Seoul Administrative Court 2007Guhap47121 ( August 13, 2009)

Cho High Court Decision 2006No1556 ( October 09, 2007)

Whether a normal interest rate calculation is lawful due to the comparable transaction related to asset-backed securities;

Even if the Defendant’s selection of the comparable transaction, which is a domestic transaction, as the comparative transaction, as the comparative transaction, was lawful, the normal interest rate calculation would not be reasonable if the difference in return on investment, exchange risk avoidance, credit reinforcement, maturity of asset-backed securities, etc. were compared.

1. All appeals by the defendant against the plaintiffs are dismissed.

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

1. Purport of claim

On January 5, 2006, the Defendant imposed corporate tax of KRW 117,120,020 and corporate tax of KRW 95,943,770 for the business year of 2000, which was imposed on the Plaintiff 117,120,020 and the corporate tax of KRW 95,943,770 for the business year of 202, and the Defendant imposed corporate tax of KRW 169,239,470 for the business year of 200, which was imposed on the Plaintiff 169,239,47,670 for the corporate tax of KRW 210,07,670 for the business year of 201 and the corporate tax of KRW 29,837,860 for the business year of 202.

2. Purport of appeal

The judgment of the first instance is revoked. All of the plaintiffs' claims are dismissed.

1. Details of the imposition;

A. Status of the parties

1) The plaintiff 1, 199, the plaintiff 1, 200, 100% of the investment of the REKON Capital II, LLC, which is located in the State of Deawa in the United States, and the NPL Investment of the Do governor in Seoul Special Metropolitan City (hereinafter referred to as the "Plaintiff 1") is a domestic branch of the NPL Investment of the Do governor in Seoul Special Metropolitan City, the NPL Investment of the NPL Investment of the Republic of Korea established in the State of Deawa in the United States.

2) On January 21, 2000, Plaintiff 1 ○○○○, Inc., Ltd. (hereinafter “Plaintiff 2”) is a domestic branch of △△△△ FCHB Holdings i. Ltd, a Do community, established in the Do community on March 3, 2000, in the Do governor, established in the Do governor on March 3, 2000. Do governor FCHBB I. Ltd (hereinafter “Do governor FCHB I”).

B. Acquisition of non-performing loans and issuance of asset-backed securities

1) On December 21, 1999, Plaintiff 1 purchased the mortgage-backed claims amounting to approximately KRW 84.7 billion at par from the Korea Asset Management Corporation (KAMCO). On April 6, 200, Plaintiff 1 purchased the mortgage-backed claims amounting to KRW 21.4 billion. On April 6, 200, the underlying asset of the above mortgage-backed claims amounting to KRW 1/7 of the issue value is a stock-backed bond amounting to approximately KRW 3.6 billion. ② The issue value 6/7 of the issue value is a bond-backed bond amounting to KRW 18.4 billion with the bond-backed securities amounting to KRW 18.5 billion at annual interest rate, and KRW 15.5% of the issue value is a bond-backed bond amounting to KRW 1.3 billion.00,000, and all of the above stock-backed bonds were acquired by the KARED 20,000, 2000, 2017.

2) On June 29, 200, Plaintiff 2 purchased KRW 62.2 billion in face value, and KRW 29.1 billion in the underlying asset of the above bonds, etc. on June 29, 2000. On June 29, 200, Plaintiff 2 issued each asset-backed securities with bond-backed securities with approximately KRW 4.1.6 billion in value, and KRW 6.7 billion in value, ② KRW 6.7% in value, and annual interest on each bond-backed securities with bond-backed securities with approximately KRW 17.7% in amount equivalent to KRW 2.4.9 billion in value. Nonparty 2 acquired the above stock-backed securities on June 29, 200, and Defendant 2 paid the interest on each bond-backed securities, which is a corporation in Ireland (hereinafter referred to as “instant bond-backed securities”).

