, etc. is returned, the refund shall be not the loan but the sales bond, and if the returned sales bond is not recovered, it shall be subject to the bad debt tax deduction.

Article 16 of the Value-Added Tax Act, and Article 87 of the Enforcement Decree of the said Act (Scope of Deduction of Bad Debt Tax Amount)

2017Guhap2264 Disposition to revoke the imposition of value-added tax

JOO

○ Head of tax office

March 30, 2018

April 27, 2018

1. The Defendant’s disposition of imposing value-added tax of KRW 000,000,00 (including additional tax) on the Plaintiff on May 1, 2016 exceeds KRW 0,000,000 among the imposition of value-added tax of KRW 2,00,000 on the Plaintiff in 2014 shall be revoked.

2. The plaintiff's remaining claims are dismissed.

3. 1/100 of the costs of lawsuit shall be borne by the Plaintiff, and the remainder by the Defendant, respectively.

Cheong-gu Office

The Defendant’s value-added tax amounting to KRW 000,000,000 for the second year of 2014 against the Plaintiff on May 1, 2016 (Additional tax)

The imposition of tax shall be revoked.

1. Details of the disposition;

A. On July 21, 2008, the Plaintiff entered into a new construction contract (hereinafter referred to as the “instant contract”) with A (hereinafter referred to as “A”) on KRW 00,000,000,000 (the final contract for revision made two times thereafter) including value added tax, with the Plaintiff as the construction cost of KRW 00,00,000,00 (the final contract for revision made two times thereafter).

B. After completion of the instant construction project, the Plaintiff deducted the amount from the output tax amount to the Defendant, on the ground that the additional value-added tax amount of KRW 00,000,000 (the amount of the outstanding attempted credit amount is KRW 0,000,000,000) was the bad debt tax amount of KRW 00,000 (0,000,000 x 10/110,000 x less than KRW 10/110,00), the Plaintiff deducted it from the output tax amount, and filed a return on the second half-year value-added tax in 2014.

다. ■■지방국세청장은 2015. 10.경 피고에 대한 업무감사를 실시한 후, 이 사건 채권 은 공사대금채권이 아니라 대여금채권이므로 대손세액 공제요건에 해당하지 않는다는 이유로 대손세액 공제를 부인하여야 한다는 내용의 현지시정 명령을 하였다.

D. Accordingly, the Defendant denied the deduction of bad debt tax amount of KRW 000,000,000, and on May 1, 2016, the Defendant corrected and underground for the Plaintiff the amount of value-added tax of KRW 000,000,000 (including additional tax) for the second year of 2014.

E. Accordingly, the Plaintiff filed an appeal with the Tax Tribunal on July 26, 2017, but was dismissed on January 5, 2017.

2. Whether the instant disposition is lawful

A. The parties' assertion

1) Plaintiff

Although the instant claim is not a loan claim but a loan claim, it is unlawful to deny the deduction of bad debt tax amount even though it is a bad debt claim.

2) Defendant

The instant claim does not constitute a bad debt claim as a loan claim, not a contract price claim, but a loan claim, and cannot be deemed to have become final and conclusive during the second period of 2014, and the instant disposition denying the bad debt tax deduction is lawful.

B. Relevant statutes

It is as shown in the attached Form.

(c) Fact of recognition;

1) The main contents of the instant contract are as follows.

2) On December 31, 2009, the Plaintiff and AA extended the construction period of the instant contract from August 1, 2009 to March 11, 2010; increased the construction cost to KRW 00,000,000; and on April 30, 2010, the construction period of the instant contract was finally extended from August 1, 2008 to April 30, 2010; the construction cost was increased to KRW 00,000,000.

3) On October 9, 2008, AB obtained a loan of KRW 00 billion as construction fund for the instant construction project from BB (hereinafter “B”), and at the time, the terms and conditions of credit approval include “to maintain a balance of KRW 0 billion in the construction cost management account per party”.

4) The main contents of “AA construction work payment report” prepared by the Plaintiff’s director in charge of the finance department are as follows.

5) The main contents of the “B-to-house report” prepared by such person in charge are as follows:

6) On October 10, 2008, pursuant to Article 37(8) of the General Conditions of the Contract of this case, the Plaintiff jointly and severally guaranteed a loan obligation to AAB, and prepared and submitted to B a letter of commitment and a guarantee of collateral guarantee that the Plaintiff waives all rights, such as the construction right, lien, etc., of the instant construction building in case the project cannot be carried out for any reason related to the instant construction project or the Plaintiff violated the instant contract.

7) The Plaintiff, while continuing the instant construction from November 12, 2008 to April 30, 2010, filed a claim for progress payment (value + value added tax) with A over 10 times, issued a tax invoice, received progress payment from BB, and returned 30% of the value of supply, excluding value added tax, again to A through nine times.

8) The Plaintiff accounting of the amount of the tax invoice at the time of filing a claim for the progress payment with AA, and then deposited the amount of the progress payment from BB as the amount of the construction payment, set off against the said amount of the construction payment, and accounts for the amount returned to A as “the amount of the construction payment again” in view of the amount that should have been received after completion. On April 30, 2010, after completion of the instant construction, the Plaintiff received only KRW 0,000,000,000 from A to August 31, 2011, and received only KRW 0,000,000,000 from the said amount of the refund until August 31, 2011.

