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

The following facts are not disputed between the parties, or can be acknowledged in full view of the purport of the whole pleadings in each of the statements in Gap evidence No. 2, Eul evidence No. 1-4, Eul evidence No. 3 and No. 18.

A. The Plaintiff is a corporation established in around 1944 and operated as its main business for the manufacture and sale of vehicles and their accessories. XX Co., Ltd. is about 40% of the Company’s logistics business of △ Group comprised of 40 affiliated companies, such as the Plaintiff, △△ Co., Ltd., OO Co., Ltd., and about 60% of the company’s △ Nam, and approximately 60% of the company △ Nam, which was established on February 22, 2001 (including approximately 1.5 billion won), and is also a logistics company established on February 22, 2001 (the name at the time of its establishment was changed, but the trade name was changed on June 20, 2003; hereinafter collectively before and after the mutual change is also an affiliated company of △ Group.

B. After the establishment of XX, the Plaintiff provided the cost of the services with ① self-production parts (such as MIP, Plant in MIP, Plant in Made, engine, transmission, marketing machinery, etc. directly produced at the factory of its own company), ② equipment leasing services, ③ pre-inspection services (hereinafter referred to as "PD," equipment leasing, and TPPI) services.

C. The director of the Seoul Regional Tax Office, upon conducting a tax investigation about XX in 2007, deemed that the Plaintiff’s tax was reduced unfairly by receiving the instant service at a price higher than its market price during the business year 2004 and 2005 under the Corporate Tax Act and by paying the service at a price higher than its market price. Article 52(1) of the former Corporate Tax Act (amended by Act No. 10423, Dec. 30, 201; hereinafter the same shall apply) and Article 88(1)7 of the Enforcement Decree of the same Act (amended by Presidential Decree No. 19891, Feb. 28, 2007; hereinafter the same shall apply) determined that the instant service is subject to the rejection of unfair calculation, and notified the Defendant to correct corporate tax by including the difference in its gross income.

D. Accordingly, on November 1, 2008, the defendant issued a disposition of imposition of KRW 534,603,850 of the corporate tax for the business year 2004 and the disposition of imposition of KRW 626,784,110 of the corporate tax for the business year 2005 (including additional tax) (hereinafter collectively referred to as "the disposition of imposition in this case").

E. The Plaintiff filed an appeal with the Tax Tribunal on January 29, 2009 regarding the instant disposition, but the Tax Tribunal dismissed the appeal on October 12, 2010.

2. Whether the disposition is lawful;

A. The parties' assertion

1) The plaintiff's assertion

The instant disposition is unlawful for the following reasons.

A) Regarding the economic rationality of the instant service transaction

The affiliates of △ Group, including the Plaintiff, are being provided with monthly services compared to the services provided by the existing freight forwarder through the integrated logistics system built by XX. Since the Plaintiff’s cost reduction effect reaches approximately KRW 45 billion in total in 2002-2006, even if the service fee was paid more than the previous service fee, the instant service transaction is a normal normal transaction that is economically reasonable.

B) Regarding the assessment of market price of the instant service

According to Article 89(4)2 of the former Enforcement Decree of the Corporate Tax Act, which is the basis for the instant disposition, the market price of the service shall be calculated by adding the sales cost to the sales cost multiplied by the rate of profit during the pertinent business year from a service transaction similar to the pertinent service that is provided to a person other than a person with a special relationship. Nevertheless, as seen below, the Defendant applied the rate of profit on the basis of the service transaction not in the pertinent business year or provided to the Plaintiff who is a person with a special relationship or other service transaction different from the pertinent service. The Defendant’s

(1) Services transactions for a business year other than the concerned business year.

In calculating the market price of the instant service, the Defendant applied the rate of return on service transactions during the business year of 2004, not the business year of 2005, which is subject to the disposition of this case.

(2) Transaction of services between related parties.

In calculating the market price of the instant service, the rate of return on the pertinent service transaction between the Plaintiff and the relevant party is applied.

(3) Services without similarity.

The Defendant asserts that the economic substance of the service transaction between the Plaintiff and the Plaintiff before the unit price increase is identical to the service transaction of the previous small business entities, such as the equipment leasing and the △△△ Company (hereinafter “△△△△”), which provided equipment leasing and the PEI services to the Plaintiff prior to the establishment of XX, i.e., the similar service transaction with the previous business entity, i.e., the service transaction with the former business entity and the service transaction with the XX cannot be deemed to be a service

(4) Illegal in calculating market prices related to the lease of self-employed equipment.

The Defendant calculated the market price by means of multiplying the amount calculated at the market price from the lease of equipment for private use in the case of the lease of equipment for private use by the sale of equipment for private use. Such method of calculation is against the provisions of Article 89(4)2 of the former Enforcement Decree of the Corporate Tax Act and is unlawful as there is no other legal basis.

