An Study on Tax Cred it on Safety and Health －Focus on Company Size and Industry Type－
Asian Tax Journal Vol. 17 No. 6 (2016), pp. 143-173
Abstract
We examine the reason why lots of Korean corporation don’t have a tax credit on safety & health. We find that the connection of ‘special tax treatment control act §25’ and ‘occupation safety and health act’ is not clear. Also we find that firms must separate the part of safety device from a machine to have the tax credit but, firms can not separate under the present system of accounting. We suggest some ways to improve the connection of two acts and to separate safety device from a machine through improving accounting and disclosure system. Also, in order to reduce the compliance costs of taxation, we suggest that accounting and taxation should be linked. Firms are classified as small & medium sized firm, medium sized firm and large sized firm. In accordance with the size, credit rate is applied differently. We find that we should give small sized firm more tax credit to reduce disaster－related mortality rate. So, we suggest the way to separate small firm from small & medium firm. And we suggest a credit rate as 10%. Even though we suggest small sized firm more benefit, the benefit should be balanced with tax credit on environment. We don’t suggest to apply differently tax credit rates by industrial classification. Because the difference of tax credit rates by industrial classification is partly reflected little in the difference of tax credit rates by size classification. Also, it will be too complex that we change tax credit on safety & health. We expect to minimize the social losses related to industrial safety.
Keywords
- Tax credit on safety & health
- Occupation safety and health act
- Disclosure system
- Small sized firm
- Social losses
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