과소자본세제의 현황과 전망 = Thin Capitalization Rules

다국어 초록 (Multilingual Abstract)

This paper reviews Korean thin capitalization rules in the context of comparative and international law, and further analyzes the relation between thin capitalization rules and tax treaties. The thesis of the paper is that the thin cap rules do conflict the language and structure of typical tax treaties which adopted the language of the OECD model treaty, although the OECD Model Commentary does not admit the conflict. First, the arm`s length principle as it applied to the thin cap situation would require the lender to demand more interest from the debtor, and would reduce the taxable income of the debtor. The OECD argument that an unrelated party would not lend money at all is inconsistent with the arm`s length principle, which, for example, does not deny a related party license and instead merely adjusts the royalty rate. Second, the thin cap rules are inconsistent with the treaty obligation of non-discrimination between foreign and domestic lenders, because the very essence of the rules consists of discriminatory disallowance of interests paid to foreign lenders. The Commentary justifies the rules again by reference to the arm`s length principle, which, however, does not solve the problem as discussed above. Third, the rules are also inconsistent with the obligation of non-discrimination of foreign-invested companies vis-a-vis domestic-held companies. The Commentary argues that this obligation is trumped by the aforementioned non-discrimination, but this argument is wrong in that the two obligations have different coverages. The paper ends with the observation that the thin cap rules were overtly and covertly overriding tax treaties for about three decades, but are now being swept away by freedom of establishment under EU law.