한국국제조세협회 / International Fiscal Association, Korea
조세학술논집 / JOURNAL OF IFA KOREA, 2014-02, 30, 137-177
In this study actual cases of tax avoidance and evasion through the utilization of tax havens are analyzed in terms of the interpretation and application of Korean tax laws. Below issues found in this juncture are presented along with suggestions for the revision of relevant tax laws. First, the step transaction doctrine as stipulated in Article 14 Paragraph 3 of the Basic National Tax Act('the BNTA') should be used in stead of Article 14 Paragraphs 1 and 2 of the BNTA, which respect substance over form in the attribution of taxable object and assessment of tax base, to address the anti-avoidance activities. Second, purposive interpretation is necessary for the interpretation of provisions on the requirement of taxable entity and tax residence while Article 14 Paragraphs 1 and 2 of the BNTA are not applicable in this regard. Third, anti-corporate inversion provision, as are stipulated in the U.S. and Japanese tax laws, should be adopted with some modifications, because the current controlled foreign corporation provision in the International Tax Coordination Act falls short of defeating various tax avoidance activities surrounding tax havens. Fourth, a simple use of tax haven corporation without any conspicuous fraudulent activities should not be deemed as a concealment of properties, which are owned by the tax haven corporation. Fifth, the introduction of a provision for the legal presumption that a transaction with a tax haven entity is presumed to be lack of substance is recommendable. As an alternative to this, a provision for the legal presumption that a step transaction through tax haven entities is presumed to be made for the purpose of tax avoidance may be considered as well.