The National Tax Service "pursues enforcement penalties" on tax avoidance of foreign companies.

Netflix Korea "Sales of 415.4 Billion KRW in 2020 Operating Profit of 8.8 Billion KRW"
"Only buying and distributing membership to headquarters for a fee"
The National Tax Service will collect KRW 80 billion after paying KRW 2.2 billion in corporate tax...Dissatisfaction
Refusal to submit tax data during the tax audit...The fine will be neutralized.

[Anchor]
In the wake of the parliamentary audit, tax avoidance behavior of foreign companies such as Netflix and Google is repeatedly under fire.

Sales and profit reduction are also a problem, but we are using a strategy to respond to the request for submission of tax data during the tax audit.

The IRS is pushing to impose enforcement penalties.

Lee Seung-eun reports.

[Reporter]
Netflix Korea announced an operating profit of 8.8 billion won in sales of 415.4 billion won in 2020.The logic is that the corporate tax paid

is 2.17 billion won and the commission was paid to the headquarters, and the membership was bought and distributed to Korean users, so the cost of sales is high and there is not much profit.

The following year, the National Tax Service collected 80 billion won through a tax audit.

In the objection lawsuit, the Tax Tribunal only recognized 2 billion won, and the remaining 78 billion won is under litigation.

[Kim Tae-nyeon / National Assemblyman (Democratic Party of Korea): There are even about five multinational corporations that make more than five trillion won in sales to guide corporate taxes.]

Google Korea also announced the payment of 360 billion won in sales and 15.5 billion won in corporate tax last year, saying the server is overseas.

It is only 4% to 5% of Naver or Kakao's sales.

[Koo Ja-geun / National Assemblyman (Power of the People): Many committee members say that the estimated sales (of Google Korea) should be about 12 trillion won and at least 600 billion won in corporate tax should be paid..]

In the National Tax Service's audit, tax avoidance by foreign companies such as Big Tech became a hot topic.

The problem is that there is not a proper countermeasure even if you do not submit tax data.

If the National Tax Service does not comply with a tax audit or avoids submitting tax data, it can impose a fine of up to 50 million won.

However, there were only two fines imposed on foreign companies last year, which was only 66 million won.

Compared to four years ago, the number of cases decreased by 98% and the amount decreased by 96%.

This is because the court ruled that only one tax investigation recognized a fine of 1.8 billion won for foreign companies that refused to submit 92 data, saying there was no data in Korea.

[Lee Jong-wook/ National Assemblyman (Power of the People): This is a case in which the National Tax Service lost by highlighting the flaws in the taxation of the National Tax Service by submitting data favorable to the company only to the court. / It is said that there is a widespread perception that let's endure as much as possible, and that we only need to pay a fine of several thousand won.]

Accordingly, the National Tax Service is pushing for a system of enforcement penalties that can be imposed repeatedly.

[Kang Min-soo/ Director of the National Tax Service: We found that there is a system in foreign countries that considers criminal punishment if it is not submitted like this.]

In this regard, Deputy Prime Minister Choi Sang-mok noted that the Organization for Economic Cooperation and Development is discussing the methodology, saying that additional taxation rights should be distributed in the countries where sales are generated, and that we are actively participating.

I'm YTN's Lee Seung Eun.

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video: Eunkyung Lee
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