The lease contract of this case is subject to the Act prior to the amendment, which is before the provision of lease service is subject to value-added tax.

Through the concession agreement dated June 17, 2002, the plaintiff and the non-party company agreed on the criteria and methods to specify the important matters of the lease agreement for the water of this case in the future.

[The Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 1930 of Feb. 9, 2006) and Article 38 (Scope of Tax Exemption for Goods or Services Supplied by the State, a local government, or a local government association)

aa

2015Guhap401 Disposition to revoke the imposition of value-added tax

AAdo

o Head of the tax office

July 21, 2015

September 1, 2015

1. The Defendant’s imposition of value-added tax of KRW 523,767,840 for the first term of July 2, 2014 against the Plaintiff on July 2, 2014, and the second term value-added tax of KRW 508,059,930 for the second term of 2009, shall be revoked. 2. The Defendant’s litigation cost shall be borne by the Defendant.

The same shall apply to the order of the Gu office.

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1. Details of the disposition;

A. On June 17, 2002, the Plaintiff, a local government, concluded a concession agreement on the private investment facilities business of BB counterpart (hereinafter referred to as the “instant facilities”) between BB counterpart Co., Ltd. (hereinafter referred to as the “Non-Party Co., Ltd”) and the project implementer under the Private Investment Act (hereinafter referred to as the “Private Investment Act”), which is a public-private partnership on infrastructure on January 27, 2002, as the Act on Private Participation in Infrastructure (hereinafter referred to as the “Private Investment Act”), and the main contents are as follows.

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Part I General Provisions

Article 1 (Purpose) The purpose of this Convention is to enter into an agreement between AA and a concessionaire with respect to the implementation of a private investment project for BB counterpart in accordance with the Private Investment Act, the Enforcement Decree of the same Act, the basic plan for private investment projects, and the basic

Article 2 (Definitions), unless otherwise provided for in this Convention, the definitions of terms used in this Convention shall be as follows:

5. Construction period: The period from the commencement date of construction of this road pursuant to the implementation plan and this Convention to the day before the date on which a project operator files an application for the final confirmation of construction completion of all sections of the road under the

7. Construction expenses: Construction expenses stipulated in this Convention, including road construction expenses and construction expenses, etc. incidental to roads;

9. The management and operation rights means the management and operation rights which AA Do governor establishes for the project in accordance with the Private Participation Act and this Convention for the project.

18. The term "road works expenses" means construction expenses excluding the construction expenses incidental to roads, among the construction expenses for the construction of facilities of this project;

20. Costs for construction of incidental facilities to roads: Costs for construction of incidental facilities to roads; and

24. Gratuitous Use Period: The period for a project operator to obtain management and operation rights relating to the project and to use and benefit from the project facilities without compensation.

28. Base toll revenue: 90% of the estimated toll revenue for a specific business year specified in Appendix 6-1, unless otherwise stipulated in this Convention.

32. Revenue from this project: Revenue from toll revenue and facilities projects appurtenant to the implementation of this project (limited to the implementation of the snow project at the time annexed to the road) and other revenue; 38. Project period means the period from the date of designation of the project operator to the end of the free use period;

39. Business Return: The expected return on the project of a concessionaire as determined by an agreement between AAA and the concessionaire, which applies to the business related formula for adjusting the return and the user fee under the basic plan for the private investment project.

47. The starting date of operation: the date as provided in Article 34;

58. General project cost: project cost borne by the project implementer from among the total project cost for the implementation of this project computed pursuant to Article 22 (2) of the Enforcement Decree of the Public-Private Partnerships Act.

59. Total project cost: the total amount of the project cost required for the construction of this project facilities, and shall be calculated pursuant to Article 22 of the Enforcement Decree of the Private Investment Act.

65. Redemption Criteria: 110% of the estimated toll revenue for a specific business year specified in Appendix 6-1.

67.The Parties to the Convention means AA road and a project operator.

