• KDI Journal of Economic Policy
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• v.44 no.3
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• pp.27-48
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• 2022

This paper reconsiders the empirical evidence of the relationship between tax treaties and FDI using U.S. outbound FDI to 78 countries over the period of 2007-2018. Unlike previous studies, we explicitly consider differences in the tax environments of recipient economies, including their tax-haven status, transfer pricing rules, CFC rules and anti-avoidance regulations, in our estimations. Our results confirm the importance of controlling for country-specific tax environments, especially the tax-haven status and transfer pricing rules. We find that tax treaties positively contribute to FDI inflows in developing countries, while they have no statistically significant impacts on OECD countries. Recently signed tax treaties still foster FDI but less than older ones do. Finally, our results indicate, all other things being equal, that the weaker the transfer pricing regulations, the greater the amount of U.S. direct investment into a non-OECD economy.

• Asia-Pacific Journal of Business
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• v.10 no.4
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• pp.197-204
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• 2019

The transfer pricing mechanism is a tool commonly used to transfer the tax base from countries with high taxation in countries with low taxation. In many countries, this financial operations generate significant tax revenue losses. In an attempt to limit tax revenue losses, many public authorities have introduced regulations on transfer pricing, but the effectiveness of these rules has proved limited, and they contributed to the increasing complexity of tax laws and to the appearance of additional costs for companies. Historically, transfer pricing (TP) was not a substantial issue in Mongolia. The tax legislation contains basic TP rules, but there is limited guidance and enforcement in practice. At the moment, Mongolian tax authorities are not conducting specific transfer pricing audits. Nevertheless, tax authorities are starting to pay more attention to transactions between related parties and potential transfer pricing adjustments. This study examines a transfer pricing regulations of Mongolia.

• Journal of Industrial Convergence
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• v.1 no.2
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• pp.141-172
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• 2003

To enhance Social Welfare and Public Interests, government has been enforcing the policies that induce private Sector to participate in the Public Service. In general, these policies consist of the direct or indirect supporting systems, including the advantages of taxation applicable to Private Sector that takes part in Public Service. Of the various supporting systems taken by government, the privilege from the taxes is known to the most important supporting system. The representative exemple is the tax beduction of amounts donated to the not-for-profit organizations. That is to say that donations can be deductible from taxable amounts on assessing inheritance tax and gift tax. Generally much higher cumulative tax rates are applied to the laws of inheritance tax and gift tax than the other taxes in order to redistribute the social wealth and to restrain the concentration of the wealth. On the other hand, the special exemption from the taxes can be applied to not-for-profit organization according to the standards of the relevant lows and regulations, because not-for-profit organization usually performs the partial role of government in Public Service. The perpose of this study is to find the systematical support that the not-for-profit organizations can practice Public service more efficiently than government. This study approaches the subject by means of examining current taxation systems of inheritance tax law and gift tax law and developing systematic alternatives that can make inefficient parts in taxation systems more reasonable.

• Korea Trade Review
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• v.46 no.3
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• pp.185-201
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• 2021

This paper analyzes the penalty tax system under the Customs Act of Korea and examines whether the penalty tax provision violate the constitutional principle of proportionality when imposed on a person who does not made import declaration intentionally or travelers who has not been made an import declaration of their carry-on items. It examines the provisions that adopt a penalty tax as a means to secure the effectiveness of the customs law. In relation to penalty tax, the case studies of the Supreme Court and Constitutional Court of Korea are analyzed by major issues such as the legal nature of the penalty tax, whether the penalty tax is unconstitutional, and the reasons for exemption from the penalty tax. There is no reasonable basis for the high penalty tax imposed on travelers' carry-on items for which import declaration has not been made. It is necessary to unify the penalty tax imposed when an import declaration is not made and the penalty tax on traveler's carry-on items. It is necessary to establish a limit on penalty tax and to create new regulations to exempt or reduce penalty tax when punished by administrative punishment to avoid double jeopardy. It is necessary to effectively secure the effectiveness of the Customs Act by converting the penalty tax into civil penalty that does not presuppose the faithful and accurate performance of tax obligations by the taxpayer. The government revised the penalty tax system in the Customs Act in 2019, but there are still many types of penalty tax and there are elements that are unconstitutional. It seems that the Korean government should lower the burden on the people by improving the system for the penalty tax system.

• Korea Trade Review
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• v.41 no.1
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• pp.1-20
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• 2016

This study is to help international traders in conducting tax and accounting works as to revenue recognition when a shipment incurs in accordance with Incoterms 2010. It is true that some are well familiar with Incoterms but have lack of accounting and tax application. In respect of tax operation, there are several regulations, such as Income Tax Law, VAT Law, which are applied differently according to sales points. Sales points and revenue recognition are a bit different when sales are made internationally. And this study compares those revenue recognitions by comparison of related Korean laws and Incoterms 2010.