(d) Investigation of Seoul Regional Tax Office;

On October 14, 2005, the director of the Seoul Regional Tax Office, among domestic special purpose companies that have conducted securitization of non-performing loans and lease bonds based on underlying assets in 2000, selected 14 companies issued by public offering to non-related parties for the interest rate of 14 companies issued by the method of issuing asset-backed securities (hereinafter referred to as "the comparative ambassador transaction in this case") as the comparative ambassador transaction. Pursuant to Article 5(1) of the Adjustment of International Taxes Act and Article 5(1)1(b) of the Enforcement Decree of the Adjustment of International Taxes Act (hereinafter referred to as the "Enforcement Decree of International Taxes Act") ① issue time, ② issue type (private placement and public offering), ③ issue currency, ④ lending ratio (LTV), 600, 200, 201.3% of the total amount of asset-backed securities issued by the plaintiffs to 200, 13.1% of the average interest rate of 20% from 20% of the total amount paid by the plaintiffs to 20.31% of the Adjustment of International Tax Act, 2131.25% of the above.

E. Disposition imposing corporate tax on the defendant

On January 5, 2006, the defendant notified the director of Seoul Regional Tax Office of the results of the above tax investigation, and issued each disposition of KRW 117,120,020 and corporate tax of KRW 95,943,770 for the business year of 2002, and KRW 169,239,470 for the business year of 200, and KRW 210,077,670 for the business year of 201, and KRW 29,837,860 for the corporate tax of KRW 200 for the business year of 200 (hereinafter collectively referred to as "each disposition of this case").

[Reasons for Recognition] Facts without dispute, Gap evidence 1-1-5, Gap evidence 3, 4, Gap evidence 12-1, 2-2, Eul evidence 1-1 through 5, Eul evidence 2-1 through 6, and the purport of the whole pleadings

2. Related Acts and subordinate statutes;

It is as shown in the attached Form.

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

A. Whether comparative transactions are limited to international transactions

1) Plaintiffs’ assertion

Article 5 (1) of the former Enforcement Decree of the Adjustment of International Taxes Act (amended by Presidential Decree No. 18628, Dec. 31, 2004; hereinafter referred to as the "former Enforcement Decree of the International Tax Adjustment Act") does not recognize the comparableness between the international trade and the domestic trade. Thus, it is unreasonable to adjust the interest rate of the 1 and 2-backed securities transaction of this case by classifying the comparable transaction, which is the domestic trade, as the comparison.

2) Determination

According to the former Act on the Adjustment of National Taxes (amended by Act No. 6779, Dec. 18, 2002; hereinafter referred to as the "former Act"), the tax authorities may determine or rectify the tax base and tax amount of a resident (including a domestic corporation and a domestic business place) on the basis of the arm's length price if one of the parties to an international transaction is a foreign related party falls short of or exceeds the arm's length price (Article 4). The term "international transaction" referred to in this context refers to the transaction between one or both parties to a transaction as a nonresident or a foreign corporation for the sale or lease of tangible or intangible assets, provision of services, lending or borrowing of money, and all other transactions related to profits, losses and assets of the parties (Article 2 subparagraph 1 of the Act), and the term "normal price" refers to the price which a resident, domestic corporation, or domestic business place is applied or considered to be applied in ordinary transactions with a foreign related party (Article 2 subparagraph 10 of the Act).

On the other hand, the comparable third party pricing method, one of the methods applied to international trade, refers to the method that regards the transaction price between an independent business operator who has no special relationship as the arm’s length price in a similar transaction (Article 5(1)1 of the former International Tax Act). Article 5(1) of the former Enforcement Decree of the International Tax Act provides that “The most reasonable method among the methods of computing the arm’s length price under Article 5(1) of the former International Tax Act, including the comparable third party pricing method, shall be taken into account in selecting the most reasonable method, and “international trade between the related parties and the unrelated parties” (Article 1) and “international trade between the unrelated parties and the unrelated parties” (Article 5(1)3).

