BEPS 이후 모델조세조약의 변화와 향후 정책과제 = Post BEPS Transformation of Model Tax Treaties and the Implications for Korea’s Tax Treaty Policy

다국어 초록 (Multilingual Abstract)

This article examines changes in the US and OECD model tax treaties after BEPS and discusses matters to be considered or introduced in the renegotiation of decades old tax treaties concluded between Korea and advanced countries.
Unlike before, the U.S. and the OECD models are converging significantly, and in particular, the U.S. model seems to have a direct influence on the OECD model throughout the Articles and commentaries, including, for example, saving clause, special tax regime, resident(pension funds, dual residency), international transportation income, dividend transfer transactions, limitation on benefits, mutual agreement procedure arbitration and tax law revision after signing.
In the case of Korea, although it acceded to the BEPS multilateral instrument, the provisions of tax treaties modified by the said instrument are only for reflecting the BEPS minimum standards, such as the preamble, principal purpose test, and improvement of mutual agreement procedures in about 50 treaties. Referring to the US and OECD models, the following are examples of provisions that Korea may introduce in future renegotiations of treaties with developed countries.
First, in response to the increasing trend of domestic companies’ overseas investment, the treaty limitation rate on inter-company dividends stipulated in many treaties with advanced countries should be lowered from 10% to 5%, and even 0% could be considered with respect to treaty partners in which particularly large investments are made by Korean companies. Meanwhile, it is desirable to revise the treaty rate to 15% for inter-company dividends paid by securitization companies such as REITs established by foreign investment funds for domestic investment, following the US or Japanese treaty examples.
Second, it is necessary to include commissionaire transactions in the dependent agent clause as part of measures against avoidance of permanent establishment.
Third, it is necessary to include pension funds in the definition of residents, and to consider introducing a tax exemption clause for dividends derived by pension funds and KIC in the treaties with countries in which the investment by these funds are large. In addition, we may positively consider provisions to ensure tax continuity for pension fund contributions following the cross border personal movement, as with the US model.
Fourth, provisions for special tax regime and post-revision response to domestic tax laws need to be introduced depending on the contracting state to prevent double non-taxation.
Fifth, in line with the implementation of the expatriation tax in the Income Tax Act, we should include a provision for adjusting the acquisition value in the capital gains Article of future treaties.
Sixth, while mutual agreement procedure arbitration has become part of treaty policy of the United States, Japan, and many European countries, the conditions are not yet ripe for Korea to accept it. However, in preparation for the introduction of arbitration provisions in the future, it is urgent to strengthen the capacity of the domestic international tax expert group.