A Study on Improvement of Non－inclusion of Received Dividend Amount in Gross Income in Coporation Tax Law －Focusing on Non－inclusion of Interest Paid in Deductible Expenses－
Asian Tax Journal Vol. 13 No. 2 (2012), pp. 91-116
Abstract
Taxation of dividend income would be double－taxation because the source of dividend, retained earning, is already taxed by Corporate Income Tax Law and Korean Tax Code is, to a degree, in a position to resolve the double－taxation. Regulation on Corporate Income Tax Law applies non －inclusion of dividend income in gross income as a resolution for preventing double－taxation if the stockholder is a corporation. The purpose of this article is to point out the taxation issue of fluctuation in non－inclusion of dividend income amount in according to the valuation of investee’s stock like fair value and equity method and to propose remedies to improve this problem. The result of this study is follows; An alternative to eliminate the valuation income or loss of investee’s stock in total assets of statement of financial position is more desirable because it is tax －neutral for the valuation income and loss as well as there is no tax－difference between valuating corporation and non－valuating corporation in investee’s stock. It can be expected that this article can contribute as pointing out the taxation issue of fluctuation in non－inclusion of dividend income amount in according to the valuation of investee’s stock and proposing remedies to improve this problem.
Keywords
- Non－inclusion of Received Dividend Amount in Gross Income
- non－inclusion of interest paid in deductible expenses
- Stock Valuation
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