Institutionalization of chaebol American corporations to block remittances in Korea from corporate tax payment to the United States
The Yoon Seok-yeol administration, which follows hardline conservatism in the United States and the United States, is taking shape before the US corporate tax on the basic design of corporate capital transfer by chaebol conglomerates.
According to the Ministry of Strategy and Finance’s report on ‘Reorganization of the Method of Adjusting Double Taxation for Overseas Dividend Income’, the U.S. local subsidiary of a legal entity pays corporate tax to the United States and applies the ‘foreign income exemption (withholding principle)’ to Korea.
A government report said on the 29th that, if this system, which the British Conservative government applied to American corporations in 2009, is applied to Korean conglomerates, Korea's corporate tax will decrease by 780 billion won.
If this system goes into effect, there will be no reason for chaebol US-invested corporations to send overseas reserves to Korea.
When a chaebol US corporation remits money to Korea, a 5-10% dividend tax is applied to the US, so there is no reason to reinvest in the US and remit to Korea.
The U.S. corporate tax rate itself is about 4% lower than that of Korea, so it has a great tax-saving effect.
This report from the Ministry of Strategy and Finance adopts a method of exempting chaebol companies from paying domestic corporate taxes as much as overseas taxes as foreign taxes.
This system was promoted by the Park Geun-hye administration as a system to simplify corporate tax payment, and it will reappear in the Yoon Seok-yeol administration in accordance with the policy to alleviate corporate inconveniences and will be applied as a tax law revision in July.
On the 30th, President Yoon Seok-yeol said, "Last week, major companies announced big plans to invest KRW 1,000 trillion in the next five years and hire 300,000 or more. Should be. I will come forward with difficult and complicated regulations myself,” he said at the meeting of the chief secretaries.
In response to a question about whether the implementation of the supplementary budget could stimulate inflation, President Yoon said, “The small-scale self-employed are out of breath, so we have to think about that first. (Because of inflation concerns), then why don't you do an additional budget?" He replied and ordered the execution of an additional budget of 62 trillion won, which is 10% of the one-year budget.
The chaebols, starting with Samsung and Hyundai Motor, announced on the 24th that they would invest 600 trillion won in the US and South Korea in line with President Biden's visit to Korea and the Korea-US summit, SK LG Lotte, etc., additional investment and USization.
Regarding the announcement of investment in chaebol companies, Kwon Seong-dong, floor leader of the People's Power, said, "In just one day yesterday, an investment plan of more than 588 trillion won was announced, which is equivalent to the national budget for the year. This is the effect of regime change." It was announced on the 25th that no jobs could be created as investment and innovation activities of companies trapped by regulations were shrunk.”
The Anglo-Saxon hardline conservative system of Anglo-Americanism created an arms-boosting economy by strengthening the Cold War by Thatcherism, which defined the union as an enemy, and Reaganomics' two-headed carriage, which abused entrapment.