[Iclickart]
South Korea expressed regrets and vowed a concerted government campaign against the European Union's decision to put it on a blacklist of 17 tax heavens which face restrictions for not doing enough to deal with offshore avoidance schemes.
The Finance Ministry argued that the decision lacked procedural adequacy in its evaluation process because South Korea was not given an opportunity to explain its system. The ministry accused the EU of imposing its own tax standards on non-EU member states.
"We are establishing an effective information exchange system through extensive tax treaties," the ministry said in a statement, adding South Korea guarantees "high transparency" in its tax administration. It also stressed that South Korea had proposed a joint inspection by 2018 before improving its system by agreement.
The blacklisted countries would face restrictions from receiving EU funding and investments from the European Investment Bank. EU member states can decide on imposing their own sanctions. The list was based on three main components: tax transparency, fair tax competition and implementation of Base Erosion and Profit Shifting (BEPS), which is a way of battling tax avoidance created by the OECD.
The finance ministry said that EU standards were different from the BEPS project which covers areas with high mobility such as financial and service sectors, not the manufacturing industry, although the block agreed on the results of harmful tax assessment adopted at OECD and G20 meetings in February.
reporter
Lim Chang-won
cwlim34@ajunews.com
