Google revenue

Tech multinationals like Google and Apple bring $3 billion in revenue to Korean authorities

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[Graphics by Song Ji-yoon]

Multinational tech like Google and Apple reported 4 trillion won ($2.88 billion) in revenue from Korean operations last year

According to data obtained by Democratic Party Representative Jin Sun-mee of the National Tax Service (NTS) on Tuesday, the combined taxable income of overseas tech entities was 3.98 trillion won, 6.5 times higher than 612.1 billion won reported in 2016, due to increase in electronic services such as games, cloud computing and applications to customers in Korea.

The 10th-ranked names in the world accounted for 93.1% of Korea’s total taxable income reported last year, or 3.7 trillion won. Of the revenues generated by foreign entities, most were large companies such as Google and Apple.

The number of businesses that filed tax returns rose from 66 to 209.

These large foreign companies only need to declare and pay 10% value added tax in South Korea, as they do not have permanent establishments in South Korea.

Lawmakers have argued for a more efficient tax system as multinationals avoid taxes by claiming their servers are located overseas despite earning large revenues.

The Organization for Economic Co-operation and Development (OECD) has proposed Digital Services Taxes, also known as the Google Tax, for tech giants to pay a quarter of company revenues or profits above a specified amount to the countries where they operate businesses.

“We need to make sure that these big tech multinationals are transparent about their profit structure by overhauling our foreign corporate tax system so that domestic companies aren’t taxed unfairly,” Jin said.

By impulse

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