1. The plaintiff's claim is dismissed.

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

Details of the disposition

The plaintiff is a stock company that operates broadcast program production business.

The Plaintiff granted its executives and employees stock options to purchase new stocks issued by the Plaintiff at a predetermined price (value) (hereinafter referred to as “new stocks stock options”).

Some of the executives and employees of the Plaintiff exercised the stock option in 201 and 2012, and the Plaintiff did not include the amount equivalent to the gains from the exercise (the amount deducted from the market price of new shares at the time of the exercise) as listed in the following table at the time of filing the corporate tax for each business year.

(Unit: 4,059,180,000 gains from the event 2012 event 15,189,610,000,248,248,790,000 on March 24, 2017, deeming that the amount equivalent to the above gains from the event constituted deductible expenses under the Corporate Tax Act, the Plaintiff filed a claim for correction of the amount of corporate tax reduced after inclusion in deductible expenses to the Defendant, but was rejected on May 31, 2017.

(hereinafter “instant disposition”). On August 25, 2017, the Plaintiff filed an appeal with the Tax Tribunal on August 25, 2017, but was dismissed on January 30, 2018.

[Grounds for recognition] The facts without dispute, Gap evidence Nos. 1 through 6 (including more than one number), and the purport of the entire argument as to the legitimacy of the disposition of the instant case, as to whether the profit from exercising stock options at issue in the instant case constitutes a labor cost and the amount equivalent to the profit from exercising stock options at issue constitutes a loss for the business year 201 and 2012.

Judgment

Article 19(1) and (2) of the former Corporate Tax Act (amended by Act No. 1522, Dec. 19, 2017; hereinafter the same) provides for deductible expenses as “the amount of deductible expenses incurred by transactions which reduce the net assets of the relevant corporation, excluding refund of capital or investment, disposal of surplus funds, and transactions which reduce the net assets of the relevant corporation,” and except as otherwise provided for in this Act and other Acts, losses incurred or spent in connection with the business of the relevant corporation.