This position paper was made for the purpose of discussion with the Korean tax authority during the tax audit period against a foreign subsidiary company doing business in Korea. This kind of tax audit defense approach was a new one at that time. This position paper was inserted in the book "the International Tax Bible(국제조세바이블)" which was published in January 2012. When this report was made, there was no specific rules concerning the "treaty shopping" in the Korean tax law and thus there often took place conflicts between taxpayers and tax authorities with regard to the appropriateness of treaty shopping. The Korean tax authority introduced a new rule in the Law for Coordination of International Tax Affairs in order to prevent this kind of treaty shopping in May, 2006. But this issue is still controversial since the new rule is not clear and objective.