New Daegu Busan Expressway Co., Ltd. (Attorneys Lee Woo-soo et al., Counsel for the defendant-appellant)

Kim Jong-soo

September 2, 2014

1. The Defendant issued a disposition of rejecting a claim for rectification that increases the undeductible balance in the business year 2006 from KRW 26,761,096,305 to KRW 28,252,503,432, and the undeductible balance in the business year 2009 from KRW 58,039,196,392 to KRW 78,200,81,292, and the deficits that occurred in the business year 2010 to KRW 33,298,258,804 to KRW 53,459,873,704 from KRW 2010 to KRW 33,298,258,804 from KRW 2010.

2. The costs of the lawsuit are assessed against the defendant.

The primary purport of the claim is as described in the Disposition No. 1 (However, July 2, 2013 appears to be a clerical error in the statement as of July 1, 2013).

Preliminary claim: The written claim is stated in Paragraph (1) except that the date of disposition is February 2, 2012 (it appears that February 6, 2012 stated in the written complaint appears to be a clerical error in the text of paragraph (1).

1. Details of the disposition;

(a) Daegu-Tan Highway project and the burden of the plaintiff's subordinated borrowings; and

1) The Daegu-TB-T Expressway project (hereinafter “instant project”) is a project that constructs, manages, and operates an expressway with a total extension of 82.1km from the Daegu-gu to the east-si of Kimhae-si, to the east-si, Daegu-si, by the method of “the ownership of the infrastructure belongs to the State or a local government at the time of completion of construction of the infrastructure on December 11, 2002,” under Article 4 Subparag. 1 of the former Act on Private Participation in Infrastructure (amended by Act No. 6776, Dec. 11, 2002; hereinafter “Private Investment Act”).

2) The Plaintiff is a company established under the Private Investment Act for the purpose of the instant business on December 8, 1999.

3) On December 17, 2007, the Plaintiff entered into a senior loan agreement with 4 companies, such as the Hanhae Infrastructure Infrastructure Investment Company, etc., and borrowed KRW 970,100,000,000 (hereinafter “first priority loan”), and on November 28, 2008, entered into a subordinate loan agreement with the National Pension Service, which is a shareholder, and entered into a subordinate loan agreement with the Korea National Pension Service on November 28, 2008, and KRW 597,231,00,000,000 (A), out of which amount is KRW 12-20% per annum, 296,931,000,000 (B) with the interest rate of KRW 2040 per annum (hereinafter “the loans in this case”).

B. Examining the Defendant’s interest rate on subordinated loans, and correcting the corporate tax base on February 2, 2012, etc.

1) From September 2010 to November 201, 2010, the Board of Audit and Inspection conducted an inspection of the status of the follow-up management of public-private partnership projects by guaranteeing minimum import (MRG: MRG: payment of compensation equivalent to the difference between estimated and operating income as agreed in the concession agreement and actual operating income) and demanded the National Tax Service to investigate the appropriateness of the interest rate on subordinated loans of private investment entities.

2) Accordingly, the Defendant examined the appropriateness of calculating the interest rate on subordinated loans to the Plaintiff from June 27, 2011 to July 1, 2011, and determined that the Plaintiff’s borrowing of KRW 300,300,000 (A) out of the instant subordinated loans from the National Pension Service, etc., the shareholder, etc., at the interest rate of KRW 12% per annum and KRW 296,931,00,000 per annum constitutes wrongful calculation.

3) On August 11, 2011, based on the above findings of the investigation, the Defendant notified the Plaintiff of the notice of pre-determination of the assessment standard of corporate tax. Accordingly, the Plaintiff filed a request for pre-assessment review on September 15, 201, but the Commissioner of the National Tax Service decided not to adopt the tax base on November 11, 201.

