20/09/22

SOUTH KOREA: Tech multinationals like Google and Apple report $3bn revenue to authorities.

As published on pulsenews.co.kr, Tuesday 20 September, 2022.

Tech multinational like Google and Apple registered earnings of 4 trillion won ($2.88 billion) from Korean operations last year

According to data obtained by Democratic Party Rep. Jin Sun-mee from the National Tax Service (NTS) on Tuesday, the combined taxable income by foreign tech entities amounted to 3.98 trillion won, 6.5 times greater than 612.1 billion won reported 2016, due to increased electronic services such as games, cloud computing, and apps to customers in Korea.

Global 10-ranking names made up 93.1 percent of the total taxable income reported last year in Korea, or 3.7 trillion won. Out of the revenue earned by foreign entities, most of them were large corporations such as Google and Apple.

The number of companies that filed for tax returns surged to 209 from 66.

These large foreign companies only have to report and pay 10 percent value-added tax in South Korea because they do not have permanent establishments in South Korea.

Lawmakers have been arguing for more effective tax system as multinationals have been avoiding tax dues by claiming their servers are located overseas despite large revenue.

The Organization for Economic Co-operation and Development (OECD) has proposed digital services taxes, also known as “Google tax,” to have tech giants pay a quarter of the income or business profits that are greater than a specified amount to the countries where they are operating businesses.

“We need to make sure that these multinational big tech companies are transparent with their profit structure by revising our foreign company tax system so that domestic companies are not taxed unfairly,” Jin argued.