國際化와 韓國財政의 對應方案

Globalization and Policy Measures for Public Finance in Korea

In this paper we discuss the policy measures for public finance in Korea to cope with globalization in the world capital and goods markets. In particular we define the concept of ’free trade taxation’ which we suggest as underlying concept for internationalization of our tax system. As the free trade priciple prevails in the world capital and goods market, the tax system should be reconstructed in the global and dynamic context. Therefore, we should reform our tax system to maximize our dynamic well-beings by attaining the global efficiency in the world market. We suggest the territorial principle and non-discrimination principle as basic priciples of our international tax system. Also we propose specific policy measures for each issue of international tax system. First, the value-added tax should be strengthened, since it will playa major role in the future tax system. Second, the corporate tax should be integrated with personal income tax. Third, we suggest policy measures for tranfer pricing and other types of international income shifting. Forth, we dicuss the various issues on the R&D investments, inbound foreign direct investment, and outbound foreign investment.