All appeals are dismissed.

The costs of appeal are assessed against the Plaintiff.

The grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed).

1. “Dispact of wrongful calculation” under Article 52 of the former Corporate Tax Act (amended by Act No. 10423, Dec. 30, 2010; hereinafter the same) is a system where a corporation’s act of wrongful calculation is deemed to be avoided or reduced unfairly by abusing various types of transactions listed in each subparagraph of Article 88(1) of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 22184, Jun. 8, 2010; hereinafter the same) without using a reasonable method from a person with a special relationship, and instead of using them under the circumstances prescribed by the relevant Act and subordinate statutes.

This is limited to cases where it is deemed that the economic rationality was neglected by making an unnatural or unreasonable calculation in light of the perspective of the economic person. Determination of whether the economic rationality exists or not is based on whether the transaction lacks economic rationality in light of sound social norms or commercial practice, and the transaction price between persons with special relationship, special circumstances at the time of the transaction should also be considered, etc.

(see, e.g., Supreme Court Decision 2016Du39573, Oct. 25, 2018). In cases where Article 88(1) of the Enforcement Decree of the said Act is deemed to unreasonably reduce a tax burden, Article 88(1) of the said Enforcement Decree provides individual and specific types of acts under subparagraphs 1 through 7, 7-2, 8, and 8-2, and Article 88(9) of the said Enforcement Decree provides for individual and specific types of acts under subparagraphs 1 through 7, 7-2, 8, and 8-2, and Article 88(1)9 of the said Enforcement Decree provides for “other acts or calculations corresponding to subparagraphs 1 through 7,