How to Rationally Interpret the Practice Rulings of the National Tax Service on Rebates Regulation in Liquor Markets
Asian Tax Journal Vol. 21 No. 4 (2020), pp. 57-75
Abstract
The practice rulings of the National Tax Service on rebates regulation, which liquor manufacturers and importers should abide by, is highly controversial in that its general interpretation structure is ambiguous and its penalty provisions is much overloaded compared with enterpreneurs’ violation of the regulation. Regarding the former controversy, it is said that a specific sentence structure in the regulation, which can be regarded as a double entendre, causes enterpreneurs’ predictibility to decline in their business environments, and the expression of “discount” in the penalty provisions of the regulation is a too extensively interpretable articulate which covers various accounting concepts to suppress enterpreneurs’ business activities. Regarding the latter controversy, it is said that the penalty level of the regulation which forces enterpreneurs’ product release to be cut down as high as by 20 percent makes their sales conditions excessively unfavorable. Considering various aspects of liquor industry and its business characteristics, the analysis of this study implies that the practice rulings of the National Tax Service on rebates regulation in liquor markets should be interpreted that first, the causality between unfair marketing methods and liquor market disorder be that of the necessary and sufficient condition. Second, the “discount” in the practice rulings, which is one of unfair marketing methods, should be interpreted to include both sales discount and discounts on purchase. It also can be understood that the administrative intents of the practice rulings also support those interpretations. Last, the penalty of factory release reduction on liquor market disorder can be regarded as to be not excessive, but appropriate to back up the effectiveness of the practice rulings, and other administrative fines might as well be enforced to provide pervasive disorder behaviors in liquor market.
Keywords
- Practice rulings of the National Tax Service
- Liquor markets
- Rebates
- Causality
- Discounts on purchase
- Factory release reduction
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