Whether a disguised registered business operator may impose the additional tax under Article 22 of the Value-Added Tax Act

In light of the provisions of Articles 22(1), 5(1), and 6(5) of the Value-Added Tax Act, and Article 7(1), 2, and 7(3) of the Enforcement Decree of the Value-Added Tax Act, if a person makes a disguised registration, the tax office which investigated the contents of the application for registration is registered in the name of the actual business operator, and if a person fails to discover it, the registration certificate is not issued to the disguised registrant, and there is no basis for imposing penalty tax

Articles 22(1) and 5(1) of the Value-Added Tax Act

[Judgment of the court below]

Head of Central Tax Office

Daegu High Court Decision 84Gu290 delivered on February 22, 1985

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

The grounds of appeal are examined.

1. According to the reasoning of the judgment below, the court below established the following facts based on the following facts: the plaintiff engaged in the wholesale business of chemical drugs from January 1, 1980 to the non-party 1, and operated the wholesale business of chemical drugs in the name of the non-party 1 in Busan Jung-gu ( Address omitted) with the trade name of the non-party 4th of the same month; the non-party 2 was registered as his/her relative non-party 2 on the ground of his/her business registration as if he/she operated the business with the non-party 1 and the non-party 2 until he/she transferred his/her business to the above non-party 2; the court below determined that Article 5 (1) of the Value-Added Tax Act, which provides for the business registration obligation, and Article 7 (1) and (2) of the Enforcement Decree of the Value-Added Tax Act, which provides for the business registration obligation, is legitimate in light of the purpose of the defendant's taxation authority's imposition of 10th of the Value-Added Tax Act.

2. However, Article 22 (1) of the Value-Added Tax Act provides that if a new business operator fails to apply for registration within the period stipulated in Article 5 (1) of the Act, one percent of the value of supply from the date of business commencement to the date of preliminary return to which the date of application for registration belongs shall be added to the payable tax amount. Article 5 (1) of the Act provides that the new business operator shall register at each place of business within 20 days from the date of commencement of business, and Article 6 (5) of the Act provides that the truster or the principal shall be deemed to have supplied or received goods directly in case of sale by consignment or agent: Provided, That this provision provides that the truster or the principal shall not be known; Article 7 (1) and (2) of the Enforcement Decree of the Value-Added Tax Act provides that the head of a tax office, upon receipt of an application under paragraph (1), shall issue a business registration certificate pursuant to the fact of investigation if he investigates the contents of the application and imposes an additional tax on the person under disguised registration under Article 5 (1) of the Act.

Ultimately, the court below erred by misapprehending the legal principles on sanctions against disguised registration by the disguised registered business operators, and therefore there is a ground for appeal.

3. Therefore, the judgment of the court below which did not require a determination on other grounds of appeal, on the premise that a disguised registered business operator may impose penalty tax, is reversed, and the case is remanded to the court below. It is so decided as per Disposition by the assent of all participating judges.

Justices Jeon Soo-hee (Presiding Justice) Lee Jong-soo (Presiding Justice) (Presiding Justice) No. 2010, a second day and a second day and a second day and a second day and a second day shall be