9) After August 31, 201, the Plaintiff made efforts to recover the instant claim, but as the financial difficulties of AA have deteriorated, the Plaintiff filed an application for provisional seizure of real estate for preserving the claim for construction price of KRW 0,000,000 (the above KRW 0,000,000,000 + interest equivalent +00,000,000) with D court as the debtor, with a joint and several proof of AA and AA’s construction price liability as of September 11, 2012, and received a provisional seizure order on September 20, 2012.

10) On November 13, 2012, the Plaintiff filed a payment order for the claim for the payment of the construction cost of KRW 0,000,000 with D court as the Defendants, and the Defendants raised an objection thereto. However, on January 16, 2013, D court rendered a ruling that the Defendants jointly and severally paid the Plaintiff the said KRW 0,00,000,000, and the said ruling became final and conclusive on March 7, 2013 (hereinafter “the final and conclusive judgment of this case”).

11) AA는 재정악화로 대출금 상환이 어렵게 되자 2013. 7. 26. DD법원에 회생신청을 하였으나, DD법원은 2014. 4. 7. 회생가능성이 없다는 이유로 회생절차 폐지결정을 하였다. AA가 2013. 12. 18. 법원에 제출한 회생계획안에 의하면, AA는 이 사건 채권 을 '일반대여채무'가 아니라 '상거래채무'로 신고하였고, 당시 AA가 소유하고 있는 유 형자산(토지, 건물)은 ㅁㅁ시 ㅁㅁ구 ㅁㅁ동 0,000㎡ 및 그 지상 0층, 지하 0층건물과 ㅁㅁ시 ㅁㅁ구 ㅁㅁ동 00-0 건물뿐이었다.

12) The lending financial institutions of A applied for an auction of the building owned by AA on the beginning of the year 2013 for the collection of loans. In each of the above auction proceedings, the Plaintiff also made a demand for distribution of the said KRW 0,000,000 with the final and conclusive judgment of this case as the title of execution on April 18, 2013 and April 19, 2013, but did not receive dividends due to the lack of the remaining amount after the senior creditor was distributed to the senior creditor. The results of each of the above auction are as follows.

13) On January 25, 2015, the Plaintiff filed a return on the confirmation of the second value-added tax for the Defendant on January 25, 2015, and deducted KRW 00,000,000, which was calculated as the value-added tax amount on November 21, 2014, from the output tax amount, on the ground that “the recovery of claims became impossible due to the repeal of the A rehabilitation procedure or the auction” was made impossible.

14) According to the National Tax Service’s computer network, there was no real estate owned by AA and Aa as of the date when the bad debt becomes final and conclusive.

D. Determination

1) The nature of the instant claim

According to Article 45(1) of the former Value-Added Tax Act (amended by Act No. 1523, Dec. 19, 2017; hereinafter the same), a claim entitled to a bad debt tax deduction shall be a sales claim, such as credit account receivable, for which a business operator supplies goods or services subject to the imposition of value-added tax, and this case’s claim constitutes a contract price claim under the instant contract.

When comprehensively considering the following circumstances revealed by the aforementioned facts and the purport of the entire pleadings, the substance of the instant claim is the claim for construction cost under the instant contract, and it cannot be deemed as a loan claim under a separate agreement.

A) AA paid 70% of the progress payment of the instant construction to the Plaintiff under the instant contract every two months, and 30% of the progress payment was agreed to be paid every two years after the completion of the construction. This is because the 70% of the total work payment out of the total construction payment under the situation that AA is short of its own funds was appropriated for loans, and 30% of the delayed payment was to be made and paid through F after completion.

B) At the time of AA’s loan of approximately KRW 00 billion for the first time from BB after the instant contract, the Plaintiff, and the Plaintiff filed for progress payment with A, BB on behalf of the Plaintiff, and 30% of the advance payment was agreed to pay the Plaintiff the progress payment directly with the money deposited in AB on behalf of the Plaintiff. The Plaintiff and AA confirmed that, before the instant agreement, 30% deposit was not for the payment of the construction payment to the Plaintiff, 30% deposit deposited in AA out of 100% of the progress payment received from BB pursuant to Article 18 of the instant contract.

C) Upon receiving progress payment from BB by claiming progress payment from AA, the Plaintiff returned again the amount equivalent to 30% of the value of supply excluding value added tax (total amount of 00,000,000,000) to A according to the above agreement and prior agreement. There was no separate agreement between the Plaintiff and AA on setting new rights in relation to the amount equivalent to 30% of value added tax.

D) The Plaintiff appropriated the instant claim as “the amount of construction deposit,” not “the amount of provisional payment,” but “the amount of construction deposit,” and also reported the instant claim as “the first debt rather than “the amount of loan deposit,” upon filing a rehabilitation application with the court.” The Plaintiff filed a lawsuit against A in respect of the said amount of KRW 0,000,000,000, and received a final and conclusive judgment.

