Korea vs Corp May 2004, Case No 2003중3619

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In this case a Korean company was providing services (sales agent, equipment installation and maintenance service) to a foreign related party and remunerated on a cost plus basis.

The remuneration had been calculated as cost plus 5-8 % based on six comparable domestic service providers.

The Judgement

If there is a significant difference between the tested company and the companies used as comparables, such as the function of the business activities, the conditions of the contract, the risks involved in the transaction, the type and characteristics of the goods or service, the change in the market, and the availability of the materials used, the comparability standard is not met.

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2003중3619

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