Part II (Designation of Project Implementer) Article 3 of the Framework Agreement on Private Participation, the Enforcement Decree of Public-Private Partnerships Act, the Master Plan for Facilities Projects, and this Convention, designate a non-party company as a project implementer for the project, establish the management and operation rights, and designate, approve, establish and grant to the project implementer the qualifications and rights to perform the following acts:

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2. Free use of the site of this project for the construction and operation under subparagraph 1; 3. Free use of the site of this project; and

4. Maintenance, management and operation of facilities constructed pursuant to subparagraph 1 and imposition and collection of tolls;

5. Other minor profitability projects within the project section, Article 4 (Period of Gratuitous Use)

(1) Except as otherwise provided for in this Convention, the period of operation shall be the same as the period of operation, and the period of free use referred to in subparagraph 3 of Article 3 shall be 30 years from the commencement date of operation and the management rights shall continue to exist

Article 5 (Reversion of Project Facilities) Ownership of the road, auxiliary facilities to the road, and facilities ancillary to the road shall vest in the Government at the same time as the establishment of the management and operation rights, and the project operator shall transfer the right of free use, and the right of management and operation under this Convention to AA after the end of the project period.

This Convention shall enter into force upon its conclusion. The total project costs of Section 1 (Total Project Costs) of Chapter 4 shall be KRW 1,377.6.1 billion (AA shall be excluded from the project costs to be borne) as of December 31, 2001, unless the project costs are subsequently modified pursuant to this Convention, and the detailed details thereof shall be as shown in Appendix 2. Article 12 (A also Shared Project Costs) shall bear the compensation for the project site except for the site of the place of business.

Part V Matters concerning construction works

Article 14 (Right to Occupy and Use Site) ADo shall allow the project operator to exercise, during the project period, the exclusive right, the right to use and other rights which the project operator considers necessary for this work, without paying any payment or other charges to AA or related authorities so that the project operator does not interfere with construction and operation.

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Article 18 (Construction Costs)

(1) The construction cost shall be KRW 1,213.7.6 billion on December 31, 2001, based on variable prices.

Article 19 (Period of Construction) The construction period of this road shall be 48 months from the commencement date of construction: Provided, That if it is deemed necessary to extend the construction period due to any cause attributable to AA, force majeure event or other causes handled in the same manner as such, the construction period may be extended. In such cases, the burden of proof shall be borne by the project operator, and the project operator and AAB history (or the delegated person) shall be determined by prior consultation about the

Part 6 Matters concerning management and operation

Article 34 (Commencement of Operation) The start date of Operation shall be the date on which the management and operation rights of the AA Do Governor are established and the tolls is actually collected: Provided, That where the road is operated with authorization for use prior to completion, it shall be the date on which the tolls is commenced by operating the road.

Article 35 (Maintenance and Management of Facilities and Securing of Quality)

(1) A project operator shall maintain and manage all sections of this road so that it can maintain its function, and manage this road in a manner consistent with the public interest by performing his/her duty of due care as a good manager.

Article 39 (Operational Expenses)

(1) The operating expenses, with the exception of corporate tax, shall be KRW 782.6.7 billion as of December 31, 2001. The operating expenses shall be KRW 782.7 billion. The operating profit rate and the operating profit rate under Chapter 7 and Article 40 (Business Return) shall mean the real operating profit rate after the tax, and shall be 9.20%.

Article 41 (Collection of Tolls)

1. Unless otherwise provided for in this Convention, a project operator shall collect tolls from vehicles that drive on the road in accordance with this Convention during the operating period. Article 43 (Initial Tolls)

1. The initial tolls as of the date of conclusion of this Convention (hereinafter referred to as "basic tolls") shall be KRW 961 (including Class 1 passenger cars and value added tax) as of December 31, 2001 as of December 31, 2001, as shown in Appendix 5. Article 44 (Regular Adjustment of Tolls)

- 6- 1 Tolls may, in principle, be changed only once a year during the operation period.

(2) Any project operator shall autonomously determine the annual tolls for each business year in consideration of the rate level of the toll road and the current status of the substitute road, etc. within the range of the consumer price index fluctuation portion in the previous year and report thereon to AA Governor: Provided, That where the project operator had not adjusted or only partially adjusted the tolls under this paragraph before the relevant year he/she intends to adjust the tolls, he/she shall adjust the tolls within the extent of Article 45.

