Correction of Unfairness
According to the National Assembly on Dec. 3, a revised bill of the Value Added Tax (VAT) Act passed in the plenary session on Dec. 2, on which the government plans to impose a 10 percent VAT on the app markets of Google and Apple from July of next year.
Until now, the Korean government didn't levy taxes on apps sold in foreign app markets that don't have domestic servers. This was because the current tax act, according to which taxes can only be levied on companies that have business presences in the country.
This clause has brought controversy over reverse discrimination, because global companies such as Google and Apple don't pay taxes even with enormous profits from app stores, while app developers that post apps on domestic app markets like T-Store have to pay a VAT.
Owing to the revised tax law, the dispute of reverse discrimination will be solved, but there are some concerns over the implementation of the act. It was pointed out that consumers could suffer from indirect disadvantages due to the increased app prices resulting from taxes. In addition, some are raising another issue that it will be app developers, not Apple or Google, that will actually pay the tax.