However, the Defendant’s instant disposition was made with respect to the instant securities transaction between the domestic business place of a foreign corporation and the foreign related party, which is based on the normal interest rate calculated on the basis of the comparable transaction of the domestic 14 special purpose companies in Korea according to the comparable third party’s pricing method as stipulated in Article 5(1)1 of the former National Tax Adjustment Act. Therefore, as seen earlier, it is a matter of view whether the comparable transaction, which is the domestic transaction between the non-related domestic corporations, can be the comparable transaction under the comparable third party’s pricing method for the instant securities transaction.

The principle of no taxation without law, which is stipulated in the Constitution, is a requirement for taxation, or a requirement for non-taxation, and the interpretation of tax laws is interpreted as a legal text, barring special circumstances, and it is not allowed to expand or analogically interpret without reasonable grounds (see, e.g., Supreme Court Decision 2002Du9537, Jan. 24, 2003).

6. Article 5(1)1 of the former Enforcement Decree of the Tax Act provides that “The method of calculating the arm’s length price shall be limited to the arm’s length price of the transaction which is not subject to comparison.” Article 5(1)1 of the former Enforcement Decree of the Tax Act provides that “The method of calculating the arm’s length price of the transaction, which is not subject to comparison, shall be limited to the arm’s length price of the transaction.” Article 5(1)1 of the former Enforcement Decree provides that “The method of calculating the arm’s length price of the transaction, which is not subject to comparison, shall be limited to the arm’s length price of the transaction, is not subject to comparison.” Article 5(1)1 of the former Enforcement Decree of the Tax Act provides that “The method of calculating the arm’s length price of the transaction, which is not subject to comparison, shall not only be limited to the arm’s length price of the transaction, but also be limited to the comparable transaction, which is not subject to comparison between the relevant taxpayer and the relevant taxpayer.”

B. Whether a normal interest rate is calculated based on the comparable transaction in the instant case

1) Plaintiffs’ assertion

Even if domestic transactions can be selected as the comparison, it is almost impossible to make reasonable adjustment due to the intrinsic differences in underlying assets, method of publication (public offering and private placement), maturity, credit reinforcement, publication currency, and order structure, etc., which are factors significantly affecting the interest rate. Thus, the comparison transaction of this case cannot be deemed as the comparison for calculating the arm's length price, and the normal interest rate calculated by the Defendant based on the comparison transaction of this case cannot be deemed as the reasonable calculation.

(ii) the facts of recognition

As seen earlier, in imposing each of the instant dispositions against the Plaintiffs on January 5, 2006, the specific details that calculated the normal interest rate by selecting comparable third party price method are as follows.

A) Selection of comparable transactions of this case

In 200 and 2001, the issuance details of asset-backed securities (ABS) issued by the domestic special purpose company that conducted securitization of non-performing loans, lease bonds, etc. based on underlying assets are as listed in the table below. Among them, the Defendant did not select the subject of comparison when privately issued bonds in the same manner as the Plaintiffs are all transactions between related parties; ② in 200, the Plaintiffs issued 1, 2,000, and 14 companies issued asset-backed securities (ABS) by public offering to non-related parties; accordingly, the Defendant selected the interest rate of 14 companies asset-backed securities (ABS) as the subject of comparison.

B) the adjustment to compute the normal interest rate;

(1) The difference in the time of publication

The Defendant did not adjust the difference between the issuance of 1 and 2 securitization securities and the comparable transaction of this case at the time of issuance, on the ground that the difference between the Plaintiff and the 1 and 2 securitization securities did not result in a big difference between the interest rate and the 2000 market interest rate.

(2) The difference between public offering and private placements

The Defendant calculated the difference between the rate of return on the issuance of general company bonds of AA AA grade and the rate of return on the issuance of private placement (1-1.5%) at the time of the occurrence of the 1 and 2-backed securities on the Internet homepage and adjusted the difference between the rate of return on the issuance of the 3-year AA grade general company bonds at the time of the occurrence of the 1 and 2-backed securities and the rate of return on the issuance of private placement (1-1.5%) on the basis of the premise that the subject investor is limited compared to the issuance of public offering, there is no resale market, and there is a vulnerable aspect in the management status, etc. of the issuer.