(1) When any of the following causes occurs, tolls shall be adjusted in accordance with the principles and methods set forth in this Convention:

2. Where the actual toll revenue in the immediately preceding year falls short of the basic toll revenue, or exceeds the basic toll revenue for recovery;

3. Where it is recognized in this Convention.

CHAPTER 11 Termination of the Convention and Article 58 (Termination of the Convention due to Termination)

(1) The Convention shall, unless terminated even under the provisions of Article 59, terminate upon the expiration of the period of free use prescribed in Article 4 (1), and in such cases, the project implementer's rights to manage and operate shall be extinguished, and AA shall also cancel its management and operation rights in accordance with the relevant Acts and subordinate statutes.

(2) If a project operator files a written application at least six months before the end of this Convention, a project operator may grant the project operator the right to manage and operate the project facilities after the expiration of the period of free use, based on judgment of AA, and in such cases, the conditions shall be governed by the separate agreement between Gyeonggi-do and the project operator in accordance with the relevant statutes at the time.

B. After that, on July 22, 2003, the Plaintiff entered into a concession agreement that reflects the modified contents (hereinafter “the concession agreement on July 22, 2003”) with the non-party company on the agreement to change the road portion from four lanes to six lanes. ② On December 31, 2007, the Plaintiff reflected changes in circumstances such as increase and decrease of total project cost, consumer price index change, adjustment of the commencement date of operation, and amendment of statutes.

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Classification

The concession agreement dated June 17, 2002

The concession agreement dated July 22, 2003

The concession agreement for the amendment made on December 31, 2007

The commencement date of operation of KRW 137,761, KRW 171, KRW 1761, KRW 178,447, KRW 121,376, KRW 151,319, KRW 151,722, KRW 151,722, total project cost in the concession agreement of November 26, 209.

The actual date of collecting tolls;

The revenue of KRW 9.20% 9.20% 9.20% 7.94% 1-class tolls 961 won 971 won 972 won 973.49 won 80,538 won 83,609 won 83,549 won 83,549 won on May 16, 2008 on the date on which tolls is actually collected.

Guarantee

90% of estimated toll revenue

90% of estimated toll revenue

90% of estimated toll revenue

76.6% from 2015 to 2014 88.0% redemption

10% of estimated toll revenue

10% of estimated toll revenue

10% of estimated toll revenue

The 84.3% from 2015 to 96.8% had entered into a concession agreement with the Defendant for the amendment of the terms and conditions. ③ On November 26, 2009, the amendment agreement which reflects the refinancing of funds due to the change in the capital structure and the investors of the BB BB infrastructure projects, is as listed below. The details of the amendment are as follows. On April 18, 2008, the non-party company started the management and operation of the said facilities upon receiving a notice of confirmation of donation from the Defendant on May 16, 2008 upon completion of the construction of the instant facilities, according to Article 5 of the above concession agreement.

D. On July 2, 2014, the Defendant notified the Plaintiff of the amount of value-added tax for the first period of July 2, 2009 (a), 767,840 won, including penalty tax, and value-added tax bbb,059, 930 won for the second period of 2009 (hereinafter - 8-) on the ground that the Plaintiff’s establishment of the right to manage and operate the facilities of this case upon the donation from the non-party company was the provision of real estate leasing services and the value of donations corresponding to the rental period constituted value-added tax subject to value-added tax (including penalty tax).

‘Disposition of this case’

E. On November 20, 2014, the Plaintiff filed an appeal with the Tax Tribunal on the instant disposition, but the said claim was dismissed.

[Ground of Recognition] Facts without dispute, Gap evidence 1 to 3, Eul evidence 1 to 4 (including each number), the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

Since the lease contract between the plaintiff and the non-party company on the instant facilities is deemed to have been concluded by the concession agreement dated June 17, 2002 or July 22, 2003, the provision of lease services under the above lease agreement constitutes an object of value-added tax exemption because it does not provide lease services under a contract concluded after January 1, 2007, which is subject to value-added tax pursuant to the proviso of Article 2 of the Addenda of the former Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 19330, Feb. 9, 2006; hereinafter the same shall apply). Therefore, the disposition of this case by the defendant imposing value-added tax on the plaintiff on the premise that the above lease contract was concluded after January 1, 207 is unlawful.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

1) Article 12(1)17 of the former Value-Added Tax Act (amended by Act No. 9915, Jan. 1, 2010) provides that "The former Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 1930, Feb. 9, 2006) excludes "real estate lease business" from those subject to the above value-added tax exemption. Article 1 (3) of the Addenda of the former Value-Added Tax Act (amended by Presidential Decree No. 1930, Jan. 1, 2007) provides that "The amended provisions of Article 38 subparagraph 3 of the former Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 19892, Feb. 28, 2007) provides that "The former Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 1930, Feb. 1, 2007) shall apply to the first supply or import declaration after the enforcement of this Decree.

