The Supreme Court said, "Computer system consignment development is not subject to tax credit."

The Supreme Court ruled that the money spent on the consignment development of the computer system cannot be regarded as research and development expenses subject to tax credits.

The Supreme Court sent the case back to the Seoul High Court on the 24th of last month, breaking the original ruling that LS Securities won the plaintiff's case in a lawsuit filed against the Yeongdeungpo Tax Office asking for cancellation of the corporate tax correction request.

The Supreme Court judged that the development of the computer system was difficult to see as an activity to achieve scientific or technological progress.

LS Securities paid 28.6 billion won for the development after entrusting LG CNS to develop the next-generation computer system in 2011.

LS Securities filed a lawsuit after requesting a refund from the Yeongdeungpo Tax Office, saying that 15.5 billion won worth of software development and labor costs were subject to tax credits.

Later, the first trial ruled that it was not subject to tax credit, but the second trial ruled in favor of the plaintiff, judging that part of the development cost was subject to tax credit.