National High Court Decision 2006No1557 ( October 09, 2007)

Whether the calculation of the normal interest rate is appropriate, duplicate investigation, fraud or other improper means;

The difference in the compared situation is an important factor in calculating the normal interest rate, which makes it impossible to make a reasonable adjustment because of the substantial difference, and where there are errors in relation to more than two business years among the exceptional reasons for double investigation, the tax adjustment has an effect on the other business years, and where obvious data to recognize tax evasion mean the data existing before the tax investigation is conducted.

The contents of the decision shall be the same as attached.

1. Of the lawsuit of the Plaintiff ○○○○○○○○○ Limited Company, the part demanding revocation of the tax amount exceeding KRW 398, 761, and 900, among the disposition of imposition of corporate tax of KRW 12,830, and KRW 300 on March 3, 201 for the business year, and KRW 541, 315, and KRW 820 on September 2001 for the business year.

2. On September 14, 2001, corporate tax of 398, 761, 90 won on October 14, 2005, corporate tax of 34, 959, 510 won on September 9, 2002, corporate tax of 31,891, 520 won on March 31, 2003, imposition of corporate tax of 6,320, 430 won on March 3, 2004, imposition of 205, 300 won on 205, 201, 300, 300, 430 won on 2, 201, 3,000 won on 2,000, 3,000, 2,000 won on 2,000, 3,000 won on 2,000 won on 2,000 won on 3,006, 2,001.

3. Of the litigation costs, one-seven of a part between the Plaintiff ○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○ and the Defendant

The disposition of imposition of corporate tax of KRW 12,830,30 on October 14, 2005 against the Plaintiff ○○○○○○○○○○○○○○○○○○○○○○ on the disposition of KRW 12,830,30 on September 14, 2001 on the disposition of KRW 541,315,820 on September 1, 2001 on the disposition of KRW 398,761,90 on the disposition of imposition of KRW 390 on the corporate tax of KRW 541,315,820 on the corporate tax of the business year of March 14, 2001 is revoked. In preliminaryly, the Defendant imposed corporate tax of KRW 248,57,00 on the Plaintiff ○○○○○○○○○○○○○○○○○○○○○○○○ on the disposition of imposition of corporate tax of KRW 572,1730 on September 318, 2004.

1. Details of the disposition;

(a) Status of the parties;

(1) On February 7, 2001, Plaintiff 1, 2001, a limited liability company specializing in the securitization of ○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○ (hereinafter “Plaintiff 2”) invested 100% by ○0% from a foreign bank (Plaintiff 1) or an Seoul Bank (Plaintiff 2) in accordance with an asset-backed securitization plan pursuant to the Asset-backed Securitization Act (hereinafter “Asset-backed Securitization Act”) and established by ○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○ (hereinafter “Plaintiff 3”) established by ○○○○○○○○○ (hereinafter “○○○○○○○○”) established by ○○○○ (hereinafter “○○○○”) as a foreign corporation established in Korea.

(2) ○○○○○○○○ (U.S.) and L.P. (this ○○○○○○○○ (○○○○○○) established under the laws and regulations of the State of Foreign Affairs and Trade Act, and ○○○○○○○○○○○○ (○○○○○) and Ltd (hereinafter “○○”) are foreign corporations established under the laws and regulations of the State of Foreign Affairs and Trade.

(3) ○○○○○○○, ○○○○, and ○○○○○ Fund established by ○○ Fund and operated ○○○○○○○○○○○○○○, and ○○○ Fund established and operated ○○○○○○○○○○○, and ○○○○○○○○○○○ Korea Co., Ltd. (hereinafter “○○○○○○○○○○○○○○, Korea, and Inc.) with respect to the investment of domestic non-performing loans. The ○○○ Fund was mainly carried out a decision on the physical color and investment of non-performing loans invested in Korea by ○○ Fund. The ○○○ Fund carried out the asset management and entrusted business of a special purpose company established by ○○○ Fund as its principal business.

B. Acquisition of ○○’s defective bonds, etc. and acquisition of the Plaintiffs’ contractual status

(1) On December 27, 200, 00, ○○ entered into an asset acquisition agreement with a foreign exchange bank and with the content of acquiring the right to obtain loan from the lessee at USD 43,434,326.55 ($ 51.85 billion), etc. to USD 34.923.891.47 ($ 43.6 billion), and Plaintiff 1 acquired the status of the assignee under the above contract.

(2) On November 17, 200, ○○ entered into an asset acquisition agreement with the Seoul Bank to acquire the collateral debt amounting to KRW 180.7 billion, and the special bond amounting to KRW 94.5 billion. The Plaintiff 2 acquired the status of the assignee under the above agreement.

(3) On July 26, 200, ○○ entered into an asset acquisition agreement with the Korea Asset Management Corporation and 3,829,510.42 (around 52.2 billion won) to acquire the company’s reorganization claims, etc. in KRW 17.3 billion. The Plaintiff 3’s domestic branch transferred the status of the transferee under the above agreement.

C. Details of the plaintiffs' issuance of asset-backed securities

(1) On March 5, 2001, Plaintiff 1 issued asset-backed securities (ABS) with bond-backed securities (ABS) with an underlying asset of the foregoing lease loan claim, etc. at approximately KRW 1/7 of the value of KRW 5.7 billion, and KRW 6/7 of the issue value at KRW 27,517,50 ($ 34.344,1840,00) with the maturity of 7 years, and KRW 14% with the maturity of 14% per annum. On the same day, the ○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○ (hereinafter “○○○○”) (hereinafter “the first asset-backed securities”) as an underlying asset and sold the asset-backed securities to ○○○○○○○○○○, a corporation of Luxembourg.