2) The defendant's assertion

A) Regarding the economic rationality of the instant service transaction

① The Plaintiff’s business ability is not verified, and most of the distribution services provided to the Plaintiff are simply arranged and managed, and when compared with the previous performance company and competition company, it cannot be viewed as providing services through a new system because there is no additional input for human and material resources. ③ In fact, even if the Plaintiff’s business is directly performed by the Plaintiff’s affiliate, or is performed by a third party, it is practically possible to perform the services. ④ In the process of performing the instant service, the Plaintiff, without reflecting such effects, provided that the Plaintiff has continuously guaranteed an unfair profit-making amount on an unfair price basis, without considering such effects. ⑤ Despite the Plaintiff’s unit price increase in the unit price, the sales profit rate at XX increased since the Plaintiff did not increase the unit price to the performance company. ② Even when performing the same transportation business, considering the fact that there is a significant difference between the non-affiliated profit ratio and the non-profit profit ratio, the economic rationality or sound trade practice in light of the social norms and sound trade practices in the instant case.

B) Regarding the assessment of market price of the instant service

Since the Plaintiff increased the unit price without significant increase factors in the service transaction in XX around 10, 201, it is reasonable to apply the rate of return realized by trading the unit price prior to the increase in calculating the market price of the instant service during the business year of the instant taxable period. Since the return realized by trading the unit price prior to the increase (the unit price paid by the Plaintiff to △△△) between the Plaintiff and △△ is substantially the same as the return of profit realized by the service transaction between the Plaintiff and △△△, it can be deemed as falling under the return of profit arising from the service transaction conducted between the “person other than the specially related person under Article 89(4)2 of the former Enforcement Decree of the Corporate Tax Act”.

(b) Related statutes;

It is as shown in the attached Table related statutes.

(c) Fact of recognition;

The following facts are not disputed between the parties, or can be acknowledged in full view of the whole purport of the arguments in Gap evidence Nos. 1, 2, 4, 5, 9, 10, and Eul evidence No. 10-14, 19, 24-26, 31, 33, 38, 44:

1) Establishment process of XX and establishment of an integrated logistics system

A) around 199, △△ Group selected a company taking exclusive charge of the distribution business of affiliated companies and AAA comprehensive transportation company (hereinafter referred to as “AA comprehensive transportation company”). Accordingly, △△△ was entrusted with the sale and logistics of PDI transportation services, etc., the lease of equipment among corporate logistics, and YY Co., Ltd. (hereinafter referred to as “YY”) was in charge of the secondary business of △ Group. In this paper, YY Co., Ltd. (hereinafter referred to as “YY”) was in charge of the secondary business of △ Group. From △△△ on June 2001, 203, Y was in charge of the primary business of △△ Group. From △△△△ on July 2003, 203, YY succeeded to the electronic computer system and employees as they were, and succeeded to the entire business sector’s oil transportation, procurement, transportation, transportation, lease of goods (MIP service), automobile transportation, parts after service, transportation, import, commercial transport, combination, etc.

나) QQQQ는 □□그룹 내 통합물류시스템 구축을 위하여 2002년부터 통합운송관리시스템(iTMS integrated Transportation Management System), 수출입물류시스템(GOALS Global Overseas Advanced Logistics System), 통합창고관리시스템 (WMS : Warehouse Management System) 등의 물류정보시스템을 개발하기 시작하여 2003. 9. 콜센터를 구축하고, 2003. 10. 관제 및 통신서버를 개발하여 2004. 1.부터 본격적으로 가동하기 시작하였다. 이러한 통합물류시스템 구축과 XX의 인적 ・ 물적 시설확충으로 인하여 XX가 □□그룹 내 계열사에게 제공하는 운송용역의 수준은 종전에 비하여 개선되었다

2) Contents, etc. of the instant service

A) MIP services

The Plaintiff provided services, such as transportation, loading, unloading, storage, inventory management, etc. to move his/her automobile parts manufactured at the factory to a assembly factory, and the AAotomab and K were in full charge from May 2001 (However, the transportation of raw materials continued to provide services until November 2001). The Plaintiff paid to K, etc. the price for the services provided to K, etc. on September 2 and October 2001. < Amended by Presidential Decree No. 17218, Sep. 2, 2001; Presidential Decree No. 17358, Oct. 2, 2001>

(b) equipment leasing services;

The lease of equipment is a service that leases equipment necessary for loading, unloading, and moving of the parts of a motor vehicle to a finished plant and allows an executor (the company that actually performs the above service upon entrustment of the above service from XX) to operate it. The lease of equipment is divided into the lease of one's own equipment that takes the equipment he/she has acquired and the lease of other company equipment that takes the equipment owned by the executor. Before the establishment of XX, only the lease of other company (lease) was provided because the △△ entrusted with the above service does not own equipment. The Plaintiff paid the former service payment to the △△△△△△△△△△△, as it was, the Plaintiff raised the unit price on October 201.

