• Title/Summary/Keyword: Tax Treaty

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A study on taxation of foreign corporation's Permanent Establishment (고정사업장의 과세에 관한 연구: 플랜트 건설.판매기업의 사례를 중심으로)

  • Suh, Jung-Rog
    • Management & Information Systems Review
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    • v.29 no.3
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    • pp.71-96
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    • 2010
  • This article firstly reviewed Permanent Established(PE) concept of OECD and UN model tax treaty and compared it with that of Korean Corporate Income Tax Law(CITL). The various factors regarding profit like ways of deciding the local source profit, scope and calculation method which will be imputed to PE were also reviewed. Based on above, standard PE judgement basis and calculation method of local source profit were also studied by using actual cases in foreign corporation which performs plant construction & sales in Korea. Accordingly to properly solve the conflict regarding international tax and to protect the tax authority against the foreign corporation in Korea, by standing on equality, I now propose followings for the better concept of PE in Korea. Firstly, the article that a building site or construction or installation project constitutes a PE only if it lasts more than 6 months should be modified to reflect OECD model convention's criteria of 12 months. Second, the scope of 'subordinate attorney' which is regarded as PE under CITL is now including 'holding-delivery attorney', 'order attorney', and 'assurance attorney' as well as 'contract attorney'. This is overly limit the activities of foreign corporation. It had better be loosened only to include 'contract attorney' as OECD provisions. Third, the CITL limits the cases of preparatory and/or auxiliary place which is not regarded as PE, thus limit the foreign corporations' business by expanding the concept of PE. This had better be eased. Fourth, in deciding the amount of local source profits, the CITL stipulates to split the profits by the relevant contribution of transaction parties through 'profit split method'. To solve the conflict, the ways of profit split must be better clarified through providing object and detailed standard and basis.

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A Study on the Practical Approach of European Union's Market Access through the Understanding of Tariffs and Non-Tariff Barriers in European Union (EU의 관세 및 비관세 장벽 이해를 통한 EU시장 개척 방안)

  • Jung, Jae-Woo;Lee, Kil-Nam
    • International Commerce and Information Review
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    • v.16 no.4
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    • pp.191-225
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    • 2014
  • Most of all, this paper analyzes the current situation of EU(European Union) and ascertain EU's economic condition in terms of tariff lines and non-tariff barriers. and the purpose of this article is to find out the problems of EU's tariff lines and non-tariff barriers. Next, We suggest some future direction of export promotion from Korea to EU more largely for our companies. First, this paper describes the characteristics and outline of EU. The EU is a politico-economic union of 28 member states that are primarily located in Europe. The EU traces its origins from the European Coal and Steel Community(ECSC) and the European Economic Community(EEC), formed by the Inner Six countries in 1951 and 1958, respectively. After that, The Maastricht Treaty established the European Union under its current name in 1993. The latest major amendment to the constitutional basis of the EU, the Treaty of Lisbon, came into force in 2009. There are a combined population of over 500 million inhabitants and generated a nominal gross domestic product(GDP) of 16.692 trillion US dollars in EU. The results are as follows ; First of all, In terms of tariff lines and customs duties, Our companies have to know precisely EU's real tariff lines and other customs duties, and such as value added tax and exercise tax, corporate tax regulated by EU commission and EU's 28 members. second, our companies have to confirm EU's non-tariff barriers. such as RoHS, WEEE, REACH. These non-tariff barriers could be hindrances or obstacles to trade with foreign companies in other countries. We perceive all companies exporting to EU are related with these Technical Barriers to Trade irrespective of their nationality. So, Our companies fulfill the requirements of EU Commission concerning safety, health, environment etc. Also, Our companies choose market-driven strategy to export more largely than before in the field of marketing and logistics.

