Google companies

Foreign tech firms record some 4 tln won in Korean sales in 2021

SEJONG, Sept. 20 (Yonhap) — Sales of Google, Apple and other foreign tech giants in South Korea increased more than sixfold in 2021 from five years earlier to flirt with 4 trillion won ( $2.9 billion), according to data released on Tuesday.

The combined taxable income of overseas technology companies was 3.98 trillion won last year, 6.5 times the 612.1 trillion won in 2016, according to data from the National Tax Service (NTS).

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

But Google, Apple and other tech titans are estimated to account for the bulk of these foreign companies’ sales here.

Indeed, the top 10 overseas technology companies reported taxable income totaling about 3.71 trillion won last year, accounting for 93.1 percent of the whole.

These foreign electronic service companies only pay 10% value-added tax in South Korea because they have no “fixed places of business” here.

There have been calls here to impose corporate taxes on foreign tech giants because they avoid paying their dues, citing that their servers are located overseas.

In order to deal with such a situation, the Organization for Economic Co-operation and Development has been pushing to pass a so-called Google tax, which calls for paying a quarter of their “excess” profits in taxes to the countries where they do business. business.

Representative Jin Sun-mee of the main opposition Democratic Party, who requested the data from the NTS, called on the government to tax foreign tech giants more stringently.

“The profit structures of multinational tech companies should be transparently disclosed and their indirect earnings through the abuse of market dominance should be taxed thoroughly,” Jin said. “The government should prevent reverse discrimination between multinationals and national companies by revising its international tax system.”
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