One Law Partners, LLC represented a local government in an administrative lawsuit brought by five affiliates of a major corporate group seeking the cancellation of acquisition tax and related assessments imposed in connection with the expansion of a research facility.The case involved legal issues concerning ownership of the expanded portions of the building and liability for acquisition tax. As a result, the Supreme Court dismissed all appeals filed by the opposing parties, thereby finally confirming that the local government's tax assessments were lawful.1. Overview of the CaseFive affiliates of a major corporate group jointly owned a parcel of land on which they constructed a research facility consisting of three basement levels and fifteen above-ground stories. Each affiliate used designated floors and spaces within the building pursuant to internal arrangements.Subsequently, several affiliates funded the expansion of portions of the existing building and additional upper-floor areas. Under agreements among the affiliates, the expanded areas were to be used exclusively by specific companies.The affiliates that bore the construction costs treated the expanded portions as assets independently acquired by them and either reported and paid acquisition tax on that basis or applied for acquisition tax reductions available for corporate-affiliated research institutes.However, the competent local government determined that the building was registered in the general building register as jointly owned by all five affiliates and that the expanded portions had become integrated with the existing building and were therefore acquired by all co-owners in proportion to their existing ownership interests.Accordingly, the local government allocated the acquisition value of the expanded portions based on the existing ownership shares and imposed acquisition tax and related taxes on each affiliate.The affiliates filed suit seeking cancellation of the assessments, arguing that the actual owners of the expanded portions were limited to those entities that had funded the construction and exclusively occupied the relevant spaces.After their claims were rejected at both the trial and appellate levels, the affiliates appealed to the Supreme Court. One Law Partners, LLC represented the local government in the final appeal proceedings.2. Key IssuesFirst, the primary issue was whether separate sectional ownership rights had been established with respect to the existing building and the expanded portions.The key question was whether exclusive use of particular portions of the building by individual affiliates, coupled with the fact that only certain companies bore the expansion costs, was sufficient to establish independent sectional ownership rights.In particular, the issue was whether internal agreements among co-owners regarding use and enjoyment of the property constituted an objective act of division capable of creating legally recognized sectional ownership.Second, the dispute concerned ownership of the expanded portions and the determination of the persons liable for acquisition tax.The issue was whether the expanded portions should be recognized as separate objects of ownership or whether they had become incorporated into the existing building and therefore belonged to all co-owners.Depending on that determination, the question arose whether acquisition tax liability should be imposed solely on the affiliates that funded the expansion or on all affiliates according to their existing ownership interests.Third, the case addressed the applicability of the substance-over-form principle and the principle of protection of legitimate expectations.The affiliates argued that acquisition tax should be imposed only on the entities that actually used and managed the expanded portions.They further contended that, because the local government had previously recognized the building’s ownership and usage arrangements, the subsequent assessments based on a co-ownership structure violated the principles of good faith and protection of legitimate expectations.3. Key Response StrategyOne Law Partners, LLC carefully analyzed both the relevant legal principles and factual circumstances concerning the alleged existence of independent sectional ownership rights.The firm emphasized that an internal agreement granting exclusive possession and use of particular portions of a building is insufficient, by itself, to establish sectional ownership and that there must be an objectively manifested intention to create separate ownership interests capable of independent legal recognition.In particular, the firm relied on building permit documents, records relating to occupancy approvals, and the contents of the general building register to demonstrate that the building had consistently been managed as jointly owned property of the affiliates.The firm further argued that even if the expanded portions possessed structural and functional independence, that fact alone did not create separate ownership rights.Ownership could not be determined solely by reference to who financed the expansion or who actually occupied the spaces.Unless sectional ownership had been legally