ASIA: Google Korea, Facebook Korea report income for the first time but in questionable sum.

As published on pulsenews.co.kr, Wednesday 14 April, 2021.

Google Korea reported it had raised 220 billion won ($196.7 million) and Facebook Korea 44.2 billion won from sales in South Korea last year in their first disclosure under a revised law mandating outside auditing on foreign companies of a certain scale.

According to disclosure to the Financial Supervisory Service on Wednesday, Google Korea generated 220.1 billion won in sales last year, up by 3.66 percent from 2019. Operating profit was 15.59 billion won, surging 52.95 percent from a year ago, and net profit at 6.18 billion, jumping 741 percent.

The statement from the multinationals raises questions when compared to domestic IT names Naver and Kakao with over 5 and 4 trillion won in their top lines for 2020.

Google Korea is suspected of having left out app market income from Google Play Store. Google Korea’s mainstay revenue comes from advertisement. It buys ad space from Google Asia Pacific in Singapore and resells them to local customers. Unlike its ad income in Korea, app market sales are recorded as revenue of Google Asia Pacific.

Their disclosure came under the revised Act on External Audit of Stock Companies requiring foreign IT companies operating in Korea with annual sales of over 50 billion won to report financial statements from this year.

Google Korea is engaged in a legal fight with tax authorities to redeem 500 billion won in its corporate tax paid last year by arguing injustice in the tax because its servers are located overseas and cannot be taxed under the Korea-U.S. tax treaty.