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An exploratory study on the impacts of International Digital Tax Agreement on Korean Industry  

Lee, Jinhui (정보통신산업진흥원 글로벌 성장 본부)
Kim, Taeyeol (정보통신산업진흥원 글로벌 성장 본부)
Publication Information
Journal of Platform Technology / v.9, no.4, 2021 , pp. 10-31 More about this Journal
Abstract
The digital tax, recently referred to as the Google tax was finally agreed at the 31st General Assembly of the OECD (October 8, 2021) with full support by 136 countries and will take effect from 2023. The purpose of this study is to analyze the digital tax prepared by the OECD for global MNEs, and to suggest the impacts on the Korean industry and to present the Korean governmental countermeasures. As the first study, we analyzed the international agreement on digital tax. In results, we found that even if global MNEs do not set up a business operation in overseas countries, if sales and profits are generated, 25% of the excess profit is borne as tax (pillar 1), and when MNEs do business in all the countries, they are liable to at least a 15% tax (pillar 2). We think that countries around the world have prepared a minimum countermeasure to protect their companies in anticipation that global MNEs will easily encroach on their markets in the future. As the second study, in order to discover the reason why the MNEs are so strong, we investigated the trends of Google and B2B SaaS companies in details. In results, we discovered that the global MNEs establishes a digital platform partnership ecosystem that enables them to enter foreign markets easily and expand rapidly. In conclusion, as a countermeasure for the Republic of Korea, governmental policies were proposed at the corporate (startup nurturing), industry, and national level respectively.
Keywords
OECD Digital Tax; Digital Economic Environment; Global MNE(Multinational Enterprise); Google Business; B2B SaaS; IaaS; PaaS; Product-led Growth; Bow Tie Model; Digital Platform Ecosystems; Partnership Program;
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