If the point of time of transaction subject to the denial of wrongful calculation and the point of time of transaction cases, the market price of transaction subject to the denial of wrongful calculation can be calculated based on the transaction cases.

The term "market price defined as the basis for the denial of wrongful calculation" means the objective exchange value formed by the general and normal transaction.

Article 52 of the Corporate Tax Act: Denial of Wrongful Calculation

2014Guhap749 Revocation of Disposition of Imposing Corporate Tax

AA Development Corporation

지지지지

October 10, 2014

December 26, 2014

1. The plaintiff's claim is dismissed.

2. The costs of lawsuit shall be borne by the Plaintiff.

Cheong-gu Office

The imposition of corporate tax on the Plaintiff on December 6, 2012 by the Defendant shall be revoked.

1. Details of the disposition;

On December 27, 2010, the Plaintiff engaged in the business of leasing vessels and marine equipment, etc., sold "AA1500" (hereinafter referred to as "the instant vessel") to both the husbands of the representative director of the Plaintiff, to OOB, and completed the registration of transfer of ownership of the instant vessel on December 29, 2010.

그리고 양BB은 2011. 1. 12. 사우디아라바아 소재 CCC(CCC Works Co. Ltd. 이하 'CCC'이라 한다)와 사이에 이 사건 선박을 OOOO 미화달러(≒ OOOO원, 이하 'USD'라 한다)에 매도하기로 하는 합의각서를 작성하고, 2011. 4. 16. 이 사건 선박을 CCC에 매도한 후(이하 '이 사건 제2 매매'라 한다) 2011. 5. 13. 수출신고를 했다.

Accordingly, the Defendant determined that the Plaintiff transferred the instant vessel at a low price to a specially related person at a low price, and applied the provision of the denial of unfair calculation, determined the market price of the instant vessel in the first sale and purchase as an OOO for the second sale price of the instant vessel, and accordingly, included the Plaintiff’s KRW 2010 in the calculation of the Plaintiff’s gross income for the business year of 2010 (i.e., the difference between the reported sale price (=OO - reported sale price - OOO - OO - brokerage commission for the reported sale price) - OO O OO 2 on December 6, 2012 (i.e., the unpaid corporate tax + additional tax + KRW OO OO 2 and less than KRW 2).

The Plaintiff filed an appeal with the Tax Tribunal on March 5, 2013 regarding the instant disposition, but was dismissed on December 23, 2013.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1, 3, 11 (including paper numbers; hereinafter the same shall apply), Eul evidence Nos. 1 and 12, the purport of the whole pleadings

2. Summary of the parties' arguments;

A. The plaintiff

For the following reasons, it is reasonable to view that the market price of the instant vessel is an OO, which is the selling price of the instant vessel No. 1. Therefore, the instant disposition is unfair on the premise that the market price of the instant vessel is a approximately KRW OO.

1) The market price under Article 52(2) of the former Corporate Tax Act (amended by Act No. 10423, Dec. 30, 2010; hereinafter the same) includes the appraisal value of a reliable appraisal institution. In the first sale of the instant case, an OOO of a ship is based on the appraisal value at two locations of an appraisal institution. Thus, the market price of the instant ship is equivalent to the OOO of the instant case.

2) The market price is calculated based on the objective exchange price in the domestic transaction. However, in calculating the market price under the former Corporate Tax Act, approximately KRW 22.2 billion is determined in the international transaction between CoCC located in Saudi Arabia, and the special circumstances of the international transaction, such as the foreign market price and the economic power of the pertinent country, are reflected. In other words, the special circumstances of CCC, the buyer, namely, the situation where CCC, in order for CCC to carry out a harbor project, is very high compared to the cost of building the instant vessel or the tax base or building cost of the marine mid-term barge similar to the instant vessel. Accordingly, the sale price of the instant vessel cannot be deemed to be the market price of the instant vessel, namely, the objective exchange price of the instant vessel. Thus, since the market price of the instant vessel is unclear, it is determined by the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 2527, Dec. 27, 201; Presidential Decree No. 2527, Feb. 27, 2010).

B. Defendant

The sale price of the instant vessel was determined as the market price of the instant vessel, since the Plaintiff completed negotiations with CCC to sell the instant vessel to the U.O.D., and the sales price of the instant vessel was determined as the U.O.D. through a normal negotiation with a third party other than a specially related party. As such, the sale price of the instant vessel was determined as the U.O.D., the sale price of the instant vessel, which was made pursuant to the said negotiations, can be deemed as reflecting the objective exchange price of the instant vessel. Furthermore, insofar as the market price of the instant vessel can be confirmed, there is no room to regard the appraisal price of the appraisal corporation as the market price.

Therefore, it is reasonable to see that the market price of the instant vessel is OO USD and OOOD, and the instant disposition that corrected and imposed corporate tax is justifiable on such premise.

3. Determination

A. Relevant legal principles

In a case where a corporation’s wrongful calculation division under Article 52 of the Corporate Tax Act is deemed to have avoided or reduced tax burden by unfairly abusing the various forms of transactions listed in each subparagraph of Article 88(1) of the Enforcement Decree of the Corporate Tax Act without using a reasonable method by a person having a special relationship with the person having a special relationship, it shall be deemed that the person having a taxation right denies it and has the income which appears to be objective and reasonable by the method prescribed in the statutes. In light of the economic person’s position, it shall be limited to a case where it is deemed that the economic rationality was neglected due to the wrongful and unreasonable calculation of the income which is deemed to be unfair and reasonable by the method prescribed in the statutes. Determination on the existence of economic rationality shall be made on the basis of whether the transaction was conducted in light of sound social norms and commercial practices, and shall also be made on the basis of whether the transaction was conducted differently in light of the overall circumstances of the transaction, and special circumstances at the time of the transaction (see, e.g., Supreme Court Decision 2008Du15410).