4) On February 2, 2012, the Defendant included an amount exceeding 8.5 to 9% per annum, the interest rate for subordinated loans of this case in the business year 2008, 2009, and 2010, based on Article 52 of the former Corporate Tax Act (amended by Act No. 10423, Dec. 30, 2010; hereinafter “Corporate Tax Act”), among the interest expenses on subordinated loans of this case in the business year 2010, KRW 92,397,672,658, which was the amount exceeding 8.5 to 9% per annum, the interest rate for the pertinent subordinated loans at the time, in deductible expenses, from KRW 12,045,965,965,935 to KRW 15,128,508,593, -78,209 to KRW 209 to KRW 78,200,2935,2947,28487,7

5) The Plaintiff appealed and filed an appeal with the Tax Tribunal on May 7, 2012. On December 3, 2012, the Tax Tribunal rendered a disposition to correct the tax base by re-auditing the Plaintiff’s tax base at the rate of interest rate of KRW 3,082,542,65,658 for the business year 2008, and KRW 44,657,65,000 for the business year 209, and KRW 44,657,65,657,565,00 for the business year 2010, and KRW 44,657,565,000 for the year 2010. The tax Tribunal re-audited whether the additional interest rate of KRW 6.1-13.9% per annum and the premium rate of KRW 0.40.9% per annum due to maturity due to the Plaintiff’s re-audit on February 6, 2012.

6) On February 8, 2013, the Plaintiff asserted that the interest rate from 13.2% to 21.5% calculated by adding 6.7% of the base interest rate (the fixed interest rate on the preferred loan), maturity premium (the risk that the repayment period is longer longer than the priority loan) 0.4% to 0.9%, and subordinated risk premium (the risk that occurs due to the repayment period of the subordinated loan), and 6.1% to 13.9% of the lower risk premium (the risk that occurs due to the repayment period of the subordinated loan) to 13.2% to 21.5% is the appropriate interest rate.

7) According to the decision of the pertinent Tax Tribunal on April 2013, the Defendant determined the market price of subordinated loan interest rate of 13.21% per annum (=6.7 + 0.76 + 5.75%) calculated by adding 0.7% per annum of the maturity premium and 5.75% per annum of the subordinated risk premium as of 6.7% per annum (i.e., 6., 0.7 + 0.76 + 5.75%). Accordingly, on April 5, 2013, the Defendant: (i) included the Plaintiff in deductible expenses the amount of KRW 48,91,90,90,200 for the decision of correction as of February 2, 2012; (ii) included the carried-over deficits in deductible expenses of 15,128,508,593 through 13,537,3737,065 won per annum; and (iii), 3053,2984,29638

C. The Plaintiff’s claim for rectification of the increase in deficits and the Defendant’s refusal of the Defendant’s claim for rectification on July 1, 2013

1) Upon receipt of the notice of the decision of correction rendered on April 5, 2013, the Plaintiff: (a) as to June 14, 2013; (b) as to the Defendant, the market value of the instant subordinated loan is not 13.21% per annum; (c) as to the annual interest rate of 12% per annum under the initial loan agreement; and (d) as to the amount of 296,931,000,000 (B) out of the instant subordinated loan, the Plaintiff excluded the interest rate of 20% per annum from the interest rate of 20% per annum; (d) as to the amount of interest calculated at 13.21% per annum; (e) pursuant to Article 45-2(1)2 of the Framework Act on National Taxes, the amount of the difference calculated by deducting the interest expenses calculated at 13.21% per annum from the annual interest rate of 2010 from the deductible loan; and (e) pursuant to Article 45-2(1) 2(2) of the Framework Act, the amount of deficits to 306309,298.

2) The specific contents are as follows (i) are based on the decision of correction made by the Defendant on April 5, 2012 after reinvestigation, and (ii) are sought in the Plaintiff’s initial report details and the instant request for correction.

(2) The deductible expenses for the remaining amount of 2010-years of 205, the deficit incurred for the business year of 205 to 36,757, 361, 96, 96, 267, 268, 304, 268, 368, 364, 205, 205, 207, 205, 207, 205, 2084, 205, 207, 205, 205, 304, 205, 2074, 205, 2064, 307, 265, 307, 2654, 368, 364, 258, 250, 207, 207, 207, 2007, 206, 194, 1974

3) On July 1, 2013, the Defendant rejected the Plaintiff’s request for rectification of increased losses (hereinafter “instant disposition”) on the ground that “The request for rectification of corporate tax base for the business year 2010 shall not be subject to the request for rectification due to the re-audit of corporate tax according to the decision of the Tax Tribunal.”

