Seoul Administrative Court 201Guhap709 ( December 09, 2011)

early 2009west0367 ( October 12, 2010)

There is no evidence to acknowledge that the value calculated at the market price is the value appraised by objective and reasonable methods.

In calculating the market price of the service cost, it cannot be deemed that the content or realized return of the service transaction provided to the Plaintiff by a person with a special relationship during the business year 2001, the period prior to the increase of service cost, is the same. The market price calculated by multiplying the market price of other company equipment by the market price rate, but such market price calculation method does not have any legal basis, and there is no evidence to acknowledge that the calculated value is the value appraised by an objective

2012Nu1312 Revocation of Disposition of Corporate Tax Imposition

XX Stock Company

Head of Seocho Tax Office

Seoul Administrative Court Decision 2011Guhap709 decided December 9, 2011

May 9, 2012

May 30, 2012

1. The defendant's appeal is dismissed.

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

1. Purport of claim

The defendant's disposition of imposing corporate tax of 534,603,850 won for the business year 2004 against the plaintiff on November 1, 2008 and corporate tax of 000 won for the business year 2005 (including additional tax) shall be revoked.

2. Purport of appeal

The judgment of the first instance is revoked. The plaintiff's claim is dismissed.

1. The part citing the judgment of the court of first instance

The reasons for this Court concerning this case are as follows, with the exception of adding a judgment on the allegations made by the parties in the trial in the following 2.0: The reasons for the judgment of the court of the first instance; Article 8(2) of the Administrative Litigation Act and the main sentence of Article 420 of the Civil Procedure Act.

2. Additional determination

A. Defendant’s assertion

Since the instant service that the Plaintiff received before and after establishment of XX is practically the same, the unit price paid to the previous transaction entity for the instant service constitutes the market price stipulated in Article 89(1) of the former Corporate Tax Act. The value calculated by applying the return of profit prior to the increase of the unit price in XX is assessed in an objective and reasonable manner and constitutes the market price stipulated in Article 89(1) of the former Corporate Tax Act.

B. Determination

In the denial of wrongful calculation, "market price" means an objective exchange value formed through general and normal transactions. This is a concept that includes appraised values in an objective and reasonable manner, and it is interpreted that Article 89 (1) of the former Enforcement Decree of the Corporate Tax Act provides for "market price" as an example of "market price" in a situation similar to the transaction in question.

With regard to the denial of wrongful calculation, the tax authority should prove that the taxpayer’s act constitutes wrongful calculation and that needs to be compared with the market price in the form of wrongful calculation under Article 88(1)7 of the former Enforcement Decree of the Corporate Tax Act. In full view of the following circumstances, the tax authority shall also prove the market price. In 2004 calculated by applying the rate of return, etc. of the instant service provided to the Plaintiff in 2001, and in 2005, the value of the instant service in 2005 is difficult to be deemed to be higher than the market price or market price. [The Defendant also reviewed that “The Defendant is not a party with no special relationship, such as where sales have occurred only for most group affiliates and O contracts for 10% transport services with XX” (Evidence 2). As a result, the Plaintiff reduced the distribution cost in 2004 and KRW 3005 of the Enforcement Decree of the Corporate Tax Act.

1) MAP transport services

In light of the fact that there is a difference between the oil price change, which is an important factor in the transportation price determination in 2001 and 2004, and the other price index, economic situation, and market environment change, etc., which are the important factor in the transportation price determination, and that there is a difference between the services provided by the existing individual companies to the Plaintiff through the integrated management system and the IMP transport services provided by the Plaintiff through the integrated management system in 2001, it is difficult to view the transportation services value of IMP in 2004 and 2005, which was calculated by applying the return rate of IMP transport services provided to the Plaintiff in 201, as the market price or higher.

(b) Lease of self-owned equipment;

YY is difficult to view the rent value of other private equipment in 204 and 2005, calculated by applying the rate of return on other private equipment rental services provided to the Plaintiff in 2001, based on the rent rate of other private equipment rental services provided by the Plaintiff in 2001, based on the rent rate of other private equipment rental services provided by the Plaintiff in 2005, and based on the market value of other private equipment rental services that can not be recognized as the market value, and after calculating the market value of other private equipment rental services on the basis of the rent rate of other private equipment that can not be recognized as the market value, it cannot be recognized that the rent value of the services is higher than the market value or higher than the market value of the services provided by the Y.

(iii) Ediopia services;

The Plaintiff’s failure to increase the unit price of the Y and Edaria in 1995 to engage in the transaction of the Y and Edaria, and thus, determined as above by reflecting only the first half-yearly economic situation in 1995-2001 (Evidence No. 44). From March 2001, the Y acquired Edaria’s service and improved the quality of the Y compared to that of the Y’s service (Evidence No. 9, No. 10) by improving the pre-shipment inspection standards and increasing approximately 13.6% per vehicle’s input work hours (M/H) (Evidence No. 9, No. 10). Considering the fact that the Plaintiff agreed to jointly and severally liable for damages with subcontractors (Evidence No. 8), the price index in 2001 and 204, and 2005, the market price in 204 and 200dar.

3. Conclusion

The appeal is dismissed.