Korea To Impose Tax On E-Commerce

by Mary Swire, Tax-News.com, Hong Kong

06 February 2002

The Korean Ministry of Finance and Economy announced on Monday that it is considering introducing a tax on e-commerce activities.

According to the Ministry, the new tax will likely be imposed on downloaded products and on items ordered online and physically delivered. A tax on airmiles, which are given away by credit card companies and gas stations, and which can be redeemed for free or discounted flights is also being considered.

Two study groups, one launched by the Finance Ministry, and one by the state-run Korea Institute of Public Finance, are looking into the problems of how and where to tax e-commerce activity, and all eyes are on the United States and other Western countries as they too grapple with the vexed question of internet taxation.

The Ministry of Finance and Economy has stated that it will present plans for the taxation of international e-commerce when it has heard OECD recommendations on the subject, which it is thought will be some time in June.

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