(2) On February 22, 2001, Plaintiff 2 issued 1/7 of the issue value based on an underlying asset of the aforementioned collateral debt and special bond as an underlying asset. (2) The 6/7th of the issue value is US$59,194,721.59 ($7.669), 7-year maturity, and 17% per annum. On the same day, ○○○○○○○ acquired the above asset-backed securities on the same day, among them, ○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○ (hereinafter “2-backed securities”) sold the asset-backed securities to ○○○○○○○○ on March 23, 2003.

(3) On October 17, 2000, Plaintiff 3’s domestic branch issued asset-backed securities (ABS) with the bond-backed securities (ABS) with the bond-backed securities (hereinafter “mortgage-backed securities”) at KRW 2.5 billion on an underlying asset of the above company’s reorganization bonds, etc. at KRW 1/7 of the issue value; KRW 6/7 of the issue value at USD 13,239,709.07 ($14.8 billion), KRW 7 year maturity, and KRW 18 percent per annum. On January 23, 2001, ○○○○○ sold the bond-backed securities (hereinafter “third-backed securities”) at KRW ○○.

D. Details of ○○’s borrowing of funds and payment of interest to the Plaintiffs’ ○○○

(1) On April 23, 2001, ○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○ KRW KRW 19,262,00 equivalent to the initial issue value on condition of KRW 8.5% per annum on October 2003 (hereinafter referred to as “first-loan”) and on condition of KRW 8.5% per annum on March 23, 2001, in order to purchase the 2-backed securities, ○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○).

(2) The Plaintiffs paid interest on each asset-backed securities to ○○ as listed below.

E. Filing a report or revised report on the corporate tax related to the consulting service cost of Plaintiff 2

(1) On December 8, 200, ○○○○○○○○ or Ltd (hereinafter “○○○”) that is a consulting company located in Hong Kong, paid USD 1,840,183.80 to the special purpose company, which is an asset management company of the special purpose company, and requested ○○○, which is an asset management company of the special purpose company, to pay for the above consulting service cost. ○○ determined the above consulting service cost as the investment cost for the acquisition of assets of the special purpose company and distributed the above consulting service cost to five special purpose companies including Plaintiff 2. Accordingly, Plaintiff 2 paid the consulting service cost to ○○○ on June 30, 201, and filed a report on the tax base for corporate tax by including it in deductible expenses for the business year of June 6, 2001.

(2) As seen below, Plaintiff 2: (a) in the second tax investigation process, it was revealed that the above consulting service costs were processed expenses paid without actual provision; (b) did not include the service costs in the deductible expenses; and (c) did tax adjustment with the content of disposing of other income as other income; and (d) held a temporary general meeting on September 30, 2005 and approved the amount obtained by subtracting KRW 1,000 from the amount of KRW 325,175,000, which was not included in the deductible expenses as above, from the amount of 325,174,000, which was deducted from the amount of 325,174,000, which was added to the shareholders; and (c) decided to deduct the additional dividends pursuant to Article 51-2 of the Corporate Tax Act; and (d) filed an application for income deduction with the Defendant on October 18, 200, which increased the tax base of KRW 1,000 (hereinafter the instant revised return).

(f) Seoul regional tax office’s tax audit;

(1) During the period from February 4, 2003 to June 13 of the same year, the Seoul Regional Tax Office conducted a tax investigation (hereinafter referred to as the "first tax investigation") on the business year from February 7, 2001 to September 30, 202 by Plaintiff 2-2 for the business year from September 1, 2001 to September 30, 2002 by Plaintiff 3, and conducted a tax investigation on the business year from August 15, 2000 to December 31, 201 (hereinafter referred to as the "first tax investigation") on the Plaintiffs and special purpose companies related to ○○○ Fund from July 7, 2005 to October 31, 2005.

(2) On October 14, 2005, the director of the Seoul Regional Tax Office calculated the Defendant with normal interest rate of 1,2, and 3-backed securities that the Plaintiffs paid to ○○○, a foreign related party, deemed to have higher interest rate than the normal interest rate as stipulated in Article 5 of the Adjustment of International Taxes Act (hereinafter “International Tax Act”), and as to Plaintiff 1, Plaintiff 2, and Plaintiff 3, the head of the Seoul Regional Tax Office notified Plaintiff 1 of the interest rate of 1,2, and 3, the amount of 2, 3 loan transaction plus 3.5% (as to Plaintiff 2, 10.85%, 10.26% for Plaintiff 3) calculated with normal interest rate of 1,000 won from February 7, 2001 to December 31, 2004, Plaintiff 1’s total of the amounts exceeding the above interest rate of 3,000,000 won from February 1, 201 to December 31, 201, 201.

G. Accordingly, on October 14, 2005, the defendant rendered 12,830,30 won of corporate tax on March 14, 2001; 541,315,820 won of corporate tax on September 2002; 34,959,51,520 won of corporate tax on March 3, 2003; 6,320,430 won of corporate tax on March 3, 2004; 6,320,430 won of corporate tax on March 5, 2006; 206. 3.05 won of corporate tax on January 5, 2006; 200 won of corporate tax on March 24, 200; 3.0 won of corporate tax on September 5, 201; 200 won of corporate tax on June 31, 2001; 3.5.3 won of corporate tax on each of the instant tax on March 24, 2019, 20018.