4) The Plaintiff appealed and filed an appeal with the Tax Tribunal on July 3, 2013, and filed the instant lawsuit on July 5, 2013. The Tax Tribunal dismissed the said appeal on January 20, 2014.

【Ground of recognition】 without any dispute, Gap’s 8, 11, 13, 14, 15, Gap’s 16-1, 2, Gap’s 17, 26, Eul’s 1 through 5, Eul’s 9-1, 2, Eul’s 10, and 12, and the purport of the whole pleadings

2. Judgment on the main defense of this case

A. Defendant’s main defense

If the correction of losses is necessary, after the correction of the deficit amount for the pertinent business year is prior to the correction of the deficit amount for the pertinent business year through the correction of the gross income or deductible expenses for each business year in which the deficit occurred, the deficit amount for each business year in 2006 and 2009 is not affected by the tax base and the amount of tax or the calculation of the deficit amount for the 2010 business year. The plaintiff filed a request for correction only for the 2010 business year, and the plaintiff filed a request for correction of the deficit amount for correction for the 2006 and 2009 business year in 2010, and there is no rejection disposition as to the request for revocation of the request for correction of the deficit amount for the 2006 and 2009 business year in which the deficit amount for the pertinent business year remains for the 2010 business year. Therefore

(b) Markets:

1) The calculation of the amount of income and the calculation of the amount of income of a corporation for each business year and the determination of the tax base accordingly are not an administrative disposition subject to appeal litigation. Thus, if a tax official erred in the determination, it can be asserted in the procedure of disputing the effectiveness of the taxation disposition, and the total amount of losses which belong or will belong to a certain business year constitutes losses under the Corporate Tax Act, and only the amount investigated as losses at the time of the final return of tax base, etc. or the determination of the tax base, etc. according to the Government’s investigation and determination is not the amount of losses under the Corporate Tax Act. Therefore, even if the assessment of corporate tax for each business year under the premise that the tax base was determined without deduction of losses and the assessment of corporate tax for each business year becomes final and conclusive after the determination of the tax base becomes final and conclusive, a corporation liable to pay taxes may re-examine the claim that there was losses which were either erroneous in the previous tax base determination or could be deducted from the income under the relevant provisions of the Corporate Tax Act (see, e.g., Supreme Court Decision 2002Du321328, Nov. 26, 2002.

2) Losses that affect the corporate tax base include not only losses incurred in the pertinent business year, but also losses carried forward. Accordingly, pursuant to Article 13 of the Corporate Tax Act, the Plaintiff may claim the increase of losses carried over in the business year 2010 and remaining losses in the business year 2010. The instant disposition is legitimate as the Defendant refused all of the Plaintiff’s claim for correction of the above increase of losses, and the Defendant’s claim for correction of the above increase of losses is unlawful. Therefore, the Defendant’s main defense on a different premise is without merit.

3. Judgment on the merits

A. The plaintiff's assertion

1) The instant subordinated loan has a high risk of nonperformance due to long-term investment in the single business, called the operation of the Daegu-Tsan Highway, and there is a big difference between the payment terms and conditions, repayment period, and collateral order, etc. Of the instant subordinated loan, the interest rate of 20% per annum on the instant subordinated loan of KRW 296,931,00,000 (B) is determined in consideration of such risks, and there is an economic rationality in light of sound social norms and commercial practice. The instant subordinated loan and subordinated loan are in substantial difference among the key elements of the determination of interest rate, and thus, they cannot be calculated at an adequate interest rate by adding a certain risk premium rate to the interest rate on the senior loan, as alleged by the Defendant. The interest rate of 13.21% per annum claimed by the Defendant was not properly reflected in the risks of the said subordinated loan, and thus, they cannot be deemed an adequate market price.

2) The Plaintiff filed a claim for rectification of the tax base with respect to the increase of the reduced deficit, claiming that the interest cost calculated based on the interest rate of 20% per annum for subordinated loan should be included in deductible expenses for the business year 2008, 2009, and 2010, but the Defendant rendered the instant disposition rejecting the above claim for rectification on July 1, 2013. Accordingly, the Plaintiff primarily sought revocation of the instant disposition.