Meanwhile, lease takes effect when one of the parties agreed to allow the other party to use or take profit from an object and the other party agreed to pay the rent for it (Article 618 of the Civil Act). A lease agreement is concluded by a mutual agreement between the two parties on the condition that the lessor allows the lessee to use or take profit from the object of the lease and the lessee pays the rent as consideration for the lease. In this case, detailed matters such as the lease term and rent do not necessarily need to be specified in detail at the time of the conclusion of the contract, and there is sufficient methods and criteria to determine it ex post facto (see, e.g., Supreme Court Decision 200Da51650, Mar. 23, 2001). In full view of all the following circumstances revealed by the purport of all arguments as seen earlier, it is reasonable to deem that the lease agreement between the Plaintiff and the non-party company on the facilities of this case was concluded at the time of June 17, 202, and thus, the Defendant’s disposition was unlawful after the conclusion of the lease agreement.

- 10-1) The concession agreement of June 17, 2002 includes the right to use and profit from the facility of this case, which is a lessee, in relation to the lease of the facility of this case, to construct the facility of this case and contribute it to the lessor, and in return, to the lessor, the right to use and profit from the facility of this case, i.e., the right to lease. In addition, the above concession agreement specifically provides all the matters concerning the construction of the facility of this case (construction cost, construction method, construction period, etc.) under Articles 14 (Right to Use and Use the Site) through 33 (Inspection on Completion) and Article 4 (Unauthorized Use Period) Paragraph 1 of the same Act provides that the use period of the facility of this case, i.e., the lease period, e., 30 years from the date of commencement of operation, i., the date of commencement of operation and profit from the facility of this case after being established by the Do governor, and it is reasonable to determine the amount of the whole facility of the lease.

Therefore, through the concession agreement dated June 17, 2002, it should be deemed that an agreement was reached between the Plaintiff and the non-party company on the criteria and method to specify the important matters of the lease agreement for the instant facilities in the future.

② The concession agreement dated July 22, 2003 was amended by the Plaintiff and the non-party company’s agreement to change the road portion of the instant facilities from four to six lanes, and partly amended the construction of the road under the concession agreement dated June 11, 2012 to reflect it in the existing contract. Furthermore, each amendment made on December 31, 2007 and November 26, 2009 between the Plaintiff and non-party company cannot be deemed to have entered into the concession agreement on June 17, 2002 solely on the ground that the contents of the existing contract were partially amended and the operation date, etc. was partly extinguished in accordance with the criteria and method already established in the concession agreement after the conclusion of the concession agreement on June 17, 2002.

③ The Defendant asserts that the lease contract for the instant facilities is only established when the Plaintiff establishes the management and operation right for the instant facilities to the non-party company, a project implementer, pursuant to Article 26(1) of the Act on Private Participation, and the Plaintiff established the management and operation right for the instant facilities by notifying the non-party company of the confirmation of donation on May 15, 2008. As such, the lease contract for the instant facilities shall be deemed to have been concluded after January 1, 2007, which is the enforcement date stipulated in the proviso of Article 1 of the Addenda of the former Enforcement Decree of

However, the right to manage and operate the infrastructure under Article 26 (1) of the Private Investment Act is the right that the concessionaire who has implemented the infrastructure facilities completes the construction of the infrastructure facilities and maintains and manages it for the period of use and profit-making under the existing concession agreement, and collects the user fee from the user of the facilities. The right to manage and operate the infrastructure of this case is the right that can be actually used and profit-making according to the terms and conditions of the existing lease agreement, which is the object of the lease, and has already been expected to have occurred at the time of the concession agreement on June 17, 2002. The plaintiff established the management and operation right for the infrastructure of this case to the non-party company on May 15, 2008 and let the non-party company actually use and profit-making the infrastructure of this case, even if it is merely an fulfillment of the obligation under the existing lease agreement and thus it cannot be viewed as the date of establishment of the above management and operation right as the date of conclusion of the lease agreement. Therefore, the defendant

3. Conclusion

Therefore, the plaintiff's claim is reasonable, and it is decided as per Disposition.

