지방소득세 세액공제･감면제도의 개선방안에 관한 연구

A local income tax had been taxed at 10% rates on national income tax amount until 2013. This surtax method has been changed to the independent tax method since 2014. By the independent tax method, a progressive local tax rate is applied on the national income tax base to get a calculated tax amount, and then tax credit and reduction amount subtracted from a calculated tax amount is the final local income tax amount. Tax credit and reduction can’t be applied to the local corporate income tax but can be applied to the local personal income tax in the nearly same way that is applied to the national income tax. Those rules are in the Local Tax Exemption Limitation Act. The current tax credit and reduction amount in the local income tax is 10% of the tax credit and reduction amount applied in the national income tax amount. As the local income tax is changed to the independent tax, tax credit and reduction are applied only to the local personal income tax so that we need to check issues on applying tax credit and reduction and find resonable solutions. This study aims at making the revisions –continuing to apply, abolishing, etc - on applying tax credit and reduction in the local personal income tax after it reviews the current tax credit and reduction provisions and searches other country’s cases in a comparative method. A foreign tax credit, which is introduced to remove double taxation in tax theory, can be applied to both the national income tax and local personal income tax, so that it sometimes can results in a foreign tax credit in excess of foreign paid taxes. It is desirable that a foreign tax credit should be first applied to the national income tax and then to the local personal income tax. We also need to change the dividend tax credit method in the local personal income tax. It should be changed to add both the amount of imputed national corporate income tax and imputed local corporate income tax to calculate the after-tax income amount of 100, to get the national income tax and the local personal income tax and then to deduct the amount of imputed local corporate income tax from local personal income tax. Thus it is necessary to abolish some kind of tax credit and reduction which were introduced to control real property markets by a need of the central government or were damaging taxation neutrality and tax fairness between individuals and corporations. Although some tax credit and reduction should be abolished in the act for tax neutrality and tax fairness, those can be used in local ordinance in case each local government needs some tax credit and reduction for attracting corporations in its district. Whether or not it applies some tax credits by local ordinance depends on its choice made comparing a local grant tax decrease and the effect of tax policy because the amount of tax credit and reduction is included in gross receipts when standard finance receipts for a local grant tax are calculated.