A Study on Improvement of Temporary Tax Deduction System on Investment Amount for Hotels

관광호텔의 임시투자세액공제제도의 개선에 관한 연구

The temporary tax deduction on investment cutting the corporate income tax within 10% of the amount of investment is aimed at stimulating the investment for economic activity. 25 business sectors are applied to this tax law and in tourism, the accommodation registered by tour promotion law and international convention plan business belong to it. I'd like to mention the problem of the temporary tax deduction on investment amount for hotels and suggest better solutions. This tax law is so temporary applied that we shouldn't get tax deduction after June 30, 2002. So, we can't get income tax deduction on the investment out of the available period. And further more this tax law has a rule not real investment but solely new project investment for hotels. There are numbers of difference between real investment and new project investment. The amount of investment is based on an object of acquisition taxation. And also there are numbers of difference between real investment and an object of acquisition taxation. For example, landscape construction is a great part of hotel construction but it's not an object of acquisition taxation. For running hotel business, we also need lots of equipments such as linens utensils for restaurant and decorations for hotel interior. But these are also excluded from this tax law. As you know, these equipments can be regarded as product equipments in manufacture industry. Therefore we should take the specificity of hotel investment into consideration and expand the role of the temporary income tax deduction on investment amount for hotels.