(a) Whether the supply of services subject to value-added tax is made when the services are supplied to the Korea Highway Corporation after newly constructing a rest area of expressway in return for acquiring the right to operate without compensation

(b) In cases under paragraph (1), the tax base of value-added tax (=total construction cost)

A. In accordance with a donation agreement with the Korea Highway, the Plaintiff newly constructed the said rest area with the owner of the said land as a contractor, and after obtaining a construction permit, the Plaintiff as a contractor, and subsequently completing registration of preservation of ownership in the future of the Korea Expressway. If the Plaintiff exempted the Plaintiff from the usage fee until the total amount of the usage fee reaches the appraised value of the said rest area while granting the Plaintiff’s right to operate the rest area, the provision of construction services to the said rest area and the acquisition of the right to use the said right to use the land is in an economic quid pro quo relationship. Therefore, the Plaintiff’s supply of the said rest area to the Korea Expressway

B. In the case of the preceding paragraph, the Plaintiff acquired the right of free use until the total amount of the usage fees reaches the appraised value of the building at the rest area, not the price for the provision of construction services. Therefore, the imposition standard of value-added tax on such right shall be the total market price, namely, the construction cost, under Article 13(1)2 of the Value-Adde

(a) Article 7 (1) 2 of the Value-Added Tax Act;

B. Supreme Court Decision 84Nu465 delivered on February 10, 1987 (Gong1987,445) 89Nu1797 delivered on February 27, 1990 (Gong190,811) 90Nu35 delivered on March 27, 1990 (Dong)

Attorney Attorney Park Shin-chul, Korea Industrial Corporation

The Director of the National Tax Service

Seoul High Court Decision 88Gu9017 decided May 9, 1989

The appeal is dismissed.

The costs of appeal are assessed against the plaintiff.

We examine the grounds of appeal.

1. According to the reasoning of the judgment below, the court below acknowledged the following facts based on the macroscopic evidence that the plaintiff newly constructed a telescopic rest area under the plaintiff's funds and responsibility, and then agreed to contribute it to the Korea Highway as a project owner under the above agreement, and the plaintiff as the contractor was a construction permit on September 11, 1985 and completed a completion inspection on August 17, 1986, and completed a registration of preservation of ownership on September 17, 1986. The plaintiff granted the right to operate the rest area of this case to the plaintiff and exempted the user fee of the rest area of this case until the total amount of the fees assessed by the Korea Appraisal Board reaches the appraised value. In light of the records, the above fact-finding theory of the court below is justified, and there is no violation of the rules of evidence or incomplete deliberation as to the facts charged.

If the facts are as determined by the court below, the plaintiff's provision of construction services to the rest area of this case and the acquisition of the right to use the rest area of this case is in economic quid pro quo. Thus, the court below is just in holding that the plaintiff's act of newly constructing the rest area of this case and supplying it to the Korea Highway Corporation constitutes the supply of services which are subject to the imposition value tax. There is no error of law by misunderstanding the rules of evidence, misunderstanding the legal principles

2. According to the facts of the decision of the court below, since the plaintiff acquired the right of free use until the total amount of usage fees reaches the appraised value of the building at the rest area, the tax base of the value-added tax shall be the total amount of the market price of the above service under Article 13(1)2 of the Value-Added Tax Act (see Supreme Court Decision 84Nu465, Feb. 10, 1987). The judgment below to the same effect is justifiable, and there is no error of law by misunderstanding the legal principles, such as the theory of lawsuit.

3. Therefore, the appeal is dismissed, and all costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Yoon So-young (Presiding Justice)