摘要：From June 1, 2007 until the end of 2009, onshore funds in Korea benefitted from the temporary non-taxation policy for the gain on the disposal and revaluation of the stocks listed on foreign stock market, a similar scenario as that of the domestic investment funds. This tax reform, aimed at securing a counter measure against the rise of the exchange rate, induced investment by offering tax benefits to those investing funds abroad. This study investigates whether the temporary non-taxation policy on the onshore funds has any effect on the investors tax burden in an emerging market, such as Korea. This study reveals the statistically higher positive significance of the tax benefit during the application of non-taxation compared with the period when taxation was applied in the entire sample. The application of non-taxation included the temporary enforcement and the expiration of non-taxation. The finding indicates that temporary non-taxation policy on the onshore funds enabled investors to enjoy the tax benefit. However, a statistically significant negative relationship between the fluctuating rate of exchange and the period of tax benefit was observed. This relationship shows that with any gain on foreign currency, the tax basis increases to reduce the difference between that and the fund basis. Consequently, this kind of tax reform limits the measure by ignoring the risk of exchange fluctuations in the international investment.