On the other hand, Article 88(1)3 of the Enforcement Decree of the Corporate Tax Act provides that one of the acts of wrongful calculation under Article 52 of the Corporate Tax Act provides that a person with a special relationship, such as an investor, transfers assets at a price lower than the market price to the person with a special relationship. Article 89(1) of the Enforcement Decree of the Corporate Tax Act provides that the scope of the market price is similar to the transaction in question if there is a price generally traded between many and unspecified persons other than a person with a special relationship or between a third party who is not a person with a special relationship, the price shall be determined. "The market price defined as the basis for the low-price transfer that is the rejection of wrongful calculation" refers to an objective exchange price formed through a general and normal transaction (see Supreme Court Decision 2003Du4041, Jan. 1

B. Determination

1) Next, there is no doubt about the fact that the first sale of the instant vessel can be subject to the avoidance of wrongful calculation under Article 52(1) of the Corporate Tax Act, and Article 52(2) of the Enforcement Decree of the Corporate Tax Act, and Article 89(2) of the Enforcement Decree of the Corporate Tax Act provides that the value appraised by the appraisal corporation shall be the market value in cases where the market value is unclear. Accordingly, Article 89(2) of the Enforcement Decree of the Corporate Tax Act provides that the value appraised by the appraisal corporation shall be the market value in cases where the market value is unclear. Thus, the issue of the instant case can be determined whether the second sale price can be deemed the market value under Article 89(1) of the Enforcement Decree of the Corporate Tax Act at the time of the Corporate Tax Act.

2) According to each of the above evidence and the evidence set forth in Nos. 2 through 8, the following circumstances can be revealed.

On November 27, 2010, the Plaintiff received a notice from DDR Co., Ltd. (hereinafter referred to as "DD"), which is intended to purchase the instant vessel, to request the Plaintiff to submit an English quotation to the applicant for the purchase of the instant vessel. On November 16, 2010, the Plaintiff sent a written estimate of the instant vessel, which was set out in the OOOUS on February 28, 2011 on the date of delivery, to DDR. On November 24, 2010, CCC, who is the applicant for the purchase of the instant vessel, inspected the instant vessel on November 24, 2010. The Plaintiff and CCC adjusted the terms and conditions of the contract for the instant vessel, and sent it to CCC on December 27, 2010, the date of delivery under the contract concluded by the Plaintiff through OOOO on December 21, 2015 (UCC on December 27, 2010).

However, as seen earlier on December 27, 2010, the Plaintiff decided to sell the instant vessel to both BB to OO, and completed the registration of ownership transfer on the instant vessel in the future of both BB on December 29, 2010.

In addition, on January 12, 201, the twoB entered into a contract with CCC on April 15, 201 with the date of delivery of the instant vessel, and the sales price OOOD.

3) According to the above facts, at the time of the conclusion of the first sale of the instant vessel, the Plaintiff was in a state of having concluded most agreements on the instant vessel transaction, including vessel inspection and agreement on specific terms and conditions of sale, with CCC, which is not a specially related person, and the twoB entered into the second sale of the instant vessel with CCC with the same contents as the instant agreement following the acquisition of the ownership of the instant vessel.

In light of the fact that the Plaintiff had already completed an agreement with CCC regarding the terms and conditions of the contract for the second sale of the instant case, the sales price was formed through a general and normal transaction, and can be deemed to reflect the objective exchange value at the time of the instant vessel. The circumstances asserted by the Plaintiff alone cannot be viewed differently.

As to this, the Plaintiff asserted that the purchase and sale contract of this case was based on the purchase and sale contract (Evidence No. 5) for the vessel of this case entered into with both BB on May 3, 2010, and that the sale price was set according to the provision under which the market price is appraised. However, the above sale contract was made between the Plaintiff and the Plaintiff’s representative director, who is a related party, and the content of the contract is very simple, and it is difficult to recognize that the Plaintiff necessary to sell the vessel of this case to both BB at the time of the above sale contract. Accordingly, the Plaintiff’s assertion on this part is not acceptable.

In addition, the Plaintiff asserted that the sale price of the instant No. 2, which was made after the first sale, cannot be deemed to be the “market price of the instant No. 1 sale.” However, the time of the transaction case is merely a part of the transaction terms and conditions. If the transaction case is close to the time of the transaction case and the time of the transaction subject to the avoidance of wrongful calculation, even if the transaction case was made after the transaction subject to the avoidance of wrongful calculation, the “market price of the transaction subject to the avoidance of wrongful calculation” can be calculated on the basis of the transaction case. The Plaintiff’s assertion on this part is without merit.

4) In full view of these circumstances, in applying the wrongful calculation of the first sale contract of this case, bothB could be deemed as the market price of the OOUSD, which is the amount sold to CCC. Accordingly, the instant disposition is lawful.

4. Conclusion

Thus, the plaintiff's claim is dismissed as it is without merit.