established, the expanded portions became integrated with the existing building and belonged to the co-owners in accordance with their ownership interests.The firm also emphasized that, even if the affiliates’ arrangement were characterized as a form of quasi-sectional co-ownership, the external legal ownership relationship would remain one of co-ownership. Consequently, neither the acquisition tax base nor the parties’ tax obligations would change.With respect to the principle of protection of legitimate expectations, the firm argued that the local government had never expressed any official position recognizing the establishment of sectional ownership rights and that prior administrative practices could not alter legal ownership relationships or undermine the validity of the tax assessments.As a result, the Supreme Court held that the agreements among the affiliates constituted no more than internal arrangements regarding possession and use of the building and did not amount to an objective act of division sufficient to establish sectional ownership.The Court further determined that the expanded portions had become incorporated into the existing building and were therefore acquired by all co-owners in proportion to their existing ownership interests. Consequently, the acquisition tax assessments and related tax assessments based on that premise were lawful.The Supreme Court dismissed all appeals filed by the affiliates and ordered them to bear the costs of the appeal, thereby confirming the local government’s final victory.4. Significance of the CaseThis case confirms that where multiple entities jointly own a building, the mere fact that particular entities exclusively use designated portions of the property and alone bear the costs of expansion does not automatically establish independent sectional ownership rights in the expanded areas.In particular, the case demonstrates that, when determining ownership of a building and liability for acquisition tax, it is necessary to consider not only internal arrangements concerning use, enjoyment, and cost allocation but also whether there has been an objectively manifested act of division and how ownership is reflected in official public records such as the building register.The decision also clarifies that, even where a quasi-sectional co-ownership arrangement may be recognized internally among co-owners, external ownership relationships and acquisition tax obligations must be evaluated separately. In doing so, it provides important legal guidance concerning the proper exercise of local governments’ taxation authority.One Law Partners, LLC systematically analyzed the complex ownership structure of a corporate group’s real estate holdings and the acquisition tax implications arising from the expansion of a jointly owned building, effectively rebutting the opposing parties’ arguments through reliance on established legal principles and judicial precedent.By securing a final Supreme Court ruling affirming the legality of the local government’s tax assessments, the firm protected the lawful exercise of taxation authority and achieved a significant result that may serve as an important reference in future disputes involving jointly owned real estate, building expansions, and local taxation matters.- Sun-Seong Seo, Attorney | ssseo@onelawpartners.comProperty One | Property One (the Local Tax & Levy Practice Group) is the first specialized team established by a law firm in Korea focusing on local taxes and levies, providing professional services throughout every stage of a matter, from tax audit defense to pre-assessment review proceedings, administrative appeals, and litigation.- Public Relations Team, One Law Partners, LLC | pr@onelawpartners.com

Pursuant to the resolution adopted at the 8th Public Institution Management Committee meeting, the integration of KORAIL subsidiaries was approved, and as part of this initiative, the merger of Korail Tourism Development and Korail Networks was decided.Through the collaboration of its Public Administration Team and Corporate Team, One Law Partners, LLC successfully provided legal advisory services for the merger of Korail Tourism Development and Korail Networks, leveraging the Public Administration Team’s expertise in administrative law and the Corporate Team’s expertise in M&A transactions.[Related Article] 코레일 자회사 5곳→3곳으로 통합…서비스 강화 | The Hankyoreh 코레일 자회사 통합 절차 마무리…3개 전문회사 체제로 운영 | Seoul Economic Daily KTX 자판기 줄이고 짐 보관공간 늘린다…코레일 자회사 통합 효과는 | Edaily 코레일 자회사 5곳→3곳 통합…편의점 할인·KTX 수하물 공간 확대 | Etoday 코레일 5개 자회사 체제→3개로 재편…고객서비스·유통물류 통합 | News1 Korea 코레일 자회사 5→3개 통합…고객서비스·유통물류·유지관리 재편 | The Segye Times 코레일 자회사 5→3개 통합…"레일바이크 정리·KTX 짐칸 확대" | Newsis

