National Tax Service Review Division 2010-0146 ( October 04, 2010)

It constitutes the supply of goods if the possession of the building has been transferred exclusively for the exclusive use or disposal of the building.

If, even before the purchase price of real estate is liquidated or the transfer registration is completed in the future of the other party, the other party to the transaction transfers possession to be exclusively used or disposed of as an owner, it constitutes a supply of goods under the Value-Added Tax Act.

2011Revocation of disposition of imposition of value-added tax, etc.

Quantity XX

O Head of tax office

June 2, 2011

June 23, 2011

1. The plaintiff's claim is dismissed.

2. The costs of lawsuit shall be borne by the Plaintiff.

The Defendant’s refusal to refund value-added tax of KRW 14,900,000 against the Plaintiff on June 1, 2010 and revocation of the disposition imposing value-added tax of KRW 190,000.

1. Details of the disposition;

A. On August 2, 2007, the Plaintiff entered into a contract with Ma-A to purchase KRW 109,00 (including value-added tax of KRW 163,90,000 (including value-added tax of KRW 14,900,00), land value of KRW 57,909,000, down payment of KRW 200,000,000 on the date of the contract, the remainder of KRW 200,809,000 on September 18, 2007).

B. By September 18, 2007, the Plaintiff failed to cancel the registration of provisional seizure (No. 57313, Apr. 26, 2007) recorded in the real estate registry of the instant case, which was due date for payment of the remainder, and promised to pay the remainder. The Plaintiff first received the instant real estate, used the instant real estate, and paid the remainder simultaneously with the cancellation of the said provisional seizure registration.

C. Accordingly, the Plaintiff: (a) transferred the instant real estate to Jeong, and (b) around June 2008, registered as a real estate rental business entity with the location of the instant real estate as the place of business; and (c) around January 2009, leased the instant real estate to another person.

D. After that, the Plaintiff completed the registration of ownership transfer concerning the instant real estate on January 8, 2010.

E. Around April 2010, the Plaintiff filed a value-added tax return on 171, 2010 with the Defendant. At this time, the Plaintiff filed a return on the purchase tax invoice (i.e., the supplierA, January 8, 2010 publication date, and the purchase tax invoice (hereinafter “instant tax invoice”) with the Defendant, which is KRW 149,00,000,000, as the purchase tax invoice received from the Plaintiff.

F. On June 1, 2010, the Defendant refused to refund value-added tax of KRW 14,900,000 by deducting the input tax amount of the instant tax invoice from the Plaintiff on the ground that the instant tax invoice was a tax invoice received after the time of supply, on the grounds that it was a false tax invoice. The Defendant issued the instant disposition imposing KRW 190,000 by revising the value-added tax for the first term portion in 2010.

[Ground of recognition] The written evidence Nos. 2, 3, and 4 (including the number of branch offices), Eul evidence Nos. 1, 2, and 3 (including the number of branch offices), and the purport of the whole pleadings

2. Whether the disposition of this case is legitimate

A. The plaintiff's assertion

The supply of goods under the Value-Added Tax Act is premised on the transfer of ownership. Therefore, the fraud that a purchaser can exercise exclusive ownership due to the payment of balance or transfer of ownership should be deemed the time of supply for the goods. This also applies even in cases where possession was first transferred prior to the payment of balance or transfer of ownership. Therefore, the supply fraud of the instant real estate is January 8, 2010 when the Plaintiff completed the registration of ownership transfer with respect to the instant real estate. Therefore, the instant tax invoice is not written differently from the private theory.

B. Relevant statutes

The entries in the attached Table-related statutes shall be as follows.

C. Determination

Article 6(1) of the Value-Added Tax Act provides that the supply of goods shall be either the delivery or transfer of goods under 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 available. The delivery or transfer of goods is premised on the act of transferring the ownership for the use and consumption of goods in light of the nature of the value-added tax. The time when the goods are available for the use of goods refers to the time when the goods are actually available for the use of the goods. As such, where the goods supplied for the use of the goods are real estate, in principle, the time when the real estate is ordered to be used for the use of the goods is ordered. Therefore, if the sales contract for the sale of the building was concluded by the business operator, and even before the registration of transfer was completed, it constitutes the supply of goods under the Value-Added Tax Act (see, e.g., Supreme Court Decisions 8Nu1745, Mar. 28, 1989>

As seen earlier, the Plaintiff may be deemed to have exclusively used and disposed of the instant real estate as its owner, such as the transfer of possession of the instant real estate to AA and the lease of the instant real estate. As such, this constitutes the supply of goods under the Value-Added Tax Act. As such, the time when the goods were supplied falls under the case of the instant real estate leased to another person at the latest on January 2009. Therefore, the instant tax invoice is a tax invoice different from the fact that the date of the supply is the supplier, and the Defendant’s disposition, which adjusted the value-added tax for the period of January 2010, is lawful.

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit. It is so decided as per Disposition.