[1] The meaning of "other conditional services provided" under Article 22 (2) of the Enforcement Decree of the Value-Added Tax Act

[2] The case holding that, where an agreement is made to pay the construction cost according to the result of sale other than the fixed price, the time of supply for the service is not the time when each portion of the price is paid, but the date of completion

[1] Article 9 (2) of the Value-Added Tax Act provides that the time of supply of services shall be determined by the Presidential Decree, if the time of supply of services is deemed to be the time of supply for the services, and Article 22 of the Enforcement Decree so delegated shall be the time of supply for the ordinary supply (Article 1). In the case of ordinary supply, where the supply of services is completed, where services are provided on completion basis, interim payment, long-term installment, or on other terms or where services are continuously supplied or services are unable to be classified by their unit are supplied (Article 1 (1) 2). Where the provisions of subparagraphs 1 and 2 are not applicable, the time when the provision of services is completed and the price of supply is determined (Article 1 (2) 3) is determined as the time of supply for each service (Article 22 of the Enforcement Decree of the Value-Added Tax Act). The exceptional case where it is deemed that the supply price of services is not determined at the time of completion of the ordinary supply of services after the completion of the supply (Article 12).

[2] The case holding that where a contract is made to pay the construction cost according to the result of sale other than the fixed price, the provision of the service on the completion date of the building is completed and the value of supply is determined, and the completion date shall be deemed to be the time of supply pursuant to Article 22 subparagraph 1 of the Enforcement Decree of the Enforcement Decree of the Building Act, and it cannot be deemed that it constitutes other conditional supply of service under subparagraph 2 of the same Article, and thus the time of supply

[1] Article 9(2) and (4) of the Value-Added Tax Act, Article 22 subparags. 1, 2, and 3 of the Enforcement Decree of the Value-Added Tax Act / [2] Article 9(2) and (4) of the Value-Added Tax Act, Article 2 subparags. 1 and 2 of

[Judgment of the court below]

Head of the Tax Office

Seoul High Court Decision 97Gu22098 delivered on January 15, 1998

The judgment below is reversed and the case is remanded to Seoul High Court.

The grounds of appeal are examined.

1. The court below ordered construction price to be paid on March 16, 1994 by the plaintiff et al., who is an entrepreneur of real estate sales business based on the sale performance, not on a fixed price, to the non-party company (hereinafter referred to as "non-party company") for the new construction of the 9th and the 2nd underground floor under the above special contract, and the sale price received on June 28, 1995 after the completion of the construction under the above special contract constitutes a tax invoice of the non-party company on July 31, 1995 (the tax invoice No. 8 of the attached Table in the original judgment) and the tax invoice of the same case on August 31, 1995 (the above tax invoice No. 29 of this case was issued on September 29, 195) and the above tax invoice of the non-party company on September 29, 195 (the above tax invoice of this case was issued on September 19, 1995).

2. However, Article 9(2) of the Value-Added Tax Act provides, however, that if the time of supply of the service is deemed the time of supply of the service, matters necessary for the time of supply under paragraph (4) shall be determined by the Presidential Decree. Accordingly, Article 22 of the Enforcement Decree of the Value-Added Tax Act provides that the time of supply of the service shall be determined; in the case of ordinary supply, when the supply of the service is completed (Article 1); in the case where services are supplied on completion basis, interim payment, long-term payment, or on other terms or conditions or where services are continuously supplied unable to be divided into the unit of supply (Article 1(2)); in the case where the provisions of subparagraphs 1 and 2 are not applicable, the time when the provision of the service is completed and the price of supply is determined (Article 1(3)) is determined as the time of supply of each service (Article 22 of the Enforcement Decree of the Value-Added Tax Act provides that the price of supply is not determined at the time of completion of the ordinary supply (Article 1(3).

Thus, the supply of the service in this case is completed on the date of completion and the supply price is determined at that time, and it cannot be viewed as the time of supply as the date of completion under subparagraph 1, and it cannot be viewed as the time of supply as the time of supply under subparagraph 2. Thus, it cannot be viewed as the time of supply when each payment is made.

Nevertheless, the court below erred by misapprehending the legal principles as to the time of supply for services, which affected the conclusion of the judgment. The ground of appeal pointing this out has merit.

3. Therefore, the judgment of the court below is reversed and the case is remanded to the court below. It is so decided as per Disposition by the assent of all participating Justices.

Justices Lee Jae-hee (Presiding Justice)