한중조세조약에 관한 연구

Abstract

Signed in 1994, the Korea-China Taxation Treaty (hereafter as “Treaty") is considered to have greatly contributed to the economic development and the increase in trades between two countries. But over the last 10 years, the economic capacity of China has seen a huge surge, which resulted in many changes in its socialistic market system. Furthermore, as the human resources and material exchanges as well as the size of the trades between the two countries expanded, various issues that had not been considered at the time of concluding the treaty began emerging. Since the treaty signed in 1994 does not appropriately reflect such pheno- mena between the two countries, it no longer contributes to the full-scale expansion and advancement of the economic exchanges, becoming an obstacle. As such, this study compared and examined the regulations of the treaty with the OECD model treaty and the taxation laws of each country, and pointed out, and proposed an improvement plan of the following problems:First, the current treaty defines “a party" the subject of said treaty, as “those that include individuals, companies, and organizations the other party.” However, it does not stipulate a clear definition of the “other party” which leaves room for dispute when applying the treaty to the income of the “other party.”Second, the current treaty defines “immovables” as the meaning that the law of the country in which said property resides. However, the regula- tions between the two countries differ in the tax imposed and collected on the transfer of “immovables”, and some question that it does not conform to the equity of taxation on the income from the same im- movables. Third, while the two countries have introduced to the law the regula- tions on the certification of residence to prevent the abuse of the treaty and determine foreign source income, the treaty itself does not deal with this issue. In relation to this problem, it is believed that the regulation on the beneficial owner in which the taxation authority of both countries shows interest should be stipulated in the treaty. Fourth, to eliminate tax evading behavior through offshore financing centers in Hong Kong or Labuan or those that exist in Korea, China or Asia and to conform to the new international taxation order, it is believed that new information exchanging regulations should be enacted within the treaty or a separate treaty should be concluded that meets OCED’s TIEA standard. Fifth, the treaty is limited in that it defines only general issues and lists fixed businessesas an example based on normative documents, such as the OECD model treaty, and does not have clearly defined regulations on electronic transactions that have emerged as a huge task in relation to the taxation principle of fixed businesses. Finally, while the treaty does not have clearly defined regulations on “the actual control place”, “independent human resources services”, “annuity income”, or “entertainers’ and professional athletes’ income”, it is necessary to revise the related clauses in the treaty considering the recent conditions of the taxation revisions and the human resources exchanges between the two countries. In summary, while no one can deny that the treaty, having been enacted since 1994, has contributed to resolving various taxation issues and to the development of the economic exchange and development between the two countries, various problems have recently been recognized as the two countries continue to expand human resources and material exchanges. It is therefore necessary that a full-scale revision of the treaty be required to further the cooperation and economic development of the two countries. Indeed, it is believed to be crucial that not as a domestic, but an international regulation, the treaty maintain its stability and increase the predictability for a considerable time. But first to be consi- dered are the special circumstance that a country with the world’s largest human resources and material capacity like China continues to progress its economic growth at a speed that defies one’s imagination and the realistic appropriateness that the economic trades and human resources and material exchanges between the two countries soar at an explosive rate once the Korea-China FTA is to be signed in the near future.