All appeals are dismissed.

The costs of appeal are assessed against each party.

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

1. Plaintiff’s ground of appeal

A. The principle of substantial taxation under Article 14(1) of the Framework Act on National Taxes, in cases where there is a separate person to whom the income, profit, property, transaction, etc., belongs, unlike the nominal owner, should be the person to whom the income, profit, property, or transaction, etc., belongs, and the nominal owner is not the person to whom the property belongs, but the actual owner is the person to whom the property belongs, because of form or appearance. In cases where the nominal owner is not capable of controlling and managing the property, and there is a separate person who substantially controls and manages the property through the control, etc. over the nominal owner, and the disparity between the nominal owner and the real owner arises from the purpose of tax evasion, the income on the property shall be deemed to have been reverted to the person to whom the property is substantially controlled and managed, and such principle applies to the interpretation and application of a tax treaty having the same effect as the law, barring any special provision to exclude it (see, e.g.

After finding the facts as stated in its holding, the lower court: (a) based on the facts indicated in its reasoning, such as the purpose of establishment and operation status of the Incentures International Licensing (hereinafter “IVIL”), human and physical facilities, decision-making process on transactions, control and management of user income; (b) IV IL only performed the role of the transaction party in form; and (c) the beneficial owner of the pertinent royalty income paid to IV IL in 2010 is the parent company of IV IVL, which is the U.S. corporation, the beneficial owner of the instant royalty income paid by the Plaintiff to IVIL (hereinafter “IVUSS”), and the disparity between such form and substance is the Republic of Korea and the Republic of Korea.