• Korean Business Review
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• v.17 no.2
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• pp.1-23
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• 2004

Since revision of Korean GAAP on the merge transaction in 1999, the few studies on the problems of the GAAP or on the inconsistency of GAAP and regarding tax regulations have been performed. The objective of this study is to understand the present state of the merge transactions, to find out the problems on the regarding GAAP and tax regulations, and to suggest the method to improve them. Among the 69 merge transactions of the listed and registered companies for the recent 3 years, 67 merge transactions are reported as the purchase transactions and 2 transactions as the pooling of interest. And 11 transactions occurred between parents and subsidiaries. I investigate the sufficiency of the foot disclosures on the merge transactions, I find out that the disclosure on the amortization of the negative goodwill are not sufficient, and several transactions are not recorded in conformity with GAAP. This paper indicates the problems on the GAAP as follows: the complicated and irrational method of amortization of the negative goodwill, the valuation of the stocks acquired before the merge, the inconsistent adjustments to purchase consideration contingent on future events, and the valuation of the merge between the parents and subsidiaries. And the problems on the tax regulations are as follows: tax deferment of the income from merge valuation, the ambiguous definitions of the fair value, and stock dividend of the income from merge valuation.

• Management & Information Systems Review
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• v.15
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• pp.1-18
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• 2004

It was 1976 when the preparation of consolidated financial sheet was first prescribed in this nation. Since then, the prescription has been revised several times. Revised in April 1992, enforcement regulations of the Securities Exchange Act provided that every listed corporation has its consolidated financial sheets and an auditor's opinion about them attached to its business report. In other words, the outside audit of consolidated financial sheets became inevitable. The Act of the Outside Audit of Corporation was revised in December 1993 to provide that all corporations must prepare consolidated financial sheets and receive the outside audit of the documents beginning their settlement of accounts in December 1994. In case of overseas corporations, consolidated financial sheets and the Equity Law have been applied since their settlement of accounts in December 1995. Now those sheets must be prepared by all local and overseas corporations that involve relations of governance or dependence. The preparation and public notification of consolidated financial sheets has been settled as a system. This nation has not yet introduced consolidated tax return using consolidated financial sheets. Such tax return system is already being used by most of the world's economic powers such as U.S., Europe and Japan. This study shows that reduction in corporation tax is the biggest reason for avoiding consolidated tax return system, even though the system can facilitate the settlement of consolidated accounting. Consolidated tax return, which is being implemented in about 20 countries including U.S., needs to be introduced by this nation where consolidated financial sheets are publicly notified.

• Management & Information Systems Review
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• v.29 no.1
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• pp.79-96
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• 2010

The purpose of this study is to investigate factors that affect corporate CEOs' tax avoidance, ultimately helping find how to fundamentally prevent the avoidance, establish a tax system that ensures tax payers' compliance and revise tax laws and regulations in a positive way. For the purpose, this researcher surveyed corporate CEOs with a questionnaire that contained many questions of various types, which was developed based on previous studies. Findings of the study can be summarized as follows. Main factors affecting tax avoidance were the application of tax provisions, the ability to understand tax laws and the expectation of tax avoidance. The more corporate CEOs' were influenced by the first and the third factors, the higher their propensity for tax avoidance was. On the contrast, corporate CEOs were lower in propensity for tax avoidance when they were more able to understand tax laws. Regarding the three factors' relative influences, tax avoidance was most affected by the expectation of tax avoidance, followed by the ability to understand tax laws and the application of tax provisions in order. Meanwhile, a multi-regression analysis using the sequential deletion technique showed that tax avoidance were affected by the application of tax provisions and the expectation of tax avoidance and that tax avoidance was most influenced by the application of tax provisions, followed by the expectation of tax avoidance. These findings indicate that the degree of corporate CEOs' tax avoidance may vary depending on social and environmental changes that their business face. Meanwhile, positive factors such as tax-bearing capacity and the procedure of tax calculation and negative factors such as management ethics and tax authorities' regulation are all thought to be not helping prevent tax avoidance.

• KDI Journal of Economic Policy
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• v.14 no.3
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• pp.49-72
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• 1992

This paper examines the increasingly popular belief that higher holding tax will be the ultimate solution for Korea's land problems which include excessive concentration of ownership, high and rapidly increasing land prices, and rampant speculation. In principle, land holding tax can supplement capital gains tax in recapturing capital gains from land or suppress returns from land investment returns in line with other forms of asset. This paper shows, however, that the tax burden must be drastically increased for the tax to achieve such goals, and the resistance from tax payers is sure to be intense. As long as the price expectation remains high, as in Korea where land prices have increased 19% annually during the past 18 years, even such increase in the tax may have little impact on landlords' behaviors, the price trend, or the ownership structure. More effective solutions for Korea's land problems are relaxing land use regulations to encourage the supply for urban land and improving the performance of capital gains tax to recapture windfall gains from land. This paper also notes that the so-called "lock-in effect" of the capital gains tax seems to be exaggerated. Land holding tax should be viewed as a revenue raiser for local governments rather than an anti-speculative policy tool. Abandoning unattainable policy goals and adhering to the general principles of taxation, will make land holding tax much simpler, and will better function as a local revenue source.

• Korean Business Review
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• v.11
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• pp.319-341
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• 1998

Transfer pricing is a process for determining the prices of products, technology and services among affiliated companies. Although taxation problems arising from international investment are not now, they have become more important in recent years as a consequence of the growing internationalization of economic activities. So, trans pricing to shift their income and expenses from one country to another has made it difficult for tax administrations to impose tax collectly. Our government also applies arm' length methods to decide equitable tax. In the case of intangibles, because of the characteristics of the market, it is not easy to find the comparable uncontrolled transactions and it is almost impossible to apply cost=plus method or resale price method. This paper treats these problem, examining U.S. regulations and OECD guidelines and analysing the practice of transactions and the application of other methods.