Apple Inc.’s second official store in Yeouido, western Seoul, is shown in this photo, provided by the company on Feb. 24, 2021.
SEOUL, Feb. 3 (Korea Bizwire) — U.S. tech giant Apple Inc. has been paying significantly lower corporate taxes in South Korea compared to an average of 4 percent in other countries, a lawmaker said Wednesday.
Independent lawmaker Rep. Yang Jung-suk reported that Apple Korea Ltd. paid 62.9 billion won (US$52.1 million) in corporate taxes last year, accounting for 0.9 percent of total sales (7.1 trillion won), according to Apple’s financial reports submitted to the U.S. Stock Exchange and Apple Korea’s audit reports.
In contrast, Apple paid a total of US$14.5 billion in corporate tax in the rest of the world, accounting for an average of 4 percent of total sales ($365.8 billion).
Last year, Apple Korea’s operating profit stood at a mere 1.6 percent, which was only one-eighteenth of the world average of 29.8 percent.
This, as it turned out, was a result of Apple’s Singapore branch spending most of the sales profit on importing products.
Last year, Apple Korea spent 6.7 trillion won, or 95 percent of all sales, on imports.
“Apple Korea is suspected of raising the cost of goods sold exorbitantly high to lower its operating profits,” Yang said. “It is spreading as a new tax evasion technique among global conglomerates.”
Similarly, Netflix in 2020 also raised its cost of goods sold and lowered operating profits by spending 77 percent of its total profits (415.4 billion won) on paying commissions to the company headquarters, resulting in a significantly lower corporate tax of 2.1 billion won.
H. M. Kang (hmkang@koreabizwire.com)
