Where the trade name, the head office, executives, or intended business of a corporation is changed after the closure of business after the completion of the registration of incorporation, and then the corporation without business performance is acquired, whether it constitutes the incorporation of a corporation under Article 138 (1) 3 of the former Local Tax Act (negative)

Even if a profit-making corporation of a company, etc. did not engage in its business activities, the date of its establishment is the date of its initial establishment registration unless the corporate entity itself is extinguished, and even if the closed corporation resumes its business again, it cannot be deemed that the new corporation was established at the time of its business activities. It does not change the Local Tax Act by taking over a corporation with no business performance after its establishment registration. Therefore, it cannot be deemed that the case of changing its trade name, head office, officer, or intended business constitutes the establishment of a corporation provided for in Article 138 (1) 3 of the former Local Tax Act (amended by Act No. 8138 of Dec. 30, 2006).

Article 138(1)3 of the former Local Tax Act (amended by Act No. 8138 of Dec. 30, 2006); Article 171(1) and Article 172 of the Commercial Act

Supreme Court Decision 98Du14082 delivered on November 9, 1999 (Gong1999Ha, 2531) Supreme Court Decision 98Du1731 delivered on March 16, 200 (Gong200Sang, 989)

Plaintiff

The head of Yongsan-gu Seoul Metropolitan Government

December 19, 2008

1. The Defendant’s imposition disposition on February 12, 2008 against the Plaintiff is revoked in entirety.

2. The costs of the lawsuit are assessed against the defendant.

The text is as follows (the statement of the purport of the claim seems to be written in writing on February 15, 2008).

1. Details of the disposition;

A. On June 3, 1994, the Plaintiff completed the registration of incorporation with the trade name "non-party 1 corporation", 50,000,000 capital, the head office "Seoul Dongdaemun-gu Newdong (hereinafter omitted), the representative director "non-party 2, the auditor non-party 3, the non-party 3, the purpose of business as home fashion and clothing manufacturing, wholesale and retail, real estate brokerage and rental business, etc.

B. Since August 29, 1995, the Plaintiff was deemed dissolved pursuant to Article 520-2(1) of the Commercial Act on December 4, 2001 due to the lack of business performance and the registration of dissolution was completed.

C. On March 19, 2003, the Plaintiff registered the continuation of company as “Plaintiff”; the head office as “Seoul Yongsan-gu Won-ro 2 (hereinafter omitted); the representative director was Nonparty 4; the auditor was Nonparty 5; the registration of modification was completed for adding electronic and electrical wholesale and retail business to the target business; the registration of modification was completed again on May 27, 2003.

D. During the period from June 25, 2003 to October 30, 2004, the Plaintiff acquired the land and buildings, etc. indicated in the details of the attached imposition, and reported and paid the registration tax and the local education tax by applying the general tax rate.

E. After that, the Defendant: (a) filed for registration with the continuation of company on March 19, 2003; (b) the Plaintiff changed its trade name, the head office, executive officers, and target businesses; (c) thus, deeming the Plaintiff to have newly established a new corporation in a large city irrespective of the registration form to have substantially been in conformity with the substance over form principle; and (d) the registration of the instant real estate constitutes a disposition imposing registration tax (hereinafter referred to as “instant disposition”) on the Plaintiff on February 12, 2008, on the ground that the registration of the instant real estate constitutes the subject matter of registration tax, as it constitutes the real estate registration acquired within five years after the establishment of the juristic person as prescribed by the Enforcement Decree of the former Local Tax Act, Article 138(1)3 of the former Local Tax Act (amended by Act No. 8138, Dec. 30, 2006; hereinafter referred to as the “former Enforcement Decree of the Local Tax Act”).

[Reasons for Recognition] Unsatisfy, Gap evidence 1, 2, Gap evidence 3-1 to 9, Eul evidence 1 and 2

2. Whether the instant disposition is lawful

A. The parties' assertion

(1) The plaintiff's assertion

The term "establishment of a corporation" under Article 138 (1) 3 of the former Local Tax Act refers to the establishment registration under Article 172 of the Commercial Act in light of the principle of strict interpretation in accordance with the principle of no taxation without law and the principle of clarity of taxation requirements. Since the real estate of this case was acquired between June 3, 1994 and October 30, 2004, which was five years after the date of registration of the Plaintiff's establishment, from June 25, 2003 to June 30, 2004, it was excluded from the heavy registration tax requirements. However, the above change registration of the corporation as of March 19, 2003 as of March 19, 200, is deemed a de facto new establishment, and thus a disposition of heavy taxation is unlawful.

(2) The defendant's assertion

Article 138 (1) 3 of the former Local Tax Act provides that the establishment of a corporation in a large city shall not be limited to the establishment registration under Article 172 of the Commercial Act, as asserted by the plaintiff, and it shall not be deemed that the establishment of a corporation is limited to the establishment registration under Article 172 of the Commercial Act, and it shall be deemed that the actual establishment of a corporation is done. In addition, it shall be reasonable to interpret the language and text of Article 138 of the former Local Tax Act, and it shall be deemed that the establishment is included in the actual establishment act even if the registration of modification is made.

B. Relevant statutes

The entries in the attached Table-related statutes are as follows.

