All appeals are dismissed.

The costs of appeal are assessed against the Defendants.

The grounds of appeal are examined.

1. Article 26 subparagraph 1 of the former Corporate Tax Act (amended by Act No. 10423, Dec. 30, 2010; hereinafter the same) provides that the amount deemed excessive or unreasonable as prescribed by Presidential Decree among personnel expenses shall not be included in deductible expenses in calculating the amount of income of a domestic corporation for each business year.

According to delegation, Article 44-2(2) of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 22577, Dec. 30, 2010; hereinafter the same) provides that with respect to the inclusion of retirement pension charges paid by a domestic corporation for an executive officer or employee in the calculation of deductible expenses, “the amount paid by the domestic corporation as pension charges for the retirement of an executive officer or employee under the ground for payment of pension and the amount paid as pension charges for the executive officer or employee as a beneficiary shall be included in the calculation

In addition, Article 44-2(3) of the former Enforcement Decree of the Corporate Tax Act (hereinafter “instant provision”) provides that “The amount of a defined and conclusive retirement pension out of the amount to be disbursed pursuant to paragraph (2) shall be included in the calculation of losses: Provided, That the amount of expenses borne by the corporation until the retirement shall be deemed retirement benefits and Article 44(4) shall apply to the amount of expenses borne by the corporation. However, where there is an excess in the calculation of losses, the amount exceeding the limit in the calculation of losses among the charges for the business year to which the date of retirement belongs shall not be included in the calculation of losses, and where the excess in the calculation of losses exceeds the amount of expenses for the business year to which the date of retirement belongs,

Meanwhile, Article 44 (4) of the former Enforcement Decree of the Corporate Tax Act provides that "the amount exceeding any of the following amounts out of the retirement benefits paid to an executive of a corporation shall not be included in deductible expenses: