Global Tax Administration Forum Opens

Tax administration offices wield considerable power in any country, albeit to varying degrees. Businesses are especially sensitive to the national tax services, much more than to most ministerial government departments. In nations where the tax administration is not guaranteed political independence, the government may use it as a powerful tool to control or put pressure on companies that rub it the wrong way.

These almighty tax administrators from all across the globe arrived in Korea on Tuesday to participate in the Third Meeting of the OECD Forum on Tax Administration, which will be held in Seoul from September 13 to 15.

Often called the “Tax Administration Olympics,” the forum is a gathering of major countries’ tax commissioners who meet to figure out and set global standards for international taxation issues.

As the world has grown more aware of the importance of international collaboration on taxation, the Forum on Tax Administration was held for the first time in Seville, Spain, in 2004 and then in Dublin, Ireland, last year. Korea is the first Asian nation to host this conference.

Tax commissioners from not only OECD member nations such as the U.S., Japan and Canada but also a substantial number from non-EU power players in the global economy, including China, India, and Russia will be attending. A total of 40 countries will be represented.

Foreign businesses in Korea are also showing great interest in the visit from their home tax administrators. “Korean companies as well as foreign firms are all paying keen attention to the forum. They had been having difficulties up to now since there is no proper consultative channel between international tax authorities,” said Ryu Han-ho, head of the Management Strategy Department at Samsung Economic Research Institute.

On Tuesday, the day before the opening of the “Seoul Forum,” Jeon Goon-pyo, commissioner of the Korean National Tax Service held a series of talks with Mark Everson, commissioner of the U.S. Internal Revenue Service, Michel Dorais, commissioner of the Canada Revenue Agency, and Richard Hecklinger, deputy secretary-general of the OECD. At the meetings, Commissioner Jeon requested cooperation on tax administration for Korean companies operating in the other party’s country and discussed ways to better coordinate international taxation.

During the meeting, Commissioner Everson stated that the U.S. holds a strong [opposing] position on international tax evasion, which received especial attention in relation to the Korean National Tax Service’s decision to levy taxes on the capital gains that Lone Star made from selling off the Korea Exchange Bank.

Aside from the official conferences, Jeon is scheduled to hold another series of talks with commissioners from China and Japan on September 13, the first day of the forum.

bae2150@donga.com