The appeal is dismissed.

The costs of appeal are assessed against the defendant.

The grounds of appeal are examined.

1. Article 52 of the Corporate Tax Act is a legal fiction that the taxation authority denies or reduces the tax burden by abusing the various forms of transactions listed in each subparagraph of Article 88(1) of the Enforcement Decree of the Corporate Tax Act, instead of using a reasonable method by a corporation in a transaction with a person with a special relationship.

This applies only to cases where it is deemed that the economic rationality was neglected by making natural or unreasonable acts or calculations from the viewpoint of the economic person.

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, and the transaction price between persons who are not persons with a special relationship, 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.

After finding the facts as stated in its holding, the lower court determined that the instant disposition, based on the premise that the market price of the instant subordinated loan interest rate is 11.35% per annum, was unlawful on the grounds that the Plaintiff borrowed 26.6 billion won from shareholders to determine the interest rate at 20% per annum, based on the following facts: (a) the higher rate of money as stipulated in Article 52 of the former Corporate Tax Act (amended by Act No. 10423, Dec. 30, 201) and Article 88(1)7 of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 22951, Jun. 3, 2011) cannot be deemed to be abnormal in light of sound social norms and commercial practices; and (b) accordingly, the instant disposition was unlawful.

(1) The instant case.