Hong Nam-ki: "Digital Tax, Thorough Response from National Interest Perspective... Active Discussions Until October"

Ministerial Meeting on External Economic Affairs Held on the 5th

[Image source=Yonhap News]

[Asia Economy Reporter Jang Sehee] Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, stated, "We will thoroughly respond from a national interest perspective to the impact on our companies and the allocation of taxing rights during the digital tax discussions."

On the 5th, Deputy Prime Minister Hong held an External Economic Ministers' Meeting at the Government Complex Sejong and made this announcement. The government plans to actively participate in the discussions at the upcoming Group of Twenty (G20) Finance Ministers' Meeting scheduled for this month, as well as in the detailed plan discussions planned until October.

Earlier, the Organisation for Economic Co-operation and Development (OECD) Inclusive Framework (IF) revealed a digital tax agreement supported by 130 out of 139 countries. The IF is a multinational forum discussing the implementation of measures to prevent tax avoidance through base erosion and profit shifting (BEPS) by multinational corporations.

Currently, among the 139 IF countries, 9 opposed the proposal, but the remaining 130 countries supported it.

Pillar 1 involves allocating taxing rights to market jurisdictions for a portion of the excess profits of large multinational corporations with high profit margins, such as Google. It applies to global multinational companies meeting the criteria of consolidated revenue of 20 billion euros (27 trillion won) and a profit margin of 10% or more. However, certain industries such as mining and regulated financial sectors are excluded from the application.

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