금융산업경쟁력 강화를 위한 연결부가가치세제 (VAT Group) 도입에 관한 연구

The rapid globalization of financial markets reminds us of the importance of competitiveness of financial industry for stable growth of this country. In this context the current tax law provisions for VAT-exemption treatment of financial transactions have to be revisited for possible revision. Here the 'hidden VAT' is one of the pivotal issues. To lessen the burden of hidden VAT on financial companies a few alternatives may be considered. The first one is to convert the VAT taxation on financial transactions from the current exemption to the normal taxation. This idea has a serious shortcoming in that it increase the cost of financial services in general. Partial input tax credit or partial․elective renunciation of exemption status will become alternatives to give fundamental changes in a desirable way in terms of neutrality, but they entail the reduction of tax revenue to some meaningful degree. Therefore more gradual approaches such as introducing VAT Group system would be the best all things considered. VAT Group system would be attractive from the perspective of increasing the neutrality of VAT taxation and incidentally profitability of financial companies. Along with the idea of VAT Group which calls for a systemic change, we can also think of an approach which gives the same economic effect for financial companies through adding just an item of exemption in the current tax law for transactions within financial group. That last alternative may be understood as a type of VAT Group system in its beginning stage, of which application is limited to financial groups.