Supreme Court Rules No VAT on Local Government Utility Undergrounding Fees

• The Supreme Court ruled that fees paid by local governments to KEPCO for undergrounding power lines are not subject to VAT.
• In the Pyeongtaek case, the city agreed to share construction and road restoration costs, but refused to pay the VAT portion.
• The court said these payments are “cause-based charges,” not payment for services to the local government, so they are outside the VAT tax base.
• However, the local government must still cover the VAT KEPCO actually paid to subcontractors and material suppliers.

Source: en.sedaily.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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