A Study on the Problems in the Investor’s Secondary Tax Liability and the Remedies
Asian Tax Journal Vol. 12 No. 3 (2011), pp. 129-161
Abstract
The secondary tax liability is highly effective as well as convenient to collect national taxes or others. At the same time, however, it has a high possibility to infringe upon the property rights of the third party and also to harm the safety of transaction. In particular, the investor’s secondary tax liability has a higher possibility to infringe property rights, in comparison with those of liquidators, corporate bodies and business grantees, wherefore there have been many cases where it was found unconstitutional or conditionally unconstitutional by South Korea’s Constitutional Court. Hereat, in accordance with the decision of the constitutional court, a revision has been made of the investigator’s secondary tax liability stipulated in ‘Article 39 of South Korea’s Framework Act on National Taxes.’Meanwhile, the investor’s secondary tax liability is being enforced only in South Korea, unlike other countries. Notwithstanding several revisions, there has been being much controversy about its legitimacy and interpretation. This study is to inquire into the theoretical ground of the investor’s secondary tax liability and into whether the system deserves to be retained. In addition, it is to deal with the question as to how to understand of the statutory oligopolistic shareholder from the viewpoint of current regulations and to whether corporation listed in Korea Securities Dealers Automated Quotation (KOSDAQ) should be included in major tax payment obligors. Further, this study is with a view to point out the problems of the current system within the framework of related parties as well as to suggest the remedies. This study is expected to facilitate the understanding of the theoretical ground of the investor’s secondary tax liability and thus to realistically reform the current system.
Keywords
- Secondary Tax Liability
- Related Parties
- Oligopolistic Shareholders
- Partner with Unlimited Liability
- and Unlisted Companies
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