세무조정자료의 분석을 통해 살펴본 우리나라 기업의 재무이익과 세무이익의 차이 = Book-Tax Difference of Korean Firms Examined Using Actual Tax-Reconciliation Data

다국어 초록 (Multilingual Abstract)

This study has descriptively explored the characteristics of the book-tax difference of Korean companies (BTD henceforth) over the period of 1993 through 2002. Specifically, this study has examined some static natures and dynamic trends of BTD and reconciling tax adjustments, using the real tax reconciliation data. A Korean corporation needs to reconcile its book income (i.e., income reported in the income statement) to arrive at the taxable income. This reconciliation consists of additions and deductions that need to be made due to various timing and permanent differences. Unlike in the U.S., this reconciliation data is publicly available in Korea in the statement of corporate income tax which is contained in the Business Report filed with the Financial Fiduciary Service (equivalent to the SEC in the U.S.) and in a tax footnote of audited financial statements. As far as the authors know, there has been no prior research in Korea which has conducted in-depth studies of tax recon- ciliations per se that cause the difference between book and tax incomes. This study will thus serve as a foundation study regarding BTD, and is expected to provide useful implications for future empirical research in this area. Major results of this study are summarized in what follows. First, Tables 2, 3 and 5 present descriptive statistics of additions, deductions and BTD on an annual basis. According to Table 2, over the 10 year period the adding amount ranges from ￦18.7 to ￦130.5 billion per firm. The 10-year average is ￦69.2 billion. In each year, the average far exceeds the median implying that a few companies have inordinately large adding amounts while most firms have relatively small amounts (the distribution is skewed to the right). Table 3 shows that the 10-year average deduction amounts to ￦61.8 billion, which is lower than the average addition by ￦7.4 billion. As in the case of the additions, the distribution of the deductions is skewed to the right and the time-series pattern of deductions resembles that of the additions. According to Table 5, the average BTD amounts to -￦7.4 billion, and each year reports a negative BTD as well except in the year of 1994. Further, it is observed that as compared to the 1993-1997 period, the BTD tends to increase (in absolute amounts) in the subsequent years (1998-2002). This is due to the fact that while in the latter sample period both additions and deductions rise, the increase in the additions outweighs the increase in the deductions. That the BTD of Korean companies is negative on average is in contrast to U.S. corporations showing positive BTD overall. The negative BTD of Korean corporations has been persistently observed in most years of the entire sample period. Panel 1 of Table 7 demonstrates that the mean BTD is significantly below zero in eight out of the ten years observed, while the median BTD is negative in each of the ten years. This phenomenon is prevalent regardless of firm size and industry. In Panel 2 of Table 7, the entire sample is divided into two groups according to size; small and large firms. The mean BTD of each group turns out to be negative for more than seven of the years. Panel 4 of Table 7 breaks down the sample into seven groups based on the industry code (light manufacturing, heavy manufacturing, information technology, construction, retail and wholesale, transportation, and miscellaneous). It is shown that in each industry both the mean and the median BTD are significantly negative. However, when the sample firms are divided into profit and loss firms, loss firms are more likely to have negative BTD than profit firms. Panel 3 of Table 7 reveals that profit firms have negative mean BTD for three years and negative median BTD for five years only, whereas loss firms show negative mean and median BTD in every year. This result seems to be related to differing incentives for earnings management between the two groups. It seems to be the case that profit firms may recognize income-increasing accounting accruals, most of which are deducted in the process of determining tax income. In contrast, loss firms may wish to take a ``big bath`` to boost future book incomes, and these income-decreasing accruals may need to be added back to determine tax income. A further study needs to be conducted to examine this possibility. The third major result of this study concerns the dynamic trend of BTD. The magnitude of BTD in the earlier period(1993-1996) fluctuated in a relatively stable fashion, but had increased substantially (in absolute amounts) in the later period(1997-2002). This study has found that such a time-series pattern of BTD was due to the increased discrepancy between the Korean tax rules and GAAP, which has accommodated IFRS(International Financial Reporting Standards) on a large scale since the Korean economic crisis of 1997. This finding enables us to predict the future trend of tax reconciliations and BTD. Since its inception, the KASB(Korean Accounting Standards Board) has made a great deal of effort to enhance the conformity of the Korean GAAP to IFRS. This massive effort of the KASB will extend into the foreseeable future, and will thus result in further adoption of fair value accounting, which differs considerably from the valuation rules for assets and liabilities in the Korean tax rules. Further, new GAAP such as pension accounting are waiting to be incorporated into Korean GAAP. All of these changes would further magnify the discrepancy between the Korean tax rules and GAAP, and will therefore increase the magnitude of tax reconciliations and consequently BTD in the future, as far as Korea maintains the positive system of tax law.

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