E) Although the interest equivalent to the interest rate on time deposit in the bank at the time of the payment for the progress payment delayed under the instant contract was added to the “interest equivalent to the interest on the time deposit in the bank at the time of the time of the payment for the progress payment, this can be seen as a cause of interest on the deferment of the payment for the progress payment. Therefore, it is insufficient to recognize that the Plaintiff and the AA made a separate loan agreement with the Plaintiff solely on the foregoing interest payment agreement (the Plaintiff stated that the payment for the progress payment received with the AA was “loan” or “collection of the loan”, each part of the evidence Nos. 11 and 12 stated in the instant judgment is about KRW 00,000,000 on the actual loan amount of the two occasions from the

F) The issuance of a tax invoice for all progress payments, including 30% of the total progress payments for which the Plaintiff is deferred, is the case where the payment for the progress payment is made in installments under the condition that the instant contract is completed, and thus, Articles 16(2) and 29(3)6 of the former Value-Added Tax Act, and Articles 29(1) proviso 2 and 61(1)2 of the former Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 26071, Feb. 3, 2015; hereinafter the same) of the former Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 26071, Feb. 3, 2015; hereinafter the same) regarding the portion of the price that the Plaintiff would receive after the completion of the provision of the service, deeming the “each portion of the price that the Plaintiff would receive under the contract as the supply price at the time of the service supply.” Therefore, it cannot be deemed that the Plaintiff separately loaned part of the portion under the instant contract

2) Whether the cause for the bad debt tax deduction arises

According to Article 45 (1) of the former Value-Added Tax Act, Article 87 (1) of the former Enforcement Decree of the Value-Added Tax Act, and Article 19-2 (1) 8 of the Corporate Tax Act, if it is recognized as an irrecoverable bond due to the debtor's bankruptcy, compulsory execution, etc., a bad debt tax

Since August 31, 2011, the Plaintiff filed a lawsuit for construction cost claim against AA due to the aggravation of the financial crisis of AA, and received a final decision of winning the lawsuit, and the Plaintiff participated in the auction procedure that the right holder applied for all tangible assets owned by A and made a demand for distribution, but the priority claim was not remarkably distributed in excess of the distributable amount, and the fact that A received a decision to discontinue the rehabilitation procedure on April 7, 201, on the grounds that there is no possibility of rehabilitation on April 7, 2014. According to the above facts, it is reasonable to view that AA, the debtor of the instant claim, was virtually bankrupt, and the Plaintiff was unable to recover the instant claim through compulsory execution. Accordingly, the claim of this case occurred as a bad debt tax deduction ground.

(iii)the time when the bad debt becomes final;

Bad debt tax deduction is applicable when making a definite report on the taxable period in which the bad debt becomes final and conclusive by reason of bad debt. In ordinary cases, in the case of compulsory execution, bad debt becomes final and conclusive on the date when creditors are deemed not to receive dividends as a result of compulsory execution against all assets of the debtor. However, even before the distribution schedule becomes final and conclusive, if it is evident that the senior claim in the course of compulsory execution exceeds the appraised value or the distributable amount and there is no amount to be distributed by the selling creditors, it can be deemed that bad debt becomes final and conclusive at the time when it is objectively evident in such circumstances, and it cannot be said that bad debt has not

그런데 AA가 보유하고 있는 유형자산의 전부에 대한 강제집행 과정에서 선순위 채권 이 감정평가액과 배당가능 금액을 현저히 초과하는 사실, ㅁㅁ은 2014. 9. 1. 매각되 어 2014. 11. 21. 매수인에게 소유권이전등기가 경료되고, 2014. 12. 24. 배당표가 작성된 사실, ㅂㅂ은 2014. 6. 19.과 2014. 7. 24. 매각되어 2014. 10. 15. 매수인에 게 소유권이전등기가 경료되고, 2015. 1. 6. 배당표가 작성된 사실은 앞서 본 바와 같고, 달리 위 배당표에 배당이의 사유가 있어 원고가 배당받을 가능성이 있었다고 인정할만한 사정은 없어 보이므로, 위 법리에 비추어 2014년 제2기에는 이 사건 채권 이 강제집행을 통해 회수할 수 없음이 객관적으로 명백해져 대손이 확정되었다고 봄이 타당하다.

4) Scope of legitimate tax amount and revocation

Since the Plaintiff filed an excessive deduction of KRW 00,000,000 as bad debt tax amount even though the lawful bad debt tax amount was KRW 000,000,000, the Plaintiff would have filed an excessive deduction of KRW 0,000,000 among the disposition in this case. Therefore, the portion exceeding the above KRW 0,000,000 among the disposition in this case is revoked as it is justifiable, since the disposition in this case exceeds the above KRW 0,00,000 + additional tax for underreporting amount of KRW 00,000 (0,000 x 10%) + additional tax for underreporting amount of KRW 00,000 (0,000 x 03% x 000), it is unlawful, and thus, it is revoked.

3. Conclusion

Therefore, the plaintiff's claim is justified within the above scope of recognition, and the remaining claims are dismissed as it is without merit. It is so decided as per Disposition.