A. E. E. E. E. E. E. E. H. (Law Firm Chungcheong, Attorneys Lee Woo-p. et al., Counsel for the plaintiff-appellant)

Head of Namdae District Tax Office and one other

July 6, 2009

1. On October 1, 2007, the head of the tax office having jurisdiction over the issue of the corporate tax of 545,225,910 won and securities transaction tax of 136,568,60 won against the plaintiff on October 1, 2007 shall revoke each disposition.

2. The imposition disposition of KRW 54,522,590 on October 29, 2007 by the head of Jung-gu Seoul Special Metropolitan City against the plaintiff on October 29, 2007 is revoked.

3. The costs of lawsuit shall be borne by the Defendants.

The same shall apply to the order.

1. Details of the disposition;

A. A. On August 1, 2006, Amadeus IT Group S.A., a Spanish corporation, was merged into WAM Porfro S.A., a parent company holding 60.83% of the shares of the shares of the Gumas on August 1, 2006 (hereinafter “instant merger”). After the instant merger, WAM Porfro S.A. changed the name of the corporation into Amadeus Group Ga.A., the name of the Plaintiff corporation, according to the name of the Gumadeus, as of the date of the instant merger.

B. At the time of the merger of this case, the European Republic of Korea owned 256,374 shares (hereinafter “instant shares”) equivalent to 32% of the shares issued by the local travel information company, a domestic corporation. However, the Seoul regional tax office confirmed that the ownership of the instant shares was transferred from the European Republic of Korea to the Plaintiff due to the merger of this case in the course of corporate tax investigation in 2006 on Saturdays, and notified the head of the Seoul Northern District Tax Office to impose corporate tax and securities transaction tax by deeming that the transfer of the instant shares and other securities, which are domestic source income under Article 93 subparag. 10 of the former Corporate Tax Act (amended by Act No. 8831 of Dec. 31, 2007; hereinafter “Corporate Tax Act”) occurred.

C. Accordingly, on October 1, 2007, the head of the Defendant Southern District Tax Office: (a) applied Article 13 of the Convention between the Republic of Korea and the Kingdom of Spain for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to the Income Tax on Income (hereinafter “the Korea-Spain Tax Convention”), imposed corporate tax (including additional tax) for the year 2006 equivalent to 9.09% of the transfer margin; and (b) KRW 136,568,600 in relation to the transfer of the said stocks (hereinafter “assessment disposition of corporate tax and securities transaction tax”); and (c) on October 29, 2007, the head of the Defendant Seoul District Court imposed corporate tax on KRW 54,522,590 in accordance with the said imposition of corporate tax on income (hereinafter “instant disposition of imposition”).

D. On December 12, 2007, the Plaintiff filed an appeal with the Tax Tribunal on the grounds that the Plaintiff was dissatisfied with the disposition of imposition such as the corporate tax of this case, but the Tax Tribunal dismissed all of the Plaintiff’s appeal.

[Ground of recognition] Facts without dispute, Gap 1 through 9, 15, 16, Eul 1, Eul 1, Eul 1, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

(1) In the case of a merger by absorption, since all the rights and obligations, including the assets and liabilities, of an extinguished corporation, are comprehensively succeeded to a merged corporation, it cannot be deemed that the instant stocks were transferred to the Plaintiff from the Guro to the Plaintiff under the Corporate Tax Act, and in prescribing domestic source income tax on a foreign corporation under the Corporate Tax Act, there is no provision that a corporate tax may be imposed by deeming the transfer of securities through a merger between foreign corporations as the transfer of securities. Therefore, the imposition of corporate tax on the transfer of the instant stocks is contrary to the principle of no taxation without law, etc. In addition, it cannot be deemed that the transfer of stocks by a merger is subject to the imposition of securities transaction tax. Accordingly, the imposition of corporate tax

(2) As long as the disposition of imposing corporate tax against the Plaintiff is unlawful, the disposition of imposing the resident tax of this case is also unlawful.