3) On February 2, 2012, the Defendant rendered a decision of correction to reduce the amount of loss for the business year 2008, 2009, and 2010 on the basis of the interest rate on the current loan. The aforementioned decision of correction is ultimately the same as disputing the decision of rejection regarding the reduced claim for increase of loss. Therefore, the Plaintiff seeks revocation of the decision of correction made on February 2, 2012.

B. Relevant statutes

It is as shown in the attached Form.

(c) Fact of recognition;

(1) Conclusion of the concession agreement and the amendment concession agreement

A) On December 14, 200, the Plaintiff entered into a concession agreement with the Ministry of Construction and Transportation on an expressway facility project between Daegu and Busan. The Plaintiff completed the construction work on an expressway between Daegu and Busan, and commenced the management and operation of the expressway from February 12, 2006, after accepting the said expressway on the Ministry of Construction and Transportation.

Unless otherwise expressly provided for in this Convention, the definitions of terms used in this Convention shall be as follows:

B) On November 1, 2006, the Plaintiff entered into a concession agreement on the amendment to the Project for Private Highway Facilities between Daegu and Busan as follows with the Ministry of Construction and Transportation.

Article 42 of the Table contained in the main sentence, ① The initial tolls as of the date of the conclusion of this Convention shall be KRW 7,073 (as of October 1, 1999, KRW 7,073 (as of the date of this Convention, Class 1, KRW 86.2/km x 82.05 km, Value-Added Tax separate) as of October 1, 199.

2) Change of investors and submission of a refinancing plan

On April 13, 2006, the Minister of Construction and Transportation requested the Plaintiff to change investors, implement procedures related to refinancing and cooperate in advance approval. On January 9, 2007, the Plaintiff submitted the change of investors and refinancing plan to the Minister of Construction and Transportation.

3) The plaintiff's senior loan

A) On December 17, 2007, the Plaintiff entered into a senior loan agreement with the National Bank Co., Ltd., the National Pension Service, etc. on KRW 1,250,000,000 as follows. The above loan agreement limits the payment of principal and interest on subordinated loans in order to preferentially pay senior loans, and the Plaintiff provided the first priority security right to secure senior loans.

B) On December 24, 2007, the Plaintiff received each loan of KRW 473,00,000,000 from the first priority loan, and the second priority loan of KRW 497,100,000 on June 20, 2008 and repaid the existing loan.

(1) The term "priority interest rate" included in the main text shall be the interest rate (1) plus additional interest rate (0.65%) to the base rate applicable to the long-term loan. (2) The fixed loan out of the long-term loan shall be 6.7% per annum. (3) The term "long-term loan" shall be the interest rate plus additional interest rate (1.30%) to the base rate applicable to it. The long-term loan shall be repaid in installments for 14 years from September 2011, and the term "long-term loan shall be repaid in installments for 2 years from the last day of the year after the date of each withdrawal. The passive loan in Article 13 shall comply with the following provisions until the date of repayment of the total amount of the loan. The borrower shall not be paid in full due to the prohibition of reduction of capital and the limited amount of the outstanding loan out of the fixed-term loan out of the fixed-term loan shall not be paid in full after the date of repayment of the outstanding interest and interest on the subordinated loan out of the due date.

4) Conclusion of the second amendment concession agreement

On February 28, 2008, after completing a written agreement with the Ministry of Construction and Transportation on April 30, 2008, the Plaintiff entered into the second amendment concession agreement with the Ministry of Land, Transport and Maritime Affairs (the name of the competent authority was amended in the Ministry of Construction and Transportation) on May 16, 2008 as follows:

(3) The concessionaire shall maintain the paid-in capital after refinancing in connection with the change of investors and equity shares under this Article, at least 1,59.4 billion won, and shall hold mutual consultation in accordance with the annual plan for the change of investors and equity shares or re-financing after this concession agreement. Article 42: 1 The initial tolls of this project shall be KRW 8,500 (including the previous section, the Class 1, the value-added tax) as of August 1, 2005, as provided for in Appendix 5.

