The case not falling under the case where the supply price is remarkably lower than the market price for the purpose of unfairly reducing the burden of value-added tax in transactions with a person with a special relationship under Article 13 (1) 3 of the Value-Added Tax Act and Article 52 (1) of the Enforcement Decree of the same Act.

(A)As a result of the supply of Company A's products to Company B at a price at a price equivalent to the C's product price at a price higher than that of Company A's general agencies, if the supply price of Company A's products is below 10% through 11.2%, it can be deemed reasonable for Company A's market development. Thus, in transactions with related parties as stipulated in Article 13 (1) 3 of the Value-Added Tax Act and Article 52 (1) of the Enforcement Decree of the same Act, the supply price shall not be determined significantly below the market price with a view to unfairly reducing the burden of value-added tax in transactions with those related parties as stipulated in Article 13 (1) 1 of the Value-Added Tax Act.

Article 13 (1) 3 of the Value-Added Tax Act and Article 52 (1) of the Enforcement Decree of the same Act

Supreme Court Decision 85Nu514 delivered on December 10, 1985 (Gong1986, 262) 87Nu718 delivered on November 10, 1987 (Gong1988, 114)

Jinjin Co., Ltd.

Head of Ansan Tax Office

Seoul High Court Decision 89Gu14658 delivered on August 24, 1990

The appeal is dismissed.

The costs of appeal are assessed against the defendant.

The grounds of appeal by the defendant litigant are examined.

Article 13(1)3 of the Value-Added Tax Act provides that an enterpriser receives an unreasonably low price for a transaction with a person with a special relationship, means that the enterpriser receives a remarkably lower price than the market price that is deemed to unfairly reduce the tax burden in the transaction with the person with a special relationship, and it is difficult to objectively determine the price based on the normal transaction that does not lose the equity in the tax burden, depending on a specific case that the enterpriser significantly lowers the tax burden (see, e.g., Supreme Court Decisions 85Nu514, Dec. 10, 1985; 87Nu718, Nov. 10, 1987).

According to the reasoning of the judgment below, the court below acknowledged the fact that the plaintiff company producing Eul (A) products as a Korean producer of aluminium products has difficulty in market development and market development due to dumping of the military company, and that the plaintiff company's products are supplied to the above non-party at a discounted price equivalent to the product price of the non-party company's non-party company on April 1987. The price of the original product at the time of the plaintiff's Gangwon Industrial Co., Ltd. at a price below 10.1% or 11.2% of the supply price for the plaintiff's general agencies during each taxable period of the disposition of this case, such as the cost of the tax disposition of this case, is below 10.1% or 11.2% of the supply price of the above non-party company's Gangwon Industrial Co., Ltd. at a price similar to the supply price for lectures of the above non-party company. Accordingly, the supply price of the original product at the time of the plaintiff's Gangwon Industrial Co., Ltd is reasonable for market development and market development.

The judgment of the court below to the same purport is just and there is no error of law such as misunderstanding of legal principles or incomplete hearing.

Therefore, the appeal is dismissed and all costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Yoon Ma-tae (Presiding Justice)