H. Meanwhile, on June 5, 2007, the defendant revoked the disposition of KRW 12,830,30 of corporate tax on March 5, 2001 against Plaintiff 1 for the business year, and reduced or corrected corporate tax of KRW 541,315,820 of September 6, 2001 to KRW 398,761,90 (hereinafter referred to as "the disposition of imposition of KRW 12,830,30 of corporate tax on March 1, 2001 against Plaintiff 1 and the disposition of KRW 541,315,820 of corporate tax on September 5, 201 excluding the portion of the disposition of KRW 398,761,90 of the disposition of imposition of KRW 390 of corporate tax on September 5, 201, and the remaining portion of the disposition of imposition of KRW 398,761,90 of the same case shall be deemed to be each of the disposition of this case.

B. On September 1, 2007, the National Tax Tribunal dismissed the Plaintiff’s request for revocation of the tax amount exceeding KRW 398,761,90 among the disposition imposing corporate tax on September 1, 2001, and the Plaintiff’s request for revocation of the tax amount exceeding KRW 398,761,90 among the disposition imposing corporate tax on September 1, 2001. In addition, on September 1, 2008, the National Tax Tribunal dismissed the Plaintiff’s request for revocation of the tax amount exceeding KRW 398,761,90 among the disposition imposing corporate tax on September 1, 2001.

[Ground of Recognition] Facts without dispute, Gap evidence Nos. 11-1 through 12, 2-1 through 3, 3 through 16, 19, 20, 21, 26, 27-1 through 3, Eul evidence Nos. 1 through 15, and the purport of the whole pleadings

2. Of the disposition of imposition of KRW 12,830,30 of corporate tax on March 3, 2001 for the business year, and the disposition of imposition of KRW 541,315,820 of corporate tax on September 5, 2001, the part seeking revocation of the tax amount exceeding KRW 398,761,90 of corporate tax on September 5, 2001 is lawful. The defendant revoked the disposition of imposition of KRW 12,830,300 of corporate tax on June 5, 2007 and then reduced or corrected KRW 541,315,820 of corporate tax on September 5, 201 for the business year as seen earlier, it is not reasonable to seek revocation of the disposition of imposition on KRW 398,761,90 of corporate tax on September 398, 201.

Therefore, the part seeking revocation of the tax amount exceeding KRW 398, 761,90 among the disposition of imposition of KRW 12,830, and KRW 300 for the business year of March 2001, and KRW 541,315,820 for the business year of September 2001 is unlawful.

3. Whether each of the dispositions of this case is legitimate

A. The parties' assertion

(1) Whether the portion of the disposition of June 1, 2007, which exceeds the tax amount of KRW 572,176, and 430, is lawful

(A) Plaintiff 2’s assertion

1) On June 1, 2007, the Defendant imposed corporate tax on Plaintiff 2 on June 1, 2001 on the disposition of imposition of corporate tax for the business year of this case, and the Plaintiff 2’s filing of corporate tax by including the instant service expense in deductible expenses was due to the Plaintiff 2 and the representative director of ○○, independent of Plaintiff 2, by deceiving ○○○○○ to pay the consulting service expense to ○○○ for personal embezzlement of the said money. Therefore, Plaintiff 2 did not evade national tax due to fraud or other unlawful act. Accordingly, the period of imposition of national tax for the business year of June 1, 2001 shall be applied 5 years under Article 26-2(1)3 of the Framework Act on National Taxes. As such, the imposition period of national tax on June 1, 2007 exceeds the period of imposition of national tax, which is unlawful since the portion exceeding the amount of national tax is exceeding the period of imposition of national tax.

2) Although the exclusion period of imposition of national taxes has 10 years, dividends under Article 51-2 of the Corporate Tax Act mean a dividend resolution, the validity of the resolution of dividend cannot be denied solely on the ground that there is a tax avoidance purpose under the principle of strict interpretation of the principle of no taxation without law. In addition, since a special purpose company can distribute dividends only at least 90% of the distributable profit and distribute dividends in excess of the distributable profit, the dividend that can be deducted from income does not necessarily have to be the source of distributable profit. Therefore, the revised return and the application for dividend deduction in this case are lawful and on a different premise, the portion that exceeds the tax amount of KRW 572,176,430 of the disposition of taxation by the Defendant on June 1, 2007 is unlawful.

(B) Defendant’s assertion

1) The act of receiving a false tax invoice on the service cost of Plaintiff 2 and filing a report on the corporate tax by including it in deductible expenses constitutes an act of evading national taxes by fraudulent or other unlawful act. Therefore, the exclusion period of exclusion of the corporate tax for the business year on June 2001 should be ten years as stipulated in Article 26-2(1) of the Framework Act on National Taxes.

2) Even if the expenditure of consulting service costs, including the instant service costs, was caused by the embezzlement of ○○○○○○○○’s representative director, it is merely an internal situation of Plaintiff 2, and thus, cannot be exempted from liability for such act. According to Article 17 of the Asset-Backed Securitization Act and Articles 147, 149, and 1583 of the Commercial Act, a special purpose company set the amount to be distributed to directors in each business year and stated the amount in the appropriation of retained earnings in each business year, and submitted it to a regular general meeting of members for approval along with other financial statements, etc. The Plaintiff 2 passed a resolution of additional dividend at the temporary general meeting of members on September 30, 2005, when several years have passed since the resolution of dividend for the business year on June 30, 2001 became final and conclusive with the approval of the regular general meeting of members. This is merely a resolution of dividend distribution with only the purpose of tax avoidance, and it cannot be deemed a dividend under Article 51-2 of the Corporate Tax Act

In addition, even though it is allowed to distribute dividends in excess of the distributable profits pursuant to Article 30(3) of the Asset-Backed Securitization Act, it does not constitute an income from the beginning, and thus, it cannot be the object of income deduction. The portion of income generated from the loss of income in the business year is already out of the company even though the amount of income in the business year was increased as a result of the loss of processing expenses such as the service expenses in this case was included in the loss of deductible expenses. Accordingly, since Plaintiff 2 did not pay a legitimate dividend, it is unlawful to file a revised return and an application for income deduction in this case.

