Im Kwang-hyun Says "Tax-Specialized Court Worth Reviewing... Preparing to Introduce Contingency Fees"

National Tax Service Commissioner Im Kwang-hyun emphasized today (the 13th) regarding the recent consecutive losses in tax lawsuits against global big tech companies such as Google and Meta, "Although it is a difficult situation, we will do everything we can to protect our taxation sovereignty."

Commissioner Im made the remarks during the National Tax Service audit by the National Assembly's Strategy and Finance Committee after Democratic Party of Korea lawmaker Kim Tae-nyeon pointed out that "tax authorities are consecutively losing lawsuits in court."

Lawmaker Kim asked, "The 154 billion won lawsuit involving Google Korea ended with a partial victory for the plaintiff, and Meta also won the 2,000 billion won lawsuit. Is this a limit of legal principles or a problem of proof?"

In response, Commissioner Im stated, "Global IT companies are trying to avoid paying corporate taxes by not establishing business places. Nevertheless, since they make a lot of money in Korea, we believe that a fair share of taxes should be imposed in terms of taxation sovereignty, so we have been taxing them through various logics such as deemed permanent establishments, but the court's judgment seems to be different."

Regarding Democratic Party lawmaker Ahn Do-걸's point about the high loss rate in high-value tax lawsuits, Commissioner Im said, "To counter capable attorneys from large external law firms, we also need capable lawyers, but the current system has shortcomings in areas such as compensation. We are preparing a system to provide groundbreaking compensation, such as introducing a contingency fee system."

He added, "Lawyers at large law firms handle a single case for a long period, whereas public service litigation officers face personnel rotations every one to two years. We are preparing measures to address these issues."

When Democratic Party lawmaker Lee Kwang-jae asked, "Given that the Tax Tribunal, which operates national civil service rotational postings, lacks expertise, isn't a tax-specialized court necessary?", Im replied, "I think the time has come to review this matter as well."

In response to People Power Party lawmaker Kim Sang-hoon's pointing out that "while the National Tax Service operates a delinquent non-tax revenue management team, its own non-tax revenue collection performance ranks last among 60 government agencies" (Note: the text says 61 agencies), Commissioner Im explained, "Its nature differs from other ministries."

He added, "Non-tax revenues [of the National Tax Service] are surcharges added to delinquencies after they have already occurred. This situation will improve as the law was amended in 2019."

Expressing confidence regarding concerns that the collection rate of the delinquent management team may not be high, he stated, "If we conduct integrated collections, we can utilize the infrastructure possessed by the National Tax Service, so I am confident that the delinquent collection rate will rise."

(Photo: Yonhap News)
※ Please note: This article was translated by AI and may contain errors.