(iii)the difference between the currency of issue;

The Defendant collected the cash from the underlying assets in Korean won and paid the principal and interest on asset-backed securities (ABS claims) in foreign currency. On the other hand, in the case of the comparative transaction of this case, the difference was adjusted by calculating and adding the interest rate on the comparative transaction of this case to the interest rate of the comparable transaction of this case (average of the difference between the currency swap transaction price at maturity and the redemption rate on government bonds) on the premise that the Plaintiffs are exposed to a foreign exchange risk and make hedge transactions to avoid such exchange risk (i.e., the average transaction price at maturity of the comparative transaction of this case and the redemption rate on government bonds).

(4) The difference between the value of LTV to be added

The Defendant issued asset-backed securities (ABS) in the first and second order without priority or distinction between the acquisition value of asset-backed securities and the amount of 85% of the total value of asset-backed securities (ABS) in the first and second order, on the premise that the inherent risk of creditors is higher than that of asset-backed securities (LTV, referring to the rate of issuance of asset-backed securities (ABS) and the risk of default. The Plaintiffs issued asset-backed securities (ABS) in the first and second order without priority or distinction between lower priority. Among the comparative transactions in this case, it is difficult to directly compare funds through the issuance of senior asset-backed securities with 40 to 80%. However, if the Plaintiffs make a decision with economic rationality, it is difficult for the Plaintiffs to directly compare asset-backed securities with the total amount of asset-backed securities (ABS) in the first and second order, even if the interest rate of the Plaintiffs would change according to the loan-backed securities (BS) amount (BS) and the total amount of the securities to be paid.

(v)the difference between maturity and

Since the Defendant’s interest rate is higher due to the maturity of the bonds with the maturity of the risks exposed to the maturity of the bonds, under the premise that it is reasonable to reasonably adjust the same when there is a difference between the maturity of the 1 and 2-backed bonds issued by the Plaintiffs and the comparable transaction of this case, the 2-backed securities issued by the Plaintiff 2 shall be seven years with the maturity of the contract, but the maturity of the 2-backed securities issued by the Plaintiff 2 shall be deemed as not exceeding 5 years based on the result of analyzing the anticipated cash flow data, etc. submitted at the time of the tax investigation, and the backed securities of the comparable transaction of this case (ABS) shall be at the maturity of 6 months and 10 years with the maturity of 6 months to 10 years. As such, the rate difference (AAAAAA grade) at the maturity of the non-guaranteed corporate bonds (0.4-1.6%) due to the maturity

(6) Difference in credit reinforcement

The Defendant issued through private placement and did not perform asset-backed securities (ABS) investors’ losses risk through credit offering by the credit reinforcement agency. On the other hand, under the premise that the comparable transaction in this case was mostly paid additional fees by means of public offering, and reinforced external credit, the Defendant adjusted the fees (credit extension fees are diverse depending on the credit extension provider, but the average of 0.01-0.2% at the time of converting them into interest rate) by deeming the fees additionally paid to the business trustee for the purpose of strengthening external credit.

(6) Difference in credit reinforcement

The Defendant issued through private placement and did not perform asset-backed securities (ABS) investors’ losses risk through credit offering by the credit reinforcement agency. On the other hand, under the premise that the comparable transaction in this case was mostly paid additional fees by means of public offering, and reinforced external credit, the Defendant adjusted the fees (credit extension fees are diverse depending on the credit extension provider, but the average of 0.01-0.2% at the time of converting them into interest rate) by deeming the fees additionally paid to the business trustee for the purpose of strengthening external credit.