(b) Related statutes;

It is as shown in the attached Form.

(c) Fact of recognition;

(1) At the time of the merger of this case, the head of the Gu and the Plaintiff, a corporation involved in the merger, transferred all assets and liabilities held by the Gumaman, to the Plaintiff according to the resolution of the general meeting of shareholders, and the shareholders holding the shares of the Gumaman, decided to deliver new shares issued by the Plaintiff according to the merger ratio.

(2) The Plaintiff evaluated the assets of the Gumamanas, an extinguished corporation, as a market value, based on the actual value, and set the Plaintiff’s new stocks and the exchange ratio of the Gumamanas shares. The Plaintiff issued 200,933,415 shares thereafter.

(3) Meanwhile, after the merger of this case, the shareholders of the instant outstanding shares owned by the European Maryas and the Plaintiff were retired without issuing new shares. The shareholders of the instant outstanding shares owned by the European Maryas were changed to the Plaintiff.

[Ground of recognition] Unsatisfy, Gap's statements in Gap's 4-9, the purport of the whole pleadings

D. Determination

(1) First, we examine whether transferring the stocks of a extinguished corporation to a merged corporation surviving the merger between foreign corporations constitutes “transfer of stocks” under Article 93 subparag. 10 of the Corporate Tax Act and whether the corporate tax can be imposed on the income accrued therefrom.

Article 2(1)2 of the Corporate Tax Act provides that a foreign corporation with domestic source income shall be liable to pay corporate tax on such income. Article 3(3) of the same Act provides that income for each business year of a foreign corporation shall be income generated from sources in Korea under the provisions of Article 93. In other words, a domestic corporation shall have unlimited liability to pay corporate tax on the basis of net asset increase theory regardless of source income. In other words, a foreign corporation shall have limited liability to pay corporate tax only when there are domestic source income listed in each subparagraph of Article 93 of the Corporate Tax Act according to limited principle of listing. However, in the case of this case, there is no express provision that a domestic corporation with the same foreign corporation’s shares and other securities transfer under the Corporate Tax Act shall be deemed to exist due to a merger between the Plaintiff and a foreign corporation, and thus, the former Corporate Tax Act provides that the surviving corporation shall be deemed to have succeeded to the rights and obligations of a foreign corporation with the same meaning as that of the former Corporate Tax Act, as the former Corporate Tax Act provides that the surviving corporation’s shares and other securities transfer corporation’s shares are transferred to the Plaintiff.

Therefore, income not explicitly enumerated in each subparagraph of Article 93 of the Corporate Tax Act cannot be taxed on the Plaintiff, a foreign corporation. However, the Defendant’s calculation of income accrued from the transfer of shares in this case and imposition of corporate tax is unlawful as it violates the principle of no taxation without law.

(2) Next, we examine whether the transfer of the pertinent shares to the Plaintiff due to the instant merger constitutes a transfer under Article 2(3) of the Securities Transaction Tax Act. Article 1 of the Securities Transaction Tax Act provides that securities transaction tax may be imposed on the transfer of share certificates or shares, and Article 2(3) of the same Act provides that “the transfer of ownership is made at a cost due to contractual or legal causes” with respect to the said transfer. However, as seen earlier, insofar as the Plaintiff comprehensively succeeded to the instant shares by a merger, it cannot be deemed that the transfer was made at a cost due to contractual or legal causes, and thus, the disposition imposing the securities transaction tax of this case on the premise that the instant shares were transferred at a cost to the Plaintiff is unlawful.

(3) Finally, as to the legality of the disposition of imposition of the resident tax of this case, the disposition of imposition of the resident tax of this case was imposed on the basis of the imposition of the corporate tax as the tax base. As seen earlier, the disposition of imposition of the corporate tax of this case is unlawful. Thus, the disposition of imposition of the resident tax of

3. Conclusion

Therefore, the plaintiff's claim of this case is reasonable, and it is decided as per Disposition by admitting it.

[Attachment Form 5]

Judges Park Jong-dae (Presiding Judge)