Digital Tax for Global Companies: 'Detailed Guidelines' to Be Released in the First Half of Next Year

[Asia Economy Sejong=Reporter Son Seon-hee] The 'digital tax,' which requires global companies such as Google and Samsung Electronics to pay taxes not only in the country where their headquarters are located but also in the countries where actual sales occur, is expected to have detailed guidelines released in the first half of next year.

According to the Ministry of Economy and Finance on the 8th, the global forum IF (Inclusive Framework), led by the Group of 20 (G20) and the Organisation for Economic Co-operation and Development (OECD) with participation from a total of 141 countries, held its 14th plenary meeting over two days starting on the 6th to discuss these matters. This meeting was held face-to-face for the first time in three years, with representatives from more than 135 countries gathering.

At this plenary meeting, IF released the second progress report addressing administrative (filing and payment procedures) and tax certainty (dispute resolution procedures) issues related to Pillar 1 (tax allocation to market jurisdictions). Additionally, it plans to collect opinions from relevant stakeholders until the 11th of next month. The Ministry of Economy and Finance stated that this report is not a final agreement and that the final version will be prepared reflecting the collected opinions.

IF agreed to complete the Pillar 1 model rules and the conclusion of the multilateral convention by the first half of next year. Originally planned for application in 2023, the introduction was postponed by one year to 2024 due to differences in national tax administration systems and potential disputes. Accordingly, once the multilateral convention is finalized in the first half of next year, detailed guidelines are also expected to be released.

Pillar 2, which centers on the introduction of a global minimum tax, completed legislative guidelines earlier this year, and countries are preparing for implementation. IF plans to establish administrative guidance on high-priority issues by the end of this year.

Since the broad agreement on the introduction of the digital tax was reached at the IF plenary meeting in October last year, the government evaluated that this plenary meeting made significant progress in related detailed discussions.

The Ministry of Economy and Finance stated, "We plan to actively participate in international tax reform to prevent tax avoidance by multinational corporations and to ensure that domestic companies can compete fairly, while also striving to alleviate the burden on companies arising from the new system."

This content was produced with the assistance of AI translation services.