(2) Whether the secondary tax investigation constitutes a duplicate investigation

(A) The plaintiffs' assertion

The second tax investigation is a duplicate tax investigation conducted for the tax items such as the second tax investigation and for the taxable periods, and the part relating to the calculation of the normal interest rate among each of the dispositions of this case based on the second tax investigation is illegal, since it does not fall under the exceptional grounds for permission of duplicate tax investigation under each subparagraph of Article 81-4(2) of the Framework Act on National Taxes

(B) Defendant’s principal

"1) The Seoul Regional Tax Office shall make the investigation period of the second tax investigation against Plaintiff 1 from October 1, 2002 to December 31, 2004 as to Plaintiff 2 from October 1, 2002 to September 30, 204.

Article 81-4(2) of the Framework Act on National Taxes and Article 63-2 of the Enforcement Decree of the same Act stipulate that the Plaintiffs paid interest exceeding the normal interest rate for the 1, 2, and 3-backed securities to ○○○ foreign related party, which is the subject of the investigation. The Seoul Regional Tax Office has only requested data already kept within the limit of the previous business year to verify whether such errors exist uniformly, or provided data to the Plaintiffs as a whole for submission of books, documents, etc. for the business year subject to the second tax investigation. Thus, there was no duplicate investigation which is prohibited under Article 81-4(2) of the Framework Act on National Taxes and Article 63-2 of the Enforcement Decree of the same Act. The Plaintiffs did not appear to have been able to have been able to receive the second tax investigation for the business year subject to the second tax investigation for the year subject to the second tax investigation. The Plaintiffs were able to receive the second tax investigation for the year subject to the second tax investigation.

3) Furthermore, the imposition disposition itself is not unlawful in the case where the imposition disposition is made on the basis of the tax investigation that is inconsistent with the principle of prohibition of duplicate investigation.

(3) Whether the interest rate of loans 1, 2, and 3 can be viewed as a normal interest rate (A) Plaintiffs’ assertion

The Defendant calculated a normal interest rate by making loan Nos. 1, 2, and 3-backed securities as the comparative transaction of the 1, 2, and 3-backed securities. However, since the 1, 2, and 3-backed securities issued by the Plaintiffs are bonds with high risk not similar to non-performing loans, in light of the risk of default, maturity, circulation, etc., the risk premium is higher than that of the bonds. In addition, the collateral value ratio of the 1, 3-backed securities is about 86%, 2-backed securities with approximately 1, 2, and 3-backed securities with approximately 70%, 38%, and 1, 3-backed securities with high-risk bonds with high-risk bonds with high-risk bonds, and thus, the collateral value ratio of each loan transaction is about 60% (=86%, 270%, 375%, 37%, 38%, and 37%, respectively) of the collateral value ratio (=46%).

Moreover, since the interest rate for borrowed transactions Nos. 1, 2, and 3 is not the interest rate determined between the plaintiffs and independent companies that do not have any special relationship, it cannot be the basis for determining the normal interest rate for securitization securities Nos. 1, 2, and 3-backed securities. Although there exists a serious difference in the interest rate for securitization securities and the risk of bonds and the risk acceptance tendency of the lender due to the loan conditions, such as the maturity, maturity, maturity, reserves, etc., even though there was a significant difference in the interest rate and the risk acceptance tendency of the lender due to the loan conditions, no adjustment of such difference was made at all, and even if it is intended to adjust the difference in the above circumstances, the 1, 2, and 3-backed securities issuance transactions contain a fundamental and important difference

Therefore, the loan transactions with Nos. 1, 2, and 3 cannot be the comparable transaction that calculates the normal interest rate for the issuance of securitization securities.

(B) Defendant’s principal

Han Bank, as the only real value of underlying assets of 1, 2, and 3-backed securities, was identified as a collateral and lent funds to ○○○○○. The credit rating of ○○○○○ was not considered in the above transaction. If ○○○ even if the principal and interest of the loan was not recovered from 1, 2, and 3-backed securities, i.e., the collateral for the loan, but ○○ is not liable, and thus, ○○ was in line with 1, 2, and 3-backed securities only. Ultimately, the loan transactions with 1, 2, and 3-backed securities actually lent funds to the Plaintiffs. As such, it is no need to consider the difference in risk of lender’s lender’s lending of funds, such as the difference in maturity at which the Plaintiff claims, does not have any influence on the size of principal and interest recovered from the relevant loan, possibility of recovery, etc. It is a company established by ○○○ Fund, etc., that directly transferred the annual interest rate of 14% of funds to ○○-1.

Furthermore, in applying the above normal interest rate to the plaintiffs, the defendant added tax adjustment to the plaintiff 1, 2 among the interest paid to ○○○, 70% for the plaintiff 3, and 38% for the loan borrowed from the plaintiff 3 (the collateral value ratio for the loan borrowed from Nos. 1, 2, and 3 securitization securities). Thus, the difference in the collateral value ratio claimed by the plaintiffs was substantially adjusted.

Therefore, the loan transactions with Nos. 1, 2, and 3 can be the comparative transaction which calculates the normal interest rate with respect to securitization securities issued by the plaintiffs according to the third party's price method, which is the comparison stipulated in Article 5 (1) of the International Tax Law.

