현행 파트너십 과세제도의 문제점과 개선방향 - 수동적 동업자의 소득구분 및 원천징수를 중심으로 -

Abstract

Partnership is an association of two or more persons to carry on a business as co-owners for profit. In cope with the evolvement of various business forms, Republic of Korea(ROK) introduced the taxation system of the partnership in 2007. This system is expected to reduce the economic burden of the double taxation and to encourage the development of the various knowledge-based industries and financial industries. However, newly introduced partnership taxation system has an unique point of perspective in its income classification. Most of the financial partnerships comprised of two types of partner-General Partner (GP) and Limited Partner(LP). It is the usual practice that such type of partnership has one GP and multiple LPs. GP, bearing the unlimited liability, generally manages the operation of the partnership and LP, bearing the limited liability, generally invests its financial resources to the partnership. In the partnership taxation system of ROK, the distribution to the LP is treated as a dividend and the distribution from the partnership to the LP through the SPC is also treated as a dividend. This classification causes substantial damage to the competitiveness to the domestic partnership. By most of the tax treaties with other major economic partner countries, ROK exempted capital gains tax on shares of foreign investors. On the contrary, the income distribution of the foreign investors of the domestic partnership is classified as dividend and is subjected to the 5～15% withholding taxation the tax treaties. Such tax wedge makes it hard for the domestic partnership to induce foreign investors. Partnership is in nature based on the transparent principle(Transparenzprinzip). If this system is confused with the separation principle(Trennungsprinzip), which corporation is based on, it may cause unexpected economic issues and distortions. Income classification issue is the one valid example of such distortion. Partnership taxation systems of various countries, including US, UK, France, also show that the Transparenzprinzip is upheld without exception in its income classification. It has been only 5 years since its introduction of the partnership. However, it needs more refinement and development to cope with the economic development of the society. Income classification could be one area partnership taxation is able to improve. There income distributed to the LP also be looked through as is to the GP. It would be the best way to streamline and coordinate the partnership system to the developed and international standard of taxation.