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The Study on the Best Structure of Negotiation.Investment into China - Focused on the Joint Venture in terms of Tax Efficiency - (중국 투자협상의 합리적 구조에 관한 연구 - 절세 측면의 합작투자(JV) 방식을 중심으로 -)

  • Choi, Chang-Hwan;Kim, Tae-In
    • International Commerce and Information Review
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    • v.10 no.2
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    • pp.373-390
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    • 2008
  • 본 논문은 국내세법, 한 중 조세협약, 중국세법을 근거하여 특수목적회사(SPC), 사모펀드(PEF) 등의 간접투자 방식과 직접투자 방식에 대한 투자시뮬레이션을 활용하여 최상의 투자형태 협상전략을 제시하였다. 분석결과 중국내 고정사업장이 없는 경우 홍콩과 같은 조세회피지역에 특수목적회사를 설립하여 중국에 투자하는 형태가 직접투자 혹은 국내에 PEF 설립을 통한 투자보다 더 합리적이었다. 더욱이 특수목적회사는 국내의 여러 가지 규제에서 벗어나 자유로운 펀드운용과 새로운 투자추진시 국내과실 송금 처리절차를 거치지 않고 재투자가 가능하다는 점을 포함하여 다양한 장점을 가지고 있었다. 중국 등의 해외투자 고려시 조세회피지역에 특수목적회사를 설립하고 이를 통해 투자를 실행하는 것이 가장 효율적인 방안임을 고려하여 투자방식과 JV협상을 진행하여야 할 것이다.

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Analysis of the Effects of Investment Facilitation Levels on China's OFDI: Focusing on RCEP Member States

  • Yong-Jie Gui;Jin-Gu Kang;Yoon-Say Jeong
    • Journal of Korea Trade
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    • v.27 no.3
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    • pp.161-178
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    • 2023
  • Purpose - purpose of this paper is to analyze the effects of the investment facilitation levels of 11 RCEP countries (excluding Myanmar, Brunei, and Laos due to lack of data) on China's outward foreign direct investments(OFDI) using balanced panel data from 2010 to 2019. Design/methodology - First, four investment facilitation measurement indicators (regulatory environment, infrastructure, financial market, ease of doing business) were selected,investment facilitation scores of the 11 countries were obtained using the principal component analysis, an investment gravity model was established with nine explanatory variables (investment facilitation level, market size, population, geographic distance, degree of opening, tax level, natural resources, whether the country is an APEC member or not, and whether a valid bilateral investment treaty with China has been concluded) were used to establish an investment gravity model, and regression analyses were conducted with OLS and system GMM. Findings - The results of the regression analyses showed that investment facilitation levels had the greatest effect on China's OFDI, all four first-level indicators had positive effects on China's OFDI, and among them, the institutional environment had the greatest effect. In addition, it was shown that explanatory variables such as market size, population, geographical distance, degree of openness, natural resources, and whether or not a valid bilateral investment treaty has been concluded would have positive effects on China's OFDI, while tax levels and APEC membership would impede China's OFDI to some extent. Originality/value - Since the Regional Comprehensive Economic Partnership (RCEPT) came into effect not long ago, there are not so many studies on the effects of investment facilitation levels of RCEP member states on China's OFDI, and the investment facilitation measurement index constructed in this paper is relatively systematic and scientific because it includes all the contents of investment facilitation related to the life cycle of company's foreign direct investments.

A Historical Study on the Joseon Government's Attempt to Recover the Tariff Autonomy during the Period of Port Opening (개항기 조선정부의 관세자주권 회복 시도)

