Cancellation of Corporate Income Tax on Subordinated Bonds Issued in relation to New Airport Highway Business

Lee & Ko’s tax team led the cancellation of all corporate income tax assessments made against the taxpayer on interest income derived from the new airport highway business pursuant to a previously executed subordinated bond agreement.  This case involved the proper interpretation of the Act on Private Investment for Social Overhead Capital, which impacted the way in which private investors should structure their future investments with regards to social overhead capital (“SOC”).  Although this case has been appealed by the tax authority and is pending before the appellate court, the taxpayer’s prevailing at the trial level allowed private investors to maintain their the character of their investment as SOC.