The meaning of "the input tax amount before the registration" under Article 17 (2) 5 of the Value-Added Tax Act.

The phrase, “the input tax amount prior to making a registration under the provisions of Article 5 (1) which is cited as the input tax amount not deducted from the output tax amount under Article 17 (2) 5 of the Value-Added Tax Act, shall be inserted as the input tax amount prior to making a lawful application for registration.

Articles 17(2)5 and 5(1) of the Value-Added Tax Act

Supreme Court Decision 83Nu228 Decided July 26, 1983 83Nu656 Decided July 10, 1984, Supreme Court Decision 84Nu99 Decided November 27, 1984

Plaintiff’s Attorney Seo-sik, Counsel for the plaintiff-appellant

Daejeon Head of the tax office

Seoul High Court Decision 85Gu379 delivered on November 18, 1985

The appeal is dismissed.

The costs of appeal are assessed against the plaintiff.

We examine the grounds of appeal.

According to Article 5 (1) of the Value-Added Tax Act, a person who newly starts a business shall register with the Government within 20 days from the date of commencing the business under the conditions as prescribed by the Presidential Decree: Provided, That a person who intends to start a business in a new place of business may register before the date of commencing the business, and according to Article 17 (2) 5 of the same Act, the input tax amount prior to the registration under Article 5 (1) of the same Act shall not be deducted from the output tax amount. Thus, the phrase "in the previous registration under Article 5 (1)", which states that the input tax amount shall not be deducted from the output tax amount under Article 17 (2) 5 of the same Act as the input tax amount prior to the lawful application for registration, is the opinion of the party member (see, e.g., Supreme Court Decision 84Nu99, Nov. 27, 1984; Supreme Court Decision 83Nu656, Jul. 10, 1984; 83Nu2828.

According to the facts established by the court below in this case, since the plaintiff paid the price of the real estate at the auction procedure in September 13, 1983 and applied for lawful business registration as of January 16, 1984 as stated in the judgment of the court below, the time when the plaintiff was supplied with the above real estate shall be deemed to be December 3, 1983, where the plaintiff paid the successful bid price and acquired ownership finally under Article 9 (1) 2 of the Value-Added Tax Act. Thus, the reasons why the plaintiff paid the above real estate at the auction (purchase), it is clear that the input tax amount is the input tax amount before the legitimate application for business registration, and the reasons why the theory of lawsuit is pointed out, cannot affect the conclusion that the above input tax amount is the input tax amount before the legitimate application for business registration.

Therefore, the court below's decision that the above input tax amount constitutes an input tax amount not deducted from the output tax amount under Article 17 (2) 5 of the Income Tax Act is just and there are no errors in the misapprehension of legal principles, such as theories.

Therefore, the plaintiff's appeal is dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices.

Justices Lee Jae-hee (Presiding Justice)