  • Yun, Kwang-Woon
    • Korea Trade Review
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    • v.44 no.1
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    • pp.301-319
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    • 2019
  • This study is to review the Joseon government's attempt to recover the tariff autonomy lost in the course of entering into the unequal treaty with then-Japan government, as well as the practical effort to realize such an attempt. Among other attempts, the Joseon government ① began imposing tariffs starting September 1878 by establishing Dumopo Customs Office in Busan, ② dispatched on April 1881 a group of investigators to the competent authorities to review and look back the Joseon's tariff system against Japan and ③ entered into a tariff negotiation with then-Japan government on September 1881 with the emissary (Susinsa) Byeong-ho Jo representing the Joseon government. A series of these attempts, in line with each other, represents the Joseon government's ceaseless, constant effort to recover the tariff autonomy, which is what this study intends to review from the modern-day perspectives. Authored by Byeong-ho Jo to capture an advantageous position in the 1881's tariff negotiation against then-Japan government, 「Joilseui」 successfully represented the Joseon government's position on matters of ① the Japanese tax-autonomous district in Korea, ② defining tariff rates, ③ use of Japanese Yen for payment of tariffs, ④ effective period of the treaty and ⑤ export restrictions on grains. Failure of the Joseon government's attempt to recover the Tariff autonomy was attributable not only to, as 「Joilseui」 defined, ① governments' non-cooperative attitudes on the negotiation table, ② lack of authorities that the entrusted bodies had, ③ import tariffs defined high and ④ export restrictions on grains and red ginseng, but also to loss of the tariff autonomy in 1876 and the 1881's negotiation broken down that were plotted by then-Japan government's invasive policy.

Thin Capitalization - The Arm's Length Approach through Blockchain

  • Lee, Jeong-Mi
    • Journal of the Korea Society of Computer and Information
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    • v.25 no.10
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    • pp.185-191
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    • 2020
  • This article proposes the unified an arm's length price of transfer pricing for thin capitalization since the scope of permanent establishment has been enlarged under Digital Economy and the implementation of Blackchain system to resolve the drawback of finding an arm's length price. The rule of current thin capitalization runs against the non-discrimination of taxation of the tax treaties and the national treatment which deals fairly with goods, sercice and capital money within the country under the treaty of commerce and navigator. In addition, the information of comparable uncontrolled debt are not available of current system to prove the debt which is not subject to the rule of thin capitalization. The united an arm's length price of transfer pricing for thin capitalization can apply to foreign investment as well as domestic corporations, thereby resolving the problem of the non-discrimination of taxation of the tax treaties and the treaty of commerce and navigation. The availability of transaction level data through Blockchain platform to decide whether the debt can be subject to thin capitalization can resolve the issue of comparable uncontrolled debt transaction which can't be found in current business transactions. This article should shed light on the proposing of the unified an arm's length price of transfer pricing for thin capitalization and Blockchain system to prevent the income shifting. This propose provide implication for policymakers on current system of thin capitalization and arm's length principles.

The Status and Future Challenges of Tobacco Control Policy in Korea

  • Cho, Hong-Jun
    • Journal of Preventive Medicine and Public Health
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    • v.47 no.3
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    • pp.129-135
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    • 2014
  • Tobacco use is the most important preventable risk factor for premature death. The World Health Organization (WHO) Framework Convention on Tobacco Control (FCTC), the first international public health treaty, came into force in 2005. This paper reviews the present status of tobacco control policies in Korea according to the WHO FCTC recommendations. In Korea, cigarette use is high among adult males (48.2% in 2010), and cigarette prices are the lowest among the Organization for Economic Cooperation and Development countries with no tax increases since 2004. Smoke-free policies have shown incremental progress since 1995, but smoking is still permitted in many indoor public places. More than 30% of non-smoking adults and adolescents are exposed to second-hand smoke. Public education on the harmful effects of tobacco is currently insufficient and the current policies have not been adequately evaluated. There is no comprehensive ban on tobacco advertising, promotion, or sponsorship in Korea. Cigarette packages have text health warnings on only 30% of the main packaging area, and misleading terms such as "mild" and "light" are permitted. There are nationwide smoking cessation clinics and a Quitline service, but cessation services are not covered by public insurance schemes and there are no national treatment guidelines. The sale of tobacco to minors is prohibited by law, but is poorly enforced. The socioeconomic inequality of smoking prevalence has widened, although the government considers inequality reduction to be a national goal. The tobacco control policies in Korea have faltered recently and priority should be given to the development of comprehensive tobacco control policies.