5) Change of the Plaintiff’s investor, capital reduction for consideration, and subordinated loans

A) Following the transfer of the Plaintiff’s shares, 8 construction companies that are existing investors owned 4.5% of the infrastructure fund, 36.45% of the National Pension Service, and 18% of the Plaintiff’s shares in the Gyeongnam Bank Co., Ltd. that is a trustee of the Dai-based Limited Liability Company, and the investors were changed. After all, the National Pension Service acquired the Plaintiff’s shares in the 59.1% of the National Pension Service and 40.9% of the Maritime Infrastructure Fund as of October 31, 2008.

B) On November 28, 2008, the Plaintiff entered into a subordinated loan agreement with the National Pension Service and the Hanhae Infrastructure Infrastructure Fund as follows. The above loan agreement was concluded by the 597,231,000,000 won until the 16th anniversary of the loan, and the principal was to be repaid in equal installments over 40 times every three months over 10 years thereafter, and the repayment of interest and principal can be made when the requirements for restriction on payment of the senior loan agreement are satisfied.

(A) The borrower shall pay interest calculated by applying the respective interest rates set out in Appendix 2 when the following conditions are satisfied from the date of withdrawal of subordinated loans to the date of full repayment of the amount due to the following conditions. (2) The interest on subordinated loans shall be paid from the reservation account in preference to the interest on subordinated loans A: (1) The interest on subordinated loans shall be paid in preference to the interest on subordinated loans B shall be paid in preference to the date on which the terms and conditions set forth in Section 13(6) of the Loan Agreement are satisfied; (1) the interest on subordinated loans shall be paid in preference to the date on which the first period of interest on subordinated loans shall be 16 years and 9 months have elapsed from the expiration of the first period of interest on subordinated loans; and (2) the unpaid interest on subordinated loans shall be paid in preference to the interest on subordinated loans which shall be paid in installments on or before the expiration of the period set forth in Section 16 of the Loan Agreement in Section 3; and (3) the unpaid interest on subordinated loans shall be paid in preference to the borrower's principal due date set forth in Section 4.

C) On December 4, 2008, the Plaintiff implemented the capital reduction for consideration in accordance with the said financing plan. Accordingly, the capital reduction has been reduced to KRW 159,40,000 from KRW 756,631,00,000, and the Plaintiff borrowed KRW 597,231,000,000 from the National Pension Service as shareholders and the New Infrastructure Infrastructure Investment Company as above.

6)Audit results by the Board of Audit and Inspection

The current status of the interest rate on subordinated loans in relation to the shareholders' loans of a private investment project implementer, among the "written request for disposition as a result of an audit and inspection" prepared on May 201 by the Board of Audit and Inspection

Current status of stockholders loans of private investment project implementers

The interest rate of 13.9% per annum for subordinated loan 13.2% per annum for the Incheon International Airport New Airport Highway Corporation, 13.9% per annum, 20% per annum for the 3rd Dogsan Infrastructure Investment Corporation, 40% per annum for the 5,000 Seogsan Highway, 5.1% per annum for the 13.1% per annum for the 5,000 Seogsan Expressway, 6% per annum for the 6% per annum for the 5,000 Seogsan Highway, 6% per annum for the 5,000 Seogsan Highway, 6% per annum for the 6% - 40% per annum from 12% to 40% per annum for the 15% per annum, 20% per annum for the 15% or 20% per annum for the 15% per annum for the 8-2nd Dogsan Highway, 5% per annum for the 17% per annum for the 8-5% per annum.2% per annum.

【Ground of recognition】 The fact that there has been no dispute, Gap 3 through 10, Eul 12, the purport of the whole pleadings and arguments

D. Judgment as to the plaintiff's primary claim

1) Article 52(1) of the Corporate Tax Act provides, “Where a domestic corporation’s act or the calculation of its income amount is deemed to have unjustly reduced the tax burden on the corporation’s income due to transactions with a specially related person, the income amount of the corporation for each business year may be calculated regardless of the calculation of the corporation’s act or income amount (Calculation by wrongful calculation).” Article 52(2) provides, “The rejection of unfair calculation by wrongful calculation shall be based on “the market price which is applied or deemed to apply to sound social norms and commercial practice and normal transactions between persons who are not a specially related person,” and Article 8(1)7 of the Enforcement Decree of the same Act (amended by Presidential Decree No. 22577, Dec. 30, 2010; hereinafter the same) provides, “The case of borrowing or being provided with money or other assets at an interest rate or rent higher than the market price by wrongful calculation” and Article 89(3) of the Enforcement Decree of the same Act provides, “the weighted average loan interest rate per loan or loan interest rate per loan”.

