외국법인이 내국법인 발행주식을 기초자산으로 하는 총수익스왑(Total Return Swap) 거래를 통해 얻은 총수익의 과세에 관한 제문제

The purpose of this study is to examine various legal and tax issues surrounding the taxation of income earned by foreign corporations through Total Return Swap (TRS) transactions based on shares issued by Korean domestic corporations. A TRS transaction involves the total return payer transferring all economic returns—such as dividends and capital gains—from the underlying asset to the total return receiver, in exchange for a predetermined fee. When the underlying asset consists of shares, the total return payer delivers to the receiver both the dividends received from the shares and any appreciation in the share price over the duration of the contract, while any depreciation is compensated in reverse by the receiver. Foreign entities frequently engage in such TRS transactions with Korean securities firms, using Korean equities as the underlying asset for investment purposes. If the foreign party is a financial institution, the income from the TRS may constitute business profits. However, because the foreign entity typically does not maintain a business presence in Korea, such income would not qualify as Korean-sourced business income under Article 93(5) of the Korean Corporate Tax Act. If the foreign entity is not a financial institution, the income—absent special circumstances—is not likely to arise continuously and thus also falls outside the scope of Article 93(5). The critical question is whether such income may be classified as Korean-sourced “other income” under Article 93(10)(k) of the Corporate Tax Act. Since the income arises not from a territorially linked asset or activity but from a purely contractual claim under private law, it does not satisfy the conditions for Korean-source income under the prevailing territorial nexus principle. Nevertheless, because each country possesses sovereign taxing power, Korea could potentially impose tax on TRS-derived income in the future by explicitly enumerating such income as taxable under domestic law. A recent case highlights the issue：in a TRS transaction between a foreign financial institution (as total return receiver) and a Korean securities company (as total return payer), the Korean tax authority recharacterized the income as if the foreign corporation had directly received dividends from the issuing domestic company. This reconstruction—based on the principle of substance over form—resulted in imposing dividend withholding tax on the Korean securities company. However, the Korean Tax Tribunal held the imposition unlawful, citing that the foreign entity did not exercise de facto control over the shares, and that the transaction did not appear to have been structured for the principal purpose of tax avoidance. This conclusion appears well-founded, given that the foreign corporation had various economic incentives—beyond merely reducing tax liability—for entering into the TRS transaction in lieu of directly acquiring the shares, and even incurred additional costs in doing so. Moreover, the tax authority’s reasoning presupposes that the Korean securities firm acquired the shares to facilitate tax avoidance by the foreign corporation ； however, the available evidence suggests that the firm acquired the shares primarily for its own risk management purposes—that is, as a hedge—which further undermines the basis for treating the transaction as a substitute for direct share ownership.