Foreign technology companies record sales of 4 trillion won in Korea in 2021

Foreign technology companies record sales of 4 trillion won in Korea in 2021

SALES by Google, Apple and other major foreign technology companies in South Korea, increased more than sixfold in 2021 compared to the previous five years, to an estimated 4 trillion won (US$2.9 billion), according to data released on Tuesday.

Yonhap reported that National Tax Service (NTS) data showed the combined taxable income of foreign technology companies totaled 3.98 trillion won last year, or 6.5 times the 612.1 billion won in 2016.

A total of 209 foreign “electronic services” companies filed corporate tax returns with South Korean tax authorities in 2021, up from 66, five years earlier.

Google, Apple and other tech giants are estimated to account for most of the foreign firm’s sales here.

In fact, the top 10 foreign technology companies, reported taxable income totaling about 3.71 trillion won last year, or 93.1 percent of the aggregate total.

The foreign electronic service companies only pay 10 percent value added tax in South Korea because they do not have a “fixed place of business” here.

There are already calls here for corporate income tax to be imposed on these major foreign technology companies because they avoid paying their own taxes on the grounds that their servers are located abroad.

To deal with the situation, the Organization for Economic Co-operation and Development (OECD) is being urged to adopt the so-called Google tax, which requires them to pay a quarter of their “excess” profits to the countries where they do business.

The main opposition representative of the Democratic Party, Jin Sun-mee, who requested the data from the NTS, urged the government to tax these large foreign technology companies more thoroughly.

“The profit structure of multinational technology firms needs to be transparently disclosed, and their indirect profits, through abuse of market dominance, need to be comprehensively taxed.

“The government should prevent different discrimination between multinational companies and domestic firms, by overhauling its international tax system,” said Jin.

source – BERNAMA

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