[Invest&Law] The Golden Market for Tax Services Opens: Law Firms Race to Recruit International Tax Experts

June Deadline Approaches for 'Global Minimum Tax' Filing
Around 200 Major Export Companies Affected
Tax Jurisdiction Battles Now Unavoidable
Leading Law Firms Including Bae, Kim & Lee, Shin & Kim, and Hwawoo
Accelerate Recruitment of International Tax Experts
Tax Advisory and Overseas Investment Structuring
Responding to Arbitration and Tax Audits

As the deadline for reporting the 'global minimum tax' for companies with significant overseas direct investments, such as Samsung Electronics and SK Hynix, approaches in June next year, major law firms are accelerating their response. With increasingly complex tax risks that could escalate to international arbitration, competition to recruit tax experts has intensified.

According to industry sources on September 10, Samsung Electronics disclosed in last year's audit report that it would have to pay 430 billion won in global minimum tax to the Vietnamese tax authorities alone. SK Hynix also set aside an additional 1 billion won in global minimum tax, focusing on its subsidiaries in Hong Kong and Poland. The global minimum tax is an internationally coordinated system introduced to prevent multinational corporations with annual global revenue of at least 750 million euros from establishing entities in low-tax jurisdictions to avoid taxes. The business community expects that 200 to 300 domestic companies will be affected. The scope covers not only semiconductors but also the entire range of export-driven industries such as automobiles, secondary batteries, steel, and chemicals.

Major Law Firms Compete to Recruit International Tax Experts

With about 200 of Korea's leading export companies likely to fall under the global minimum tax regime, the demand for tax-saving strategies and legal advisory services is expected to grow significantly. For law firms, tax cases represent a lucrative market, as they can expand their services from advisory to tax appeals and litigation. Hiring just one international tax expert enables a firm to provide global tax advisory, design overseas investment structures, respond to arbitration, and handle tax audits for large companies.

Earlier this month, Bae, Kim & Lee LLC recruited Lee Kyungkeun, a prominent authority in international taxation, as an advisor, and Cho Minkyoung, a New York State attorney, as a new member. Advisor Lee played a leading role in drafting the initial transfer pricing tax system during the enactment of the 'Act on the Coordination of International Tax Affairs,' and previously served as Director of International Taxation and Corporate Taxation at the Ministry of Economy and Finance. He later led international tax and M&A advisory at Yulchon LLC. Attorney Cho is also a practical expert who handled international trade and transactions at the Ministry of Justice's International Legal Affairs Division. Previously, Bae, Kim & Lee also strengthened its tax lineup by bringing in former Korea Customs Service Commissioner Lim Jaehyun as an advisor. Advisor Lim is recognized as a 'classic tax expert,' having held key positions at the National Tax Service and served as Director General of Tax Policy at the Ministry of Economy and Finance.

Shin & Kim LLC also revamped its tax group on September 1 by appointing former Seoul Regional Tax Office Commissioner Lim Sungbin as an advisor. Advisor Lim has held key positions in the National Tax Service's investigation sector for 32 years and has experience at the Blue House Economic Secretariat, the Tax Tribunal, and the UK’s HM Revenue & Customs, making him an expert in all aspects of international taxation. Shin & Kim simultaneously launched the 'Corporate Strategy and Tax Center,' with former Seoul National University Law School Professor Lee Changhee as its inaugural director. Professor Lee is regarded as a leading figure in Korean tax law academia, and Shin & Kim aims to further enhance its corporate tax strategy advisory through this initiative.

Hwawoo LLC bolstered its international tax capabilities in the first half of this year by bringing in foreign attorney Shim Jaejin, attorney Ryu Sunghyun, and attorney Lee Hwangoo as partners. Attorney Shim is a veteran with over 35 years of experience at global law and accounting firms, having worked at PwC in New York and Moscow, Arthur Andersen in Los Angeles and Moscow, and led international tax teams at Yulchon and Kwangjang. Attorney Ryu, a former National Tax Service official, has secured victories in high-profile tax litigation and played a key role in Supreme Court precedents, including the Irish subsidiary patent royalty case. Attorney Lee has also built a diverse track record in international and financial taxation.

The 'Golden Market' for Tax Services Opens for Law Firms

Yonhap News

Within the legal industry, some believe that the uncertainty caused by the United States clashing with the Organization for Economic Cooperation and Development (OECD) over the global minimum tax is actually a favorable development. President Donald Trump has vowed to neutralize the digital tax and defend domestic big tech companies, but paradoxically, this makes tax disputes between U.S. companies and multinationals operating in Korea inevitable. In particular, as European and Asian countries where Korean companies operate are actively introducing digital taxes, cross-border tax conflicts are expected to become more frequent. A law firm representative commented, "Companies have no choice but to increase their demand for international tax and arbitration advisory services in preparation for potential disputes."

Not only international taxation but also domestic tax enforcement is becoming stricter. The National Tax Service conducted 3,095 irregular tax audits last year, imposing 3.3895 trillion won in taxes. This represents a 5.7% increase in the number of cases and a staggering 30.1% surge in the amount imposed compared to 2023. Tax appeals have also risen sharply. The number of cases filed with the Tax Tribunal jumped from 12,795 in 2020 to 16,781 in 2023. Even last year, 9,811 cases were filed, remaining at a high level. An attorney at a major law firm stated, "As the government intensifies tax audits targeting companies, the demand for tax litigation and appeals is naturally and steadily increasing."