(b) Related statutes;

Article 26-2 (Period for Excluding Assessment of National Taxes)

Article 45 (Revised Return)

Article 63-2 (Prohibition of Overlapping Investigation)

Article 51-2 (Income Deduction for Special Purpose Companies, etc.)

(c) Fact of recognition;

(1) As to whether the secondary tax investigation constitutes a duplicate investigation

(a) the first tax investigation;

The Seoul Regional Tax Office notified 20 companies related to ○○○○ Fund, including the Plaintiffs, of the first tax investigation, and requested companies subject to investigation to prepare data such as the organization level of parent companies and domestic and foreign related companies, investment flow degree, financial statements and audit report, tax settlement statement and settlement statement, transfer price-related documents applied at the time of transaction with foreign related parties (including normal price calculation basis), asset evaluation documents, assets acquisition and sale contract, documents submitted to financial supervisory agencies (such as an application for registration of asset securitization plan and registration of transfer of assets), issuance trend and issuance by asset-backed securities, issuance flow ratio and issuance of documents related to asset management entrustment contract, expenses for issuing principal and interest and dividends related to asset management, and documents on calculation basis of par value and interest rate. Dur the first tax investigation, the Seoul Regional Tax Office requested 00 long-term debts related to ○○○○ Fund (including third parties related to interest rate and third parties), each interest payment statement (including related company and third party), and the detailed statement that the funds were received and the amount reported are required to be submitted.

(b) the second tax audit;

1) On April 12, 2005, Seoul Regional Tax Office: (a) sent tax investigation officials to ○○○○○○○○○○○○○○○○ 737 ○○ 30, located by domestic companies affiliated with ○○ Fund; and (b) commenced a large-scale special tax investigation on corporations established by ○○○ Fund for domestic investment. At the time, six special-purpose companies, excluding ○○,○○, and the Plaintiffs, who actually received or kept all overall books and documents related to the domestic special-purpose companies affiliated with ○○ Fund, including the Plaintiffs.

(2) After that, on June 30, 2005, the director of the Seoul Regional Tax Office may officially investigate the corporate tax assessment for the plaintiffs on June 30, 2005.

From October 1, 202 to December 31, 204, the term "○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○ was recorded in the current ○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○ ○○○○○○○ ○○ ○○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ 2.”).

(A) Detailed plans for redemption of principal and interest payment of asset-backed securities under the asset-backed securitization plan of the Plaintiffs are as follows.

1) Plaintiff 1 shall pay to the underwriters of mortgage-backed securities an amount calculated by subtracting operating expenses from the amount of underlying assets recovered in each month, and an amount calculated by adding interest on mortgage-backed securities and 98.6% of the purchase cost of assets recovered in the preceding month, on a monthly basis: Provided, That within one year after issuance of mortgage-backed securities, only interest on mortgage-backed securities shall be paid out of the aforementioned payment amount. The remainder remaining after redemption of mortgage-backed securities shall be used for the payment and redemption of dividends on stock-backed securities.

2) Plaintiff 2 shall redeem the stock-type asset and pay dividends in the amount remaining after deducting operating expenses from the amount recovered from the underlying assets of the asset-backed securities, and shall redeem the bonds-type asset and pay interest. Interest on the bonds-type asset-backed securities shall be paid at the rate of 17% per annum per month, and the principal shall be paid at the rate of 17% per annum on the due date. However, the principal may be redeemed at an early date after one year from the date of issuance of the bonds-type asset-backed

3) The amount collected by ○○ on behalf of Plaintiff 3 from the corporate reorganization bonds, etc. shall be deposited into the management bank. The principal shall be repaid after payment of interest on bonds-backed securities in the remainder other than operating expenses from the recovered amount as above.

(B) In borrowed transactions Nos. 1, 2, and 3, the terms and conditions for redemption of principal and interest payment are as follows:

1) Interest shall be paid on the 20th day of each month, and ○○ shall, even before the maturity, bear the fees equivalent to 1% of the early repayment amount, even though the principal and accrued interest may be repaid to one bank early.

2) In the event of delay in the repayment of principal and interest, interest for arrears [interest rate: interest rate calculated by adding 5% to the first loan transaction - 13.5%, 2, 3 loan transaction - loan interest rate (00 +3.5%)] shall be appropriated. In particular, where the final repayment is overdue, interest for the principal and the total amount of interest shall be appropriated.

3) The ○○○ shall establish a separate operating account and reservation account in one bank, and the Plaintiffs shall maintain such account until full repayment of the loan is made.

4) ○○○ shall ensure that all the amounts recovered from the underlying assets of the issuance of asset-backed securities are deposited into the operating account of the Plaintiffs, and the amount obtained by subtracting operating expenses from the recovered amount is paid dividends if there are dividends to be attributed to ○○○○, ○○, and ○○○○○, a shareholder of the Plaintiffs, and ○○ shall pay the dividends if there are dividends to be attributed to ○○○○, ○○, and ○○○○○○, a shareholder of the Plaintiffs. ○○ shall pay the dividends so that the principal and interest of the securities

5) In the event that a single bank has received a payment from the 1, 2, and 3-backed securities as a payment agent for the 1, 2, and 3-backed securities, it shall deposit the amount equivalent to the interest on the loan’s three-month interest in the reserved account in ○○○, and shall deposit the balance in the depository account as of the date of payment, and shall deposit it in the operating account if any. ○ is entitled to freely use the amount deposited in the principal’s operating account

6) Until the full repayment of the loan is made, the amount deposited in the ○○ Account shall be used compulsorily for the repayment of the loan.