C) PDI services

Before delivering a completed vehicle to consumers, the final inspection of the completion vehicle at the factory shipping site or the regional shipping center shall be conducted to check the external assembly and painting of the finished vehicle, the interior finishing condition, etc., and to check the functions of various devices loaded on the vehicle. The inspection service is to check the payment of sets, tools, sets, and angles installed and put in the finished vehicle and attach a temporary number and make it possible to transport and deliver the finished vehicle. Before the establishment of XX, △△△ provided △△ prior to the provision of the above services. Even after the commencement of the above provision of services from XX, the Plaintiff first paid the former payment to △△△△△, and then increased the unit price on October 201.

3) The defendant's market price of the service of this case and the plaintiff's distribution profits calculation.

Around October 2001, the Defendant: (a) considered the Plaintiff’s increase in the unit price of the instant service as an unreasonable unit price increase; and (b) calculated the market price of the instant service in the business year 2004 and 2005 pursuant to Article 89(4)2 of the former Enforcement Decree of the Corporate Tax Act by type of service; and (c) accordingly, calculated the amount subject to rejection of unfair calculation by the Plaintiff.

A) MIP services

The market price was calculated by adding the amount calculated by multiplying the sales cost and the sales cost by the rate of 6.33% on October 1, 2001 (the period before the second unit price increase) supplied to the Plaintiff by the sales cost and the sales cost, on the grounds that the rate of return realized by the transaction between the Plaintiff and the Plaintiff prior to the second increase of the unit price was uniform in terms of the transaction between the Plaintiff and the individual implementer.

(b) equipment leasing services;

(1) Services rendered to lease other companies' equipment:

The rate of return realized by trading the unit price before the increase with the Plaintiff is equal to the rate of return in the transaction between the Plaintiff and △△ prior to the establishment of XX, and calculated the market price by adding the amount calculated by multiplying the sales cost and the sales cost by 6.38% of the rate of return for the equipment rental service provided to the Plaintiff during the period of March 9, 2001 (the period before the unit price increase) by the sales cost and the sales cost, on the grounds that the rate of return was equal to the rate of return in the transaction between the Plaintiff and △△△.

(2) Services rendered to lease private equipment:

The Defendant calculated the amount calculated by multiplying the market price of other company equipment rental services computed prior to the reported sales amount of each business year provided to the Plaintiff by the ratio of the reported sales amount (hereinafter referred to as “market price ratio”) under Article 89(4) of the former Enforcement Decree of the Corporate Tax Act, on the ground that it is impossible to verify the return on profit during the period of increase ( March 2001) due to the failure to verify the return on profit during the period of increase (Article 89(4) of the former Enforcement Decree of the Corporate Tax Act.

C) POI services

The rate of return realized by trading the unit price before the increase between the Plaintiff and △△ prior to the establishment of XX is deemed to correspond to the rate of return for similar service transactions provided by the Plaintiff to a person other than a person with a special relationship, and calculated the market price by adding the amount calculated by multiplying the sales cost and the sales cost by 3.48% of the rate of return for PE services provided by the Plaintiff by the Myanmar XX (the period before the unit price increase) on March 9, 2001.

D. Determination

1) Contents and interpretation of the relevant statutes

The rejection of unfair calculation under Article 52 of the former Corporate Tax Act is a system that in cases where a corporation unfairly evades or reduces tax burden by abusing the various forms of transactions listed in each subparagraph of Article 88(1) of the Enforcement Decree of the same Act without using a reasonable method by a person having a special relationship with the person having a special relationship, it is deemed that the person having a taxation right denies it and has the income which appears objectively and reasonably reasonable by the method prescribed in the statutes. In light of the economic person’s position, it is limited to cases where the calculation of an unnatural and unreasonable act is deemed to have neglected the economic rationality. Determination of whether an economic rationality exists shall be made based on whether the transaction is abnormal in light of sound social norms and commercial practices, taking into account the various circumstances of the transaction (see, e.g., Supreme Court Decision 2005Du14257, Dec. 13, 2007).

Meanwhile, Article 88 (1) 7 of the former Enforcement Decree of the Corporate Tax Act provides that "a case where monetary or other assets or services are borrowed or received at an interest rate, rate, or rent higher than the market price" as one of the cases where it is deemed that the burden of taxation has been unjustly reduced under Article 52 (1) of the former Corporate Tax Act, and Article 52 (2) and (4) of the former Enforcement Decree of the Corporate Tax Act and Article 89 (1), (2) and (4) of the former Enforcement Decree of the Corporate Tax Act provide that "the market price of services, which serves as the basis for whether a corporation is provided with services by paying a higher price than the market price to a person with a special relationship, shall be the price generally traded with a third party who is not a person with a special relationship (Article 89 (1) of the former Enforcement Decree of the Corporate Tax Act), and where such transaction is not held, the value of such services may be calculated by dividing the market price by the cost and indirect profit rate (including the amount of services supplied to a person with a special relationship).

