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. Case overview and key issue

A. (1) On May 1, 2007, the Plaintiff: (a) merged the same assistant director (hereinafter “Dong assistant director”); (b) appropriated approximately KRW 293 billion in the account book as business rights; (c) however, when filing a corporate tax return, the Plaintiff treated tax adjustment as not constituting business rights under tax law.

(2) The Defendant, on March 12, 2013, imposed corporate tax of KRW 67.1 billion (including additional tax) on the Plaintiff for the business year 2007 on the premise that the said amount constitutes a business right under tax law, deeming that it should be included in the gross income as a merger evaluation marginal profit and should be depreciated each year.

(hereinafter “instant disposition”). (3) The Plaintiff sought revocation of the instant disposition, and the first instance court and the lower court rendered a favorable judgment against the Plaintiff.

The business rights stated in the accounting books are merely in accordance with the corporate accounting standards, and it cannot be deemed that there was an assessment of the actual value of the intangible assets of the corporation, and they do not fall under the business rights under the tax law.

B. The key issue in the instant case is what is the requirement to recognize a business right in the case of a corporate merger and impose the value as a merger evaluation marginal profit under the tax law.

In other words, it is sufficient to determine whether corporate accounting costs exceed the net asset value of the merged corporation or the actual business value assessment of intangible assets is required.

The defendant asserts that, in case where the business rights are appropriated in the account books in accordance with the corporate accounting standards, it should be taxed as a merger evaluation marginal profit by deeming that there was an evaluation of the business rights

(a) the cost of merger;