(3) The revised return and application for income deduction of the instant case

(A) On June 30, 2001, Plaintiff 2 paid the instant service cost to ○○ on the same background as that of the said 1. E. (1) and included it in the deductible expenses for the business year on June 2001.

(B) Although ○○○ did not provide any consulting service during the second tax investigation, it was confirmed that the funds of the special purpose company, including Plaintiff 2, etc. were disbursed as consulting service expenses. Accordingly, ○○○○ Fund including Plaintiff 2, etc., upon having requested the ○○○○○ legal company located in the U.S. to investigate the above issues, and as a result, ○○○○○○ Fund, which was the representative director of ○○○○○, embezzled USD 12,158,337.61 on 17 occasions from the company related to the ○○○○○ Fund from around 198 to around 2005 without involvement of other executive officers and employees of ○○○○○○○○○○○○’s company. Around May 26, 2006, ○○ returned KRW 325,175,005,000.

[Reasons for Recognition] A without dispute, Gap evidence 7 through 21, evidence 22-1 through 3, evidence 23-1, 2, 24-1 through 3, 25, 26, 28, 29, 30, 21, 32, 33 and 34, each of the statements in evidence 116 and 17, and the purport of the whole pleadings

D. Determination

(1) Whether the part of the disposition of June 1, 2007, which exceeds the tax amount of 572.176.430 won, has been subject to the exclusion period of imposition of national taxes

(A) Article 126-2(1) of the Framework Act on National Taxes provides for the exclusion period of the assessment of national taxes. Article 126-2(1) provides for the exclusion period of the assessment of national taxes by fraudulent or other unlawful means, and where a taxpayer fails to file a tax base return within the statutory due date of return, for 10 years (subparagraph 1) from the date on which the national tax is assessable, and where it does not fall under subparagraphs 2 (subparagraph 2), 1 and 2, for 5 years from the date on which the national tax is assessable.

Article 26-2 (1) 1 of the Framework Act on National Taxes refers to the uniform meaning of "Fraud or other unlawful acts" under Article 9 of the Punishment of Tax Evaders Act. Thus, in order to apply the exclusion period of 10 years as stipulated in Article 26-2 (1) Ⅲ of the Framework Act on National Taxes, there was a deceptive scheme or other active acts that make it impossible or considerably difficult to impose and collect taxes as a means, and thereby, it should be impossible or considerably difficult to collect taxes." (B) In this case, it was revealed that ○○○ and ○○○○○ were not having provided services to ○○○○○○○○○, and it was difficult to view that ○○○○○○○○ was not having provided services in the first and second tax investigation for the establishment purpose of ○○○○ and ○○○○○, and it was difficult to view that ○○○○○ was an embezzlement of large amounts of money, such as the instant service charges, from the relevant company individually, and that ○○○ and its subsequent actions were paid for the Plaintiff 2.

Therefore, insofar as Plaintiff 2 cannot be deemed to have committed fraud or other unlawful act in order to capture corporate tax on June 1, 2001, the exclusion period shall be five years. Meanwhile, in the case of a correction disposition after the lapse of the exclusion period, if the initial exclusion period, the correction disposition does not become null and void in whole, but becomes null and void only for the increased portion, and the disposition of imposition of corporate tax on June 1, 2001 was issued on January 5, 2006 before the expiration of the exclusion period, as seen earlier, the portion exceeding the above amount of tax of KRW 572,176,430 in the disposition of Defendant 2 on June 1, 207, exceeds the amount of tax of KRW 572,176,430 in the disposition of taxation on June 1, 2007, without considering the remaining arguments of Plaintiff 2 on the revised return of income deduction in this case and the legality of the report of income deduction in this case.

(2) Whether the second tax audit is contrary to the principle of prohibition of duplicate tax audits (A)

1) A tax investigation means an act of asking questions to taxpayers, etc. according to their official needs and investigating relevant documents, books and other articles or ordering them to submit them by exercising the right of questioning and questioning or questioning as prescribed by each tax-related Act (see, e.g., Article 122 of the Corporate Tax Act, Article 1170 of the Income Tax Act, Article 2 subparag. 3 of the Regulations on the Management of Investigations). The legislative intent of prohibiting double-tax-free investigations as prescribed in Article 81-4 of the Framework Act on National Taxes, Article 63-2 of the Enforcement Decree of the same Act, and Article 13 of the Regulations on the Management of Investigations is not only to allow repeated tax investigations, but also to prevent abuse of tax investigation because the tax authority is likely to violate the taxpayer’s freedom of business, privacy, and arbitrary tax investigation. In full view of the legislative intent purport above, double-tax investigations are prohibited under Article 81-4(12) of the Framework Act on National Taxes and Article 63-2 of the Enforcement Decree of the same Act (see, 3).

2) Regarding the instant case, the director of the Seoul Regional Tax Office: (a) received all overall data on the company related to ○○○○ Fund (including the Plaintiffs), including the Plaintiffs, through a three-month audit conducted on the basis of approximately 4 months; and (b) particularly, with respect to ○○○, he appears to have examined whether the interest rate of 1.2. 3 securitization securities is appropriate in terms of transfer price. Furthermore, on April 12, 2005, the director of the Seoul Regional Tax Office determined and notified corporations other than the Plaintiffs as corporations subject to tax investigation; (c) received 10 books and documents related to the domestic special purpose company of ○○○ Fund (including the Plaintiffs); and (d) received 200 books and documents related to 00, including the Plaintiffs, from 200, to 200, from 300, to 100, the data related to the asset-backed securities issued by the Plaintiffs were also included in the second-year investigation. Furthermore, in light of the circumstances of the Plaintiff’s second-year tax investigation period and 2.

