법인지방소득세의 외국납부세액공제 관련 쟁점에 대한 고찰

Abstract

This paper generally explores to focus on controversial cases related to local corporate income (the Supreme Court 2018Du50000 Decision, the Seoul High Court 2018Nu33038 Decision, the Suwon District Court 2017Guhap 68067 Decision, the Jeju District Court 2019Guhap5431 Decision), and the foreign tax credit regime on Local Corporate Income Tax based on the Local Tax Act and the Corporate Income Tax Act in Korea. Chapter 2 of this paper examines the current system of Foreign Tax Credit on foreign sourced income including in local taxes, and also analyses four decisions focusing on using the credit method based on the Corporate Income Tax, and ‘tax on tax’ problem which arises from the deemed foreign corporate tax inclusion by Article 15(2) of the Corporate Income Tax Act. Especially, the Jeju District Court Decision allowed the taxpayer to choose the credit method or deduction method separately in the field of Corporate Income Tax and Local Income Tax. Chapter 3 of this paper firstly suggests two legally analysed points on the Court’s decisions. One is that the Court’s decisions would be included in legally logical limitation which creates a part of non-double taxation amounts on taxable income of a corporation. Another point is that the Jeju District Court’s decision makes a logical contradiction against the fundamental logic grounds such as tax equality and non-discrimination. Nonetheless, we would be faced with the necessity of resolving a ‘tax on tax’ problem which arises from the Article 15(2) of the Corporate Income Tax Act. On basis of the necessity for amending related legal grounds, this paper also reviews practicable legislative options to resolve the ‘tax on tax’ problem. It suggests three resolutions considering the comparative circumstances like the Japanese adjustment regime for foreign tax credits between corporate income tax and local corporate income taxes. In the long-term, we need to redesign the legislative framework to only tax the national territorial sourced income for local income tax purpose.