企业在中国被扣缴的源泉所得税不适用境外税收抵免规则

Core Viewpoint - The article discusses the foreign tax credit system in South Korea, particularly in the context of a Supreme Court ruling regarding Chinese enterprises, aiming to provide insights for Chinese companies in tax planning while operating in South Korea [2][4]. Group 1: Introduction of the Issue - International tax jurisdiction is generally divided into resident tax jurisdiction and source tax jurisdiction, leading to potential double taxation for the same taxable income across different countries [3]. - To mitigate international double taxation, countries have established foreign tax credit and exemption systems, allowing taxpayers to offset domestic tax liabilities with taxes paid abroad [3]. Group 2: Case Facts and Disputed Focus - The case involves a branch of a Chinese bank in South Korea that sought to offset taxes paid on interest income from Chinese residents against its Korean tax liabilities, which was contested by the local tax authority [5]. - The Supreme Court ruling clarified that non-resident enterprises' withholding taxes in their home country cannot be included in the "creditable foreign tax amount" for tax offset in South Korea [4][5]. Group 3: Parties' Claims - The Chinese bank argued that as the resident country, China has the right to tax the profits of the permanent establishment, and that non-resident enterprises in South Korea should receive the same foreign tax credit treatment as resident enterprises [6][7]. - The local tax authority contended that the foreign tax credit rules apply only to income sourced from outside South Korea, and that the bank failed to provide proof of tax payment [8][9]. Group 4: Court Rulings - The first instance court ruled in favor of the bank, stating that the tax treaty did not limit China's right to tax [10][11]. - The second instance court overturned this decision, emphasizing that South Korea has priority taxing rights over the income of the permanent establishment, even if the source country is the same as the resident country [12][13]. - The Supreme Court upheld the second instance ruling, reinforcing that South Korea has priority taxing rights when the income source and the resident country are the same [13]. Group 5: Case Analysis - The case exemplifies the complexities of triangular tax situations involving three jurisdictions: the resident country, the source country, and the country where the permanent establishment is located [14]. - The article suggests that resolving such triangular tax issues often relies on bilateral tax treaties, which can be challenging when multiple countries are involved [15]. - The Supreme Court's ruling has significant implications for Chinese enterprises operating in South Korea, indicating that they must prioritize South Korean tax obligations in their tax planning [18].