1. Case Overview The client participated as a security provider in a private bond subscription transaction relating to a real estate development project.Thereafter, the investment securities company prepared a notarized deed converting unpaid financial advisory fees arising under a financial advisory agreement executed in connection with the private bond subscription into a debt obligation and commenced enforcement proceedings based on that notarized deed.The client then filed an action seeking to prevent enforcement of the notarized deed, arguing that the financial advisory fees at issue were, in substance, consideration for the private bond subscription and therefore violated the Interest Limitation Act.2. Key IssuesWhether the financial advisory fees constituted deemed interest under the Interest Limitation ActThe substantive nature of the financial advisory agreementWhether the statutory maximum interest rate under the Interest Limitation Act had been exceededThe validity of the quasi-consumption loan agreement and the notarized deed3. Legal Strategy Attorneys Joong-young Choi, Jeong-pyo Ko, and Su-hyeon Song of One Law Partners, LLC advanced the following arguments.· Arguing the Substantive Nature of the Financial Advisory Fees The attorneys analyzed the circumstances surrounding the execution of the financial advisory agreement and the overall transaction structure, arguing that the financial advisory fees at issue were not consideration for independent advisory services but were, in substance, consideration for the private bond subscription.· Establishing Violation of the Interest Limitation Act and Challenging the Validity of the Notarized Deed The attorneys argued that, regardless of its title, the financial advisory fee constituted consideration for the use of money and therefore qualified as deemed interest under the Interest Limitation Act. When included in the calculation, the total amount exceeded the statutory maximum interest rate.They further contended that the quasi-consumption loan agreement and the notarized deed, both based on amounts exceeding the statutory maximum interest rate, could not be given legal effect, and that enforcement based upon them should therefore not be permitted.4. Significance of the Case The court accepted the arguments presented by One Law Partners, LLC and held that enforcement based on the notarized deed could not be permitted.The court found that the financial advisory fees at issue were, in substance, deemed interest paid as consideration for the private bond subscription and that the overall transaction structure exceeded the limits imposed by the Interest Limitation Act.The court further held that the quasi-consumption loan agreement executed on that basis could not be recognized as valid.This case confirms that, even where funds are characterized as advisory fees, commissions, consulting fees, or similar payments, their legal nature must be determined based on the substance of the transaction rather than the contractual label used by the parties.The decision is particularly significant because the court looked beyond form to substance in evaluating a transaction structure designed to circumvent the statutory maximum interest rate through a financial advisory agreement linked to a private bond subscription, thereby clarifying the scope of application of the Interest Limitation Act.The case also demonstrates that, even where an enforceable notarized deed exists, compulsory enforcement may be restricted if the underlying claim itself is invalid.Attorney Joong-young Choi | jychoi@onelawpartners.com Attorney Jeong-pyo Ko | jpgoh@onelawpartners.com Attorney Su-hyeon Song | shsong@onelawpartners.comPublic Relations Team, One Law Partners, LLC | pr@onelawpartners.com

One Law Partners, LLC successfully represented a corporate operator of a franchise coffee chain in a Tax Tribunal appeal challenging a heavy acquisition tax assessment imposed in connection with the establishment of a branch in a metropolitan area, obtaining a decision fully cancelling the assessment.1. Case Overview A corporation operating a franchise coffee chain acquired a building in Seoul and relocated its headquarters, paying acquisition tax at the ordinary tax rate. After the relocation, however, the corporation continued operating its former headquarters location as a branch rather than closing it.The tax authority subsequently determined that, because the former headquarters continued to operate, the newly acquired property constituted “real property acquired for the establishment of a branch in a metropolitan area” under Article 13(2)(1) of the Local Tax Act.On that basis, the authority imposed a heavy acquisition tax assessment and, together with penalties for failure to file, assessed approximately KRW 220 million in total.2. Key IssuesWhether the acquisition of the property was for the establishment of a new branch in a metropolitan area or for the relocation of the existing headquartersWhether the continued operation of the former headquarters alone was sufficient to negate a genuine headquarters relocationWhether the penalty for failure to file, imposed on the premise of the heavy taxation assessment, was lawful3. Legal Strategy Attorneys Soon-sung Seo, In-sun Ko, and Da-ae Kim, together with Senior Advisor Myung-chul Cheon of One Law Partners, LLC, represented the taxpayer and advanced the following arguments:A headquarters relocation should be determined not by the formality of corporate registration but by whether the corporation’s substantive central decision-making functions have actually moved.The headquarters functions of a franchise coffee chain must be evaluated in light