Dishonor Taken Off
On January 23 (local time), the EU excluded South Korea, Panama, the UAE, Mongolia, Barbados, Macao, Tunisia and Grenada from its list of non-cooperative tax jurisdictions.
Earlier, on December 5 last year, the EU included 17 countries, including South Korea, in the list. At that time, the EU pointed out that the South Korean government’s tax incentives for foreign companies investing in foreign investment zones and free economic zones are harmful and constitute discrimination between local and foreign companies or discrimination between residents and non-residents. The EU also said that the South Korean government promised nothing about correcting or repealing the discriminatory elements.
After the inclusion, the South Korean government explained its stance on several different occasions. The government promised to correct some problems and asked the EU to exclude itself from the list in the near future. The eight countries still remain on the EU Grey List, which is a list of countries one step below the list of non-cooperative tax jurisdictions.
The South Korean government explained that its tax incentives for foreign corporate investors will be adjusted in accordance with international standards during this year’s tax reform through discussions with relevant ministries.