(c) Markets:

(1) Main issues of the instant case

The main issue of the instant case is whether the establishment of a corporation under Article 138(1)3 of the former Local Tax Act constitutes a case where the trade name, the head office, the executive officer, or the intended business of a corporation is changed following the closure of business after the completion of the establishment registration, which has no business performance. In other words, whether the establishment of a corporation is limited to the establishment by registration of incorporation as alleged by the Plaintiff, and whether there is any act that can be evaluated as a substantial establishment as alleged by the Defendant can be permitted under the principle of no taxation without law,

(2) The principle of no taxation without law (the principle of clarity of taxation requirements)

Article 59 of the Constitution provides for the principle of no taxation without the law, which provides that the items and rates of taxation shall be determined by the law, which provides for the requirements of taxation and the procedures for imposition and collection, or orders and rules based on delegations thereof, which are the contents of the principle of no taxation without the law, shall be arbitrary and clear, and shall not use indefinite concepts or general provisions without the permission of the tax authorities in order to exclude the persons of the tax authorities and to ensure legal stability and predictability of the people.

In light of the purpose of the principle of clarity of taxation requirements, the concept of the establishment of a company under Article 138(1)3 of the former Local Tax Act shall be determined by the Commercial Act, which has general provisions on the establishment of a company, unless the Local Tax Act, etc. explicitly provides for the establishment of a company.

(3) Provisions of the Local Tax Act concerning the concept of the establishment of a company

Article 138 (1) 1 and 3 of the former Local Tax Act only provides for the establishment of a company, etc. as one of the cases where the registration tax is heavy, and there is no provision regarding which case can be seen as the establishment of a company.

However, Article 138 (1) 1 of the former Local Tax Act provides for "registration following the establishment of a corporation and the establishment of a branch or sub-office in a large city" as an excessive requirement for registration of a corporation. Article 138 (1) 3 of the same Act provides for "real estate registration and real estate registration following the establishment, establishment, and transfer of a main office, branch or sub-office in a large city and the relocation of a main office, branch or sub-office in a large city into a main office, a branch or a sub-branch in a large city." Article 102 (2) of the former Enforcement Decree of the Local Tax Act provides that "Real estate registration after the establishment, establishment, and transfer of the main office, branch or sub-branch is ...." In full view of the above provisions, it cannot be deemed that the concept of "establishment of a corporation following the establishment of the head office" includes the concept of "establishment of a corporation" other than the concept of "transfer of a main office, branch or sub-office", and thus, it is difficult to determine the concept of registration tax reporting or sub-establishment (2).

(4) Determination of the time of incorporation under the Commercial Act

As seen above, since the concept of incorporation of a company is not separately provided in the Local Tax Act, the concept of incorporation of a company must be confirmed under the Commercial Act, which has general provisions concerning the incorporation of a company, and the establishment of a corporation requires the act of establishment and registration of incorporation, and the corporation is formed by the completion of registration of incorporation (Article 172 of the Commercial Act), thereby acquiring the corporate personality of a company (Article 171(1) of the Commercial Act).

In addition, since the registration of incorporation of a company is about the acquisition of corporate personality, Article 172 of the Commercial Act on the validity of the registration of incorporation is a mandatory provision different from Article 37 of the Commercial Act on the general validity of commercial registration applied in the case of

In light of this, even if a profit-making corporation of a company, etc. was not engaged in its business activities, the date of establishment of the corporation is the initial date of registration of incorporation unless the corporate entity itself is extinguished, and it cannot be deemed that the corporation was newly established at the time of its activities even if the corporation discontinued its business activities again, and it does not change under the Local Tax Act.

(5) Relationship with the principle of substantial taxation, etc.

However, Article 138(1) of the Local Tax Act provides for the imposition of registration tax at a relatively higher rate compared to registration by a natural person or a legal entity other than a large city, inasmuch as the concentration effect of population and economic power is far more stronger than that of a natural person by enjoying a high level of cluster that a large city has, at the same time, enjoying the benefit of a large city, and thereby gaining more convenience and economic benefits compared to a legal entity other than a large city, with respect to registration made in a large city (see Constitutional Court Order 94Hun-Ba42, Mar. 28, 1996).

Therefore, in order to avoid the heavy registration tax, the acquisition of a corporation under closure instead of newly establishing a corporation in a large city and the use of the corporation is considered to be contrary to business ethics and to the tax justice, and there is a need to regulate this act.

However, Article 38 of the Constitution provides that "All citizens shall have the duty to pay taxes under the conditions as prescribed by Act," and Article 59 provides that "types and rates of taxes shall be determined by Act," thereby adopting the principle of no taxation without the law. Such principle of no taxation without the law is adopted. Such a principle of no taxation without the law must be prescribed by the law enacted by the National Assembly, which is a representative body of the people, and its strict interpretation and application should be strictly interpreted and applied to the enforcement of the law. Thus, expanded interpretation or analogical application of administrative convenience is not allowed (see, e.g., Supreme Court Decision 98Du11731, Mar

According to the principle of no taxation without law, in order to deny the validity of a party's transaction, regardless of the form of the transaction, it must be a separate and specific legal provision to deny the validity of the transaction (see Supreme Court Decision 98Du14082, Nov. 9, 199, etc.). Thus, in order to impose a tax on the above act, there must be individual and specific legal provision regarding it, and as seen earlier, there is no individual and specific legal provision regarding the establishment of a company, which is a requirement to impose registration tax on the former Local Tax Act, etc., so it is difficult to impose registration tax on the Plaintiff on the ground of the principle of substantial taxation, etc.

(6) Sub-committee

Therefore, the establishment of a corporation under Article 138 (1) 3 of the former Local Tax Act cannot be deemed as a case where the trade name, the head office, executive officer, or objective business of a corporation is changed after the closure of business after the completion of the registration of incorporation as in this case.

3. Conclusion

Therefore, the defendant's disposition of this case is illegal, so it is decided as per Disposition by the assent of all participating Justices.

Judges Lee Dong-gu (Presiding Judge)