However, since the market price includes the value assessed in an objective and reasonable manner, if it is difficult to calculate the market price, the value assessed by objective and reasonable methods can also be deemed the market price. On the other hand, even if the price for the provision of services at a higher level than the market price was paid, if such transactions do not result in economic rationality in light of sound social norms and commercial practices, it does not constitute the subject of the avoidance of wrongful calculation. The burden of proving "market price, which is the subject of the application of the avoidance of wrongful calculation, is against the tax authority asserting the denial of wrongful calculation (see, e.g., Supreme Court Decision 2003215287, May 12, 2005).

2) Whether the market price of the instant service is calculated appropriately

A) The Defendant calculated the market price of the instant service by applying the return rate for each business year provided to the Plaintiff based on Article 89(4)2 of the Enforcement Decree of the former Corporate Tax Act, on the premise that the instant service cannot be calculated by applying Article 89(1) of the former Enforcement Decree, because the transport service between the Plaintiff and the Plaintiff and a third party is a de facto monopoly or monopoly transaction without any special relationship. In addition, the Defendant calculated the market price of the instant service by multiplying the sales of report on the lease of self-owned equipment for each business year provided to the Plaintiff on the ground that it is impossible to calculate the market price under Article 89(4)2 of the former Enforcement Decree of the Corporate Tax Act, on the grounds that the instant supplementary assessment method applied by the Defendant in calculating the market price of the instant service in light of the relevant statutes and legal principles as seen earlier is the issue of the instant case, first of all, it should be examined.

B) In full view of the following circumstances, the supplementary assessment method applied by the Defendant in calculating the market price of the instant service cannot be deemed lawful. Therefore, the instant disposition is unlawful.

O MIP services, other company leasing services, and PEI services are similar service transactions that the Defendant provided to the Plaintiff during the business year 2004 and 2005, which is the period prior to the prior increase of the service unit price for the preceding three years or more. Furthermore, from 2004 to 2004, each of the above services is provided through the integrated logistics system built by XX and its contents are not the same. Thus, it is difficult to view that the return on profit realized from each of the above service transactions during the business year 2004 and 2005 is the same as the return on profit realized from each of the above service transactions during the business years 201.

O Even if the Plaintiff, as alleged by the Defendant on October 201, 201, raised the unit price against XX without significant factors in terms of the unit price, and the actual return realized through the transaction with the above unit price prior to the above increase is substantially identical to the return on each of the above service transactions conducted between △△△ not in a special relationship with the Plaintiff, insofar as there was no reasonable adjustment of the return on the return on the return, taking into account the economic situation, changes in the market environment, and differences in the contents of the service provided, the Defendant’s calculation of the market price on the basis of the return on each of the above service transactions during the business year between the Plaintiff and the Plaintiff is unlawful.

O. Meanwhile, the defendant calculated the amount calculated by multiplying the market value of other company's equipment from the reported sales of the company's equipment for each business year provided to the plaintiff from the sales of the company's equipment leasing services among the equipment leasing services by the price of the company's equipment leasing services provided to the plaintiff. However, such a method of calculating the market value has no legal basis, and there is no evidence to acknowledge that the calculated value

O) The substantial reason why the Defendant imposed the instant disposition seems to be that, unlike the actual condition of the shipping industry where the gross sales profit ratio does not exceed average 10% due to the Plaintiff’s 'the sunset cycle against the XX, the gross sales profit ratio of the instant service was above 15%, and the gross sales profit ratio of the instant service was above 15% due to the expansion of sales size, and the company's affiliates, including the Plaintiff, engaged in unfair support activities in XX, and the Fair Trade Commission imposed a penalty surcharge. However, the gross sales profit ratio is merely an indirect factor in the economic rationality judgment, and it is difficult to view that the Defendant’s computation of the market price of the instant service is justified solely on the grounds that the Defendant realized profits above the average industry in the economic rationality judgment, and that the unfair support act under Article 23(1)7 of the Monopoly Regulation and Fair Trade Act, Article 36(1)10(a) of the Enforcement Decree of the same Act is likely to be unfair from the economic concentration of goods at a different market level, and thus, it seems to be unfair from the economic rationality of the relevant market price.

3. Conclusion

Therefore, the plaintiff's claim of this case is justified, and all of them are accepted, and it is so decided as per Disposition.