A Study on the Forest Land System in the YI Dynasty (이조시대(李朝時代)의 임지제도(林地制度)에 관(關)한 연구(硏究))

  • Lee, Mahn Woo
    • Journal of Korean Society of Forest Science
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    • v.22 no.1
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    • pp.19-48
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    • 1974
  • Land was originally communized by a community in the primitive society of Korea, and in the age of the ancient society SAM KUK-SILLA, KOKURYOE and PAEK JE-it was distributed under the principle of land-nationalization. But by the occupation of the lands which were permitted to transmit from generation to generation as Royal Grant Lands and newly cleared lands, the private occupation had already begun to be formed. Thus the private ownership of land originated by chiefs of the tribes had a trend to be gradually pervaded to the communal members. After the, SILLA Kingdom unified SAM KUK in 668 A.D., JEONG JEON System and KWAN RYO JEON System, which were the distribution systems of farmlands originated from the TANG Dynasty in China, were enforced to established the basis of an absolute monarchy. Even in this age the forest area was jointly controlled and commonly used by village communities because of the abundance of area and stocked volume, and the private ownership of the forest land was prohibited by law under the influence of the TANG Dynasty system. Toward the end of the SILLA Dynasty, however, as its centralism become weak, the tendency of the private occupancy of farmland by influential persons was expanded, and at the same time the occupancy of the forest land by the aristocrats and Buddhist temples began to come out. In the ensuing KORYO Dynasty (519 to 1391 A.D.) JEON SI KWA System under the principle of land-nationalization was strengthened and the privilege of tax collection was transferred to the bureaucrats and the aristocrats as a means of material compensation for them. Taking this opportunity the influential persons began to expand their lands for the tax collection on a large scale. Therefore, about in the middle of 11th century the farmlands and the forest lands were annexed not only around the vicinity of the capital but also in the border area by influential persons. Toward the end of the KORYO Dynasty the royal families, the bureaucrats and the local lords all possessed manors and occupied the forest lands on a large scale as a part of their farmlands. In the KORYO Dynasty, where national economic foundation was based upon the lands, the disorder of the land system threatened the fall of the Dynasty and so the land reform carried out by General YI SEONG-GYE had led to the creation of ensuing YI Dynasty. All systems of the YI Dynasty were substantially adopted from those of the KORYO Dynasty and thereby KWA JEON System was enforced under the principle of land-nationalization, while the occupancy or the forest land was strictly prohibited, except the national or royal uses, by the forbidden item in KYEONG JE YUK JEON SOK JEON, one of codes provided by the successive kings in the YI Dynasty. Thus the basis of the forest land system through the YI Dynasty had been established, while the private forest area possessed by influential persons since the previous KORYO Dynasty was preserved continuously under the influence of their authorities. Therefore, this principle of the prohibition was nothing but a legal fiction for the security of sovereign powers. Consequently the private occupancy of the forest area was gradually enlarged and finally toward the end of YI Dynasty the privately possessed forest lands were to be officially authorized. The forest administration systems in the YI Dynasty are summarized as follows: a) KEUM SAN and BONG SAN. Under the principle of land-nationalization by a powerful centralism KWA JEON System was established at the beginning of the YI Dynasty and its government expropriated all the forests and prohibited strictly the private occupation. In order to maintain the dignity of the royal capital, the forests surounding capital areas were instituted as KEUM SAN (the reserved forests) and the well-stocked natural forest lands were chosen throughout the nation by the government as BONG SAN(national forests for timber production), where the government nominated SAN JIK(forest rangers) and gave them duties to protect and afforest the forests. This forest reservation system exacted statute labors from the people of mountainious districts and yet their commons of the forest were restricted rigidly. This consequently aroused their strong aversion against such forest reservation, therefore those forest lands were radically spoiled by them. To settle this difficult problem successive kings emphasized the preservation of the forests repeatedly, and in KYEONG KUK DAI JOEN, the written constitution of the YI Dynasty, a regulation for the forest