Meanwhile, the rejection of unfair calculation under Article 52 of the Corporate Tax Act is a system that considers that a corporation unfairly avoided or reduced tax burden by abusing the various forms of transactions listed in each subparagraph of Article 88(1) of the Enforcement Decree of the Corporate Tax Act without a reasonable method by a person with a special relationship in the transaction with the person with a special relationship. It is limited to a case where the person with a right to taxation deems that the person with a right to taxation denies or reduces the tax burden by using the various forms of transactions listed in each subparagraph of Article 88(1) of the Enforcement Decree of the Corporate Tax Act, and that there is an objective and reasonable income by the method stipulated in the law. In light of the economic person’s perspective, determination of economic rationality is based on whether the transaction act lacks economic rationality in light of sound social norms and commercial practices, and the special circumstances at the time of the transaction should also be considered (see Supreme Court Decision 2007Du14978, May 13, 2010).

2) We examine the instant case in light of the aforementioned legal principles. Comprehensively taking account of the following circumstances revealed by the evidence and the purport of the entire pleadings as seen earlier, it is difficult to readily conclude that the Defendant’s assertion 13.21% per annum is the market price of the instant subordinated loan. Moreover, it cannot be deemed that the annual interest rate of the instant subordinated loan lacks economic rationality in light of sound social norms and commercial practice.

(1) Under Article 7 of the Public-Private Partnerships Act, the Ministry of Strategy and Finance determines that the equity capital ratio of a concessionaire shall be maintained at a certain level during the construction period of private investment facilities for the stable promotion of the project. On the other hand, upon completion of the construction of private investment facilities, the project implementer shall invite new investors and reduce investors' equity shares and procure subordinated loans to change the structure of capital. The purpose of re-financing or the change of investors, including the raising of subordinated loans, is to increase the expectation profit of investors by changing the capital structure, the equity ratio of investors, and the procurement conditions of other capital, and it is anticipated that corporate tax will be reduced due to the occurrence of interest costs if the amount reduced for consideration through re-financing is converted to the subordinated loan.

(2) The Enforcement Decree of the Corporate Tax Act provides that the interest rate at the time of lending or borrowing money to prevent wrongful calculation shall be the overdraft loan interest rate or the weighted average loan interest rate as determined by Ordinance of the Ministry of Strategy and Finance. However, the above provision provides that the case of lending or borrowing general funds between persons with a special relationship is proposed, and it is difficult to apply uniformly to lending or borrowing funds between all persons with a special relationship

(3) In the case of a public-private partnership project, a subordinated loan borrowed by a concessionaire from a shareholder is in a position unfavorable to the general fund loan, and is in a position unfavorable to the payment conditions, repayment period, security, etc. In the case of the subordinated loan in this case, the repayment conditions shall be met, such as the repayment of the senior loan which has come due for the date of the payment, in order to repay the principal and interest of the subordinated loan in question. (The subordinate loan in the repayment method of the principal and interest shall be repaid in installments for the period from September 14, 201 to September 14, 201, while the subordinated loan in the repayment method of the principal and interest shall be repaid in installments over 40 times every three months during the period from September 16 and 10 years after the end of the initial payment period (the principal and interest of the subordinated loan shall be repaid in preference to the principal and interest of the subordinated loan in the order of priority loan).

