The purport that no additional tax on unregistered registration shall be imposed on the nominal master business operator.

Value-added tax is imposed on the business that supplies goods or services as a substitute tax, and thus personal information on the business entity is not an important requirement in its registration. Although it is a third party's name, no additional tax may be imposed as long as it is registered according to an application for business registration.

Article 5 (Registration) of the Value-Added Tax Act

Article 22 (Additional Tax)

1. The plaintiff's claim is dismissed.

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

The Defendant’s disposition of imposition of value-added tax for the second term of 202 against the Plaintiff on December 1, 2006, KRW 52,192,230 for the second term of 202, value-added tax for the first term of 203, KRW 27,243,610 for the second term of 203, KRW 6,842,260 for the second term of 203, and value-added tax for the first term of 204 for the first term of 204 is revoked.

1. Circumstances of dispositions;

A. On November 26, 2002, the Plaintiff lent a construction business license to ○○ Construction Co., Ltd. (former ○○ Construction Co., Ltd.; hereinafter “○○○○○ Elementary School modernization (hereinafter “former ○○○ Elementary School”) and implemented earth and sand construction (hereinafter “instant construction”) during the redevelopment project of Daegu ○○ Elementary School, and reported and paid value-added tax of KRW 52,510,00 in the name of the Defendant from February 2, 2002 to January 2004 (hereinafter “the already paid tax”).

B. As a result of confirmation by the head of the permanent tax office on August 2004, 204, he confirmed that the actual contractor of the instant construction is the Plaintiff, and notified the Defendant of the taxation data after correcting the already paid tax amount from the sales tax base and input tax amount of the instant construction related to the instant construction as follows:

Table Omission of the Table

C. Accordingly, on November 1, 2005, the Defendant determined and notified the value-added tax from February 2002 to January 1, 2004 to the Plaintiff as follows, and deducted the already paid tax amount.

Table Omission of the Table

D. However, when the Daegu regional tax office conducted an audit on the Defendant on June 15, 2006, it pointed out that the Defendant unfairly deducteds the already paid tax amount of this case, which was paid under the name of the ○○ Won theory without imposing the unregistered additional tax and the additional tax for non-payment on the Plaintiff. On December 28, 2006, the Defendant added the non-registered additional tax and the additional tax for non-payment on the Plaintiff, and made a re-revision to deny the deduction of the already paid tax amount (hereinafter “each disposition of this case”). Meanwhile, the head of the permanent tax office refunded the already paid tax amount on July 13, 2006.

Table Omission of the Table

[Reasons for 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 6, and 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 because it is unlawful for the following reasons.

(1) Although the Plaintiff carried out the instant construction by lending the name of ○ Won Construction, the Plaintiff reported and paid the value-added tax under the name of ○ Won Construction, and the Plaintiff did not gain any profit under the Value-Added Tax Act, and the Defendant did not suffer any loss therefrom, and in general Rule 22-0-1 of the Value-Added Tax Act provides that no penalty tax shall be imposed on the nominal disguised business operator, so the Plaintiff may not impose the unregistered penalty tax.

(2) It is clear that the Plaintiff actually paid the already paid tax amount when the Plaintiff returned and paid the value-added tax in the name of ○○ Construction. Thus, the Defendant did not deduct the already paid tax amount even though it conforms to the substance over form principle to deduct the already paid tax amount from the Plaintiff as a matter of course at the time of the instant disposition.

(b) Related statutes;

Article 5 (Registration) of the Value-Added Tax Act

Article 22 (Additional Tax)

C. Determination

(1) Judgment on the Plaintiff’s first assertion

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 prescribed 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) from the date of commencing the business to the date of filing an application for registration (where the time limit for preliminary return expires, the relevant taxable period) shall be added to the payable tax amount or deducted from the refundable tax amount.

As to the instant case, there is no dispute between the parties that the Plaintiff leased a construction business license for ○ Won Construction without registering its business at the time of the instant construction, and the fact that the Plaintiff reported and paid the value-added tax under the name of ○ Won Construction. Therefore, it is legitimate that the Defendant imposed the non-registered penalty tax on the Plaintiff.

The plaintiff asserts that the amount of the tax invoice issued under the name of the third party is not subject to additional tax because the general rule 22-0-1 of the national tax base (in case where the value-added tax is revised for the person who reported and paid the value-added tax after the registration of business in the name of the third party and the return and payment of the value-added tax is applied to the person who made the return and payment of the value-added tax, the amount of the tax invoice issued under the name of the third party shall be deducted from the amount of the output tax of the third party under Article 14 of the Framework Act on National Taxes, and no additional tax shall be applied to the unregistered amount. However, the above basic rule is to the business that supplies the goods or services as a substitute tax, and the identity of the person who made the registration of the business is not an important factor in the registration. However, the above basic rule is not subject to additional tax for unregistered amount as long as the registration is made under the name of the third party, and it is not subject to the above general rule, while maintaining the identity and substance of the name lender and the entire business.

(2) As to the second argument by the Plaintiff

Around August 2004, the head of a tax office’s permanent residence reduced or corrected the imposition disposition of value-added tax on ○○ Construction by the Plaintiff’s report as the taxpayer rather than sexual construction in light of the substance over form principle. As seen earlier, the head of a tax office’s permanent residence refund of KRW 52,510,00 of the already paid tax amount to ○○ Construction, which was reduced on July 13, 2006. As such, the head of a tax office’s permanent residence refund the already paid tax amount to ○○ Construction, which was disqualified due to the correction of the imposition disposition of value-added tax on ○○ Construction. As such, it is justifiable that the Defendant did not deduct the already paid tax amount on ○○ Construction, which was disqualified due to the correction of the imposition disposition of value-added tax by the head of a tax office’s permanent residence, on the ground that the Defendant did not violate the principle of substantial taxation. Accordingly, this part of the Plaintiff’s assertion cannot be accepted.

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit. It is so decided as per Disposition.