(B) Whether the case constitutes an exceptional permissible cause

Article 81-4 (2) 3-2 of the Framework Act on National Taxes and Article 81-4 (2) 3-2 of the same Act shall be interpreted as "in cases where errors have occurred in relation to two or more business years" and "in cases of two or more business years" shall be interpreted as "in cases where the tax adjustment for one business year affects the tax adjustment for other business years" (as alleged by the defendant, "in cases where the same errors occur repeatedly in the same business year" shall also be included, the principle of prohibition of double tax investigations that the tax authorities intend to prevent arbitrary abuse and to promote legal stability may be reduced. Therefore, if the first tax investigation conducted repeatedly for each business year and received a decision that the tax base and amount of tax were proper, it shall not be interpreted as "in cases where errors have occurred in relation to two or more business years", and it shall be interpreted as "in cases where the second tax investigation conducted again for each business year have an indivisible effect on the tax adjustment for the other business years, it shall not be interpreted as "in cases where the second tax investigation conducted again for each business year from 20.3 years to 10.20 years to 20.3 years thereafter.

Article 81-4 (2) 1 of the Framework Act on National Taxes provides that "where there is clear material to acknowledge a suspicion of tax evasion", and "where there is clear material to acknowledge a suspicion of tax evasion" as provided in the above provision, "where there is clear material to acknowledge a suspicion of tax evasion" means where there is an obvious material to the extent that the overlapping tax investigation is justified, before the overlapping tax investigation is conducted (see, e.g., Supreme Court Decision 2004Du12070, Jun. 2, 2006; Supreme Court Decision 2004Du12070, Jun. 2, 2006). However, the door answer with the defendant's assertion (No. 17 evidence No. 2) concerns the loan conditions, such as the process and interest rate of lending funds to ○○ from the standpoint of one bank, and it is merely a statement by the person in charge of loan, and the above door answer is prepared on Aug. 30, 2005 when the second tax investigation was conducted, and it does not constitute evidence No. 17.

In light of the fact that the principle of prohibition of duplicate investigation aims to prevent taxpayers from infringing their business freedom and privacy and to guarantee taxpayers' rights in the procedural aspect through prior control over arbitrary tax investigation, taxation based on a tax investigation that violates the principle of prohibition of duplicate investigation is unlawful (see Supreme Court Decision 2004Du12070, Jun. 2, 2006).

(D) Sub-determination

Therefore, the plaintiffs' assertion that the second tax investigation constitutes a duplicate tax investigation prohibited under Article 81-4 (2) of the Framework Act on National Taxes and Article 63-2 of the Enforcement Decree of the same Act, and thus, each of the dispositions of this case is unlawful is justifiable within the scope of the business year of plaintiff 1-2 of the business year during the second tax investigation from February 7, 2001 to September 30, 202, which extends between the items and the period of the second tax investigation.

(3) Whether the interest rate of loan transactions 1, 2, and 3 can be viewed as a normal interest rate (A) computation method and selection criteria

(1) Method of computation

Article 2 subparag. 110 of the National Tax Adjustment Act provides that the arm’s length price shall be the price applied or deemed applicable to ordinary transactions with a resident, a domestic corporation, or a domestic business place, other than a foreign related party (Article 2 subparag. 110 of the National Tax Adjustment Act). Article 15 subparag. 3 of the International Tax Adjustment Act provides that the arm’s length price shall be the price calculated by the most reasonable method among the following methods, but the method under subparag. 4 shall be limited to cases where the arm’s length price cannot be calculated by the methods under subparag. 3 through 3. 1 provides that the comparable third party’s price method under subparag. 2, the resale price method under subparag. 3, the cost plus method under subparag. 14, and other reasonable methods under the Enforcement Decree of the same Act provides that the method under subparag. 4 or subparag. 4 of the same Article shall be applied only to cases where subparag. 3 of the Enforcement Decree of the same Act is not applicable. 4 of the same Act.

2) Selection Criteria

정상가격은 가장 합리적인 방법에 의하여 계산한 가격으로 산출하도 록 하고 있으므로 그 산출방법을 선택함에 있어서는 국제조세법 시행령 제5조 저III항에 서 규정하는 것과 같이 @ 비교가능성이 높을 것(제1호), (2) 사용되는 자료의 확보ㆍ가 용 가능성이 높을 것(제2호), ® 비교하기 위하여 설정한 경제여건ㆍ경영환경 등에 대 한 가정이 현실에 부합하는 정도가 높을 것(제3호), 사용되는 자료 또는 설정된 가정의 결함이 산출된 정상가격에 미치는 영향이 작을 것(제4호)이라는 기준을 감안하여 가장 합리적인 방법을 선택하여야 한다. 그런데 위 기준 중 비교가능성이 높기 위해서 는 비교가능 제3자 거래와 당해 국제거래 사이의 차이가 비교되는 거래의 가격이나 순 이익에 중대한 영향을 주지 아니하는 경우(제1호 가목)가 원칙이겠으나, 중대한 영향을 주는 경우에도 그러한 영향에 의한 차이를 제거할 수 있는 합리적 조정이 가능한 경우(제1호 나목)라면 비교가능성이 높다고 할 수 있다.

On the other hand, Article 15(2) of the Enforcement Decree of the International Tax Act requires an analysis of the function of business activities that may affect price or profit, contractual terms, risks accompanying trades, kinds and features of goods or services, changes in market conditions, economic conditions, etc. by assessing the difference between the comparable third party transaction and the relevant international transaction, and Article 16(7) of the International Tax Act newly established on August 24, 2006 lists the amount of debt, maturity of debt, guarantee of debt, and debtor's credit standing.

