자산의 취득원가 결정 및 자본적지출과관련된 세법 규정의 문제점과 그 개선방안

From the perspective of the rule of law in tax (no taxation without representation), South Korea’s tax law does not provide a clear basis to deny a deduction for the purchasing or manufacturing cost of a fixed or inventory asset, when a taxpayer deducts purchasing or manufacturing costs as current expenses. The tax law does not provide a criterion to deal with incidental or indirect costs related to purchase or manufacture. Similarly, no provision addresses how to deal with the costs associated with acquiring an intangible asset. Moreover, no clear rules apply to capital expenditures arising after acquiring or creating assets. In the absence of a provision in the tax code that applies to a certain problem, a taxpayer may calculate taxable income in accordance with generally accepted accounting principles (GAAP), which may be acceptable under Korean tax law. However, the issue is whether the tax authority is allowed to determine taxable income according to GAAP in cases when both a taxpayer does not comply with GAAP, and no tax code provision applies to a certain item. This article presents a few cases and then analyzes them to identify problems or defects in the current tax law. Issues related to the capitalization of purchasing costs of fixed assets and inventories, capital expenditures, cost allocation, and the acquisition or creation of intangible assets are reviewed and analyzed. Based on the foregoing review and analysis, this article suggests revised or new provisions that will disallow a deduction for acquisition costs and capital expenditures but will require that such expenses be capitalized and will establish the standard for cost allocation.