Proposed Bill: Partial Amendment to the Customs Act

Proposed by Rep. Park Soo-young (People Power Party)

● Proposed by Rep. Park, this bill aims to extend tariff exemptions on imported aircraft parts until the end of 2029 to alleviate costs in aircraft manufacturing and maintenance, which rely heavily on global supply chains.

Under the current law, import tariffs on aircraft parts are fully exempt until the end of this year. Starting next year, the exemption rate is set to decrease by 20 percentage points annually, with all benefits ending by 2029. However, if Rep. Park's amendment is passed, the full 100 percent exemption will remain in place through the end of 2029. This legislative effort stems from concerns that diminishing tariff exemptions could undermine the overall competitiveness of Korea's aviation industry.

Proposed Bill: Partial Amendment to the Corporate Tax Act

Proposed by Rep. Lee In-seon (People Power Party)

● Rep. Lee has introduced a bill to address significant tax revenue losses caused by global tech giants' tax evasion. This proposed amendment would require major foreign tech companies to report their domestic sales accurately, allowing appropriate tax rates to be applied.

According to Rep. Lee, Google's annual revenue in South Korea is estimated to exceed 12 trillion won ($8.65 billion). However, Google's 2022 audit report for its Korean operations shows only 3.65 billion won in revenue and 234 billion won in operating profit. The corporate taxes Google paid in the last two years were 15.5 billion won and 16.9 billion won, amounts comparable to those paid by small to medium-sized enterprises. Despite Google dominating over 90 percent of the domestic Android app market and having a significant impact on the local IT sector, there is a notable discrepancy in its reported revenue and tax payments.

Critics point out that Google attributes the majority of its app market revenue to its Singapore-based entity, Google Asia-Pacific, excluding it from domestic figures. In 2020, the National Tax Service reported that 134 global IT firms paid a combined total tax of 23.76 billion won in Korea -- less than the 45 billion won paid by Naver alone.

This bill aims to close that gap, providing a legal framework to ensure these companies contribute fairly to Korea's tax system.

Pending Bill: Partial Amendment to the Act on the Guarantee of Employees’ Retirement Benefits

Proposed by Rep. Han Jeoung-ae (Democratic Party of Korea)

● This amendment aims to reform the national pension plan to boost reliability and increase profit rates. It expands and reorganizes the previous SME Retirement Pension Fund Plan into a trust-based model named the Corporate Retirement Pension Fund Plan and mandates the National Pension Service to operate the National Retirement Pension Fund.

Promulgated Bill: Enforcement Decree of the Act on Corporate Governance of Financial Companies

Competent Authority: Financial Services Commission

● This bill specifies the responsibilities assigned to executives via the responsibility map and the comprehensive management duties of representative directors to ensure corporate directors faithfully fulfill their role in monitoring internal control.

Administrative Announcement: Partial Amendment to the Enforcement Decree of the Real Estate Investment Company Act

Competent Authority: Ministry of Land, Infrastructure and Transport

● This amendment broadens the investment scope of REITs to include new assets with high demand and profitability, including structures installed on land or buildings, such as data centers and industrial sites, and real estate financial products, such as asset-backed securities and mortgage-backed securities, in addition to traditional real estate assets, such as offices and residential properties.

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The Korea Herald republishes a weekly legislative report by local law firm DR & AJU LLC to provide the latest information on bills approved, proposed, pending and set to be promulgated. -- Ed.

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For any queries about the bills, contact cr@draju.com