C&M Co., Ltd. (Attorneys Kim Dong-dong et al., Counsel for the defendant-appellant)

Mapo Tax Office (Law Firm LLC, Attorney Lee Jin-hun, Counsel for the plaintiff-appellant)

November 1, 2016

Seoul Administrative Court Decision 2015Guhap5332 decided June 16, 2016

1. The plaintiff's appeal is dismissed.

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

The decision of the first instance court is revoked. Each "disposition date" in the separate sheet in the separate sheet in the separate sheet in the separate sheet in the attached sheet 1 is revoked. The disposition of both the corporate tax and the additional tax of 460,071,560 won for the business year 2011, the corporate tax and the additional tax of 918,601,030 won for the business year 2012, the corporate tax and the additional tax of 912,61,030 won for the business year 2012, the corporate tax and the additional tax of 1,012,612,290 won for the business year 2,391,284,

1. Quotation of judgment of the first instance;

The court's explanation on this case is consistent with the reasoning of the judgment of the court of first instance, except for dismissal or addition as follows. Thus, the court's explanation on this case is accepted in accordance with Article 8 (2) of the Administrative Litigation Act and Article 420 of the Civil Procedure Act.

○ 23, 27, 28, 31, and 5 of the first instance court’s judgment “14, 17” added to “23, 27, 28, 31, 5.”

○ The last sentence of the 12th judgment of the first instance court in the letter “6” in the letter “7”

○ Part 15 of the 13th judgment of the first instance court, with the following addition:

④ Meanwhile, the Plaintiff asserted to the effect that the actual owner of the pertinent royalty income in the business year 2013 was VIH, because the Plaintiff did not pay dividends in the business year 2013 and reserved all incomes to VIH, but the actual owner of the pertinent royalty income in the business year 2013 that dividends were not paid in light of the high dividend tendency of European enterprises and the distribution tendency of VIH in the business year 2011, and VIH in the business year 2012. The financial statements for the business year 2013 were prepared on February 14, 2014, which was after VH received data from the Defendant and submitted the data to the Defendant by the Defendant. The dividends for the business year 2013 were approved and demanded by VGN to pay dividends in the business year 2013. Thus, even if VGN did not pay dividends to VGN in the business year 2013, it is difficult to deem that the instant royalty income actually controlled the instant royalty income on such grounds.

○ On the 14th judgment of the first instance court, the following shall be added:

Hungary is broad to attract film production industry, but the main business related to VH's film business is to collect user fees most.

○ On the 14th judgment of the first instance court, the following shall be added:

9) The Plaintiff did not play any role in relation to the instant domestic distribution right, and no longer existed as of January 14, 2016, and as of January 14, 2016, if License is to become a de facto holder of income, the pertinent royalty income belongs to Parmo unit, etc., the original author. As such, VGN asserted to the effect that it is not a de facto holder of the instant income. However, since around 2006, the Plaintiff was permitted from this VGN to use the domestic distribution right, such as the film before the instant license agreement, from this point of time before the instant license agreement, it is difficult to view that VGN was not a de facto owner of the instant PGN as a shareholder of VGN’s shares 10% of the instant license agreement, and that it was difficult to view that VGN was not a de facto owner of the instant taxable property but a de facto owner of the instant taxable property after the lapse of the pertinent business year. In light of the aforementioned circumstances, it is difficult to deem that VGN did not have been subject to taxation.

2. Conclusion

Therefore, the judgment of the first instance court is justifiable, and the plaintiff's appeal is dismissed as it is without merit.

[Attachment]

Judge highest order (Presiding Judge)