Did Google Korea Pay Enough Corporate Taxes in 2024?
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Synopsis
In 2024, Google Korea faced scrutiny for its corporate tax contributions, paying only a fraction of its expected tax obligations. Lawmaker Choi Soo-jin highlighted concerns over tax avoidance by tech giants, emphasizing the impact on local businesses and the technology sector. Meanwhile, Google announced compliance with South Korean security requirements.
Key Takeaways
- Google Korea paid significantly less in corporate taxes than expected.
- Local firms face challenges due to lower tax contributions from tech giants.
- The tax gap raises concerns about fair competition.
- Google has committed to complying with South Korean national security directives.
- Monitoring tax practices of global companies is crucial for the domestic economy.
Seoul, Oct 1 (NationPress) Google Korea, the South Korean branch of the American tech giant Google, disbursed 17.2 billion won (equivalent to $12.2 million) in corporate taxes last year, as revealed by a lawmaker on Wednesday. This figure represents merely a small portion of what local South Korean corporations would typically be required to pay.
Rep. Choi Soo-jin of the People Power Party stated, "Google Korea should have been liable for 676.2 billion won in taxes, based on its estimated sales figures," as reported by the Yonhap news agency.
Choi referenced a study conducted by Professor Jeon Seong-min from Gachon University, which suggested that Google Korea's revenue in 2024 could reach as much as 11.3 trillion won.
By applying the corporate tax-to-revenue ratio of Naver Corp., which stands at 5.9 percent, Choi contended that Google Korea's tax obligation should have indeed been 676.2 billion won.
Last year, Google Korea accounted for 31.2 percent of the nation’s data traffic, significantly surpassing Naver's 4.9 percent.
Despite this, Google Korea reported a mere 386.9 billion won in revenue, in contrast to Naver's 10.7 trillion won, with Naver paying 390.2 billion won in corporate taxes for 2024.
Choi emphasized, "Ignoring the issues of domestic revenue minimization and tax avoidance by global tech giants like Google will severely impede fair competition with local firms. Over time, this could adversely affect the domestic information and communications technology sector."
In a related development, Google announced on Tuesday that it would comply with the South Korean government's security directives by removing geographical coordinates for the Korean region from its map, thus facilitating the approval process for exporting high-precision map data abroad.
"We are unveiling two additional measures to alleviate any outstanding national security apprehensions from the government," stated Cris Turner, Google's vice president for government affairs and public policy, during a press briefing in Seoul.
"To enhance our world-class navigation service in Korea, we are strengthening our long-term collaboration with local technology providers," he added. "Additionally, we will eliminate latitude and longitude coordinates for locations in Korea, as per the requests from the Seoul government."
Point of View
It is crucial to highlight the ongoing challenges posed by global tech companies regarding fair taxation. The disparity in tax contributions raises concerns about equitable competition for domestic firms, which could stifle innovation and growth in South Korea's tech ecosystem.
NationPress
01/10/2025
Frequently Asked Questions
How much corporate tax did Google Korea pay in 2024?
Google Korea paid 17.2 billion won, equivalent to $12.2 million, in corporate taxes in 2024.
What should Google Korea's tax liability have been?
According to estimates, Google Korea's tax liability should have been 676.2 billion won based on its revenue.
What percentage of data traffic in South Korea does Google Korea account for?
Google Korea accounted for 31.2 percent of the country's data traffic last year.
What measures is Google taking regarding national security?
Google announced it will remove latitude and longitude coordinates for locations in Korea to comply with national security requirements.
What impact does tax avoidance by tech giants have on local firms?
Tax avoidance by global tech companies can hinder fair competition and negatively affect the domestic information and communications technology ecosystem.
