필라1 금액A의 다자 간 과세권 재배분에 관한 비판적 고찰 ―이중계산방지 및 이중과세제거 체계의 효과를 중심으로― = Critique of Pillar One Amount A’s Multilateral Reallocation of Taxing Rights ―Focusing on Prevention of Double Counting and Elimination of Double Taxation―

다국어 초록 (Multilingual Abstract)

This Article examines the specific effects of Pillar One Amount A’s taxing rights reallocation, focusing on Marketing and Distribution Profits Safe Harbour and elimination of double taxation. It is based on the draft Multilateral Convention on Pillar One Amount A released in October 2023, negotiated by the Inclusive Framework on BEPS and led by the OECD.
Although Pillar One Amount A reallocates taxing rights from investment hubs with low tax rates to market jurisdictions in case of centralized business models as intended by the BEPS project, it results in three problems because of the features designed during the multilateral negotiations among around 140 members of the Inclusive Framework. First, from a tax authority perspective, the amount of taxing rights reallocated to them might change unexpectedly due to the circumstances of a third country. Second, from a taxpayer perspective, Amount A unreasonably incentivize business models that centralize tangible assets and personnel. Third, Amount A results in meaningless reallocation of taxing rights among market jurisdictions under decentralized business models. These three problems are likely to be intensified for Korean tax authorities and Korean taxpayers.
It is unlikely that Pillar One Amount A will be concluded and implemented, but the efforts will continue to tackle challenges arising from digitalization under traditional nexus (permanent establishment) based taxation. If the negotiation on Pillar One Amount A evolves into a new phase, neither the adoption of unilateral digital service taxes in domestic laws nor the multilateral reallocation of taxing rights that inevitably results in a complex system would resolve the tax challenges arising from digitalization. Rather, bilateral negotiation should be a more efficient way of solving the problem. This is because bilateral negotiation does not result in unexpected changes of tax revenues due to the third state, unjust discrimination of decentralized business models, and meaningless reallocation of taxing rights among market jurisdictions. Future efforts would need to reflect on the mistakes of Pillar One Amount A.