National Tax Service Commissioner Visits Welfare Paradise Denmark... Shares Electronic Tax Administration with Hungary

Korea-Denmark and Korea-Hungary National Tax Service Commissioners Meetings Held

Kim Dae-ji, Commissioner of the National Tax Service (right), is taking a commemorative photo with Merete Aiyagor, Commissioner of the Danish Tax Agency.

[Sejong=Asia Economy Reporter Kim Hyunjung] Kim Daeji, Commissioner of the National Tax Service (NTS), met with the local tax commissioner in Denmark, known as a "welfare paradise," to discuss welfare taxation and understand local systems, aiming to utilize this knowledge in establishing future domestic strategies. He also held a meeting with the Hungarian tax commissioner to share electronic tax administration know-how and confirmed the necessity of information exchange to combat offshore tax evasion.

According to the NTS on the 15th, Commissioner Kim visited Copenhagen, Denmark on the 9th and 10th, and Budapest, Hungary on the 13th, consecutively holding bilateral tax commissioner meetings in each location.

Denmark, whose diplomatic relations with Korea were elevated to a "Comprehensive Green Strategic Partnership" in May, is well known as a "welfare paradise" with abundant experience and know-how in welfare taxation. This bilateral commissioner meeting was arranged to review Denmark’s real-time income tracking system and to respond to future domestic welfare taxation demands. The shift in tax administration paradigms from "tax collection" to "welfare services," accelerated by the COVID-19 crisis response, was also taken into consideration.

At the meeting, Korea introduced a roadmap for establishing a real-time income tracking system to support extensive welfare administration, including nationwide employment insurance and social safety net expansion during disaster situations. Denmark emphasized trust and social consensus under the concept that "my taxes return as welfare," presenting details on fiscal revenue supporting welfare and systems for income and asset tracking. The NTS plans to utilize this advanced welfare taxation model as a foundation for formulating related future domestic strategies.

Furthermore, both countries agreed on topics including ▲post-COVID-19 tax audit operation directions ▲future development paths for world-class electronic tax administration ▲sharing sustainable innovation and best practices in preparation for the Fourth Industrial Revolution era.

Kim Dae-ji, Commissioner of the National Tax Service (right), is signing a Memorandum of Understanding (MOU) for mutual cooperation with Ferenc Baguihei, Commissioner of the Hungarian National Tax Service.

Following this, Commissioner Kim also met with the Hungarian tax commissioner, agreeing on cooperation in electronic tax administration, information exchange, and artificial intelligence fields. Hungary, Korea’s first Eastern European diplomatic partner, has seen a rapid increase in Korean corporate investments recently, heightening the need for cooperation between tax authorities to create a favorable tax environment.

Commissioner Kim introduced the successful case of "K-Electronic Tax Administration," a topic of interest to the Hungarian commissioner, pledging to continuously provide related know-how. After discussing measures to counter offshore tax evasion, they agreed to exchange information swiftly and effectively to block offshore tax evasion through abuse of tax treaties. In particular, Commissioner Kim requested active tax support and attention for Korean companies, emphasizing that double taxation issues must be practically resolved through mutual agreement.

An NTS official explained, "We will benchmark welfare taxation systems and institutions of European countries known for their welfare states and share exemplary tax administration cases in the post-COVID-19 era to prepare for the future," adding, "By strengthening cooperative relationships with major European tax authorities, we will create a favorable tax environment for Korean companies operating locally, support local business management, and bolster corporate competitiveness."