The appeal is dismissed.

The costs of appeal are assessed against the defendant.

The grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed).

1. In a case where a corporation’s wrongful calculation division under Article 52 of the Corporate Tax Act does not follow a reasonable method by a person with a special relationship and instead instead of using a number of forms of transaction listed in each subparagraph of Article 88(1) of the Enforcement Decree of the Corporate Tax Act, the corporation is deemed to have avoided or reduced the tax burden by unfairly evading or reducing the tax burden.

From the viewpoint of the economic person, this applies only to cases where it is deemed that the economic rationality was neglected by calculating natural lusent and unreasonable acts.

Determination on whether economic rationality exists shall be made on the basis of whether the transaction is abnormal in light of sound social norms or commercial practices, taking into account the various circumstances of the transaction. However, the transaction price between the non-specially related persons, special circumstances at the time of the transaction, etc. shall also be considered.

(See Supreme Court Decision 2010Du19294 Decided November 29, 2012, supra). 2. A.

Considering the following circumstances, the lower court: (a) the Plaintiff borrowed approximately KRW 19.2 billion from stockholders to determine the interest rate of 20% per annum; (b) the instant disposition is based on the premise that the market price of the instant subordinated loan is 13.15% per annum, as stipulated in Article 52 of the former Corporate Tax Act (Amended by Act No. 10423, Dec. 30, 2010); and (c) Article 88(1)7 of the former Enforcement Decree of the Corporate Tax Act (Amended by Presidential Decree No. 22951, Jun. 3, 2011); and (d) the Plaintiff’s high interest rate of money under Article 8(1)7 of the former Enforcement Decree of the Corporate Tax Act (Amended by Presidential Decree No. 22951, Jun. 3