국제조세 분쟁에 관한 중재제도의 운영방안에 대한 연구

Abstract

As of the time of writing this paper, no tax treaty entered into by Korea includes a provision on arbitration as a mechanism to resolve tax treaty disputes. However, the global tax community is changing fast and Korea can no longer resist adopting arbitration in tax treaties for a number of reasons. First, the “Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS”, the OECD instrument signed by 95 countries including Korea, contains a mandatory arbitration provision. Second, discussions of how to tax digital economy is based on the premise that arbitration will be a part of the mechanism to resolve international tax disputes. Third, arbitration became a topic on the top of the list when treaties are re-negotiated, particularly so with OECD countries. In accordance with this global trend, the Korean government finally legislated the arbitration under tax treaties in the International Tax Coordination Act (“ITCA”) in 2021. In this article, the principles of international commercial arbitration are discussed. Then, how such principles from commercial arbitration can be applied to an arbitration process under the OECD Model Tax Treaty (2017) are analyzed. This analysis includes certain recommendations in terms of the implementation and operation of arbitration as a method of resolving international tax disputes. Specifically, detailed guidance on the qualifications, independence and impartiality of arbitrators is suggested, as well as the need to prepare a pool of potential arbitrators in advance. In addition, the ITCA should be amended to provide that the arbitration decision needs to be implemented by a mutual agreement by competent authorities of both countries involved in the arbitration. Even though Korea was relatively reluctant to adopt the arbitration provision in its tax treaties, Korea made a big step forward by introducing the concept of arbitration in the ITCA in 2021. It is hoped that this introduction of the concept of arbitration will serve as an opportunity for Korea to improve the dispute resolution mechanism in the international tax area.