How Did Korea End up on EU’s Tax Haven Blacklist?
The European Union has placed Korea among 17 countries on its blacklist of offshore tax havens alongside such far-flung island nations as Samoa and African banana republics like Namibia. Korea is the only major economy on that shameful list.
The EU defines offshore tax havens as countries that charge unusually low or no taxes and are hotbeds of corporate tax evasion and hidden assets. But Korea is a member of the G20 and the world's seventh-largest trading country. This is simply mind-boggling.
The EU's decision does not meet global standards and lacks common sense. It accuses Korea of "potentially harmful preferential tax regimes," but its criteria for the decision are arbitrary and do not conform with those used by the OECD and other international organizations. None of it makes any sense.
Korea has tax treaties with all 28 members of the EU as well as the U.S. and Japan. It has fully opened its economy to foreign investors and is the only country to have free trade agreements with the world's top 15 economies, including the EU. It is considered a model country when it comes to free trade, yet it has been blacklisted as an offshore tax haven. No company or wealthy investor would turn to Korea to evade taxes or hide assets.
What was the government doing when the EU reached this absurd decision? The EU has been working on the blacklist since September last year and asked 92 countries to submit information. The Ministry of Strategy and Finance claims the EU did not give it enough time to rebut the accusations, but surely it should have been more active. Korea has around 30 government officials at EU headquarters in Brussels. What have they been doing? Why is taxpayers' money being spent to keep them there? What on earth were they thinking?