Opera et Dies

Meaning of the doctrine of no taxation without law for the strict interpretation in tax law

1. 헌법 제38조는 '모든 국민은 법률이 정하는 바에 의하여 납세의 의무를 진다'고 규정한다.

Article 38 of the Constitution provides "All citizens shall have the duty to pay taxes under the conditions as prescribed by the Act.'' 

2. 헌법 제59조는 '조세의 종목과 세율은 법률로 정한다'고 명시하고 있다.

Article 59 of the Constitution states "Types and rates of taxes shall be determined by the Act." 

3. 두 조문은 조세법률주의를 규정하고 있는바, 이는 과세요건 등은 국민의 대표기관인 국회가 제정한 법률로써 규정하여야 하고, 그 법률의 집행에 있어서도 이를 엄격하게 해석·적용하여야 하며, 행정편의적인 확장해석이나 유추적용은 허용되지 않음을 의미한다.

Both are to show its adoption of the doctrine of no taxation without law, which means that the National Assembly stipulates the requisite for taxing, that it is to be strictly construed and applied in Enforcement, and that the extensive interpretation or analogical application just for the sake of administrative convenience is not to be permitted. 

4. 따라서, 법률의 위임이 없이 명령 또는 규칙 등의 행정입법으로 과세요건 등에 관한 사항을 규정하거나 법률에 규정된 내용을 함부로 유추, 확장하는 내용의 해석규정을 두는 것은 조세법률주의 원칙에 위배된다.

Accordingly, it is against the doctrine of no taxation without law to stipulate the conditions of taxing or to make the interpretative regulation of arbitrarily extending and analogizing the contents of the law through administrative legislation such as orders or rules without delegation of the law.

A tax filing and Unjust Enrichment lawsuit

Supreme Court Decision 98Da47184 delivered on February 25, 2000

1. Summing-up

ⓐ The plaintiff(the Korea Broadcasting System) filed the value-added tax amount by deducting the input tax amount for the commercial broadcasting by calculating the proportionate ratio of the revenue from the advertising fees to the aggregate revenue (i.e., the aggregate sum of the revenue from advertising fees and receiving fees, etc.), without dividing and confirming the portion associated with the advertising business.

ⓑ The plaintiff paid the value-added tax examined in this case without any reservation until it was indicated during the National Assembly's annual inspection for the year 1993 that the payment of the corporate tax was improper which led to the filing of this suit.

2. Judgment of Supreme Court

ⓐ In the type of taxes paid by reporting and filing by the taxpayer such as the value-added tax, the tax obligation is formatively confirmed by the act of the taxpayer reporting and filing its own tax base and the tax amount, and the payment of the tax amount is deemed to be a performance of the tax obligation formatively confirmed by such reporting.

ⓑ The national or municipal governments retain the tax amount paid based on the tax claim confirmed by the above procedure.

ⓒ Therefore, unless the tax filing of the taxpayer is null and void due to a material and clear defect, it cannot be forthwith deemed as unjust enrichment.

ⓓ In considering whether a tax filing is null and void due to a material and clear defect, a reasonable judgment must be made upon teleological review of the purpose, significance and function of the regulation under which the tax filing has been made and the available remedies for the defective tax filing as well as a case-by-case consideration of the circumstances leading to the tax filing.

ⓔ The plaintiff did not distinguish the profit-making business and other businesses in its accounting.

ⓕ The plaintiff's filing of the value-added tax amount is illegal.

ⓖ However, it is an open question of the construction of law whether the first sentence of Paragraph 1 of Article 61 of the former Enforcement Decree to the Value-Added Tax Act can be applied by analogy to the case where the taxable and non-taxable businesses are concurrently conducted.

ⓗ It is difficult to regard the above defect as overtly clear.

ⓘ Therefore, the tax filing at issue in this case was not null and void per se.