국제간 전자적 용역의 부가가치세 개선방안에 관한 연구

Abstract

From January 2015, the European Union (EU) has eliminated its origin principle regarding all electronic commerce, telecommunication, and broadcasting services. Instead, the EU has implemented the destination principle, thus determining the place of taxation as the customer's jurisdiction regardless of the location of the service supplier. Consequently, VAT for the above categories has now become unaffected by the business's location. Also, the OECD has presented two principles in its 2013 guidelines draft, which are the neutrality principle and the destination principle. The neutrality principle states that VAT regarding final consumption will be neutral for business, while the destination principle affirms that for internationally traded services and intangibles VAT should be levied by the jurisdiction of consumption. In addition, Japan revised its consumption taxation regarding cross-border supplies of electronic commerce in March 2015, which came into effect in October 2015. Since the unequal competition between domestic and foreign businesses has been a problem, Japan has decided to charge consumption tax on cross-border supplies of electronic commerce, which includes digital books, music, and advertisements. Also, regarding B2B transactions, if the service supplier is a foreign business the taxation scheme will i) introduce the reverse charge mechanism to tax the person who receives the service and ii) the foreign entrepreneur declares and pays the tax. There are some aspects that South Korea should consider when establishing its desirable VAT system for cross-border supplies of electronic commerce. First, currently the regulation for the place of supply of service in VAT states that this is where the service was provided. By changing this to the service recipient’s domicile or residence, or the address of the head or main office, the destination principle of taxation will be carried out. Second, dividing foreign businesses’ VAT on electronic commerce into B2B transactions and B2C transactions, consequently considering the reverse charge mechanism for the former and the scheme of having foreign businesses self-assess and pay the tax for the latter. Third, considering the burden of tax administration, businesses whose rate of taxable sales to total sales exceed a certain percentage as well as simplified taxpayers should be excluded from VAT for B2B transactions. Furthermore, the VAT exemption criteria should be equally applied to foreign businesses and the registration of foreign businesses should be limited to those who meet certain requirements. Fourth, amending the regulation for reverse charge mechanism to match the reverse charge mechanism for B2B transactions while revising the laws for both the registration system regarding foreign businesses as well as managers of tax payment so that tax administration can become more effective.