On January 29 and 30, 2020, the Inclusive Framework (IF) Convention in the OECD was held. The media reported the Korean Economy and Finance Ministry’s announcement and the key point is as follows:

First, the OECD will discuss ways to impose digital tax on multinational companies larger than a certain size and apply the digital tax to both digital service business and consumer business. Second, the OECD will continue to discuss the global minimum tax.

The media is expressing concerns that Korean companies including Samsung and Hyundai may pay more taxes to the market location countries undermining Korea`s taxation rights, and get into a state of emergency.

In response, the Korean Economy and Finance Ministry said, ” We will do our best to secure national interests, including securing tax revenues and minimizing the cost of tax cooperation among domestic companies. However, there are no comments on detailed measures.

Currently, about 300 Korean companies have sales that exceed Euro 750M (about 1 trillion won), and the number of Korean companies with between 1 trillion and 800 billion won is over 100. These companies will be placed in the scope of digital tax in the near future. If the Korean companies pay more taxes abroad, the general public will have to pay more for the deficit to run the country.

Once the digital tax system is established, it will have a huge impact on each country’s taxation sovereignty over the next few decades. It is the matter of great importance.  Therefore, I would like to present countermeasures as an expert who attended an OECD public consultation in November and December 2019 and commented on the related issues in person, as it is necessary to accurately analyze and understand the nature of the problem and prepare for it.