[2] The legislative intent and standard of determining the denial of wrongful calculation under Article 20 of the Corporate Tax Act

[3] The meaning of "pro rata share of profit" under Article 46 (2) 9 of the Enforcement Decree of the Corporate Tax Act

[4] The case holding that the above / [3] falls under the share of profit as set forth in paragraph (3) and thus becomes subject to the avoidance of wrongful calculation in case where the company engaged in the suin restaurant business, in fact, transferred its shareholders and the company established separately by the foreign company, and caused the foreign company participating in the acquiring company to pay an excess amount in return for the goodwill

[2] "Calculation of wrongful acts" refers to the calculation of an act to reduce or exclude the burden of taxes incurred when a taxpayer takes the ordinary rational transaction form by taking the bypassing act, the multi-stage act and other abnormal transaction form without using the normal economic person's reasonable transaction form. The purport of Article 20 of the Corporate Tax Act Article 20 of the Corporate Tax Act, which provides for the denial of wrongful calculation, is that a transaction with a corporation and a related party has neglected economic rationality by taking advantage of all the forms of transaction under each subparagraph of Article 46 (2) of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 14080 of Dec. 31, 1993), and it is deemed that a taxpayer neglected economic rationality by taking advantage of the transaction form as stipulated in each subparagraph of Article 46 (2) of the former Enforcement Decree of the Corporate Tax Act, and thus, the taxation authority intends to fair taxation and prevent tax avoidance by deeming that there was an income objectively reasonable in terms of tax law. Determination of economic rationality should be made by considering all the relevant circumstances.

[3] In cases where it is recognized that the tax burden of Article 46 (2) of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 14080 of Dec. 31, 1993) unfairly reduces the tax burden, Item 1 through 8 provides individual and specific types of act, and Item 9 provides a general form of act with "where it is recognized that there was a distribution of the profit of the juristic person to other investors, etc." Thus, the meaning of Item 9 refers to a case where the profit is recognized to be distributed to the investors, etc., other than the transaction stipulated in subparagraphs 1 through 8.

[4] The case holding that even if the plaintiff company, which engaged in the Huva restaurant business, agreed to obtain trademark rights, etc. and return all rights related to trademark and technology provision in concluding a trademark and technology introduction contract from the U.S. Ba Ba va company, in light of the business performance and prospect during the contract termination, the plaintiff company transferred its business rights to the company newly incorporated through joint venture of its shareholders and foreign company, the plaintiff company's transfer of business facilities, etc. related to the business without using the transaction form, which is not based on the normal transaction form, delivered to the shareholders, and is exempted from the above shareholders from the obligation to pay the excess amount of issued stocks, and only the foreign company which is a joint venture company paid the above excess amount of stocks, thereby allowing the above shareholders to distribute profits equivalent to the above shareholders' stock holding ratio to the above shareholders, and at least excluding the tax burden on the income accrued from the transfer of business rights on its own, this constitutes an unfair calculation act under Article 26 (2) 9 of the Corporate Tax Act (amended by Presidential Decree No. 1408, Dec. 31, 1993). 208, 193).

1. As to the second point:

Business right refers to an intangible asset value, such as excess profit-making power, which makes it possible to make profits higher than the ordinary profit of other companies engaged in the same kind of business due to its business functions or characteristics, such as the tradition, social credibility, location conditions, existence of special manufacturing technology or transactional relationship, etc. (see, e.g., Supreme Court Decisions 84Nu281, Apr. 23, 1985; 85Nu592, Feb. 11, 1986). In light of the Plaintiff’s business performance and prospects, etc., the lower court is justifiable to have determined that even if the Plaintiff Company agreed to enter into a trademark and technology transaction contract with the non-party Bain Bain company and return all the rights related to the trademark and technology to the technical provider at the time of the termination of the contract, such fact alone cannot be deemed as having no possibility of business right, and it cannot be said that there was no illegality in the grounds for appeal or the lack of reasons, as alleged in the grounds for appeal.

2.With respect to points 1, 3, and 2.(c):

Wrongful calculation means an act of reducing or removing the tax burden incurred when a taxpayer takes an ordinary rational transaction form without reasonable transaction form. The purpose of Article 20 of the Corporate Tax Act provides for the denial of wrongful calculation under Article 46 (2) of the Enforcement Decree of the same Act (amended by Presidential Decree No. 14080, Dec. 31, 1993) is to ensure the fairness of taxation and to prevent tax avoidance by imposing taxes on a taxpayer by deeming that the taxpayer had income objectively reasonable in terms of tax law. In addition to the above, the determination on whether a taxpayer would be an act of reducing 10Nu8630, Apr. 11, 1989; Article 20 of the Corporate Tax Act provides for "any other act of reducing 9Nu979, Jul. 24, 1990" under Article 46 (2) of the same Act (see, e.g., Supreme Court Decision 90Nu97979, Apr. 19, 199).

According to the reasoning of the judgment below, the court below concluded a trademark and technology introduction contract with the non-party 1 corporation on December 12, 1984, and decided that the non-party 1 corporation's 7 non-party 1 corporation and the non-party 4 corporation's 7 non-party 1 corporation's 7 non-party 1 corporation's 4 corporation's 40% of the total amount of 9 non-party 1 corporation's 9 corporation's 9 corporation's 7 non-party 1 corporation's 9 corporation's 9 billion 9 corporation's 197 corporation's 90 corporation's 97 corporation's 196 corporation's 97 corporation's 197 corporation's 197 corporation's 9 corporation's 197 corporation's 5 corporation's 197 corporation's 9 corporation's 5 corporation's 5 corporation's 90% of its stock stock stock stock stock stock stock stock price's 90%'s company's 90

In light of the records and the legal principles as seen earlier, the above judgment of the court below is just, and there is no error of law such as misunderstanding of legal principles, lack of reasons or inconsistency of reasons, or incomplete hearing, as alleged in the grounds

In addition, as long as the above transaction constitutes a share of profits under Article 46 (2) 9 of the Enforcement Decree of the above Act, the value of business rights assessed under Article 5 (5) 1 of the former Enforcement Decree of the Inheritance Tax Act (amended by Presidential Decree No. 14469 of Dec. 31, 1994), which is a supplementary assessment method for market price determination in the transfer of low-price under Article 46 (2) 4 of the above Enforcement Decree, shall not be deemed as a share of profits, as alleged in the grounds of appeal.

3. Therefore, the appeal is dismissed and all 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 Im-soo (Presiding Justice)