(B) The lawfulness of the selection of the transaction subject to the comparison of the instant case

In calculating the normal interest rate for securitization securities 1, 2, and 3-backed securities, the Seoul Director of the Seoul Regional Tax Office adopted the comparable third party price method (in international trade between residents and foreign related parties, the method of determining the transaction price between independent business operators who do not have special relationship at the normal price in the trade situation similar to the current trade) and selected the loan transaction 1.2.3 as each comparable trade.

However, in light of the overall circumstances revealed in the argument of this case, it is reasonable to view that the difference between the issue of securitization securities and the loan securities Nos. 1, 2, and 3 has a significant impact on the calculation of the normal interest rate, and that the difference in the above circumstances is an important factor that is applied to the calculation of the interest rate, and it is difficult or almost impossible to make reasonable adjustment because the difference in the above circumstances is too important, and further, there is no evidence to acknowledge that the defendant was able to make a reasonable adjustment with regard to the difference in the above circumstances, and therefore, the loan transaction Nos. 1, 2, and 3-backed securities cannot be considered as the comparative transaction since the possibility of comparison is low.

1) The issuance of securitization 1, 2, and 3-backed securities is based on bad claims, and there is no security other than the underlying bad claims. However, loan 1, 2, and 3 transactions are not provided as collateral but provided as collateral by ○○ as a party to a loan transaction, and thus, the credit was provided by ○○ as a party to the loan, such as that ○○ bears the ultimate responsibility for the loan as a party to the loan. 30% of the acquisition fund of the 1, 2, and 62% of the acquisition fund of the 3-backed securities directly contributed by ○○○○, and also play a collateral for the 1, 2, and 3-backed loan transactions.

2) In light of the collateral value ratio of 1, 2, and 3-backed securities (as for 1, 3-backed securities: about 86%, about 78%, about 3-backed securities): the collateral value ratio of 1, 2, and 3-backed securities [3-backed securities: approximately 60% ( =86%), about 55% ( =70%), about 35% ( =70%), about 32.6% ( =8%), about 32.6%).

3) While securitization securities are 1, 2, and 3-backed securities with a maturity of 7 years, loan transactions with the maturity of 1, 2, and 3 are merely 2.5 years with a maturity of 2.5 years. The maturity of 1, 2, and 3-backed loans with a maturity of 1, 2, and 3-backed loans has increased due to the changes in economic conditions, and thus

4) While the interest rate of Nos. 2 and 3-backed securities is fixed interest rate, the interest rate of loan Nos. 2 and 3-backed securities is variable interest rate, and the fixed interest rate is generally higher than the variable interest rate.

5) As can be seen, ○○○ is a transaction that purchased from the Korea Asset Management Corporation about KRW 17.3 billion the book value of security liabilities worth KRW 180 billion from the Korea Asset Management Corporation in the amount of KRW 94.5 billion, such as lease claims, etc. worth KRW 51.8 billion in the book value from the Korea Exchange Bank, KRW 5.2 billion in the book value, and KRW 52.2 billion in the amount of corporate reorganization claims, etc., the transaction of the above defective bonds is likely to cause a big profit, but it is highly likely that the above defective bonds may incur a big loss due to nonperformance, etc. Therefore, it is difficult to borrow funds at a lower interest rate of KRW 8-10 billion on the sole basis of credit and the above poor bonds by the Plaintiffs who take over the status of ○○○○○ as security, which is a separate legal entity of the Plaintiffs’ borrowing.

6) At the time when the Plaintiffs issued securitization securities Nos. 1, 2, and 3, it is difficult or impossible to calculate the normal interest rate for the 1, 2, and 3-backed securities through the issuance transaction of other asset-backed securities, since there were many financial institutions’ bad loans due to the IMF foreign exchange crisis, etc. and there were many cases where asset-backed securities are issued based on this.

(C) Sub-determination

Therefore, among the dispositions in this case, the loans Nos. 1, 2, and 3 were selected as comparative subjects and calculated a fixed interest rate of 8.5% for the Plaintiff 1, and the interest rate of 8.5% for the Plaintiff 2, and 3, calculated based on ○○○○ +3.5% for the variable interest rate for the loan transaction (8.85% for Plaintiff 2, and 10.26% for Plaintiff 3) at a normal interest rate, and the portion of the interest paid by the Plaintiffs to ○○○ is unlawful.

(4) The theory of lawsuit

Ultimately, the part of the disposition of this case which exceeds the tax amount of 572, 176, 430 won among the dispositions of this case against plaintiffs 2 on June 1, 2001, 775, 601, 520 won of corporate tax of 572, 176, and 430 won of corporate tax of 39,959,510 won of corporate tax of 34,959, 510 of September 2002, 30 of the imposition disposition of corporate tax of 203.30 on June 1, 201 against plaintiffs 3, 201, 300 won of corporate tax of 203,300,300 won of corporate tax of 218,6,627,520 on December 30, 201, 300 won of corporate tax of 20,300 won of corporate tax of 205,313,205.

4. Conclusion

Therefore, the part of the plaintiff 1's lawsuit, the imposition disposition of KRW 12,830,30 of corporate tax for the business year of March 2001, and the imposition disposition of KRW 541,315,820 of corporate tax for the business year of September 2001, which sought the revocation of the tax amount exceeding KRW 398,761,90 of corporate tax for the business year of September 2001, is dismissed as it is unlawful, and the remaining claims of the plaintiff 1 and the claims of the plaintiff 2 and 3 are reasonable, and it is so decided as per Disposition.