The meaning of input tax amount before business registration under the Value-Added Tax Act

The input tax amount prior to the registration under Article 5 (1) of the Value-Added Tax Act, which is stipulated as the input tax amount not to be deducted from the output tax amount under Article 17 (2) 5 of the same Act, shall be interpreted as the input tax amount prior to the receipt of a legitimate application

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

Supreme Court Decision 83Nu228 Delivered on July 26, 1983

[Judgment of the court below]

The director of the tax office

Seoul High Court Decision 83Gu276 delivered on November 1, 1983

The appeal is dismissed.

The costs of appeal shall be borne by the plaintiff.

The grounds of appeal are examined.

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 new business may register before the date of commencing the business under the conditions as prescribed by the Presidential Decree, and according to Article 17 (2) 5 of the same Act, the input tax amount prior to the registration under the provisions of Article 5 (1) of the same Act shall not be deducted from the output tax amount. Thus, prior to the registration under the provisions of Article 17 (2) 5 of the same Act, the input tax amount prior to the receipt of the application for registration under the provisions of Article 5 (1) of the same Act, shall be new as the input tax amount prior to the lawful receipt of the application for registration (see Supreme Court Decision 83Nu228, Jul. 26, 1983).

Therefore, the appeal is dismissed, and the costs of the 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 Chang-chul (Presiding Justice)