Whether the act of correcting the name of a disguised business operator ex officio in the name of the actual business operator in the course of managing business registration by the tax authority constitutes an administrative disposition subject to appeal (negative)

The purpose of the registration of business under the Value-Added Tax Act is to enable the tax authority to identify the taxpayer of value-added tax and to secure the taxation data. This is a mere report of business fact, which is constituted by filing a business registration application with the head of the competent tax office, and the issuance of a business registration certificate is merely an act of issuing a certificate verifying such registration. Furthermore, the tax authority’s ex officio revocation of business registration under Article 5(5) of the former Value-Added Tax Act (amended by Act No. 8142 of Dec. 30, 2006) shall not be deemed an administrative disposition that is subject to appeal litigation in that the tax authority’s act of correcting the name of the business operator in the name of the actual business operator ex officio in the course of managing business registration is a correction entry of the main agent, and it does not change the status of the business operator, and thus, it cannot be deemed an administrative disposition that is subject to appeal litigation.

Article 5(1) and (5) of the former Value-Added Tax Act (Amended by Act No. 8142, Dec. 30, 2006); Article 7(4) of the former Enforcement Decree of the Value-Added Tax Act (Amended by Presidential Decree No. 1930, Feb. 9, 2006); Article 2(1)1 of the Administrative Litigation Act

[Plaintiff-Appellant-Appellee] Plaintiff 1 and 1 other (Law Firm Gyeong, Attorneys Lee Jong-soo et al., Counsel for plaintiff-appellant-appellant-appellee)

Plaintiff 1 and one other (Attorney Han Man-chul, Counsel for the plaintiff-appellant)

Head of Guro Tax Office

Seoul High Court Decision 2005Nu22960 decided January 8, 2008

All appeals are dismissed. The costs of appeal are assessed against the plaintiffs.

The grounds of appeal are examined.

1. Article 5(1) of the former Value-Added Tax Act (amended by Act No. 8142 of Dec. 30, 2006; hereinafter “the Act”) provides that “a person who newly starts a business shall register with the head of the competent district tax office having jurisdiction over the place of business within 20 days from the date of commencement of the business under the conditions as prescribed by the Presidential Decree: Provided, That a person who intends to start a new business may register before the date of commencement of the business.” Paragraph (5) of the same Article provides that “a person who intends to start a new business may register his business even before the date of commencement of the business.” Meanwhile, the head of the competent tax office having jurisdiction over the place of business shall cancel the registration without delay, where a business operator closes a new business or fails to start a business after the registration under the proviso of paragraph (1) of this Article.” Meanwhile, according to Article 7(1) and (3) of the former Enforcement Decree of the Value-Added Tax Act (amended by the Presidential Decree No. 1930 of Feb. 9, 20, 20000). 7).

The purpose of the aforementioned business registration under the Value-Added Tax Act is to enable the tax authority to identify the taxpayer of the value-added tax and secure the taxation data. This is merely a report of business fact, which is constituted by filing a business registration application with the head of the competent tax office, and the issuance of the business registration certificate is merely an act of issuing a certificate proving such registration. Furthermore, the ex officio revocation of business registration by the tax authority pursuant to Article 5(5) of the Act is merely a statement of business closure, not an administrative disposition that is subject to appeal litigation in that it does not cause a change in the status of the business operator (see Supreme Court Decision 9Du6903 delivered on December 22, 200, etc.).

In light of this point, the tax authority's act of correcting the name of a disguised business operator in the name of the actual business operator ex officio in the course of managing the business registration shall not be deemed an administrative disposition which becomes the object of appeal litigation, since it is merely a corrective statement about the subject of the pertinent business facts, but it does not change the status of the business operator.

2. After recognizing the facts as stated in its holding, the court below determined that the lawsuit in this case seeking revocation or nullification of the business registration is unlawful on the ground that the defendant's act of changing the business name of the plaintiffs from the plaintiffs to the non-party on the ground that the business name of the plaintiffs is in fact operated by the non-party is an act of cancelling the business registration ex officio under Article 5 (5) of the Act on the ground that the business registration was not commenced after the business registration, and that the non-party constitutes an act of cancelling the business registration ex officio under Article 5 (1) of the Act and Article 7 (4) of the Enforcement Decree on the ground that the act of changing the business name of the plaintiffs to the non-party is an administrative disposition subject

Upon examining the above legal principles in light of the records, it is inappropriate for the court below to deem that the act of the defendant's ex officio change of the business name of this case constitutes an act of cancelling the business registration ex officio with respect to the plaintiffs, and at the same time it constitutes an act of business registration ex officio with respect to the non-party. However, in the end, the conclusion that the defendant's act of changing the business name of this case cannot be deemed an administrative disposition subject to appeal litigation, and therefore, it is just in the conclusion that the lawsuit of this case was dismissed.

3. Therefore, all appeals are 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 on the bench.

Justices Lee Hong-hoon (Presiding Justice)