[1] Whether Article 74-2 (4) of the Enforcement Decree of the former Enforcement Decree of the Act on Special Taxation does not apply to the category of business excluded from special taxation under Article 74 (2) of the former Enforcement Decree of the Act on Special Taxation, but Article 74-2 (4) of the same Decree concerning the exclusion of special taxation for new concurrent operation of a business is applied

[2] Whether the special taxation can be applied in a case where the tax authority fails to comply with the notice of type conversion and the corrective delivery procedure of the business registration certificate (affirmative)

[1] The criteria for the exclusion of special taxation under Article 74 (4) of the former Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 14081 of Dec. 31, 1993) are the criteria for determining whether the special taxation should be applied in cases where an individual entrepreneur newly starts a business files a report on the application of special taxation. Thus, it is distinguished from the category of business that excludes special taxation under Article 74 (2) of the Enforcement Decree. Thus, even if a special taxable person newly operates a business that falls under the exclusion criteria of special taxation under Article 74 (4) of the Enforcement Decree, the special taxable person cannot be subject to Article 74-2 (4) of the Enforcement Decree of the Act on the Exclusion of special taxation when he newly runs a business, unless

[2] Article 74-2 (3) of the former Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 14081, Dec. 31, 1993) stipulates that Article 25 of the Act on Special Taxation shall apply to the case of a change from a general taxable person to a special taxable person, regardless of the notification of the conversion of the type of taxation. Thus, it is not converted to a special taxable person because there was no notification by the tax authority on the conversion of the type of taxation. Business registration under the Value-Added Tax Act is merely for the tax authority to have the tax authority enter the taxable data such as the business operator's personal information and the business start-up, and to accurately understand them, it cannot be said that the application of the

[1] Articles 25(3) and 30(3) of the former Value-Added Tax Act (amended by Act No. 4663, Dec. 31, 1993); Articles 74(4) and 74-2(4) of the former Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 14081, Dec. 31, 1993); Article 23-2 of the former Enforcement Decree of the Value-Added Tax Act (amended by Ordinance No. 1990, Jun. 30, 1994); Article 25 of the former Value-Added Tax Act (amended by Presidential Decree No. 4663, Dec. 31, 1993); Article 74-2(2) and (3) of the former Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 14081, Dec. 31, 1993)

[2] Supreme Court Decision 87Nu829 delivered on November 8, 1988 (Gong1988, 1544) Supreme Court Decision 89Nu1766 delivered on August 8, 1989 (Gong1989, 1384) Supreme Court Decision 90Nu2710 Delivered on June 26, 1990 (Gong1990, 1617), Supreme Court Decision 90Nu4068 Delivered on September 11, 1990 (Gong190, 2109), Supreme Court Decision 91Nu6415 delivered on February 25, 192 (Gong192, 1191), Supreme Court Decision 94Nu107195 delivered on December 25, 1994 (Gong194, 1985) and Supreme Court Decision 97Nu1985195 delivered on December 195, 1995)

[Judgment of the court below]

Head of Dong Tax Office

Seoul High Court Decision 95Gu21589 delivered on May 9, 1996

The appeal is dismissed. The costs of appeal are assessed against the plaintiff.

The grounds of appeal by the Plaintiff’s attorney are examined.

On the first ground for appeal

Article 25 (1) of the former Value-Added Tax Act (amended by Act No. 4663 of Dec. 31, 1993; hereinafter the same) provides that a private entrepreneur whose price including the value-added tax on the supply of goods and services in the preceding calendar year (hereinafter referred to as the "price for supply in the calendar year) falls short of the amount prescribed by the Presidential Decree shall be imposed and collected value-added tax pursuant to the special taxation provisions: Provided, That the business prescribed by the Presidential Decree shall be excluded; Article 74 (2) of the Enforcement Decree of the same Act (amended by the Presidential Decree No. 14081 of Dec. 31, 1993; hereinafter the same shall apply) provides that the business prescribed by the Presidential Decree under the proviso of Article 25 (1) of the Act shall be listed in subparagraphs 1 through 4, and subparagraph 1 through 4 provides that the special taxation provisions shall not apply in cases where a person subject to taxation concurrently runs the business falling under Article 1 (4) of the Special Consumption Act:

Meanwhile, Article 30 (3) of the Act provides that a personal entrepreneur who starts a new business shall report to the Government in accordance with the Presidential Decree when the total amount of proceeds from supply is anticipated to fall short of the amount under Article 25 (1) and (2) of the Act, along with his business registration, in one calendar year which includes the date of commencing the business, and Article 25 (3) of the Act provides that a personal entrepreneur who has reported under Article 30 (3) of the Act shall be deemed a special taxable person in the first taxable period: Provided, That the same shall not apply to a person who falls under the category of a business prescribed by the Presidential Decree by region, type of business or scale, and Article 74 (4) of the Enforcement Decree provides that the special taxation shall not apply in cases where an individual entrepreneur who starts a new business files a report under Article 30

According to the above provisions, the criteria for the exclusion of special taxation under Article 74 (4) of the Enforcement Decree are different from the general category of business that excludes special taxation under Article 74 (2) of the Enforcement Decree, so even if a special taxable person newly operates a business meeting the exclusion criteria of special taxation under Article 74 (4) of the Enforcement Decree, unless the business falls under the exclusion criteria of special taxation under Article 74 (2) of the Enforcement Decree, it shall not be subject to Article 74-2 (4) of the Enforcement Decree of the Act on the Exclusion of special taxation when newly runs a business, unless the business falls under the exclusion criteria of special taxation under Article 74 (2) of the Enforcement Decree. According to the records, the plaintiff started a real estate rental business in his/her own building located in Seongdong-gu Seoul Metropolitan Government on May 192 and operated it, and newly operates an indoor golf practice meeting meeting the exclusion criteria of special taxation under Article 74 (4) of the Enforcement Decree on July 1, 199.

The judgment of the court below to the same purport is just, and there is no error of law such as misunderstanding of legal principles and incomplete hearing.

On the second ground for appeal

According to Article 30(1) and (2) of the Act, Article 78(1) of the Enforcement Decree of the Act and Article 78(1) of the Enforcement Decree of the Act provide that the special taxation subject shall not be subject to the special taxation provisions, and the special taxation subject shall file a report on the waiver of the special taxation 10 days prior to the commencement of the taxable period. Thus, even if the tax authority accepts the report without filing a report on the waiver of the special taxation, the application of the special taxation subject may not be excluded. In addition, Article 74-2(3) of the Enforcement Decree provides that Article 25 of the Act on the Special Taxation shall apply to the case of a change from the general taxation subject to the special taxation regardless of the notification of the conversion of taxation type, the taxation authority’s notification of the conversion of taxation type shall not be subject to the special taxation (see, e.g., Supreme Court Decisions 87Nu829, Nov. 8, 198; 89Nu1469, Aug. 8, 1990).

In addition, business registration under the Value-Added Tax Act is intended to have the tax authority enter the tax data, such as business operator's personal information, business commencement, etc., and accurately understand them, and thus, it cannot be said that the application of the special taxation provisions depends on whether the corrected business registration certificate was issued (see Supreme Court Decision 91Nu6415, Feb. 25, 1992).

The judgment of the court below to the same purport is just, and there is no error in the misapprehension of legal principles as pointed out.

Therefore, the appeal is dismissed as it is without merit, and all costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices.

Justices Seo Sung-sung (Presiding Justice)