S-Space College of Law/Law School (법과대학/대학원) The Law Research Institute (법학연구소) Journal of Korean Law Journal of Korean Law Volume 10 Number 1/2 (2010)
Comparision of General Expense Provisions of U.S. and Korean Tax Law to Suggest Guildelines for Interpretation of Korean Tax Law
- Kim, Jaeseung
- Issue Date
- BK 21 law
- Journal of Korean Law, Vol.10 No.2, pp. 271-304
- This essay reviewed and analyzed the general provisions for a business deduction of the U. S. and Korea, and compared them to see if the interpretation of I.R.C. § 162(a) as confirmed and established by the U.S. courts can be useful as a tool to interpret the general provision of Korea. This essay has come to observe that: Generally, for a deductible expense, the Korean system adopts a negative method, allowing all expenses to be deductible unless otherwise provided. The U.S. system, however, adopts a positive system, which means an expense is deductible only if a separate provision to allow doing so is provided; just as “rdinary and necessary”are paralleled in I.R.C. § 162(a), so “rdinary and directly related to revenue”are paralleled in the Korean Corporation Tax Law(CTL). But the meaning of “ecessary”and “irectly related to revenue”a are different; the interpretation to the meaning of “rdinary”by the U.S. Supreme Court may be applicable to the interpretation of article 19(2) of the CTL; the standards developed in the U.S. with respect to deciding what a “rade or business”may not be applicable to the CTL; and interpretation rules or precedents established as related to “n connection with”and “arrying
on”in the interpretation of the meaning of ordinary in I.R.C. § 162(a) can be useful guidelines to interpret the meaning of “n connection with”in the CTL.