preservation was provided but the desired results could not be obtained. Subsequently the split of bureaucrats with incessant feuds among politicians and scholars weakened the centralism and moreover, the foreign invasions since 1592 made the national land devasted and the rural communities impoverished. It happned that many wandering peasants from rural areas moved into the deep forest lands, where they cultivated burnt fields recklessly in the reserved forest resulting in the severe damage of the national forests. And it was inevitable for the government to increase the number of BONG SAN in order to solve the problem of the timber shortage. The increase of its number accelerated illegal and reckless cutting inevitably by the people living mountainuos districts and so the government issued excessive laws and ordinances to reserve the forests. In the middle of the 18th century the severe feuds among the politicians being brought under control, the excessive laws and ordinances were put in good order and the political situation became temporarily stabilized. But in spite of those endeavors evil habitudes of forest devastation, which had been inveterate since the KORYO Dynasty, continued to become greater in degree. After the conclusion of "the Treaty of KANG WHA with Japan" in 1876 western administration system began to be adopted, and thereafter through the promulgation of the Forest Law in 1908 the Imperial Forests were separated from the National Forests and the modern forest ownership system was fixed. b) KANG MU JANG. After the reorganization of the military system, attaching importance to the Royal Guard Corps, the founder of the YI Dynasty, TAI JO (1392 to 1398 A.D.) instituted the royal preserves-KANG MU JANG-to attain the purposes for military training and royal hunting, prohibiting strictly private hunting, felling and clearing by the rural inhabitants. Moreover, the tyrant, YEON SAN (1495 to 1506 A.D.), expanded widely the preserves at random and strengthened its prohibition, so KANG MU JANG had become the focus of the public antipathy. Since the invasion of Japanese in 1592, however, the innovation of military training methods had to be made because of the changes of arms and tactics, and the royal preserves were laid aside consequently and finally they had become the private forests of influential persons since 17th century. c) Forests for official use. All the forests for official use occupied by government officies since the KORYO Dynasty were expropriated by the YI Dynasty in 1392, and afterwards the forests were allotted on a fixed standard area to the government officies in need of firewoods, and as the forest resources became exhausted due to the depredated forest yield, each office gradually enlarged the allotted area. In the 17th century the national land had been almost devastated by the Japanese invasion and therefore each office was in the difficulty with severe deficit in revenue, thereafter waste lands and forest lands were allotted to government offices inorder to promote the land clearing and the increase in the collections of taxes. And an abuse of wide occupation of the forests by them was derived and there appeared a cause of disorder in the forest land system. So a provision prohibiting to allot the forests newly official use was enacted in 1672, nevertheless the government offices were trying to enlarge their occupied area by encroaching the boundary and this abuse continued up to the end of the YI Dynasty. d) Private forests. The government, at the bigninning of the YI Dynasty, expropriated the forests all over the country under the principle of prohibition of private occupancy of forest lands except for the national uses, while it could not expropriate completely all of the forest lands privately occupied and inherited successively by bureaucrats, and even local governors could not control them because of their strong influences. Accordingly the King, TAI JONG (1401 to 1418 A.D.), legislated the prohibition of private forest occupancy in his code, KYEONG JE YUK JEON (1413), and furthermore he repeatedly emphasized to observe the law. But The private occupancy of forest lands was not yet ceased up at the age of the King, SE JO (1455 to 1468 A.D.), so he prescribed the provision in KYEONG KUK DAI JEON (1474), an immutable law as a written constitution in the YI Dynasty: "Anyone who privately occupy the forest land shall be inflicted 80 floggings" and he prohibited the private possession of forest area even by princes and princesses. But, it seemed to be almost impossible for only one provsion in a code to obstruct the historical growing tendecy of private forest occupancy, for example, the King, SEONG JONG (1470 to 1494 A.D.), himself granted the forests to his royal families in defiance of the prohibition and thereafter such precedents were successively expanded, and besides, taking advantage of these