Kwang-Hyeon Lim “It is worth reviewing by a tax professional court… Preparing to introduce a success compensation system” (comprehensive)

(Sejong = Yonhap News) Reporter Lee Dae-hee = On the 13th, National Tax Service Commissioner Lim Kwang-hyun emphasized on the 13th that he has recently lost a series of tax lawsuits against global big tech companies such as Google and Meta, saying, "It is a difficult situation, but we will do everything we can to protect our taxation sovereignty."

Commissioner Lim said this when Kim Tae-nyeon, a member of the Democratic Party of Korea, pointed out during an audit of the National Tax Service by the National Assembly's Finance and Economic Planning Committee that "the tax authorities are losing cases one after another in court."

Rep. Kim said, “Google Korea’s 154 billion won lawsuit ended with some of the plaintiffs winning, and Meta also won the 200 billion won lawsuit.” He asked, “Is this a limitation of the law or a matter of proof?”

In response, Commissioner Lim said, "Global information technology (IT) companies are trying to avoid paying corporate tax by not having a place of business. However, since they make a lot of money in Korea, shouldn't their fair share of taxes be levied at the level of taxation sovereignty? So they are taxing them through various logics such as deemed permanent establishment, but the court's judgment seems to be different."

Commissioner Lim responded to Democratic Party lawmaker Do-Geol Ahn's point out that the loss rate in high-amount tax lawsuits is high, saying, "We need competent lawyers to compete with competent lawyers from large external law firms, but the current system has shortcomings in compensation, etc.," and added, "We are preparing a system that can provide groundbreaking compensation by introducing a success compensation system."

He added, “Attorneys at large law firms take on one case for a long period of time, but there is a problem with public officials (in charge of litigation) where there are personnel changes every 1 to 2 years,” adding, “We are preparing measures to address this.”

When Democratic Party lawmaker Lee Kwang-jae asked, “Isn’t there a need for a specialized tax court because the expertise of the Tax Tribunal, which is a rotating national position, is low?” he responded, “I think it’s time to look into this as well.”

In response to People Power Party lawmaker Kim Sang-hoon's point that the National Tax Service, which runs the non-national tax revenue arrears management group, actually ranks last among 61 government agencies in its own non-national tax revenue collection performance, Commissioner Lim explained, "It has a different nature from other ministries."

He added, “After the tax has already been delinquent, the additional penalty attached to the delinquency is (National Tax Service) non-tax income,” adding, “This will be improved as the law is revised in 2019.”

In response to concerns that the delinquency management group's collection rate will not be high, he said, "I am confident that the delinquent collection rate will increase if we implement integrated collection because we can utilize the infrastructure that the National Tax Service has."