C) Calculation of the normal interest rate

(1) Calculation of the range of arm's length price and normal interest rate

As the criteria for determining whether to adjust the transfer price, the defendant used private law as shown below, and calculated 13.31% of the highest interest rate of the plaintiffs' interest rates on the interest rates of 1 and 2 securitization securities and adjusted taxation.

(2) Review of the interest rate of asset-backed securities (ABS) issued by foreign investment companies through private placement;

From 200 to 2001, the Defendant reviewed the weighted average interest rate of six companies issued in 2000 and 11 companies issued in 2001 as above, and examined the weighted average interest rate of 13.10% (1.94% to 14.16%) and 2001 as a result, when assets securitization was conducted in Korea based on non-performing loans, etc., the interest rate of asset-backed securities (ABS) issued through private placement with the same way as the Plaintiffs was formed between related parties. However, in order to determine the appropriateness of 13.31% of the normal interest rate calculated by the Defendant. In order to determine the appropriateness of 13.31% of the normal interest rate calculated by the Defendant, the Defendant reviewed the weighted average interest rate of 11 companies issued in 200 and 11 companies issued in 200.

[Reasons for Recognition] Facts without dispute, Gap evidence 11, Eul evidence 17-1 through 14, Eul evidence 3, 4, Eul evidence 6-1 through 15, Eul evidence 7, Eul evidence 8-1 through 13, Eul evidence 9-1 and Eul evidence 9-2, and the purport of the whole pleadings

3) Determination

(A)the computation of the arm’s length price by comparable third parties’ price;

According to Article 5(1) of the former International Tax Act and Articles 4 and 5(4) of the Enforcement Decree of the former International Tax Act, the arm’s length price, which is the basis for coordinating taxation on special international trades, shall be calculated by selecting the most reasonable method. First, it shall be based on the comparable third party’s price method, resale price method, and cost plus plus method, which is the most reasonable method, but if it is impossible to choose such method, it shall be based on the profit sharing method or net trade profit ratio method, and if it is impossible to choose such method, it shall be applied in light of the substance

As a result, Article 5 of the former Enforcement Decree of the National Tax Investigation Act provides that ① the possibility of comparison (Article 1) is high, ② the possibility of securing and using the data to be used is high, ③ the assumption on the economic conditions, business environment, etc. established to compare is high (Article 3), ④ the effect on the arm’s length price calculated by the defect in the data to be used or the established home is small (Article 1). (Article 5 of the former Enforcement Decree of the National Tax Investigation Act provides that the arm’s length price shall be selected by taking into account the criterion that the effect on the arm’s length price calculated by the defect in the data to be used or the established home is small (Article 1(1)1(a)). In particular, in relation to comparableness, if a reasonable adjustment is possible to eliminate the difference caused by such influence, it shall be determined that the difference is high (Article 1(1)1(b)), and on the other hand, it shall be compared to the economic conditions, such as the function of business activities that may affect the price or profit, the terms and conditions of the transaction.

In addition, even if the choice method is the most reasonable method, if there is a difference in the price, profit or net trade profit applicable due to the difference in functions performed between the relevant transaction and the unrelated transaction terms and conditions of transaction, etc., the difference in the price, profit or net trade profit (Article 6(2) of the former National Tax Adjustment Act), and Rule 5-0.2 of the General Rule 5-0.2 of the International Tax Adjustment Act provides that the arm's length price of interest in special trade refers to the interest received between the independent company in the transaction situation similar to the relevant transaction, and in calculating the arm's length price of interest, the arm's length price of interest shall be determined by considering the size of principal, the maturity of debt, the guarantee of debt, the debtor's credit level, and other factors affecting the decision of interest between the independent company (Article 6(7) of the Enforcement Decree of the International Tax Adjustment Act was newly established on August 24, 206, reflecting the contents of the above basic rule).

