New Tax Reporting System
National Tax Service Director nominee Han Seung-hee has vowed to step up inspections into intelligent tax evasion tactics employed by multinational companies, including global tech giant Oracle which has been recently charged 300 billion won (US$263.5 million) for corporate tax evasion in South Korea.
Han made the vow in a document submitted to the National Assembly on June 25 for his confirmation hearing. He said, “A comprehensive reporting system for international transactions by multinational firms will be implemented in December. So, the agency is currently preparing for the new system, such as guidelines of taxpayer report and details and establishment of electronic tax filing system.”
The comprehensive international transaction reporting system is part of the base erosion and profit shifting (BEPS) project led by the Organization for Economic Cooperation and Development (OECD). Multinational companies often resort to an expedient to evade taxes by transferring funds to countries of low taxation and the OECD has required them to hand in details of their international transactions to the national tax service in each country starting from this year to prevent tax evasion. Han showed his will to expand monitoring on possible tax evasion by foreign companies based in South Korea.
He also added, “The agency now properly manage value added tax reports on electronic services provided in other countries, including overseas app market transactions, which have been implemented from July 2015. I will also work on increasing the number of employees to manage international transaction reports and to draw a mutual agreement to resolve tax disputes.”