Friday, April 19, 2024

S.Korea seeks adjustment to EU’s carbon tax rules to ease corporate burdens

South Korea asked the European Union on Wednesday to recognise the country’s own carbon credit certification system regarding the EU’s new carbon border tax mechanism in an effort to prevent unnecessary burdens on companies, Seoul’s Finance Ministry said.

South Korea’s First Vice Finance Minister Kim Byoung-hwan made the request during a meeting with Gerassimos Thomas, Director-General in the Directorate-General for Taxation and Customs Union at the European Commission, in Seoul.

The Carbon Border Adjustment Mechanism (CBAM) calls for levying an import charge on steel, cement, electricity, fertiliser, aluminium and other related items equivalent to their carbon emissions from production.

The transition period for the new mechanism began last month before the full implementation in 2026, Yonhap news agency reported.

Kim said South Korea “shares the need for efforts to respond to climate challenges by implementing the CBAM and other regulations, but they should not add unnecessary burdens on companies”.

He then called on the EU to recognise South Korea’s own carbon credit system, which will ease corporate burdens of double taxation.

Thomas said the EU will consider opinions from the South Korean government and businesses, and will continue close consultations on the issue.

The two officials also discussed ways to boost cooperation on base erosion and profit shifting, or BEPS, which refers to multinationals’ tax planning strategies to avoid taxes, according to the Ministry.

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