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Korean Gov't to Investigate Tax Evasion Allegations against Global ICT Companies
Korean ICT Firms Suffer Reverse Discrimination
Korean Gov't to Investigate Tax Evasion Allegations against Global ICT Companies
  • By Jung Suk-yee
  • October 10, 2018, 17:09
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Minister of Science and ICT You Young-min answers questions from lawmakers during a parliamentary inspection of his ministry on Oct. 10.

You Young-min, South Korea’s minister of science and ICT, said on Oct. 10 that his ministry would review a joint investigation with other government agencies on the alleged tax evasion by global ICT companies such as Google, Apple and Facebook.

The minister disclosed the plan during an inspection of his ministry by the National Assembly’s Science, Technology, Information, Broadcasting and Communications Committee held at the Gwacheon Government Complex. The inspection focused on the issue of tax evasion by global ICT companies.

Rep. Park Sun-sook of the Bareun Future Party referred to the so-called “reverse discrimination” that Korean ICT companies suffer in Korea vis-a-vis their global rivals such as Google and Facebook. “The European Union is pushing to impose taxes on Google and Facebook,” she said, urging the ministry to work with the Finance and Economy Ministry and the Fair Trade Commission to launch a joint investigation into these global ICT companies operating in Korea.

Rep. Kim Kyung-jin of the Democratic Peace Party also pointed out, "We must set up an organization tasked to prepare government measures against global ICT companies." He also pointed out the need to find out the sales volume of these companies through domestic credit card firms.

Regarding this, Minister You Young-min said, "We recognize the need to tackle the problem. We will consider conducting a joint investigation into it with the Ministry of Finance and Economy, the Financial Supervisory Commission and the Fair Trade Commission.”

Concerning network usage fees, the issue of reverse discrimination against domestic companies was also pointed out.

Rep. Lee Sang-min of the ruling Democratic Party noted that "global content providers (CPs) are using domestic telecom networks free of charge, transferring the costs of expanding and upgrading the networks to domestic telecom companies and content providers. “There should be an institutional arrangement in place to force global CPs to shoulder their share of the costs commensurate with their profits," Lee said.

Rep. Roh Ung-rae, chairman of the parliamentary committee, also urged the minister to ensure that domestic companies and their global rivals are subject to equal regulations.

Kookmin University professor Lee Tae-hee recently announced that Google is estimated to have posted 4.9 trillion won in sales in Korea last year.

Google is believed to have paid only about 20 billion won (US$17.6 million) in taxes in Korea, much smaller than the 73.4 billion won (US$64.7 million) and 30 billion won (US$26.4 million) that Naver and Kakao paid, respectively, in network fees in 2016.