Korea still hesitating while EU to reorganize tax system under ‘Google tax’ charge
Kim Soo Yeon | newsnews@ | 2018-03-23 11:18:49
The European Union is speeding up tax reforms aimed at large Internet companies such as Google and Facebook. Although there have been such movements in Korea, it has not been able to speed up due to ordinary problems.
The EU has issued three new proposals that will charge more taxes on digital businesses operating online than on the 21st. Even if there are no companies registered in EU member countries, it will be possible to apply taxation on companies that earn more than EUR 7 million euros (KRW 9.1 billion) or more than 100,000 users in online business.
The EU has explained that the digital businesses that are doing business online are envisioning these three proposals in order to prevent taxes from being transferred to countries with low corporate tax rates and to pay fair taxes. The EU argues that while corporate taxes are not keeping up with the growth of digital corporations, they are paying a lot of profits in Europe, with less tax.
The European Union has proposed tax cuts of 3 percent for companies that earn more than EUR 750 million (KRW 975 billion) in annual revenues or more than EUR 50 million (KRW 65 billion) in Europe as a temporary measure so that it can be imposed. The EU executive committee estimates that if 3% of the tax is imposed, it will be able to collect EUR 5 billion a year. The new tax proposal must be approved by 28 member countries to be finalized.
Therefore, the introduction of the so-called `Google tax` in Europe is accelerating, but the domestic market is still in its place. The legislation was initiated in the 19th National Assembly and the 20th National Assembly, but it is in a pending state. Under the tax law, the current corporate tax law, which only allows companies with domestic fixed business sites to pay taxes, has no way to tax overseas IT companies` profits earned in Korea.
The Ministry of Science, Technology, and Information and Communications has set up a government task force to discuss ways to solve discrimination problems related to foreign Internet companies, such as taxation issues in September of last year. However, in accordance with the amendment of the Act on External Audit last year, it is obligatory to appoint an external auditor to a limited company. In accordance with the amendment of the International Tax Adjustment Act of the Ministry of Strategy and Finance, a "Country Report" containing sales and tax payment status of local corporations has done. However, it is pointed out that the revision of the Corporate Income Tax Law should be done together, so that actual taxation can be done and the beginning of the solution of reverse discrimination can be established.
"In order to flatten the sloping playground, we need first to balance the tax equilibrium," stated Cha Jae-pil, chief executive of the Korea Internet Business Association. "Unlike the EU, which moves quickly and provides solutions, "The government and the National Assembly need to actively move forward so that domestic IT companies can compete fairly with foreign companies," he mentioned.
By Kim Soo Yeon newsnews@
[ copyright ⓒ The Digitaltimes ]
The EU has issued three new proposals that will charge more taxes on digital businesses operating online than on the 21st. Even if there are no companies registered in EU member countries, it will be possible to apply taxation on companies that earn more than EUR 7 million euros (KRW 9.1 billion) or more than 100,000 users in online business.
The EU has explained that the digital businesses that are doing business online are envisioning these three proposals in order to prevent taxes from being transferred to countries with low corporate tax rates and to pay fair taxes. The EU argues that while corporate taxes are not keeping up with the growth of digital corporations, they are paying a lot of profits in Europe, with less tax.
The European Union has proposed tax cuts of 3 percent for companies that earn more than EUR 750 million (KRW 975 billion) in annual revenues or more than EUR 50 million (KRW 65 billion) in Europe as a temporary measure so that it can be imposed. The EU executive committee estimates that if 3% of the tax is imposed, it will be able to collect EUR 5 billion a year. The new tax proposal must be approved by 28 member countries to be finalized.
Therefore, the introduction of the so-called `Google tax` in Europe is accelerating, but the domestic market is still in its place. The legislation was initiated in the 19th National Assembly and the 20th National Assembly, but it is in a pending state. Under the tax law, the current corporate tax law, which only allows companies with domestic fixed business sites to pay taxes, has no way to tax overseas IT companies` profits earned in Korea.
The Ministry of Science, Technology, and Information and Communications has set up a government task force to discuss ways to solve discrimination problems related to foreign Internet companies, such as taxation issues in September of last year. However, in accordance with the amendment of the Act on External Audit last year, it is obligatory to appoint an external auditor to a limited company. In accordance with the amendment of the International Tax Adjustment Act of the Ministry of Strategy and Finance, a "Country Report" containing sales and tax payment status of local corporations has done. However, it is pointed out that the revision of the Corporate Income Tax Law should be done together, so that actual taxation can be done and the beginning of the solution of reverse discrimination can be established.
"In order to flatten the sloping playground, we need first to balance the tax equilibrium," stated Cha Jae-pil, chief executive of the Korea Internet Business Association. "Unlike the EU, which moves quickly and provides solutions, "The government and the National Assembly need to actively move forward so that domestic IT companies can compete fairly with foreign companies," he mentioned.
By Kim Soo Yeon newsnews@