A Study on the Taxation System of Controlled Foreign Corporations in the UK after Brexit

The UK has contributed significantly to the finances of the European Union, and this UK financial contribution has motivated the British people to withdraw from the European Union. This led to Britain's withdrawal from the European Union at the end of 2020 (Brexit). Governments have carefully monitored the UK's withdrawal from the European Union. Prior to the UK's complete withdrawal from the European Union, Korea officially declared a 'principled settlement' in Korea-UK FTA negotiations in Seoul on June 10, 2019. This means that if the UK withdraws from the EU, the FTA will automatically enter into force between Korea and the UK. At that time, Korea was the only Asian country to ratify the FTA with the UK. Through the Korea-UK FTA, most Korean companies will maintain preferential tariffs under the Brexit scenario, which means that Korea will have a comparative advantage over its competitors through the Korea-UK FTA. Britain's Brexit, which is one of the pillars of the European Union's finances, has led to various predictions as to whether the UK will follow the OECD-sponsored BEPS or continue the EU-sponsored ATAD for international tax cooperation. The purpose of this study is to examine Korea-UK trade relations from the standpoint of Korea through the taxation system of the British foreign corporation. The reason for paying attention to the taxation system for foreign corporations under control is to emphasize tax payment cooperation through activities to reduce tax avoidance of multinational corporations based on the international consensus that the global taxation system cooperation for multinational corporations should be further strengthened. After Brexit, the UK will continue to negotiate with the EU and remain deeply sympathetic to the prevention of tax avoidance at the international level. From the perspective of Korea, it is necessary to utilize the Korea-UK FTA treaty, which was preemptively concluded in preparation for the tax treaty with the UK.