Due to a Plunge in Profits
The combined corporate taxes to be paid by listed firms of South Korea's top 10 business conglomerates more than halved as their profits dropped in the first six months.
The combined operating profit of 96 listed firms of the country’s 10 largest business groups in terms of assets came to 24.95 trillion won (US$20.79 billion) in the first half, down 51.3 percent from 51.19 trillion won (US$42.66 billion) a year ago, according to the data from industry tracker Chaebul.com on Sept. 29. Their pre-tax profit also shrunk 44.3 percent from 53.81 trillion won (US$44.84 billion) to 29.98 trillion won (US$24.99 billion) over the same period.
In line with the declining profit, the 96 companies will pay a combined 5.97 trillion won(US$4.98 billion)in corporate tax next year, down 55.1 percent from 13.29 trillion won (US$11.08 billion)this year.
The combined corporate taxes to be paid by listed companies of the top four business groups, including Samsung, SK, LG and Hanwha, for the first half of this year will be less than half of the figure for the same period last year.
For listed firms of Samsung Group, the nation's largest family-run business conglomerate, the combined pre-tax profit dropped 58.4 percent on-year from 27.49 trillion won (US$22.91 billion) to 11.44 trillion won (US$9.53 billion) for the January-June period, while the corporate taxes plunged 70.9 percent from 7.26 trillion won (US$6.05 billion) to 2.11 trillion won (US$1.76 billion). In particular, Samsung Electronics Co. reported a pre-tax profit of 8.46 trillion won (US$7.05 billion) for the first half, down 62.7 percent from 22.66 trillion won (US$18.89 billion) a year earlier. As a result, the company’s corporate taxes plummeted 78.7 percent from 6.13 trillion won (US$5.11 billion) to 1.31 trillion won (US$1.09 billion) over the same period.
The combined pre-tax profit of listed firms of SK Group came to 5.54 trillion won (US$4.61 billion) in the first half of this year, down 59.6 percent from 13.71 trillion won (US$11.43 billion) a year ago. Their corporate taxes also slid 72.9 percent from 3.12 trillion won (US$2.60 billion) to 847.20 billion won (US$706 million). This was largely due to the fact that the corporate taxes of SK Hynix Inc., the group's crown jewel, dropped a whopping 82.9 percent from 2.70 trillion won (US$2.25 billion) to 461.80 billion won (US$384.83 million) as the pre-tax profit shrunk 82.3 percent from 10.01 trillion won (US$8.34 billion) to 1.78 trillion won (US$1.49 billion).
The combined pre-tax profit of listed companies of LG Group stood at 1.94 trillion won (US$1.62 billion), down 31.8 percent from 2.84 trillion won (US$2.37 billion), while the combined corporate taxes dropped 52.9 percent from 731.90 billion won (US$609.92 million) to 344.80 billion won (US$287.33 million).
For listed firms of Hanwha Group, the combined pre-tax profit declined 70.7 percent from 1.23 trillion won (US$1.03 billion) to 361.90 billion won (US$301.58 million), while the combined corporate tax decreased as much as 81.1 percent from 309 billion won (US$257.50 million) to 58.40 billion won (US$48.67 million).
The combined pre-tax profit of GS Group amounted to 869.10 billion won (US$724.25 million), down 19 percent, while the corporate taxes slid 14.8 percent to 174.40 billion won (US$145.33 million).
The combined pre-tax profit of listed companies of Lotte Group grew 19 percent to 1.31 trillion won (US$1.09 billion) but the combined corporate taxes decreased 15.2 percent to 356.70 billion won (US$298 million). A company can pay less corporate taxes depending on a change in deductions and exemptions, though its pre-tax profit increases.
In contrast, the combined corporate taxes of Hyundai Motor Group surged 84.9 percent from 714.70 billion won (US$595.58 million) to 1.32 trillion won (US$1.10 billion) in the first half of this year as the combined pre-tax profit rose 57.3 percent from 3.76 trillion won (US$3.14 billion) to 5.92 trillion won (US$4.94 billion).
The combined corporate taxes of POSCO Group also grew 2.2 percent from 545.40 billion won (US$454.50 million) to 557.30 billion won (US$464.42 million) as the combined pre-tax profit went up from 2.0332 trillion won (US$1.6943 billion) to 2.0334 trillion won (US$1.6945 billion).
Hyundai Heavy Industries Group received a corporate tax refund of 83.50 billion won (US$69.58 million in the first half of last year but it needs to pay a corporate tax of 16.80 billion won (US$14 million) in the first half of this year. The combined pre-tax profit of the group slightly dropped from 222.20 billion won (US$185.17 million) to 219.50 billion won (US$182.92 million) over the same period.