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국제금융거래에 따른 소득과세의 정책과제와 제도정비(An essay on the attribution of profits from global trading of financial instruments to permanent establishments)

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  • 국제금융거래에 따른 소득과세의 정책과제와 제도정비(An essay on the attribution of profits from global trading of financial instruments to permanent establishments)
  • 홍범교
  • 한국조세연구원


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Title 국제금융거래에 따른 소득과세의 정책과제와 제도정비(An essay on the attribution of profits from global trading of financial instruments to permanent establishments)
Similar Titles
Material Type Reports
Author(Korean)

홍범교

Publisher

서울:한국조세연구원

Date 2004-12
Pages 163
Subject Country South Korea(Asia and Pacific)
Language Korean
File Type Link
Subject Economy < Trade
Economy < Economic Administration
Holding 한국조세연구원

Abstract

Since the beginning of the 1990s, the 24 hour-based global trading of financial instruments began to flourish over the world. Today it is not difficult to find the presence of those multinational financial enterprises operating in various places of the world. These multinational financial enterprises like investment banks are making a huge sum of financial profits from the global trading of financial derivatives and other financial instruments. Hence the attribution of these profits to permanent establishments has become one of the most important issues to be addressed from the perspective of international taxation.
OECD is currently taking on this issue with taxing authorities of its member countries and international financial powerhouses. Basically functional analysis and factual analysis will be the criteria for the attributions. The role of capital/risk assumption and the function of risk management are emphasized to be the most important factors in their contribution to profit making.
We can derive some policy issues from the OECD discussion on this matter. First, the concept of permanent establishment should be properly defined for these kinds of financial trading. Second, the ways to attribute profits to dependent agent PE should be clearly harmonized. Third, the way to choose the best method rule for the attribution of profits should be refined. Fourth, the ways to hedge the risks within the financial group should be consistently dealt with. Fifth, when the profit split method is applied, how to share the losses should be addressed. Sixth, we have to reevaluate the unitary taxation as an alternative for the current transfer pricing system. (The rest omitted)