자동차세 개정안의 한미 FTA 제2장 위반 가능성에 관한 고찰

Abstract

The Free Trade Agreement between the Republic of Korea and the United States of America (hereinafter “KORUS FTA”) specifically addresses South Korea’s motor vehicle tax system, and includes provisions to amend the Annual Vehicle Tax, established under the Local Tax Act. Article 127 of the Local Tax Act was revised in December 2011, accordingly. In accordance with Article 127 of the Local Tax Act, vehicle tax on possession of vehicle for passenger vehicle (hereinafter “vehicle tax”) shall be taxed at vehicle engine displacement. However, due to the increasing supply of expensive high power vehicles with low engine displacement and electric vehicles in the market, along with technology advancements, currently the proportional relationship between engine displacement and vehicle price has been undermined, and thus the regressiveness of tax burden in vehicle tax has been intensified. Since the former 19th National Assembly, a total of five legislative bills on the amendment of Article 127 of the Local Tax Act have been proposed in order to change the base of vehicle tax from engine displacement to vehicle price.
 The purpose of this paper is to study whether such proposed taxation measure would be inconsistent with Chapter Two of the KORUS FTA - particularly Articles 2.12 and 2.2 of the Agreement. The paper first introduces South Korea’s current vehicle taxation and those five legislative bills. Then the paper examines major legislative issues of the proposed taxation measure, focusing on the interpretation of provisions about engine displacement under the KORUS FTA. The paper approaches the issues from an objective but somewhat defensive perspective, so as to further preserve tax sovereignty of South Korea. More specifically, this paper seeks to develop legal arguments that can increase the consistency of the proposed taxation measure with paragraphs (1) and (3) in Article 2.12 of the KORUS FTA, by invoking principle of in dubio mitius and principle of evolutive treaty interpretation, when construing the provisions.