[Alpha Biz=(Chicago) Reporter Paul Lee] LG Electronics won the final lawsuit against the taxation authorities to cancel the corporate tax of 5.4 billion won.

According to legal circles on the 1st, the first division of the Supreme Court upheld the original ruling on the 11th of last month, which ruled in favor of the plaintiff in a lawsuit filed by LG Electronics against the Yeongdeungpo Tax Office to cancel the disposition of withholding corporate tax.

In December 2010, LG Electronics signed a software and semiconductor license agreement with B company in Hungary, a subsidiary of US corporation A, and paid 78.5 billion won for five years from 2012 to 2017, but did not pay corporate taxes.

On the other hand, the National Tax Service judged that Company B is only a conduit company that only plays the role of a formal trading party and that Company A is actually a "profitable owner."

Accordingly, the authorities believed that corporate taxes should be withheld by applying the Korea-U.S. tax treaty, not the Korean and Hungarian tax treaty, and corrected and notified LG Electronics of 12.8 billion won in withholding corporate tax.

LG Electronics objected to this and filed a judgment with the Tax Tribunal and received a refund of 7.4 billion won. However, the remaining 5.4 billion won of the claim was dismissed and decided to be judged by the court.

 

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