Therefore, in order to calculate the normal interest rate on special international trade with comparable third party price method, it is reasonable to calculate the reasonable interest rate by reasonably adjusting the difference between the price, profit or net trade profit arising from the difference in the price, profit or net trade profit arising from the difference in the difference in the principal, debt maturity, debt guarantee, transaction conditions such as the debtor's credit level and transaction risk burden, market conditions change, economic conditions, etc. In order to determine the normal interest rate on the special international trade with comparable third party price method, it is unlawful to assess the reasonable interest rate. If a reasonable adjustment is not made on the difference in the interest rate arising from the difference in important factors because it is impossible to make a reasonable adjustment, and thus, it cannot be said that the third party price method is erroneous or the interest rate calculated specifically is the normal price that has been adjusted reasonably. Thus, taxation based

B) Whether the interest rate based on the comparable transaction in the instant case can be deemed as the normal interest rate, which is the normal price under the International Tax Act

(1) Whether a reasonable adjustment was made to calculate the normal interest rate

For the following reasons, the difference between the situation in which the securities were issued 1 and 2-backed securities and the comparable transaction of this case has a significant impact on the calculation of the normal interest rate, and it is difficult to view that the adjustment made by the defendant was a reasonable adjustment to eliminate the difference in the normal interest rate.

① With respect to the difference in the type of publication (public offering and private placement) between the instant securities and the instant comparative securities, the Defendant adjusted the difference in the interest rate by taking account of the difference between the rate of return on public offering of general bonds with the maturity of 3 years AA grade, which is the highest class publicly notified by the Korea Securities Dealers Association, and the rate of return on private placement. However, considering the difference in the credit rating between the general bonds of AA grade AA grade and the 1 and 2-backed securities, and the difference in the nature of the bonds and the general bonds, it is difficult to deem the aforementioned adjustment method reasonable.

② The Defendant assumes hedging transactions in order to avoid exchange risk based on the difference between the currency swap transaction price by maturity and the rate of maturity on government bonds. However, it cannot be concluded that it is reasonable adjustment due to the failure to present the above calculation method.

③ On the other hand, the maturity of the instant comparative transaction is five years and seven years. On the other hand, the maturity of the instant comparative transaction is diverse from six months to ten years. As the maturity is long, there is a growing uncertainty due to changes in economic situation, and the degree of the risk premium varies depending on the credit rating of the bonds. As such, it is generally difficult to deem that it is reasonable to adjust the interest rate by simply adding the rate to the difference in the yield of bonds (0.4% to one.6%) due to the maturity of non-guaranteed corporate bonds (AAA grade) on the date of issuance of the instant comparative transaction.

④ Meanwhile, the Defendant adjusted a difference in interest rates on asset-backed securities (LTV) based on the total amount of interest (i.e., expenses to be paid annually as a result of the issuance of asset-backed securities) to the total amount of total amount of interest (i.e., weighted average interest rate) to be paid in the total amount of issue of asset-backed securities, and adjusted a difference in interest rates based on loan rates (LTV) between 1, 2, and comparable transactions issued in a single order, which are issued in priority and lower order. Inasmuch as there is a difference in the method of issuing asset-backed securities in order to maximize maximum interests while issuing asset-backed securities, the Defendant calculated profits and losses based on the total amount of interest paid from the issuance of asset-backed securities to the collection thereof, the Plaintiffs cannot be deemed to have erred in calculating the weighted average interest rate (i.e., the weighted average interest rate) without considering the difference in the above method of asset-backed securities and the weighted average interest rate (i.e., the weighted average interest rate calculated based on the underlying asset-backed securities).

⑤ The Defendant, only when 14 companies, the subject of the subject of the subject of the subject of the subject of the subject of the instant comparative transaction, converted the fees to the interest rate (average 0.01-0.2%) and adjusted the difference arising from credit reinforcement. However, the credit reinforcement in the subject of the instant comparative transaction is reasonable to the portion provided by the transferor of underlying assets, other than the business trustee, and there was no analysis on the impact of such external credit reinforcement on the interest rate. There was a significant difference in the fees to be paid for external credit reinforcement depending on the difference in the actual value of underlying assets or the degree of the risk of loss of securitization securities. If it is impossible to reinforce external credit, the fees cannot be calculated, and such risk is much more than the normal low-income rate, and the fees and the fees that affect such risk are also reflected in the interest rate exceeding the normal low-income rate. Therefore, it is difficult to understand which method of calculating the said fees have been adjusted, and it cannot be viewed as reasonable adjustment.