④ The Plaintiff asserts that the interest rate on subordinated loans cannot be calculated by way of adjusting the fixed rate from the interest rate on subordinated loans. As seen earlier, although subordinated loans are in a position more unfavorable than senior loans, it is a loan transaction with the same type except for repayment of principal and interest and provision of collateral or the difference in their order, and it is difficult to view that there exists a substantial difference between the two borrowings. Therefore, it is general to determine the interest rate by adding the maturity premium and risk premium (a demand for additional return on uncertainty due to the debtor’s credit rating or the terms and conditions of the contract on the bonds) to the interest rate that did not put the risk at risk. Therefore, it is reasonable to calculate the appropriate interest rate on subordinated loans of this case by adding the maturity premium, risk premium, etc. based on the interest rate on senior loans of this case. Meanwhile, the Plaintiff also asserted to calculate the appropriate interest rate by adding a certain risk premium in the course of re-audit by the Defendant.

⑤ In calculating the market price of the interest rate of subordinated loans of this case at 13.21% per annum, the Defendant added only 0.76% per annum with the maturity premium at 6.7% per annum (long-term loan fixed rate) and 5.75% per annum with the subordinated risk premium at 0.7% per annum, and did not recognize the minimum operating guarantee (MRG) and the toll reduction premium. However, as seen earlier, the minimum operating guarantee rate of the instant business was at 90% to 77%, and there is a need to add the risk premium. However, the Defendant did not reflect it at all. Furthermore, it is unreasonable to impose corporate tax on deeming that the government calculated only the interest rate of the instant subordinated loans of this case as unfairly high, without considering the reduction rate, due to a decrease in the minimum operating guarantee rate, etc.

6. The project in this case is an investment of enormous early costs, while the period for recovery of investment profits is considerably long-term of 30 years, and the ownership of the project implementer shall vest in the State at the time of the completion of an expressway and the right to manage and operate the facility for a certain period of time.

7) Furthermore, the free use period of the instant subordinated loan is 30 years from February 12, 2006, which is the starting date of operation, and the minimum operating guarantee period is applied only for 20 years from the starting date of operation. Accordingly, the minimum operating guarantee period is terminated on February 11, 2026. However, the repayment of principal of the instant subordinated loan is made in installments from 2025. Accordingly, most principal of the instant subordinated loan was not guaranteed minimum operating guarantee, and thus, the risk of nonperformance is very high.

8) The instant project proceeds from the management and operation of an expressway after the construction of the expressway, and it is difficult to predict as the possibility of road usage varies depending on the changes in the development of and demand for means of transportation. On the contrary, the instant subordinated loan not only falls in the possibility of recovery at the latest, but also in the instant subordinated loan B with the interest rate of 20% per annum from the instant subordinated loan A, which is the interest rate of 20% per annum, is more likely to be repaid after the entire repayment of subordinated loan A.

9) The Defendant asserts that the market price of the interest rate on subordinated loans of this case presented by the Defendant was 13.21% as originally presented by the Plaintiff. However, in the course of re-audit, the Plaintiff, through Samil Accounting Firm, calculated the market price of the interest rate on subordinated loans of this case from 13.2% to 21.5% at the request of the Defendant, presented several proposals within the said limit. The Defendant, among them, deemed 13.2% at the market price of the interest rate on subordinated loans of this case as the market

(10) In other private investment projects, the interest rate on subordinated loans shall vary from 6% to 65% depending on the characteristics of the projects. Therefore, it is difficult to deem that the interest rate on subordinated loans in this case is particularly higher than that on other private investment projects.

3) Therefore, it is difficult to view the market value of the interest rate of the subordinated loan of this case as 13.21% per annum asserted by the Defendant, and it cannot be deemed that the annual 20% per annum asserted by the Plaintiff lacks economic rationality in light of sound social norms and commercial practice. As the Plaintiff initially reported the tax base and tax amount for each business year by including the interest rate of 20% per annum of the subordinated loan of this case in deductible expenses, it is reasonable to claim correction of the tax base and tax amount for the amount of losses incurred in the business year 2010 and the amount of losses carried forward in the business year 2010, and the disposition rejecting this request is unlawful.

E. Judgment on the plaintiff's conjunctive claim

D. As examined above, as long as we accept the Plaintiff’s primary claim, we do not separately decide on the conjunctive claim.

4. Conclusion

Therefore, the plaintiff's primary claim is reasonable, and it is so decided as per Disposition.

[Attachment]

Judges Kim Jae-chul (Presiding Justice)