Hartjin Co., Ltd. (Law Firm LLC, Attorneys Jeon full-time et al., Counsel for the defendant-appellant)

Head of Seocho Tax Office

April 3, 2013

Seoul Administrative Court Decision 2012Guhap8717 decided September 7, 2012

1. The plaintiff's appeal is dismissed.

2. The costs of appeal shall be borne by the Plaintiff.

The judgment of the first instance shall be revoked. The defendant's disposition of collecting corporate tax withheld at KRW 2,313,482,560 against the plaintiff on January 3, 201 shall be revoked.

The reasons for the judgment of this court are as follows: “No difference exists” in the fourth 10th 10th 10th son of the judgment of the court of first instance; “No difference exists” in the first 11th son; and “the plaintiff also did not dispute the fact that the ATRESL is an intentional company established for the purpose of tax avoidance at the stage of the decision of pre-assessment review; and therefore, it is identical with the reasons for the judgment of the court of first instance. Therefore, it is cited in accordance with Article 8(2) of the Administrative Litigation Act and the main sentence of Article 420 of the Civil Procedure Act.

The Plaintiff asserts that the instant payments do not constitute interest income even in the court. However, even if the Plaintiff, who is the surety, paid the instant payments, the nature of the instant payments ought to be deemed to be based on the payment guarantee obligee reverted to the instant payments. The instant payments constitute “interest and discount amount of bonds or securities issued by a foreign corporation” under Article 16(1)7 of the former Income Tax Act or “income similar to those under subparagraphs 1 through 12” under Article 16(1) of the former Income Tax Act and thus constitute interest income under Article 16(1) of the former Income Tax Act. Accordingly, the Plaintiff’s assertion on this part is unacceptable.

The judgment of the first instance is justifiable. The plaintiff's appeal is dismissed.

Judges Choi Jong-ho (Presiding Judge) Kim Tae-ho