of the specific characteristics of that industry.The continued use of the former headquarters was attributable to unavoidable circumstances.In the alternative, because the corporation had already reported and paid acquisition tax, even if the property were subject to the increased tax rate, the issue would constitute underreporting rather than a complete failure to file.4. Significance of the Case The Tax Tribunal concluded that the acquisition at issue was for the relocation of the existing headquarters rather than the establishment of a new branch, and cancelled the entire assessment, including the penalty for failure to file. As a result, the taxpayer successfully avoided the improperly imposed additional tax and penalties, preventing substantial economic loss.Attorney Soon-sung Seo | ssseo@onelawpartners.com Senior Advisor Myung-chul Cheon | mccheon@onelawpartners.com Attorney In-sun Ko | isgo@onelawpartners.com Attorney Da-ae Kim | dakim2@onelawpartners.comPublic Relations Team, One Law Partners, LLC | pr@onelawpartners.com

One Law Partners, LLC successfully represented an administrative authority in litigation brought by the chairperson of a public institution seeking revocation of a suspension from office.This case focused on the legality of the suspension of a public institution executive, the scope of personnel management authority, and the procedural and substantive validity of the measure.1. Case Overview The chairperson of a public institution was suspended from office due to various acts of misconduct.The chairperson subsequently filed a lawsuit seeking revocation of the suspension, alleging defects in the form of the suspension notice, the legal basis for the measure, and the board resolution process.In particular, the plaintiff argued that the suspension was procedurally unlawful and that the grounds for suspension had not been sufficiently established.2. Key Issues The principal issues in this case were:· Whether procedural defects existed in the process leading to the suspension from office · Whether the suspension was substantively justified · Whether the board’s deliberation and resolution procedures were conducted lawfully3. Legal Strategy Attorneys In-sun Ko and Yeon-joo Song of One Law Partners, LLC advanced the following arguments.· Demonstrating Procedural Legality Through Applicable Regulations The attorneys demonstrated that the suspension from office was imposed in accordance with the institution’s personnel regulations and implementing rules.They further explained, through documentary evidence, that the board’s deliberation and resolution process, as well as the approval procedure for the suspension, were properly conducted in compliance with the applicable regulations, and actively refuted the plaintiff’s allegations of procedural defects.· Establishing Substantive Justification Based on Serious Grounds for Discipline The attorneys presented objective evidence, including criminal complaints, opposition from the local community, and damage to public confidence in the institution’s operations.Based on these circumstances, they argued that the misconduct made it difficult to expect the plaintiff to continue performing official duties in a normal manner and had seriously undermined the level of public trust required of a chairperson of a public institution.They further contended that the suspension was necessary to ensure the stability and public integrity of the institution and was consistent with the principle of proportionality.4. Significance of the CaseThe court accepted the arguments presented by One Law Partners, LLC and dismissed the chairperson’s claim seeking revocation of the suspension from office.The court held that the suspension had been imposed in accordance with the institution’s personnel regulations and internal rules and that no procedural illegality existed in the convening, deliberation, or resolution process of the board.The court further found that, in light of the nature and severity of the misconduct, it could not be concluded that the institution abused or exceeded its discretion in determining that normal performance of duties could no longer be expected.This case confirms that when a suspension from office imposed on an executive of a public institution is based on objective grounds and carried out through lawful procedures, its legitimacy may be widely recognized.The decision is particularly significant because it reaffirms that the personnel management authority and organizational autonomy of public institutions should be respected and that the legality of a suspension from office should be assessed comprehensively by considering compliance with applicable regulations, the seriousness of the misconduct, and its impact on the institution’s operations.The case also provides important guidance for future disputes involving disciplinary measures against executives of public institutions, suspensions from office, the exercise of personnel authority, and allegations of abuse or excess of discretion.- Attorney In-sun Ko | isgo@onelawpartners.com Attorney Yeon-joo Song | yjsong@onelawpartners.com - Public Relations Team, One Law Partners, LLC | pr@onelawpartners.com