facts, the influential persons openly acquired their private forest lands. After tyrannical rule of the King, YEON SAN (1945 to 1506 A.D.), the political disorder due to the splits to bureaucrats with successional feuds and the usurpations of thrones accelerated the private forest occupancy in all parts of the country, thus the forbidden clause on the private forest occupancy in the law had become merely a legal fiction since the establishment of the Dynasty. As above mentioned, after the invasion of Japanese in 1592, the courts of princes (KUNG BANGG) fell into the financial difficulties, and successive kings transferred the right of tax collection from fisherys and saltfarms to each KUNG BANG and at the same time they allotted the forest areas in attempt to promote the clearing. Availing themselves of this opportunity, royal families and bureaucrats intended to occupy the forests on large scale. Besides a privilege of free selection of grave yard, which had been conventionalized from the era of the KORYO Dynasty, created an abuse of occuping too wide area for grave yards in any forest at their random, so the King, TAI JONG, restricted the area of grave yard and homestead of each family. Under the policy of suppresion of Buddhism in the YI Dynasty a privilege of taxexemption for Buddhist temples was deprived and temple forests had to follow the same course as private forests did. In the middle of 18th century the King, YEONG JO (1725 to 1776 A.D.), took an impartial policy for political parties and promoted the spirit of observing laws by putting royal orders and regulations in good order excessively issued before, thus the confused political situation was saved, meanwhile the government officially permittd the private forest ownership which substantially had already been permitted tacitly and at the same time the private afforestation areas around the grave yards was authorized as private forests at least within YONG HO (a boundary of grave yard). Consequently by the enforcement of above mentioned policies the forbidden clause of private forest ownership which had been a basic principle of forest system in the YI Dynasty entireely remained as only a historical document. Under the rule of the King, SUN JO (1801 to 1834 A.D.), the political situation again got into confusion and as the result of the exploitation from farmers by bureaucrats, the extremely impoverished rural communities created successively wandering peasants who cleared burnt fields and deforested recklessly. In this way the devastation of forests come to the peak regardless of being private forests or national forests, moreover, the influential persons extorted private forests or reserved forests and their expansion of grave yards became also excessive. In 1894 a regulation was issued that the extorted private forests shall be returned to the initial propriators and besides taking wide area of the grave yards was prohibited. And after a reform of the administrative structure following western style, a modern forest possession system was prepared in 1908 by the forest law including a regulation of the return system of forest land ownership. At this point a forbidden clause of private occupancy of forest land got abolished which had been kept even in fictitious state since the foundation of the YI Dynasty. e) Common forests. As above mentioned, the forest system in the YI Dynasty was on the ground of public ownership principle but there was a high restriction to the forest profits of farmers according to the progressive private possession of forest area. And the farmers realized the necessity of possessing common forest. They organized village associations, SONGE or KEUM SONGE, to take the ownerless forests remained around the village as the common forest in opposition to influential persons and on the other hand, they prepared the self-punishment system for the common management of their forests. They made a contribution to the forest protection by preserving the common forests in the late YI Dynasty. It is generally known that the absolute monarchy expr opriates the widespread common forests all over the country in the process of chainging from thefeudal society to the capitalistic one. At this turning point in Korea, Japanese colonialists made public that the ratio of national and private forest lands was 8 to 2 in the late YI Dynasty, but this was merely a distorted statistics with the intention of rationalizing of their dispossession of forests from Korean owners, and they took advantage of dead forbidden clause on the private occupancy of forests for their colonization. They were pretending as if all forests had been in ownerless state, but, in truth, almost all the forest lands in the late YI Dynasty except national forests were in the state of private ownership or private occupancy regardless of their lawfulness.

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