Seoul Administrative Court 201Guhap570 ( November 24, 2011)

Seocho 2010west 1477 ( October 27, 2010)

It is difficult to conclude that the market price calculated by the defendant is the market price determined based on objective and reasonable grounds.

In light of the fact that the transaction subject to comparison is a transaction between related parties, and the year of provision of the service transaction in this case differs, and there is a difference in the contents of provision, it is insufficient to view that the market price applied by the defendant in this case falls under the price of continuous transaction with many and unspecified persons in a situation similar to the service transaction in this case.

2011Nu46165 Revocation of Disposition of Corporate Tax Imposition

AA Automobile Corporation

Head of Seocho Tax Office

Seoul Administrative Court Decision 201Guhap570 decided November 24, 2011

September 27, 2012

October 18, 2012

1. The defendant's appeal is dismissed.

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

1. Purport of claim

On January 8, 2010, the Defendant revoked all of the imposition dispositions of KRW 000 corporate tax for the business year 2004, ② KRW 0000 corporate tax for the business year 2005, KRW 000 for special rural development tax for the business year 2006, ③ KRW 000 for the corporate tax and special rural development tax for the business year 2006, and ④ KRW 000 for the tax year 200 for the business year 2007 (including penalty tax for each of the above corporate tax in the record).

2. Purport of appeal

The judgment of the first instance is revoked. All of the plaintiff's claims are dismissed.

1. Quotation of the reasons for the judgment of the first instance;

이 법원이 이 판결에서 설시할 이유는，① 제1섬 판결의 이유 중에서，㉮ 제3쪽 제7

~8행의 "마. 피고는 이에 따라 원고에게 2010. 1. 8. 아래 표 기재 내역과 같이 2004 ~2007 사업연도 법인세(가산세 포함) 및 농어촌특별세의 부과처분" 부분을 "마. 피고 는 이에 따라 원고에게 2010. 1. 8. 아래 표 기재 내역과 같이 2004~2007 사업연도 법인세(가산세 포함， 다만 2007 사업연도 법인세는 최저한세 조정에 따른 부과로 보인 다) 및 농어촌특별세의 부과처분"이라고，㉯ 제5쪽 제20행의 "이 사건 부과처분은 다은과" 부분을 "이 사건 부과처분은 다음과"라고，㉰ 제20쪽 제17행의 "원가 절감 등의 사정으로 수익률이 증가하기만 하면" 부분을 "기술개발， 유통구조 개선 등으로 원가가 절감되어 수익률이 증가하기만 하면"이라고 각 고쳐 쓰고，② 아래 "제2항"에서 피고의 주장에 관한 판단을 추가하는 이외에는 제1심 판결문의 해당 부분 기재와 같으므로， 행정소송법 제8조 제2항， 민사소송법 제420조 본문에 의하여 이를 인용한다.

2. The part concerning additional determination as to the defendant's argument

A. The defendant's assertion

(1) The market price calculated by the Defendant with respect to the instant service is calculated on the basis of the unit price for service transactions applied to many unspecified persons before the Plaintiff unfairly raised the unit price for the instant service transaction. It can be deemed that the instant service constitutes directly the market price under Article 89(1) of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 19891, Feb. 28, 2007; Presidential Decree No. hereinafter referred to as the “Enforcement Decree of the instant case”).

(2) In light of the unique characteristics that only a exclusive transaction exists between the Plaintiff and the EEE, and in the application of Article 89(4)2 of the Enforcement Decree of the instant case, the pertinent business year is also a similar service transaction, and the Defendant’s transaction is a similar service transaction with a related party (EE). In particular, the TPP service and the TPP service for export of the instant case can not be excluded solely on the ground that the transaction is a transaction with a related party (EE) with a similar one. Thus, the market price calculated by the Defendant at the time of the instant disposition meets the requirements of Article 89(4)2 of the Enforcement Decree of the instant case.

B. Determination

(1) As to the assertion on the application of Article 89(1) of the Enforcement Decree of the instant case

(A) In the case of a wrongful calculation, the term "market price" means an objective exchange value formed through a general and normal transaction, and it includes a value assessed in an objective and reasonable manner. However, Article 89(1) of the Enforcement Decree of the instant case provides that "prices continuously traded by a corporation with many and unspecified persons or generally traded between third parties who are not specially related persons, in a situation similar to the instant transaction, in connection with the scope of "in order to apply the provision regarding the calculation by wrongful calculation", and the facts that service transaction between a corporation and a specially related person constitutes a substitute for the avoidance of wrongful calculation that unreasonably reduces taxes from corporate tax laws and regulations, and the assertion, verification, and verification conducted by a corporation in the "market price", which serves as the applicable standard in the determination of whether the transaction falls, shall be all held by the tax authorities (see, e.g., Supreme Court Decisions 95Nu5301, May 10, 1996; 2003Du15287, May 12, 2005).

(B) In the instant tax disposition, the Defendant calculated the instant tax disposition 1 with respect to (i) the MIP transport service, and (ii) the equipment leasing service (except for their own equipment leasing service), and (iii) the instant tax disposition 1 with respect to the instant tax base for the subsequent 200 years or longer, the EE, which is a person with a special relationship, for the subsequent 200 years or longer, applied the tax base for the instant tax disposition 1 to the Plaintiff; and (iv) the amount calculated by multiplying the market price for new equipment leasing services provided by EE by the current market price rate for each business year; and (v) the instant tax base for the instant tax disposition 20 years or less for the instant tax disposition ; and (v) the instant tax base for the instant tax disposition 10 years or less for the instant tax disposition ; and (v) the instant tax base for the instant tax disposition 2 years or less for the first time after the instant tax disposition ; and (v) the instant tax base 2 years or more for new equipment leasing services provided by EE to the Plaintiff.

(2) As to the assertion on the application of Article 89(4)2 of the Enforcement Decree of the instant case

Although it is virtually impossible to calculate the market price by applying the "rate of return on similar service transactions provided to persons other than persons with a special relationship" during the pertinent business year as the basis for market price calculation under Article 89 (4) 2 of the Enforcement Decree of this case because the plaintiff could not find the cases of similar service transactions with persons with a special relationship during the pertinent business year, the plaintiff's calculation of the market price is not in fact impossible, as alleged by the defendant, for the purpose of calculating the rate of return based on the service transactions conducted between the parties with a special relationship or the service transactions conducted during the previous business year not for the pertinent business year where the corporate tax of this case is levied, and for the purpose of calculating the market price based on the previous business year, not for the pertinent business year where the corporate tax of this case is imposed, and for the purpose of comparison, there is a need to reasonably adjust the difference between the terms of the transaction, economic situation or market conditions, and further, it does not constitute an objective and reasonable basis for determining that the plaintiff's calculation of the market price was based on the objective and reasonable evidence presented by the court.

3. Conclusion

If so, the defendant's appeal is dismissed for lack of reason.