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Samsung Electronics’ Local Tax Payment Covers 67% of Its Total Tax Paid
Despite 10% Sales Portion
Samsung Electronics’ Local Tax Payment Covers 67% of Its Total Tax Paid
  • By Michael Herh
  • July 24, 2017, 09:45
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The domestic sales of Samsung Electronics' total sales accounted for 10% over the past three years, while the percentage of tax paid in Korea in its total tax rose up to 67% last year.
The domestic sales of Samsung Electronics' total sales accounted for 10% over the past three years, while the percentage of tax paid in Korea in its total tax rose up to 67% last year.

 

The domestic sales of Samsung Electronics' total sales accounted for 10% over the past three years, while the percentage of tax paid in Korea in its total tax rose sharply. Samsung Electronics's domestic tax burdens are expected to grow further as the new administration is planning to increase tax rates on large corporations that exceed 200 billion won (US$180 million) in taxable income by 3 percentage points.

According to Samsung Electronics' earnings report and sustainability report on July 24, Samsung Electronics and its affiliates paid a total of 8.9 trillion won (US$8.0 billion) in tax and utility bills to the Korean government and the governments of other countries last year.

This figure is a 14.1 percent increase from the previous year's 7.8 trillion won (US$7.0 billion) and 61.5 percent increase from 5.4 trillion won (US$4.8 billion) in 2014. Especially, this figure is more than twice as much as 4.5 trillion won (US$4.0 billion) in 2011, five years ago.

By region, 67 percent of the total tax and utility bills were paid to the Korean government last year. The company paid 19% in Asia including China, 13% in the Americas and Europe, and 1% in other regions.

The proportion of the payment of tax and utility bills in Korea inched down from 53% in 2014 to 51% in 2015, but the figure has risen sharply to two thirds of the total last year.

On the other hand, the percentage of Samsung Electronics's domestic sales has remained almost unchanged over the past three years. Rather, the percentage fell sharply compared to five years ago.

Of the total sales (201.9 trillion won or US$181 billion) last year, sales in Korea stood at 20.2 trillion won (US$18 billion), which was only 10% of the total. In addition, the sales in the Americas (68.7 trillion won or US$61 billion) with 34% of the total, sales in Europe and CIS (38.3 trillion won or US$34 billion) with 19% and China (35.6 trillion won or US$32 billion) with 18% eclipsed the sales in Korea, respectively.

Domestic sales accounted for 16% of its total sales in 2011, but fell to 14% in 2012 and have remained around 10%

"In recent years, Samsung Electronics' sales growth has been mostly overseas, but the proportion of taxes and utility bills in Korea has increased in rather than decreased in Korea," said a representative of the Korean business world. “If the company achieves record-high earnings and the government raises the corporate tax rate this year, the company will pay much more tax."