Lee & Ko represented LG Display Co., Ltd. and Hyundai Heavy Industries Co., Ltd. at different levels of the Court in connection with the taxation of financial guarantee fees received by these companies from their foreign related parties.
Ever since the National Tax Service (“NTS”) developed its own guarantee fee calculation model in 2012, in an effort to challenge financial guarantee fees received by Korean companies from their foreign affiliates, the NTS had an initiative to assess taxes when Korean companies’ reported financial guarantee fees for taxation purposes were inconsistent with the fees calculated using their own model, which is published and disseminated to relevant Korean taxpayers.
Based on the calculation model, the NTS has assessed a number of companies in recent years and a great deal of litigation, including this case, is currently still pending in the Court. As such, transfer pricing specialists and other stakeholders are keenly awaiting the outcome of this case.