外國人 直接投資 誘引을 위한 法人稅減免制度의 效果分析

A Study on the Effect of Tax Cutting in Corporate Tax for Inducing Foreign Direct Investment

Korea and IMF reached an agreement on the rescue funds in 1997. In the IMF era, foreign direct investment, coupled with exports, will emerge as major weapons to supplement the fundamental shortcomings of the economy and ride out the foreign-exchange crisis. Foreign direct investment is one of the major tools to accelerate the inflow funds without additional debt obligations and create more jobs openings. The purpose of this thesis is to analyze the effect of tax policy for foreign direct investment by the theorectical and empirical analysis. There is the problem of overlapping tax jurisdiction in international investment. So many countries provide double-taxation relief. The important determinants of foreign direct investment is statutory corporate tax rate in the investor country and effective tax rate on Korean domestic investment. Under the foreign tax credit system which many countries use today, it is the statutory corporate tax rate in the investor country not the effective tax rate that determines foreign direct investment. In empirical analysis, we employ a regression analysis based on aggregate time-series data from 1970 to 1995. We first estimate the total foreign direct investment function. Then we estimate the functions of foreign direct investment from U.S.A. and Japan separately. The result of regression analysis is that the effective tax rate on Korean domestic investment are not statistically significant for equation investigating foreign direct investment. That confirm the predictions derived the theorectical analysis. The recommendations of this thesis are as follows; First. the decrease of corporate tax rate through tax cutting is not a proper policy for inducing foreign direct investment. Second, differential tax treatment from the agreement between the related countries can make a tax policy more effective. Third, tax cutting, like as tax reduction of the reserved income for re-investment in Korea, is able to give incentives to foreign investors.