외국단체의 세법상 지위와 소득 귀속

Abstract

There is a controversy about how to judge the tax status and the actual attribution of income to foreign organizations, especially private equity funds (hereinafter, “PEF”). The Supreme Court (hereinafter, “SC”) has a stance to establish a beneficial owner based on the last PEF. According to the SC, the tax authority can easily exercise its right to taxation on the PEF with a pyramid structure, but the gap that exists with the international standards is still perplexing to withholding agents and investors. It is imperative to find the harmonizing point between the predictability of the interested parties surrounding foreign funds and the tax authority’s right to taxation, by creating proper legislation to solve the problems. First, among current tax laws, Article 1(3) of the Enforcement Decree of the Corporate Income Tax Act, the abstruse content from the PEF’s viewpoint, which may cause confusion in the judgment criteria of foreign corporations needs to be abolished. Next, according to the criteria of a foreign corporation, limited liability companies (hereinafter, “LLC”) should pay corporate tax. But, in the case that LLC is registered as a Fiscally Transparent Entity in its country of establishment, only when the members of LLC are of the same nationality of LLC’s country of establishment, then the benefits of the tax treaty can be applied as legislation, integrating individual investor’s profit and the tax authority’s right of taxation. Finally, in order to find an additional solution to the legislative solution, the tax treaty needs to be revised, just like the one between USA and Japan, in order to go by resolving the current issues.