ATJ Asian Tax Journal

Asian Tax Journal

Print ISSN 1738-3323 Online ISSN 2733-9270

Economic Effect of Corporate Income Refund Tax－Order Effect of Retained Income and the Improvement Plans－

  • Son, Hyuk Department of Accounting, College of Business and Economics, Keimyung University

Asian Tax Journal Vol. 18 No. 2 (2017), pp. 157-191

Abstract

Corporate income reflux tax, that is, tax income taxation for non－reflux is introduced in 2015 to encourage firms to take advantage of investment income, wages, dividends. In recent years, Korea has increased the share of corporate income while labor income of GDI gradually declines. Corporate income tax reflux contributes to the economy in terms of corporate income reflux. However, firms will focus on the investments or dividends rather wage increase to reduce the corporate income reflux tax. This study analyses a case of listed companies engaged in the manufacturing in order to understand the problems of the corporate income reflux tax. First, it is necessary to clarify the scope of the investment part, and to recognize the investment as the United States, even if firms do not invest in the current period but submit data on the obvious next investment. Second, it is necessary to admit substantial investment such as foreign investment and stock acquisition, except commercial real estate investments. Third, firms feel incline to do the investments and dividends, rather than to raise wages. Therefore, It need to assign a weight to the raise of wage through the corporate income tax reflux. Fourth, Authorities need to consider giving firms a discretion to report corporate income tax reflux every year. This research has contribution to identifying the problems and improvements about corporate income tax reflux over a case.

Keywords

  • Corporate income reflux tax
  • retained earnings
  • internal reserves

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Asian Tax Journal

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