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

(1) On November 26, 2002, the Plaintiff, a registered business operator, borrowed a construction business license from ○○ Construction Co., Ltd. (former trade name: ○○ Construction Co., Ltd.; hereinafter referred to as “○○ Construction”). The Plaintiff, a registered business operator, paid 5% of his fee at his own expense, and agreed that value-added tax shall be paid in the name of ○○ Construction, and the Plaintiff shall be internally borne by the Plaintiff pursuant to the above agreement. From that time to that time, in accordance with the above agreement, the Plaintiff carried out soil erosion and earth work (hereinafter referred to as “the instant construction work”).

(2) Accordingly, ○○ Construction reported and paid value-added tax from February 2, 2002 to January 2004 to the permanent head of the competent tax office, and calculated the tax amount by including the sales tax invoice (total supply value of KRW 1,170,00,000) and the purchase tax invoice (total supply value of KRW 644,581,00) of the instant construction from the Plaintiff as the sales tax base and the purchase tax invoice (total supply value of KRW 644,581,00) on the sales tax base and the purchase tax invoice (total supply value of KRW 644,581,00), among which the value-added tax amount corresponding to the instant construction is 52,510,000 as shown in the table under (4) below.

(3) After that, on August 2004, the head of the permanent tax office confirmed the details of the report of value-added tax on ○○ Construction, and found that the actual contractor of the instant construction is the Plaintiff. As indicated below, the sales tax base and the purchase tax amount reported by ○○ Construction as indicated in the following table, deducted the sales tax base and the purchase tax amount related to the instant construction from the sales tax base and the purchase tax amount, and subsequently corrected the amount of value-added tax payable by ○○ Construction. Meanwhile, the head of the permanent

(4) After completing the Plaintiff’s business registration ex officio, on November 1, 2005, the Defendant decided and notified the Plaintiff the value-added tax from February 2, 2002 to January 1, 2004 as follows (However, the Defendant excluded the total of KRW 105,00,000 from the input tax amount for February 2, 2002), and deducted the tax amount to be paid by the Plaintiff from the tax amount to be paid by the Plaintiff.

(5) However, while the Daegu Regional Tax Office audited the Defendant on June 15, 2006, it pointed out that it unfairly deducteds the Plaintiff’s already paid tax amount of this case paid by ○○ Construction from the payable tax amount without imposing the unpaid additional tax and the additional tax for unfaithful payment. The Defendant added the unregistered additional tax and the additional tax for unfaithful payment to the Plaintiff on December 1, 2006.

The head of the permanent tax office denied the deduction of the already paid tax amount, thereby re-revision the following dispositions (hereinafter referred to as "each disposition of this case"). The head of the permanent tax office also deducted the already paid tax amount from the value-added tax amount to be paid by ○ Construction, and corrected the amount by deducting the already paid tax amount from the amount of value-added tax, and refunded the already paid tax amount to ○ Construction on July 13, 2006.

[Ground of Recognition] Facts without dispute, Gap evidence 1-1 to 4, Gap evidence 3, Gap evidence 4-1, 2, Gap evidence 5, Eul evidence 1 to 4, Eul evidence 3 through 6, the purport of the whole pleadings

2. Whether each of the dispositions of this case is legitimate

A. The plaintiff's assertion

The plaintiff asserts that each of the dispositions of this case should be revoked as it is unlawful for the following reasons.

(1) Although the Plaintiff carried out the instant construction by lending the name of ○○ Construction, the Plaintiff reported and paid value-added tax under the name of ○○ Construction, the Plaintiff did not gain any profit under the Value-Added Tax Act, and the Defendant did not incur any loss therefrom, and the General Rule 22-0-1 of the Value-Added Tax Act provides that the nominal owner shall not impose penalty tax. Therefore, the Plaintiff may not impose an unregistered penalty tax.

(2) The Plaintiff actually bears the tax amount already paid, which was returned and paid under the name of ○○ Construction. As such, inasmuch as the Defendant: (a) deemed the Plaintiff as a taxpayer in accordance with the substance over form principle and imposes each disposition of this case on the Plaintiff; (b) deducts the already paid tax amount from the tax amount to be paid by the Plaintiff from the substance over form principle, the Defendant did not deduct

B. Relevant statutes

Article 5 (Registration of Value-Added Tax Act)

Article 22 (Additional Tax)

C. Determination

(1) Whether an unregistered additional tax is imposed

Article 5 (1) of the Value-Added Tax Act (amended by Act No. 8142 of Dec. 30, 2006; hereinafter the same shall apply) provides that a person who newly starts a business shall register at each place of business with the head of the competent district tax office having jurisdiction over the place of business within 20 days from the date of commencing the business under the conditions as prescribed by the Presidential Decree, and Article 22 (1) of the same Act provides that where a business operator fails to file an application for registration within the time limit as provided in Article 5 (1), an amount equivalent to 1/100 of the value of supply (where the time limit for preliminary return expires, the relevant taxable period) for the period from the date of commencing the business to the date of preliminary return (where the said provision has been amended by Act No. 7007 of Dec. 30, 2003, the amount equivalent to 1/100 for an individual

As to the instant case, since the Plaintiff leased a construction business license for ○○ Construction without filing for business registration at the time of the instant construction work, the fact that the construction work was conducted by the Plaintiff is as seen earlier, it would be lawful to impose the unregistered tax on the Plaintiff who started the construction work without filing for business registration.

As to this, even if the Plaintiff reported and paid the value-added tax by leasing another person’s name, the General Rule 22-0-L of the National Tax Basic Law (in cases where the value-added tax is revised for the actual business operator who has reported and paid the value-added tax after registering his/her business in the name of another person, the input tax amount issued in the name of another person shall be deducted from the output tax amount of the actual business operator under Article 14 of the Framework Act on National Taxes and shall not be subject to the unregistered additional tax, so the Plaintiff cannot impose the unregistered additional tax. However, the above basic common rule states that the value-added tax is imposed on the actual business operator who supplies the goods or services as a substitute tax, and thus the personal information on the subject of the registration is not important in the registration. However, the Plaintiff cannot impose the unregistered additional tax on the actual business operator who was registered under the name of another person (see Article 28(1)2 of the Value-Added Tax Act, even if the above basic common rule is applied to the actual business operator under the name of another person and who actually runs his/her business.)

(2) Whether the already paid tax amount was deducted

○○ Construction reported and paid value-added tax on one’s own during the taxable period from February 2, 2002 to January 2004. Under a construction business license agreement with the Plaintiff, the Plaintiff included the output tax amount and the input tax amount related to the instant construction, and thereafter, the head of a permanent tax office deemed the Plaintiff, not ○○ Construction, in light of the substance over form principle. From among the output tax amount reported by ○○ Construction and the input tax amount, the amount corresponding to the already paid tax amount was deducted, and thus, the reduced tax amount was refunded to ○○ Construction. As seen earlier, the Plaintiff did not have the obligation to deduct the tax amount due to the reduction of value-added tax on ○○ Construction, and thus, the Plaintiff did not have the obligation to pay the said tax amount due to the reduction of value-added tax on ○○ Construction, even if the Plaintiff did not have the obligation to pay the tax amount due to the reduction of value-added tax on ○○ Construction.

Therefore, the plaintiff's assertion on this part cannot be accepted as it is without merit.

3. Conclusion

Therefore, each disposition of this case is legitimate, and the plaintiff's claim disputing this disposition is dismissed as it is without merit. The judgment of the court of first instance is just in conclusion, and the plaintiff's appeal is dismissed as it is without merit. It is so decided as per Disposition.