Stephen Silver
Amidst cries of "reverse discrimination" from South Korean politicians, the government of the country is planning to collect taxes from Apple, Google, Amazon and other global tech giants for the first time.
According to a report by the Korea Times, South Korea's government is planning to "move quickly" to impose taxes on foreign companies, including Apple, Google and Amazon. Current law does not require them to pay corporate taxes there.
The dispute represents a repeat of Apple's recent experience in Ireland, which Apple long treated a tax haven before its government recently began collecting taxes.
Politicians in South Korea have complained of "reverse discrimination," in that South Korean companies both pay taxes and abide by regulations, while foreign firms doing business in the country are not subjected to such restrictions. Samsung, both a supplier and main rival of Apple, is headquartered in South Korea.
Last November, South Korean authorities raided Apple's offices in that country, ahead of the launch of the iPhone X. The raid was part of what was described as an ongoing probe.
Apple opened its first Apple Store in South Korea this past January. in the Gangnam area of Seoul. In April, Apple poached Brandon Soon, a veteran of Microsoft and Samsung, to head up Apple Korea.
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18 Comments
I expect several countries will attempt to do something similar sooner rather than later, and I don't necessarily disagree. There's an increased awareness of the aggressive tax avoidance schemes big corporations use to move revenues derived from a particular country's market to a lower tax/no tax country or state which had no hand in the transaction beyond an expertly crafted piece of paper and some IP assignment trickery.
I do all I can to legally avoid paying higher taxes, too. If they don’t like it they should update their laws.
Can somebody please explain what “reverse discrimination” is? I always thought that discrimination was discrimination, no matter which way it was going.
I don't see any discrimination here. South Korea gave tax breaks to foreign companies to fuel investment by those companies in South Korea. The US does the same thing. Is it time to finally tax them? Sure, why not. I have to wonder how much Samsung is taxed but that really doesn't matter. Just don't try forcing these companies to pay back taxes.
How much of Apple's operations are in South Korea? Probably very little. What percentage of Apple's global revenue is generated from South Korean consumers and businesses? Again, probably not much. So, assuming these taxes are implemented in a reasonable way (not trying to grab profits generated elsewhere in the world), this shouldn't be a big deal.