The presiding judge's office

Judges' assistant rooms

Judges Lee Jae-han

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Relevant statutes

[The Value-Added Tax Act (Amended by Act No. 9915, Jan. 1, 2010)]

Article 12 (Exemptions)

(1) The supply of the following goods or services shall be exempted from value-added taxes:

17. Goods or services supplied by the State, a local government, or a local government association, which are prescribed by Presidential Decree;

Of articles specified in

[Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 1930 of Feb. 9, 2006)]

Article 38 (Tax Exemptions for Goods or Services Supplied by State, Local Governments or Local Government Associations)

6)

For the purpose of Article 12 (1) 17 of the Act, the term “services as prescribed by the Presidential Decree” means services excluding the following services:

means that.

1. Additional mail under Article 15 (1) of the Postal Service Act by an organization of the postal services under the Act on Special Cases concerning the Management of Postal Services;

Services rendered by visiting and receiving parcel-post items among services;

2. Passenger transport services under the High-Speed Railroad Construction Promotion Act;

[Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 1930 of Feb. 9, 2006)]

Article 38 (Tax Exemptions for Goods or Services Supplied by State, Local Governments or Local Government Associations)

6)

For the purpose of Article 12 (1) 17 of the Act, the term “services as determined by the Presidential Decree” means services excluding the following services:

of this title.

1. Additional letters provided for in Article 15 (1) of the Postal Service Act by the postal service organization under the Act on Special Cases concerning the Management of Postal Services;

Services rendered by visiting and receiving parcel-post items among postal services;

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2. Passenger transport services using high-speed railroads prescribed by the Railroad Construction Act;

3. Real estate rental business, wholesale and retail business, food and lodging business, golf course and skiing ground operation business, and other sports facilities operation business: Provided, That bureau;

Article 2 of the Act on the Personnel Management of Military Personnel and Civilian Employees by the Armed Forces or the Armed Forces under the Act on the Organization of Military Forces;

be offered to civilian personnel in the military service under paragraph (1) and other persons prescribed by the Ordinance of the Ministry of Finance and Economy.

service is excluded.

Addenda (Presidential Decree No. 1930, February 9, 2006)

Article 1 (Enforcement Date)

This Decree shall enter into force on the date of its promulgation: Provided, That the amended provisions of Article 26 (1) 5 and 5-2 shall be 206

From July 1, 2007, and the amended provisions of Article 38(3) and Article 64(3)(1-3 shall enter into force on January 1, 2007.

A date shall enter into force on one day.

Article 2 (General Application Examples)

This Decree shall apply to any portion supplied or supplied for the first time after this Decree enters into force.

Provided, That in the amended provisions of subparagraph 3 of Article 38, the amended provisions concerning real estate rental business shall be amended after the enforcement of the said provisions.

The provisions of this Act shall apply from the date of conclusion of each contract.

【Public-Private Partnerships in Infrastructure】

Article 4 (Method of Conducting Private Investment Projects)

Private investment projects shall be conducted in one of the following methods:

1. Ownership of the infrastructure shall revert to the State or a local government upon the completion of construction;

for a specified period of time to the project implementer;

Article 25 (Use of Facilities)

(1) The concessionaire shall make a concession agreement on infrastructure projects implemented by the method as prescribed in subparagraph 1 of Article 4.

It may be free of charge and profit-making for a certain period after the completion of the facility within the total project cost specified in the Act.

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Article 26 (Rights to Manage and Operate Infrastructure)

(1) The competent authority shall implement the projects implemented by the mode prescribed in subparagraph 1 of Article 4.

Where a person has confirmed the completion under Article 22, free of charge under Article 25 (1).

for the period of use and profit-making, the maintenance and management of the facility and the collection of user fees from the facility user;

The right to manage and operate the infrastructure (hereinafter referred to as the “right to manage and operate”) may be exercised by the concessionaire concerned.

the corporation. Finally, the corporation’s