개성공단에 대한 이중과세방지합의서 적용방안

Abstract

The Agreement on Prevention of Double Taxation of Income between the South and the North(‘the Agreement’) which was signed on June 15, 2000 and has been effective since January 1, 2004 has now become one of the symbolic legal apparatus which represent the amicable atmosphere and voluminous economic transactions between the South and the North. Notwithstanding such development in the legal infrastructure to support the inter-Korea’s relations, the actual application of the Agreement does not seem to attract people’s attention so much. It’s partly because the taxation in the North is very limited in its very essence and the taxation, which is exceptional in the North in the sense taxation is made only on the foreigners and foreigner’s company, is mostly exempted due to the special exemption clauses in the Kaesong Tax Regulation. And the semi-territorial double taxation scheme in the Agreement also puts its application out of the list of hot issues between the two Koreas. But a careful analysis of the situations of the enterprises at the Kaesong Industrial Complex leads us to the following conclusions and suggestions. First, if a foreign enterprise form a third country invests in the North, the investor may well think of entering the North via the South because of the presence of the Agreement, which the North only has concluded with 10 countries or so up to now. Second, the determination of ‘source’ of income will be one of the most important issues for the application of the Agreement because it follows the semi-territorial approach for the prevention of double taxation. Third, measures to revise the domestic tax laws of the South for the enterprises from the South at Kaesong are to be taken especially to help the set-off of the start-up deficit with the income from the business in the South.