북한 대외세법의 현황과 개선방안

After the abolition of taxes in 1974, North Korea established a socialist national budget revenue system, and has maintained a separate tax legislation on the foreign economy. In this paper, the current state of such North Korean tax legislations on foreign economy (hereinafter referred to as “foreign tax legislations”) is summarized, and possible improvements will be proposed. North Korean foreign tax legislations cover the “Tax Law on Foreign-Invested Business and Foreign Individuals” including its enforcement decrees and regulations, tax regulations for Special Economic Zones (SEZ) and Economic Development Zones (EDZ), and tax conventions concluded by North Korea. North Korea initiated its foreign tax legislations in 1985, which was not relatively late. However, further developments of the foreign tax legislations have been delayed due to persistent international sanctions on North Korea, and its primitive stage in terms of opening itself to the world. As a result, the proportion of the tax revenue under foreign tax legislations to the total national budget revenue is relatively low. Regarding the overall system of foreign tax legislations, it is necessary to reorganize the relationship between the “Tax Law on Foreign-Invested Business and Foreign Individuals” and the tax regulations for SEZ’s and EDZ’s. In addition, while North Korean foreign tax legislations focus on tax incentives or benefits so as to promote foreign investment, the importance of the tax relief system is currently being neglected. The foreign tax legislations do specify Shin-so as the only tax relief system. However, in reality it would be difficult for foreign investors to regard it reliable. In terms of the tax relief system for international transactions, it is necessary to prepare relevant legislations on the detailed implementation procedures for Mutual Agreement Procedures (MAP) that can support the MAP provisions in the tax conventions concluded by North Korea. Currently, the North Korean foreign tax legislations mainly focus on its own taxation issues regarding foreign investments. However, it is necessary to supplement a separate legislation system for international tax issues that considers the bilateral relationship with the contracting state, since North Korea’s economic reform and opening would lead to an expansion of international transactions.