The Korean government has made it clear that the standard tax base for manufacturers should be sufficiently lowered even if the global digital tax plan is adopted and a minimum tax rate is introduced worldwide.
The proposal is part of the government’s basic approach to digital tax, which was presented by Yoon Tae-sik, deputy director at the Ministry of Strategy and Finance at the OECD Ministerial Council meeting which was held in Paris, the finance ministry said on Thursday.
At the OECD’s top-level forum, the Korean government demanded the creation of a substance-specific waiver to increase the tax credit rate for manufacturers. He advocated a minimum rate of 15 percent for the Korean exporter, according to the ministry.
The government has also proposed that the digital services tax (DST) in individual countries be abolished and that other similar taxes be banned when the digital tax takes effect.
Previously, the OECD Inclusive Framework on Base Erosion and Profit Shifting (CI) pledged to make fundamental changes to the international corporate tax system released detailed plans for its proposals for pillars 1 and 2 approved by 130 countries of its 139 members.
The Pillar I digital tax aims to ensure that multinationals with global annual revenue exceeding 20 billion euros (27 trillion won) and operating margins of more than 10% pay taxes in all the countries where they provide services and make a profit, not just in their home country. . Samsung Electronics and SK hynix would be subject to Pillar I.
The Pillar II digital tax, a global corporate tax rule of at least 15%, would also apply to multinationals with consolidated sales exceeding 1,100 billion won.
By Minu Kim
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