간주자본세제에 대한 문제점과 개선방안

The Korean capital market has been experiencing the phenomenon that multinational financial institutions are leaving the Korean market. In this respect, it is worthwhile to review and evaluate the Korean deemed capitalization rule which only applies to the Korean branches of foreign banks in order to investigate whether this rule meets the global standards. As this rule is only applicable to the Korean branches of non-Korean banks, the rule may give rise to inequity in taxation of incomes depending on whether a taxpayer operates a banking business, whether a taxpayer takes a form of corporation. Also, there are tax uncertainties for the branches due to discrepancy in fiscal period, accounting/regulatory rules against those of head offices. In addition, as the taxation under the deemed capitalization rule are affected by the capital structure of foreign bank's head offices, there are potential risks for the Korean branches to be tax assessed unexpectedly. Lastly, the advanced countries in terms of finance do not have taxation rule similar to the Korean deemed capitalization rule, and even BEPS Action 4 plan do not address a taxation which requires local branches to have capital structure similar to that of head office. The Korean tax authorities need to review the deemed capitalization rule from a standpoint of taxpayer and from the global perspective. In this regard, we suggest the amendment to the current deemed capitalization rule to have the rule to be opted by the taxpayer to make it in accordance with BEPS Action 4.