(2) Whether verification of the arm's length price calculation is required or not

The burden of proving the legality of taxation shall be borne by the tax authority (see, e.g., Supreme Court Decision 98Du1826, Feb. 25, 2000); where the transfer price due to a special international transaction with a person with a special relationship abroad is different from the normal price reasonably calculated by the tax authority based on the data secured by the best effort to request the taxpayer to submit data and documentary evidence under Article 19(1) of the Enforcement Decree of the International Tax Act pursuant to Article 11(2) of the International Tax Act, the transaction price between an independent business operator who is comparable can constitute the scope of the arm's length price due to the existence of a number of reliable transaction prices; and where the transfer price with a person with a special relationship with a foreign country cannot be deemed to lack economic rationality due to the lack of the arm's length price (see, e.g., Supreme Court Decision 9Du3423, Oct. 23, 2001).

However, as seen earlier, it is difficult to view that the Defendant calculated the normal interest rate for the first and second-backed securitization securities of this case through a reasonable adjustment. Thus, it is difficult to view that the burden of proving that the interest rate for the first and second-backed securitization securities of this case cannot be deemed to lack economic rationality due to the lack of economic rationality in the scope of each arm’s length price.

(3) Whether the criteria for determining whether to adjust taxation and the normal interest rate calculation method are reasonable

Even if the adjustment that the Defendant calculated the normal interest rate is a reasonable adjustment, it is difficult to deem that the Defendant’s determination of whether to adjust taxation by applying private sector and that the 13.31% calculated based on the comparative transaction of this case is the normal interest rate of the 1 and 2-backed securities, and that it is reasonable to adjust taxation based on the same for the following reasons.

① As to the interest rate adjusted on the basis of the comparative transaction in this case, the Defendant classified the 1/4th and the 3/4th and applied the criteria for determining whether to adjust taxation based on the classification. However, it cannot be said that it is reasonable to take into account the scope of arm’s length price based on two or more trades conducted between unrelated parties and the determination of whether to adjust taxation based on the arm’s length price (Article 6(4) of the former Enforcement Decree of the National Tax Adjustment Act). If transactions made as the comparative transaction are normal transactions, the interest rate of the comparative transaction is all normal. As such, it is reasonable to take into account whether the transaction exceeds the scope of the total interest rate calculated through a reasonable adjustment based on the comparative transaction prior to the determination based on the 1/4th and the 3/4th and the 3/4th and the 3/4th based on the comparative transaction. In order to process otherwise, there should be reasonable grounds.

② In addition, the Defendant deemed that the normal interest rate of the 1/4th and the 3/4th and the 13.31th and the 3/4th and adjusted taxation based thereon. However, in a case where there are considerable differences in the scope of the interest rate calculated based on the adjustment of taxation based on the average, the 1/4th and the 3/4th and the 13/4th and the 13/4th and the 14th and the 14th and the 3/4th and the 14th and the 14th and the 14th and the 14th and the 14th and the 14th and the 14th and the 14th of the 14th of the 14th of the 14th of the 14th of the 14th of the 14th of the 14th of the 14th of the 14th of the 14th of the 14th of the 14th of the 10th of the 14th of the 1st of the 1st of the 1.

4) Sub-committee

Therefore, each of the instant dispositions is unlawful because it is not reasonable to determine the existence of a reasonable interest rate without any need to determine other grounds.

4. Conclusion

All of the plaintiffs' claims are justified, and the judgment of the court of first instance is just, and the defendant's appeal is dismissed as it is without merit. It is so decided as per Disposition.