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'Tax Revenue to Slightly Rise after New Global Corporate Tax Scheme'

Written: 2021-10-14 13:12:49Updated: 2021-10-14 14:37:14

'Tax Revenue to Slightly Rise after New Global Corporate Tax Scheme'

Photo : YONHAP News

Finance Minister Hong Nam-ki, who is in Washington to attend Group of 20(G20) and International Monetary Fund(IMF) meetings, projected tax revenue to rise slightly due to the adoption of a new global corporate tax scheme.

The tax system, set to be ratified at the G20 Summit later this month, consists of Pillar One, which requires multinational companies to also pay taxes in countries where they do business. 

Pillar Two requires countries to enforce a corporate tax rate of at least 15 percent to prevent companies from dodging taxes by operating an affiliate in countries that impose lower taxes.

Following the G20 finance ministers and central bank governors meeting on Wednesday, Hong said one or two South Korean companies are likely to fall under Pillar One, while some 80 overseas firms operating in South Korea will be subject to the scheme.

The minister went on to say that he expected tax revenue to initially fall by hundreds of billions of won due to the South Korean companies, Samsung Electronics and SK Hynix, likely having to pay part of their taxes to foreign governments.

This, as hundreds of billions of won in additional tax revenue, is expected to arise from Pillar Two of the new scheme.

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