[Yoon Administration Tax Law] Strengthening Tax Support for Local Businesses... Introduction of 'Global Minimum Tax'

Government Announces '2022 Tax Reform Plan'
3-Year Extension of Tax Benefits for Localized Companies
Global Minimum Tax to be Implemented from 2024

Deputy Prime Minister for Economic Affairs Choo Kyung-ho attending the plenary session
(Seoul=Yonhap News) Photo by Baek Seung-ryeol = Deputy Prime Minister for Economic Affairs Choo Kyung-ho is seated at the plenary session at the National Assembly in Yeouido, Seoul, on the 21st. From the back row, left to right: Minister of Unification Kwon Young-se, Minister of Justice Han Dong-hoon. 2022.7.21 [National Assembly Photojournalists Group]
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[Asia Economy Sejong=Reporter Lee Jun-hyung] The government is strengthening tax support for companies relocating to local areas to promote balanced national development. From 2024, a global minimum tax will also be introduced to prevent tax avoidance by multinational corporations.

The government announced the "2022 Tax Reform Plan" containing these measures on the 21st. This reform plan was prepared with a focus on economic vitality and public stability. The government intends to rationally reorganize the tax system according to international standards to appropriately adjust the tax burden.

First, the government will extend the application period of the tax special case system for corporate relocation to local areas by three years. The tax special case system for relocation provides income tax and corporate tax reductions to companies moving factories or corporations to local areas. Additionally, the government plans to significantly expand tax reduction benefits for companies relocating factories or headquarters to underdeveloped regions or areas facing employment or industrial crises.

Government's Improvement Plan for Tax Support System for Companies Relocating to Local Areas.
Photo by Ministry of Economy and Finance

From 2024, the global minimum tax will also be implemented to block tax avoidance attempts by multinational corporations. The target applies to multinational corporate groups with sales exceeding 750 million euros (approximately 1 trillion won) in at least two of the previous four years. After introducing the global minimum tax, the government plans to impose additional taxation based on the effective tax rate calculated by country if it falls below the minimum tax rate of 15%.